SCOTTISH MINISTERS v (1) MRS M DOCHERTY (2) GREATER GLASGOW HEALTH BOARD [2009] UKEAT 0053_08_0907

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2009] UKEAT 0053_08_0907Case No Appeal No. UKEATS/0053/08Venue 52 MELVILLE STREET, EDINBURGH, EH3 7HF
Between
SCOTTISH MINISTERSAPPELLANT(1) MRS M DOCHERTY (2) GREATER GLASGOW HEALTH BOARDRESPONDENT
Before
Lady SmithDate 9 July 2009
[1]APPEARANCES For the Appellants MR B NAPIER (One of Her Majesty's Counsel) Instructed by: The Scottish Government Legal Services Area G-C Victoria Quay Edinburgh EH6 6QQ For the First Respondent MRS M DOCHERTY (The Respondent in Person) For the Second Respondent MR M MACLEOD (Solicitor) NHS Scotland Central Legal Office Anderson House Breadalbane Street Bonnington Road EDINBURGH EH6 5JR SUMMARY EQUAL PAY ACT: Part-Time Pensions Part-time pensions. NHS employee did not join a voluntary scheme after having become eligible to do so. Circumstances in which Tribunal was found to have erred in law, not having addressed(a) the question of whether the claimant would have joined the scheme in 1988 if she had been eligible to do so; and(b) whether the claimant's ignorance of her entitlement to join the scheme after 1991 (from which time she was eligible to do so) was attributable to a policy or campaign of the dissemination of misinformation about her rights. THE HONOURABLE LADY SMITH INTRODUCTION This is an appeal from a judgment of the Employment Tribunal sitting at Glasgow, Employment Judge Mr M.W.J MacMillan (sitting alone), registered on 5 June 2008 which was in the following terms:
"The judgment of the Tribunal is to declare that the claimant is entitled to membership of a National Health Service superannuation scheme from 6 April 1988 to 31 March 1991, and thereafter from 1 April 1991 to 15 March 1998. Paragraphs 7.2 and 7.3 of the information bulletins are disapplied for the reasons after stated."
[2]The respondents were the relevant health board and the Scottish Ministers, the latter because NHS pensions are administered by a Government agency, the Scottish Public Pensions Agency.[3]I will continue to refer to parties as claimant and first respondent (Greater Glasgow Health Board) and second respondent (Scottish Ministers). BACKGROUND[4]The claimant was employed by the first respondents and their predecessors as a nursing assistant from March 1975. She worked eighteen hours per week, part-time.[5]Between 1975 and 5 April 1988, membership of the NHS Pension Scheme was compulsory for full-time employees but not only were part-time employees such as the claimant not bound to be members, they were not entitled to join the scheme.[6]From 5 April 1988, membership of the NHS Pension Scheme ceased being compulsory for full-time employees. They were, however, entitled to join it if they chose to do so. The position of part-timers such as the claimant remained as it had been before, namely that they were still not entitled to join the scheme at all.[7]From 1 April 1991, the terms of the scheme were changed so that part-time employees such as the claimant were entitled to join the scheme.[8]In 1991, the first respondents prepared a circular entitled "National Health Service Superannuation Scheme for Scotland: Superannuation for Part-Time Employees" in which the eligibility of the part-timers, such as the claimant, to join the scheme, was explained. The claimant did not see the circular until the hearing before the Tribunal on 3 June 2008. The Tribunal made no findings as to the explanation for the claimant not seeing the circular until then.[9]By letter dated 16 October 1994 to the second respondents and copied to the first respondents, the claimant wrote in the following terms:
"Dear Sir/Madam Pensions for Part-Time Staff I have been a part-time Nursing Assistant at Lennox Castle Hospital, Lennoxtown, Glasgow since 1976. As you know it was not possible to join the pension fund as a part-timer at that date. However I understand from the recent publicity given to a European Union ruling that this situation has changed and part-time workers should now be able to join an employers' pension fund and backdate their membership to their start date. I am aware it may take some time to sort out the ramifications of the EU ruling but I wish, by this letter, to formally indicate my interest in backdating membership of the pension fund to my start date in 1976. I understand this will require me to pay "buy back" contributions and I would be obliged if you would inform me what these will be as soon as you are able. My date of birth is 30 th April 1940. I would be obliged if you would acknowledge receipt of this request at your earliest convenience."
The second respondents responded to the claimant's letter indicating that the European ruling on rights for part-time workers was being studied and once a decision had been reached regarding it, they would revert to her. They did not in fact do so but the claimant made no further enquiries nor did she apply to join the scheme.[10]The claimant presented a claim to the Employment Tribunal in terms of her form IT1 dated 7 December 1994. It is a claim under the equality clause in her contract of employment implied in terms of s.1 (1) of the Equal Pay Act 1970 . The claimant claimed backdated membership of the scheme and/or compensation to reflect her loss in benefits caused by the denial of access to membership of the scheme.[11]A pre-hearing review took place on 2 August 2007 at which the first respondents argued, unsuccessfully, that the case had no reasonable prospects of success. The Tribunal heard evidence and made findings which were incorporated by reference in its subsequent judgment following the full hearing. The issue raised by the first respondents at the pre-hearing review was whether the claimant had any reasonable prospects of showing that she would have joined the scheme in the period from 6 April 1988 if she had been entitled to do so. In response, the claimant relied on certain facts which were found by the Tribunal to have been established. Firstly, she relied on the fact that she had written the above letter in October 1994; that indicated her willingness to join the scheme. Secondly, she relied on the fact that by the time her entitlement to join the scheme became known to her she was, as she put it, at the point of retirement. That was in circumstances where the hospital at which she worked was closed in 1998 at which point the claimant accepted redundancy and retired. The Tribunal accepted her evidence that by 1994, because of a change in social policy regarding appropriate care for psychiatric patients (Lennox Castle Hospital was a psychiatric hospital), it became clear to the claimant in 1994 that at some point there would no longer be a job available to her at Lennox Castle. She did not in fact retire until four years later when she accepted voluntary redundancy and stopped work.[12]The Tribunal's observations in the light of that evidence, as contained in paragraph 15 of the reasons attached to their judgment registered on 14 August 2007, bears some consideration. It observes: "….her explanation of being too close to retirement in 1994 does not really conform to the fact. Whilst her job might have been under threat of redundancy from 1994 there was always the prospect of redeployment. Redundancy might not have been available to her. 'Retirement' as she put it was in fact self imposed retirement; she was happy to take redundancy at that time and did not seek employment elsewhere. We do not believe that we can draw any inference from the events in 1998 as to what the claimant might otherwise have done in 1994".[13]The Tribunal did not, however, in that judgment address the question of whether the facts relied on by the claimant told them anything about what she would have done so far as opting into the scheme was concerned at any stage prior to 1994. THE TRIBUNAL'S JUDGMENT DATED 5 JUNE 2008[14]At the hearing in June 2008 the Tribunal took evidence from the claimant both orally and via a written statement. They found her credible and reliable. The Tribunal made no additional findings in fact in their 2008 judgment other than that in 1991:
"5(3) …the respondents issued a circular which should have been distributed to all employees. The Tribunal were satisfied, on the evidence, that the claimant had not received sight of the circular until the date of the Tribunal hearing."
[15]The Tribunal then proceed to infer that had the claimant seen the circular she would have followed the instructions in it and would have joined the scheme. It gives as its reasons for drawing that inference the fact that she wrote the letter of 16 October 1994 when she learned of the European Court of Justice ruling.[16]The case of Dennison v University College of St Mark and St John UKEAT/0196/06 1907 (19 July 2006 ) is referred to by the Tribunal in both its 2007 and 2008 judgments. It seems to have considered that the decision in that case was such as to direct it to find in the claimant's favour. RELEVANT LAW[17]The claimant's claim is made under the Equal Pay Act 1970 . She asserts that she received unequal treatment during the period that she was excluded from access to the NHS scheme on the ground that she was a part-time worker. The right of access asserted falls under Article 141 of the Treaty of the European Union: Bilke –Kaufhaus GmbH v Weber Von Hartz [1986] IRLR 317 ; Vroege v NCIV Instituut voor Volkshuisvesting bv [1994] IRLR 651 . The right relied on is, as above noted, the implied equality right. In the case of access to a pension scheme, that amounts to the right of female part-timers not to be excluded from a pension scheme because of their particular part-time status. An employer is in breach of the implied equality right where pension scheme membership is compulsory for full-time staff but part-time staff are excluded. The employer is not, however, in breach, if membership is compulsory for full time employees and optional for part-time staff (see: Preston v Wolverhampton Health Care NHS Trust (No.3) [2004] IRLR 96 ). Accordingly, in the case of this claimant, the right to have access to the Scottish NHS Pension Scheme was implied into the contract of employment she entered in 1975. Membership of the scheme did not require to be compulsory at any stage but she ought to have been entitled to join it as from that date.[18]In these circumstances, it is not surprising that the claimant's claim was conceded by the respondents for the period 1975 to 1988. Plainly, however, an issue arises between them thereafter. Whilst the claimant was not entitled to join the scheme until 1991, the denial to her of the right to do so between 1988 and 1991 only gives rise to a claim if she lost a benefit that otherwise she would have had. Thus, there was an onus on the claimant to establish that had she been entitled to do so, she would have joined the scheme in 1988. As was said by the President (Elias J) in the case of Dennison , the fundamental question is:
"Whether the employee would have joined the scheme at the earliest stage, had she thought that she was eligible to do so."
[19]In the case of Lavety v Lanarkshire Health Board and Scottish Ministers , I sought to explain the task of a tribunal when addressing that fundamental question. For the purposes of this case, I would repeat what I said there, in paragraph 17, regarding it being a matter of evidential assessment namely:
"….a Tribunal will be entitled to infer from the fact that the claimant did not join the scheme when she became entitled to do so or, if she did join later, that she delayed in doing so, that she would probably not have joined it at an earlier date. However, as ever, the Tribunal will require to consider the whole facts and circumstances and will, equally, be entitled to conclude that the claimant would have joined earlier notwithstanding her not having done so at the first opportunity if, on those facts and circumstances, it is satisfied that she probably would have done."
As in Lavety , however, it is critical that the Tribunal poses the question under reference to the correct point in time. In the present case, that was April 1988 and any date thereafter up to 1 April 1991.[20]I should also refer to the non-statutory guidance contained in the Employment Tribunals Information Bulletin No.9 on part-time worker pension cases since it was referred to specifically by the Tribunal in its 2008 judgement. Paragraphs 7.2 and 7.3 of that guidance provide:
"7.2 Membership for full-time employees not compulsory – part-timers excluded Your claim will not succeed in respect of this period of time if you did not join the scheme when the rules later changed to allow you to do so or you only did so after significant delay. This is because your failure to join the scheme when you were allowed to, suggests that had you been a full-timer you would not have joined the scheme during this earlier period of time anyway and therefore you lost nothing. However, there is an exception for applicants who can satisfy a Tribunal that they would have joined during the earlier period had they been eligible. This was to allow for special cases such as those where by the time the rules were changed to enable part-timers to join, an applicant was so near to retirement that joining was pointless, or she had already taken out a private pension plan. 7.3 Part-timers always eligible to join or who did not join on becoming eligible A part-time employee who was in fact always eligible for membership of her employers scheme (i.e. although part-time she always worked more than the minimum qualifying hours) or who did not join the scheme after a rule change made her eligible to join, normally cannot succeed in her claim. There is one exception – if on seeking to join the scheme she was denied the right to join or discouraged or dissuaded from joining as the result of a policy of her employer, aimed at part-timers and involving the imposition of conditions not imposed on full-timers, or a campaign of deliberate misinformation, or which otherwise in practice amounted to a denial of the right to membership of the scheme. Where no such policy existed but the employer failed to draw the change in the rules governing eligibility to part-time employees attention, although her equal pay claim cannot succeed (because the rule change in fact removed the discrimination between full-timers and part-timers) she may be able to bring a breach of contract claim. However, if she only does so more than six years after she was refused the right to join or became aware of the right to join, the claim might be out of time. In any event, such a claim can only be brought in the Employment Tribunal after the applicant's employment with the relevant respondent has ended and must be brought within three months of that date."
[21]My concerns regarding reliance on non-statutory guidance as expressed in the Lavety case remain and I would reiterate that they are no substitute for the relevant law. However, broadly put it can be seen that the comments in 7.2 are apposite in the context of the claimant's claim in respect of the period 1988 to 1991 and the comments in 7.3 are apposite in respect of her claim thereafter. That is because as from 1 April 1991, the claimant had the relevant entitlement. There are two aspects to paragraph 7.3. Both were identified in Preston No.3 where the question of whether the provisions of the Equal Pay Act 1970 are breached where an employer has failed to inform staff of the removal of a barrier to scheme membership was considered. The answer, as explained in paragraphs 77 and 78 (and in the first part of 7.3) is that they are not unless the employer has had in place some form of practice or policy directed at seeing to it that employees are not informed of their rights. That is not to say that employers do not have a contractual duty to take reasonable steps to bring the entitlement to the employees' attention. They do: Scally v Southern Health and Social Services Board [1991] IRLR 522 HL. However, any claim for failure on the part of an employer to fulfil that duty is a breach of contract claim, not a claim under the Equal Pay Act , and it would require to have been advanced as such. The claimant in this case does not advance a breach of contract claim. Accordingly, the only means open to her to establish an entitlement to retrospective membership of the NHS Pension Scheme as from 1 April 1991 would have been if she could have shown that the first respondents had a practice or policy to misinform employees, or similar, in place. THE APPEAL[22]For the second respondents, Mr Napier submitted that the Tribunal had erred. There was no basis in their findings for determining that the second respondents had applied any policy or practice of misinforming the claimant as to her entitlements. Separately, there was no basis for their finding that she would have joined the scheme in the period 1988 to 1991 had she been permitted, as a part-timer, to do so. That was not an inference that it was entitled to draw from the fact of her having shown an interest in joining the scheme in 1994.[23]For the first respondents, Mr MacLeod adopted Mr Napier's submissions. He expressed particular concern on behalf of the first respondents at the reference to paragraph 7.3 of the judgment lest it have been intended by the Tribunal to indicate that they had adopted and applied a policy or practice of deliberately misinforming employees. That was a serious matter and would require to have been backed up by quite specific evidence which was simply absent. All there was was a finding that the claimant did not receive the 1991 circular. That was far short of being evidence of a proscribed policy or practice as part of a discriminatory regime.[24]Mrs Docherty made submissions under reference to a carefully prepared statement which can be summarised as follows. The health boards and the Scottish Public Pension Agency should be regarded as having a single identity. Their administrative arrangements should not be used to confuse the issue with respect to their failure to inform their staff of their rights. Thus, at least in part, Mrs Docherty appeared to be approaching her claim as being one based on the respondents failure to inform her of her rights after 1991. She continued under reference to the cases of Dennison and Lavety and explained that she understood that she required to demonstrate in the periods when she was not allowed to join the scheme that she would have done so if she had had the entitlement. In support of her submission that she had satisfied the onus upon her she referred to her letter of 16 October 1994. It proved, she submitted, that she would have joined earlier if she had been entitled to do so. Then, under reference to the Preston judgments, Mrs Docherty submitted that she understood from the bulletin that there was a presumption in her favour. She again referred to her letter of 16 October 1994. She was critical of the fact that she did not receive a positive response to that letter. She again referred to the respondents having a duty to make her aware of the changed rules. She submitted that it could be inferred that the first respondent's application of government policy was to do nothing and give nothing away. DISCUSSION AND DECISION[25]I am satisfied that, in common with the Tribunal in Lavety , despite referring to the case of Dennison , this Tribunal failed to focus on the correct question in respect of the period 1988 to 1991. In this case it was whether, had the claimant been entitled to join the scheme in 1988 or at any time between then and 1991, she would, on a balance of probabilities, have done so. In its 2007 judgment the Tribunal wrongly identified as the question it had to answer:
"16. What would the claimant have done in 1994?"
[26]Similarly, the 2008 judgment focuses on 1994. Whilst a possible interpretation of paragraph 6 is that it also considered the issue of whether, had the claimant known about her entitlement in 1991, she would have joined the scheme, there is no indication at all of the Tribunal having asked itself what would have been the position in 1988 or between then and 1991. That was a critical failing on its part.[27]I turn then to the question of whether on the facts found, it would have been open to the Tribunal to find that the claimant would have joined that scheme during that period. I readily conclude that it would not. No findings were made regarding the claimant's circumstances as at 1988 and the fact that she was interested in joining it in 1994 says nothing about what would have been her position some six years earlier.[28]Separately, the Tribunal in both judgments appears to have failed to appreciate that for the period from 1 April 1991 the question it had to address was not that of whether the claimant would have joined the scheme if she had known that she was entitled to do so. As of that date she had the entitlement, unlike the position prior thereto. Whilst the first respondents had a duty to take reasonable steps to bring the fact of that entitlement to the claimant's attention ( Scally v Southern Health and Social Services Board ) any claim that they had failed to fulfil that duty would be a claim of breach of contract, which this claim was not. In a claim for breach of contract the factual inquiry would be different and more extensive. It would not simply be a matter of ascertaining whether or not the claimant received the relevant employee circular because it is not necessarily inconsistent with an employer having taken reasonable steps to inform employees that some of them do not in fact receive the relevant information. As explained in Preston No.3 , where the claim is under the Equal Pay Act and it relates to a post entitlement period, there will only be a breach of the Act if it is proved that there was some form of practice or policy of misinforming or not informing women regarding their rights, in place. HHJ McMullan, at paragraph 78 of his judgment explains:
"If they are not informed of their rights to join the pension scheme, discrimination cannot be inferred unless (a) disparate impact between genders is shown; and (b) it is proved as a matter of law that the failure to inform a female employee she can join the pension scheme constitutes unequal pay at a time when she is in fact entitled to join the pension scheme on equal terms with a man. The first of these inferences requires there to be some form of practice or policy in place: a one off mistake by an officer in an individual's case would not suffice. For the purposes of this (indirect) discrimination, the law is concerned with a discriminatory regime or policy or practice."
Notwithstanding the reference in the Tribunal's judgment to paragraph 7.3 of the guidance which reflects that principle, as identified in the Preston No.3 judgment, there is no indication at all of the Tribunal recognising its implications. Yet it required to do so because, so far as the post April 1991 period is concerned, the Tribunal had made no findings in fact at all that the first respondents were operating a policy or practice of misinforming employees nor can any such inference be drawn from the findings in fact that it does make. Nor, indeed, was any evidence recorded by the Tribunal as having been led that pointed to there having been such a policy or practice.[29]Overall, it is difficult to resist the conclusion that the Tribunal has become confused. As a result, its judgment is not sustainable. There was no evidential basis for it. DISPOSAL[30]In all the circumstances, I will pronounce an order upholding the appeal. I am satisfied that there is no need to remit the case. The facts are clear and they cannot support either a finding that the claimant was entitled to membership of the NHS Pension Scheme between 6 April 1988 and 31 March 1991 or that she was entitled to membership of it during the period 1 April 1991 and 15 March 1998. I will, accordingly, set aside the judgment of the Employment Tribunal of 5 June 2008 and substitute for it a judgment that the claimant is not entitled to membership of the National Health Service Superannuation Scheme either in the period 6 April 1988 to 31 March 1991 or in the period 1 April 1991 to 15 March 1998.