Dass v The College of Haringey Enfield & North East London (Equal Pay Act : Article 141/European law) (27 November 2014) [2014] UKEAT 0108_12_2711

EAT
Dass v The College of Haringey Enfield & North East London (Equal Pay Act : Article 141/European law) (27 November 2014)
[2014] UKEAT 0108_12_2711 · 2014-11-27
[15]“15. section 2ZA [was], inserted into the Equal Pay Act by amendment in 2003, to bring domestic law into line with the decision of the European Court of Justice in Preston v Wolverhampton Healthcare NHS Trust [2000] IRLR 06. The section introduces the concept of a "stable employment relationship case", an expression explained by section 2ZA(2):
"'stable employment case' means a case where the proceedings relate to a period during which a stable employment subsists between the woman and the employer, notwithstanding that the period includes any time after the ending of a contract of employment when no further contract of employment is in force."
In such a case (as contrasted with a "standard case"), the qualifying date for the purpose of the commencement of proceedings under section 2ZA(4) of the Act is – "the date falling six months after the day on which the stable employment relationship ended."” It is therefore important to consider the features of a ‘stable employment relationship’ identified by the CJEU in Preston , the end of which marks the start of the limitation period. 42. The concept of ‘stable employment relationship’ was formulated by the CJEU in answering the third question referred to them by the House of Lords. This was:
“3. In circumstances where: (a) an employee has served under a number of separate contracts of employment for the same employer covering defined periods of time and with intervals between the periods covered by the contracts of employment; (b) after completion of any contract, there is no obligation on either party to enter into further such contracts; and (c) she initiates a claim within six months of completion of a later contract or contracts but fails to initiate a claim within six months of any earlier contract or contracts: is a national procedural rule which has the effect of requiring a claim for membership of an occupational pension scheme from which the right to pension benefits flow to be brought within six months of the end of any contract or contracts of employment to which the claim relates and which, therefore, prevents service under any earlier contract or contracts from being treated as pensionable service compatible with: (i) the right to equal pay for equal work in Article 119 of the EC Treaty; and (ii) the principle of EC law that national procedural rules for breach of Community law must not make it excessively difficult or impossible in practice for the claimant to exercise her rights under Article 119?” 43. The CJEU observed at paragraph 65: “This question relates to a number of actions before the national court which are distinguished by the fact that the claimants work regularly, but periodically or intermittently, for the same employer, under successive legally separate contracts. According to the order for reference, in the absence of an umbrella contract, the period prescribed in s2(4) of the EPA starts to run at the end of each contract of employment and not at the end of the employment relationship between the worker and the establishment concerned. It follows that workers are unable to secure recognition of periods of part-time work for the purpose of calculating their pension rights unless they have instituted proceedings within six months after the end of each contract under which the work concerned was performed.”
The CJEU referred at paragraphs 67 and 68 to the fundamental principle of legal certainty which requires that it be possible to fix precisely the starting point of a limitation period. Where there was a ‘succession’ of short-term contracts concluded at ‘regular intervals’ the court considered that there was no reason why the starting point for the limitation period should not be fixed as:
“the date on which the sequence of such contracts has been interrupted through the absence of one or more of the features that characterise a stable employment relationship of that kind, either because the periodicity of such contracts has been broken or because the new contract does not relate to the same employment or that to which the same pension scheme applies. [70]”
The CJEU concluded:
“The answer to the third question must therefore be that Community law precludes a procedural rule which has the effect of requiring a claim for membership of an occupational pension scheme (from which the right to pension benefit flows) to be brought within six months of the end of each contract of employment to which the claim related where there has been a stable employment relationship resulting from a succession of short-term contracts concluded at regular intervals in respect of the same employment to which the same pension scheme applies.[72]” 44. The CJEU accordingly held that domestic law should enable claimants who work regularly but periodically or intermittently for the same employer under successive legally separate contracts to bring equal pay claims within a limitation period starting on the date on which the sequence of such contracts has been interrupted. The court explained that the features characterising a stable employment relationship are a succession of contracts concluded at regular intervals. The ‘periodicity’ of such contracts is a necessary feature of such relationships. In my judgment it is apparent that the CJEU considered that a stable employment relationship could continue beyond the end of a particular contract. It would however come to an end if no new contract were entered into by the time expected in accordance with the established pattern, or periodicity, of the parties entering into such contracts. 45. Some of the Claimants in Preston were employed under consecutive but separate contracts of service with breaks in between. The stable employment relationship continued over such breaks. When the case returned to the House of Lords after the CJEU had given their judgment on the reference, Lord Slynn held that the Respondents could not rely on the six month limitation period in EqPA Section 2(4) starting at the end of each contract of employment to which the claim relates “where there has been a stable employment relationship resulting from a succession of short-term contracts concluded at regular intervals…”
He identified as features of a stable employment relationship, the existence of contracts concluded at regular intervals. 46. The EJ did not refer to EqPA section 2ZA or Preston in the CJEU or the House of Lords in considering whether there was a stable employment relationship between the Claimant and the Respondent in the period from 3 July 1995 to 4 January 1996. As submitted by Miss Motraghi this would not be in itself an error of law if the EJ had applied the correct approach to ascertaining whether there was a stable employment relationship. However the EJ erred in stating in paragraph 4 that the EAT held in Preston (No 3) “in such stable employment relationships, the six month time limit runs from [the] end of the last contract forming part of that relationship.” The EJ misunderstood the judgment of the EAT in this respect. EqPA Section 2ZA, reflecting the judgment of the CJEU in Preston , makes it clear that a stable employment relationship may subsist in the intervals between contracts. The EAT in Preston (No 3) did not decide that such a relationship was co-terminous with the ending of a contract of employment. Further such a proposition would have been inconsistent with the judgment of HHJ McMullen QC that it was a necessary feature of a stable employment relationship that there be intervals between successive short-term contracts of employment. Amongst the reasons why the submission that there were stable employment relationships between the Claimants and the Respondents failed in Preston (no 3) included that there was no interval between the short-term contracts. This reasoning depended upon a stable employment relationship existing notwithstanding the absence of a contract in the intervals which the EAT considered a necessary element of such a relationship. The basis for the decision that there was a need for interval between separate contracts for a stable employment relationship to be established was overruled in Fox in which it was held that such a relationship could be established by successive periodic contacts without a break between them. 47. The EJ referred at paragraph 5.1 to the fact that the Claimant did not suggest that he had an overriding contract with the Respondent in the period between 3 July 1995 and 3 January 1996. In other words there was no contention that an ‘umbrella contract’ covered that period. The Court of Appeal in Fox explained that the concept of a ‘stable employment relationship’ was different from that of an ‘umbrella contract’ with mutual obligations. Carnwath LJ made this clear when he held of the judgment of the CJEU in Preston :[31]“31. By adopting an entirely new expression, the court was, as I read the judgment, signalling a wish to distance itself from all these various formulations: on the one hand, to reject the Advocate-General's proposal which depended on the concept of an "umbrella contract", involving mutual obligations of renewal, and, on the other, to adopt a broad, non-technical test, looking at the character of the work and the employment relationship in practical terms. ” The reliance by the EJ on the absence of an ‘overriding contract’ in deciding that there was no stable employment relationship between the Claimant and the Respondent in the material period was an error of law. 48. The EJ observed in paragraph 5.1 that ‘there was no full-time contract’ during the period between July 1995 and January 1996. The final sentence of the paragraph:
“He was guaranteed no work in the future, and there was no obligation on the Respondent to offer him work.” is the language of the mutual obligation test for the existence of a contract of employment or an ‘umbrella contract’. It is not the test for a stable employment relationship. 49. In considering the absence of a contract of employment or an overarching ‘umbrella’ contract relevant to the question of whether there was a stable employment relationship between the parties in the period from 3 July 1995 and 4 January 1996, the EJ erred in law. 50. In paragraph 5.2 of his conclusions the EJ held that this was not case of a ‘temporary cessation of work’. Temporary cessation of work is not a term used in the EqPA . It has a particular statutory meaning for the purpose of claims under the ERA . It is not clear why the term was used in the context of this equal pay claim. The CJEU and the House of Lords in Preston made clear that ‘stable employment relationship’ was a new and different concept. This was emphasised in Fox . It was not suggested that ‘continuous employment’ under the ERA had any relevance to determining whether a ‘stable employment relationship’ existed for the purposes of an equal pay claim. 51. I do not accept the proposition advanced by Counsel for the Claimant that “in determining whether there was a stable employment relationship the EJ failed to have regard to the fact that a stable employment relationship cannot be narrower than continuous employment within the meaning S212 ERA.”
The two concepts are different. The test for each is different. They arise in different contexts and for different purposes. 52. In support of the approach that a ‘stable employment relationship’ cannot be narrower than ‘continuous employment’ under the ERA Ms Monaghan QC referred to the decision of the House of Lords in Fitzgerald v Hall, Russell & Co Ltd [1970] AC 194. In contending that in the relevant period there was ‘continuous employment’ it was rightly submitted that the EJ was wrong to conclude in paragraph 5.2:
“Nor was this a temporary cessation of work, because the work continued for full-time lecturers, and possibly other part-time lecturers.”
In Fitzgerald it was held that the expression ‘cessation of work’ must be construed as referring to the cessation of the employee’s work or work for the employee and not the employer’s work. However, since the EJ erred if and insofar as he considered ‘continuous employment’ under the ERA relevant to the decision whether there was a stable employment relationship during the relevant period, this error does not affect the outcome of this appeal. 53. In my judgment the reference in Fitzgerald to deciding retrospectively whether there is a temporary cessation of work for the purpose of the ERA is not relevant to the determination of the existence of a stable employment relationship within the meaning of the EqPA . The submission that whether an employee’s employment is continuous for the purposes of Section 212 ERA is relevant to that issue is in my judgment contrary to the judgment of the CJEU in Preston . The CJEU considered that the principle of legal certainty required the possibility of fixing precisely the starting point of a limitation period. The Court held that this principle was not infringed by adopting the concept of a stable employment relationship because in such a case the start of the limitation period could be fixed. “…as the date on which the sequence of such contracts has been interrupted through the absence of one or more of the features that characterise a stable employment relationship of that kind, either because the periodicity of such contracts has been broken or because the new contract does not relate to the same employment as that which the same pension scheme applies.” 54. The approach of the CJEU in Preston achieves the certainty which would not be secured by waiting for the end of the entirety of the Claimant’s employment before putting in a claim in respect of the period of a stable employment relationship. Such a claim may well have to be lodged before all employment of the Claimant with the Respondent has ceased. The parties will know when the periodicity of a stable employment relationship has come to an end and a claim in respect of such employment should be brought. Whether there was a ‘temporary cessation of work’ or continuity of employment within the meaning of the ERA is, in my judgment, not material to the question under appeal: whether the EJ erred in deciding that there was nor stable employment relationship in the relevant period. The CJEU in Preston and the Court of Appeal in Fox made it clear that ‘stable employment relationship’ has an autonomous meaning. Accordingly the EJ erred if and insofar as he relied in deciding whether there was a stable employment relationship on the absence of a temporary cessation of work and therefore no continuity of employment within the meaning of the ERA during the summer of 1995. Nor, in my judgment, does it assist in deciding whether there was a stable employment relationship during that period to make a comparison with continuous employment within the meaning of the ERA . 55. In paragraph 5.2 the EJ held that:
“there was no work for the Claimant, save for a few ad hoc days, in the Autumn of 1995. When the Autumn term started again in September 1995, there was no work for the Claimant, so there was no continuity of employment through the summer holidays into that term.” and that: “On the definition of stable employment relationship given in Preston , that relationship came to an end and there was no relationship from July 1995.” 56. The test for ascertaining whether there was a stable employment relationship between July 1995 and January 1996 is whether there was a succession of contracts of employment concluded at regular intervals, with or without gaps between them ( Slack ) and irrespective of the length of the contracts. Carnwath LJ in Fox held at paragraph 28: “…if stability of the relationship is the guiding principle, it would be perverse to held that a succession of long-term contracts cannot achieve the same result.”
It is to be noted that all the relevant authorities including Slack and Fox refer to the need for a succession of contracts which, according to the CJEU and Preston (No 2) in the House of Lords have periodicity. 57. That the contracts are intermittent is not necessarily a bar to the presence of a stable employment relationship. In Preston , the House of Lords considered the claims of three groups of part-time teachers or lecturers. One group included supply teachers who worked intermittently. The question in their case, as in those of those employed under a succession of contracts for the academic year with a break over the long vacation and those employed under a succession of fixed-term contracts for each term, was the periodicity of such contracts. When Preston returned to the House of Lords after the judgment of the CJEU Lord Slynn held of the intermittent contracts such as those under which supply teachers worked:
“33. Accordingly it is clear that where there are intermittent contracts of service without a stable employment relationship, the period of six months runs from the end of each contract of service, but where such contracts are concluded at regular intervals in respect of the same employment regularly in a stable employment relationship, the period runs from the end of the last contract forming part of that relationship.”
In Slack the Court of Appeal considered three cases. They held that both Mrs Slack and Mrs Elliot had been in a stable employment relationship with the Council as:
“They did the same work for the Council over very many years without any break in the work they did or in the succession of contracts.”
However the Court of Appeal remitted the third case to an Employment Tribunal for further fact finding. The necessary periodicity or succession of contracts was not clear from the facts. Mummery LJ held:[100]“100. However, the facts found in Mrs Athersmith's case are not clear enough to enable this court to say it was a stable employment case. She started as a relief carer. A new contract was issued by the Council and signed by her when she became a permanent carer. She also acquired the right to sick pay. It will be necessary for her case to be remitted to the ET to find all the facts relevant to a stable employment relationship. It is for the ET to investigate and to decide that issue, which was not raised before it first time round. ” I do not accept the proposition advanced by Ms Monaghan QC that the Court of Appeal in Fox decided that a stable employment relationship continued beyond the Claimant entering a permanent contract. That was not the issue before the court in Fox . When a somewhat similar situation was before the Court of Appeal in Slack in the case of Mrs Athersmith, the claim was remitted to an Employment Tribunal to find facts to enable the court to say whether it was a stable employment case. 58. I have concluded that the EJ failed to decide the issue before him, whether there was a stable employment relationship between the Claimant and the Respondent in the period between 3 July 1995 and 4 January 1996, on the correct basis in law. Disposal 59. The Decision of the EJ that there was no stable employment between the parties between July 1995 and 4 January 1996 is set aside. 60. Following the circulation of the draft Judgment, written submissions were invited from Counsel on disposal. Ms Monaghan QC and Ms Prince submitted that the case should be determined by the Employment Appeal Tribunal using its powers under Section 35 of the Employment Tribunals Act 1996 . Ms Motraghi for the College submitted that the matter should be remitted to an Employment Tribunal. If the matter were to be remitted, the parties were in agreement that this should be to a different Employment Judge. 61. Counsel for both parties referred to the relevant legal test as to the circumstances in which the Employment Appeal Tribunal may reach its own decision after holding that an Employment Tribunal erred in law and sets aside its conclusion. Albeit with some lack of enthusiasm, the Court of Appeal in Burrell v Micheldever Tyre Services Ltd [2014] IRLR 630 held that the ‘conventional’ approach so clearly reaffirmed in Jafri v Lincoln College [ 2014] EWCA Civ 449 should be followed. In Jafri Laws LJ held at paragraph 21: “It is not the task of the EAT to decide what result is ‘right’ on the merits. The EAT’s function is (and is only) to see that the ET’s decisions are lawfully made. If therefore the EAT detects a legal error by the ET, it must send the case back unless(a) it concludes that the error cannot have affected the result, for in that case the error will have been immaterial and the result as lawful as if it had not been made; or(b) without the error the result would have been different, but the EAT is able to conclude what it must have been. In neither case is the EAT to make any factual assessment for itself, nor make any judgment of its own as to the merits of the case; the result must flow from findings made by the ET, supplemented (if at all) only by undisputed or indisputable facts. Otherwise there must be remittal.” 62. In Burrell Maurice Kay LJ held at paragraph 20: “However, even within the confines of the conventional approach the EAT can contain its application in a number of ways. First , provided that it is intellectually honest, it can be robust rather than timorous applying what I shall now call the Jafri approach. … Secondly , as Underhill LJ said in Jafri , parties to appeals to the EAT can be encouraged to consent to the EAT disposing of the case pursuant to its powers under section 35(1) of the Employment Tribunals Act 1996, even where the EAT does not consider that the appeal before it is an ‘only one outcome’ case. …” 63. It was submitted on behalf of the Claimant that had the Employment Judge asked himself the correct question he would inevitably have found that the Claimant was in a ‘stable employment relationship’. The first alleged fact relied upon was that the Claimant ‘put forward evidence that he worked for the Respondent on six separate occasions during the 6 month period between July 1995 and January 1996. The pages referred to do not support this assertion. Two of the occasions recorded on page 83 were before July 1995 and the other two engagements set out on that page were for different times on the same day. The pages relied upon show that the Claimant worked on three days in the period referred to. This may be regarded as a small difference but the decision as to whether there was a stable employment relationship between the College and the Claimant must be founded on accurate and relevant facts. I cannot say with any degree of confidence that the original Employment Judge made all the relevant findings of fact nor that the outcome of applying the correct approach to the findings originally made would be clear. Further, this appeal does not fall within the first example given by Maurice Kay LJ in Burrell of when it is possible within the conventional approach for the Employment Appeal Tribunal itself to decide an issue rather than remit. The parties do not agree that the Employment Appeal Tribunal should decide whether the Claimant was in a stable employment relationship with the College at the material time. The second example given by Maurice Kay LJ does not apply. 64. The matter is to be remitted to an Employment Tribunal, an Employment Judge sitting alone, to determine whether or not the Claimant was in a stable employment relationship within the meaning of the Equal Pay Act 1970 Section 2ZA, (now in the Equality Act 2010 ), from 1995 until 2003 and, if not, whether he should be given permission to amend his claim and/or to present a fresh ET1 to include that period. The amendment issue has not yet been heard or determined. There would be no advantage or saving of time or costs in remitting to the Employment Judge who heard the case as long ago as August 2011. Further, remission to a different Employment Judge would give the assurance that a fresh mind will be brought to bear on the issues. The matter is to be remitted to a different Employment Judge as the parties have rightly agreed.