Pickstone v Freemans Plc [1988] UKHL 2

House of Lords

Between

PickstoneAppellant

Freemans PlcRespondent

Before

Lord Keith of Kinkel

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal (Civil Division) of the 25th day of March 1987 complained of in the said Appeal be, and the same is hereby, Affirmed and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay or cause to be paid to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments if not agreed between the parties.

Cler: Asst. Parliamentor

Judgment: 30.6.88

HOUSE OF LORDS

PICKSTONE AND OTHERS (RESPONDENTS)

FREEMANS PLC. (APPELLANTS)

Lord Keith of Kinkel Lord Brandon of Oakbrook Lord Templeman Lord Oliver of Aylmerton Lord Jounce of Tullichettle

LORD KEITH OF KINKEL

My Lords,

Under the Equal Pay Act 1970, as brought into force with amendments on 29 December 1975, a woman employee could claim parity of pay with a male employee in the same establishment only where she was employed on like work with the man or where she was employed on work rated as equivalent with that of the man. That was the effect of section 1(1) and (2) of the Act, providing:

"1(1) If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include (directly or by reference to a collective agreement or otherwise) an equality clause they shall be deemed to include one. (2) An equality clause is a provision which relates to terms (whether concerned with pay or not) of a contract under which a woman is employed (the "woman's contract"), and has the effect that - ( a ) where the woman is employed on like work with a man in the same employment -(i) if (apart from the equality clause) any term of the woman's contract is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and

(ii) if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed, the woman's contract

shall be treated as including such a term; ( b ) where the woman is employed on work rated as equivalent with that of a man in the same employment -(i) if (apart from the equality clause) any term of the woman's contract determined by the rating of the work is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and

By virtue of section 1(5) a woman's work could only be rated as equivalent with that of a man if her job and his job had been given an equal value, according to certain criteria, on a job evaluation study. A job evaluation study could not be carried out otherwise than with the consent of the employer.

The Commission of the European Community took the view that this state of the law did not comply with the obligation of the United Kingdom Government to implement Article 119 of the Treaty of Rome, enjoining application of the principle that men and women should receive equal pay for equal work, together with the Equal Pay Directive adopted by the Council of Ministers of the Community on 10 February 1975. The Commission accordingly applied to the European Court of Justice for a declaration that the United Kingdom had failed to obtemper this obligation in respect that it had not adopted measures enabling women to obtain equal pay for equal work in circumstances where there had been no job evaluation study. The European Court of Justice sustained the Commission's claim. It made a declaration that:

"By failing to introduce into its national legal system in implementation of the provisions of Council Directive (75/117/E.E.C.) of February 10 1975 such measures as are necessary to enable all employees who consider themselves wronged by failure to apply the principle of equal pay for men and women for work to which equal value is attributed and for which no system of job classification exists to obtain recognition of such equivalence, the United Kingdom has failed to fulfil its obligations under the Treaty." See Commission v. United Kingdom [1982] (Case 61/81) I.C.R. 578, 599.

The United Kingdom Government took steps to correct the defect in its equal pay legislation identified in the judgment of the European Court. Section 2(2)( a ) of the European Communities Act 1972 provides:

"Subject to Schedule 2 to this Act, at any time after its passing Her Majesty may by Order in Council, or any designated Minister or department may by regulations, make provision - ( a ) for the purpose of implementing any Community obligation, or enabling any such obligation to be implemented, or of enabling any rights enjoyed or to be enjoyed by the United Kingdom under or by virtue of the Treaties to be exercised; ..."

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Schedule 2 to the Act contains general provisions as to subordinate legislation, including, in paragraph 2(2) a provision making subject to annulment by resolution of either House of Parliament any statutory instrument containing regulations made without a draft having been approved by resolution of each House.

So the Secretary of State for Employment made a draft which was introduced as the Equal Pay (Amendment) Regulations 1983 (S.I. 1983 No. 1794) in the House of Commons on 20 July 1983 and in the House of Lords on 5 December 1983. Both Houses approved the draft albeit, in the case of the House of Lords, subject to a reservation. Quotations from the speech of the Under Secretary of State for Employment, initiating the debate in the House of Commons, are to be found in the speech of my noble and learned friend Lord Templeman. Regulation 2(1) provides:

"In subsection (2) of section 1 of the Equal Pay Act 1970 (equality clauses to be implied into contracts of employment), after paragraph ( b ) there shall be inserted the following paragraph:- ( c ) where a woman is employed on work which, not being work in relation to which paragraph ( a ) or ( b ) above applies, is, in terms of the demands made on her (for instance under such headings as effort, skill and decision), of equal value to that of a man in the same employment - (i) if (apart from the equality clause) any term of the woman's contract is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and (ii) if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed, the woman's contract shall be treated as including such a term."

Regulation 3 introduced into the Act of 1970 a new section 2A prescribing the procedure to be followed before an industrial tribunal where a dispute arises as to whether any work is of equal value. The procedure may involve obtaining a report from an independent expert who is a member of a panel designated by

A.C.A.S.

In the present case the respondent, Mrs. Pickstone, who is employed by the appellant employers as a "warehouse operative," claims that her work as such is of equal value with that of a man, Mr. Phillips, who is employed in the same establishment as a "checker warehouse operative," and who is paid £4.22 per week more than she is paid. However, it happens to be the fact that one man is employed in the establishment as a warehouse operative doing the same work as Mrs. Pickstone. The employers maintain that the existence of this fact precludes Mrs. Pickstone from claiming equal pay with Mr. Phillips under section l(2)( c ) of the Act of 1970 as amended, notwithstanding that she may be performing work of equal value with his and notwithstanding that the difference in pay may be the result of discrimination on grounds of sex.

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This argument is based on the words in paragraph ( c ) "not being work in relation to which paragraph ( a ) or ( b ) above applies." The employers say that the work on which Mrs. Pickstone is employed is work to which paragraph ( a ) applies because it is like work with a man in the same employment, namely the one male warehouse operative. So Mrs. Pickstone's work does not qualify under paragraph ( c ).

The question is whether the exclusionary words in paragraph ( c ) are intended to have effect whenever the employers are able to point to some man who is employed by them on like work with the woman claimant within the meaning of paragraph ( a ) or work rated as equivalent with hers within the meaning of paragraph ( b ), or whether they are intended to have effect only where the particular man with whom she seeks comparison is employed on such work. In my opinion the latter is the correct answer. The opposite result would leave a large gap in the equal work provision, enabling an employer to evade it by employing one token man on the same work as a group of potential women claimants who were deliberately paid less than a group of men employed on work of equal value with that of the women. This would mean that the United Kingdom had failed yet again fully to implement its obligations under article 119 of the Treaty and the Equal Pay Directive, and had not given full effect to the decision of the European Court in Commission v. United Kingdom [1982] I.C.R. 578. It is plain that Parliament cannot possibly have intended such a failure. The draft Regulations of 1983 were presented to Parliament as giving full effect to the decision in question. The draft Regulations were not subject to the Parliamentary process of consideration and amendment in Committee, as a Bill would have been. In these circumstances and in the context of section 2 of the European Communities Act 1972 I consider it to be entirely legitimate for the purpose of ascertaining the intention of Parliament to take into account the terms in which the draft was presented by the responsible Minister and which formed the basis of its acceptance. The terms in which it was presented to the House of Commons are set out in the speech of my noble and learned friend Lord Templeman. Much the same was said before the House of Lords. There was no suggestion that the exclusionary words in paragraph ( c ) were intended to apply in any other situation than where the man selected by a woman complainant for comparison was one in relation to whose work paragraph ( a ) or paragraph ( b ) applied. It may be that, in order to confine the words in question to that situation, some necessary implication falls to be made into their literal meaning. The precise terms of that implication do not seem to me to matter. It is sufficient to say that the words must be construed purposively in order to give effect to the manifest broad intention of the maker of the Regulations and of Parliament. I would therefore reject the appellant's argument.

In the circumstances it is unnecessary to consider the ground upon which the Court of Appeal found in favour of the respondents, namely that article 119 was directly enforceable in such a way as to enable their claim to be supported irrespective of the true construction of the Regulations of 1983.

My Lords,

for these reasons and those given by my noble and learned friends Lord Templeman and Lord Oliver of Aylmerton, I would dismiss the appeal.

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LORD BRANDON OF OAKBROOK

My Lords,

I have had the advantage of reading in draft the speeches prepared by my noble and learned friends, Lord Keith of Kinkel, Lord Templeman and Lord Oliver of Aylmerton. I agree with them that, in order to give effect to the purpose for which section l(2)( c ) of the Equal Pay Act 1975 was enacted, it should be construed in the manner which they have indicated. I would accordingly affirm the decision of the Court of Appeal, though on different grounds, and dismiss the appeal.

LORD TEMPLEMAN

My Lords,

The appellants, Freemans Plc. ("the employers") conduct a mail order business. The respondents are five women who work for the employers as "warehouse operatives;" their basic weekly wage is £77.66. Mr. Phillips is a man who works for the employers as a "checker warehouse operative;" his basic weekly wage is £81.88. The respondents assert that the work carried out by the respondents is equal in value to the work of Mr. Phillips in terms of the demands, effort, skill and decision-making involved. The respondents say that the difference of £4.22 between the respondents' pay and the pay of Mr. Phillips is due to the difference of sex; the respondents are paid less because they are women. The respondents complained to an industrial tribunal that they were the victims of sex discrimination, contrary to the provisions of the Equal Pay Act 1970 and contrary to Community law. When the complaints of the respondents came before the tribunal, investigation might have shown that there was no discrimination, that the work of Mr. Phillips was of greater value than the work of the respondents or that for some other reason the difference between the pay of Mr. Phillips and the pay of the respondents was not due to the difference of sex. By agreement between the parties however, the industrial tribunal was asked to decide a preliminary point of law which is the subject of this appeal on assumed facts. The assumptions are that the respondents are factually correct in their complaint; that the work of the respondents is equal in value to the work of Mr. Phillips; that the respondents are paid £4.22 less on the grounds of difference of sex and for no other reason; that, in short, the respondents are the victims of discrimination. It is unlawful under British law and under Community law for an employer to discriminate against a woman by paying her less than a man if the work of the woman is the same as or is equal in value to the work of the man. Nevertheless, the employers contend that under British law and under Community law, the respondents have no right to or, alternatively, no remedy for the discrimination which on the assumed facts is practised by the employer against the

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respondents and in favour of Mr. Phillips. The employers' argument is based on the fact that it so happens that one of the employer's warehouse operatives is a man, doing the same work as the respondents. According to the employers this fact makes all the difference. The respondents are entitled to complain if they are discriminated against by reason of the fact that they are not paid the same as the man who does the same work. Therefore, it is argued, the respondents are not entitled to complain if they are discriminated against by reason of the fact that they are not paid the same as Mr. Phillips who does work of equal value. The employers admit that if there were 15 warehouse operators and all the warehouse operators were women, paid £77.66, for work equal in value to the work of 10 checker warehouse operatives, all men, paid £81.88 and the difference was due to difference in sex, the respondents would be entitled to an increase in pay of £4.22. But the employers claim that if there were 14 women warehouse operatives, one male warehouse operative, and 10 checker warehouse operatives the respondents would be obliged to rest content with £77.66 and would have no remedy for the admitted discrimination based on difference in sex. The Industrial Tribunal and the Employment Arbitration Tribunal accepted the argument of the employers. The Court of Appeal (Purchas and Nicholls L.JJ. and Sir Roualeyn Cumming-Bruce) decided that under Community law the respondents had an enforceable right on the assumed facts to equal pay with Mr. Phillips for work of equal value. The employers appeal to this House.

For the purposes of determining this appeal, it will be necessary to consider British law and Community law as they interact one upon the other.

The Equal Pay Act 1970 was enacted on 29 May 1970. Section 1 directed that:

"(1) The provisions of this section shall have effect with a view to securing that employers give equal treatment as regards Terms and conditions of employment to men and to women, that is to say that ... - ( a ) for men and women employed on like work the terms and conditions of one sex are not in any respect less favourable than those of the other; and ( b ) for men and women employed on work rated as equivalent . . . the terms and conditions of one sex are not less favourable than those of the other in any respect in which the terms and conditions of both are determined by the rating of their work . . . . "

Under section 1 of the Act of 1970, as originally enacted, the fact that a woman and a man were engaged on like work did not debar the woman from claiming parity with another man whose work was rated as equivalent to the work of the woman.

On 1 January 1973 the United Kingdom became a Member of the European Community. By article 5 of the European Community Treaty, the United Kingdom became bound to take all appropriate measures to give effect to obligations arising under the Treaty or as a result of actions taken by Community institutions. At the date when the United Kingdom became a Member of the European Economic Community, the Act of 1970 was not in operation because the commencement of the Act had been postponed until 1975.

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Article 119 of the European Economic Treaty directs that:

"Each Member State shall . . . ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work."

The width of this principle is not susceptible to dissection so as to sanction discrimination in pay against women in some circumstances but not in others.

On 10 February 1975 the Council of Ministers of the Community, the institution responsible for Community legislation, adopted the Equal Pay Directive (75/117/E.E.C.). The Equal Pay Directive recited that article 119 of the Treaty is an integral part of the establishment and functioning of the Common Market and that national provisions should be approximated as regards application of the principle of equal pay. The Directive, so far as relevant, provided as follows:

"Article 1. The principle of equal pay for men and women outlined in article 119 of the Treaty, hereinafter called 'principle of equal pay', means, for the same work or for work to which equal value is attributed, the elimination of all discrimination on grounds of sex with regard to all aspects and conditions of remuneration ....

"Article 2. Member states shall introduce into their national legal systems such measures as are necessary to enable all employees who consider themselves wronged by failure to apply the principle of equal pay to pursue their claims by judicial process after possible recourse to other competent authorities ....

"Article 4. Member states shall take the necessary measures to ensure that provisions appearing in collective agreements, wage scales, wage agreements or individual contracts of employment which are contrary to the principle of equal pay shall be, or may be declared, null and void or may be amended."

The Equal Pay Directive ordered the elimination of all discrimination on grounds of sex with regard to all aspects and conditions of remuneration for the same work or for work to which equal value is attributed. This Directive also is inconsistent with the proposition that in some circumstances discrimination which deprives a woman of equal pay with a man for work of equal value may be sanctioned by one or more member states. The logic of article 119 and of the Equal Pay Directive is that one member state cannot permit some forms of discrimination in relation to pay in some circumstances while other member states forbid all forms of discrimination in all circumstances. In Defrenne v. Sabena

[1976] ICR 547

the European Court of Justice confirmed this logic in the following paragraphs of their ruling, at p. 565, dealing with the direct effect of article 119:

"8. Article 119 pursues a double aim.

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"9. First, in the light of the different stages of the development of social legislation in the various member states, the aim of article 119 is to avoid a situation in which undertakings established in states which have actually implemented the principle of equal pay suffer a competitive disadvantage in intra-community competition as compared with undertakings established in states which have not yet eliminated discrimination against women workers as regards pay.

"10. Secondly, this provision forms part of the social objectives of the community, which is not merely an economic union, but is at the same time intended, by common action, to ensure social progress and seek the constant improvement of the living and working conditions of their peoples, as is emphasised by the preamble to the Treaty."

In the United Kingdom, the Act of 1970 was amended by the Sex Discrimination Act 1975 and came into force on 29 December 1975. By section 1(1) of the Act of 1970 as amended in 1975 by section 8(1) of the Sex Discrimination Act 1975:

"If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include ... an equality clause they shall be deemed to include one."

By section 1(2) an equality clause modifies any term in a woman's contract which is less favourable than a term of a similar kind in the contract of man:

"( a ) where the woman is employed on like work with a man in the same employment - . . . ;

( b ) where the woman is employed on work rated as equivalent with that of a man in the same employment . . . "

Section l(2)( a ) entitles a woman to receive equal pay for "like work" and corresponds to Community law which requires equal pay "for the same work." Section l(2)( b ) entitles a woman to receive equal pay for "work rated as equivalent" and was thought by the United Kingdom Government to correspond to Community law which requires equal pay for "work to which equal value is attributed."

By section 1(3) of the Act of 1970, as amended in 1975, a variation between a woman's contract and a man's contract does not require to be modified "if the employer proves that the variation is genuinely due to a material factor which is not the difference of sex." This provision gives effect to Community law which applies the principle of equal pay only for the purpose of eliminating discrimination on grounds of sex.

When a claim is made for equal pay for like work under the Act of 1970, then by section 1(4) of that Act as amended in 1975:

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"A woman is to be regarded as employed on like work with men if, but only if, her work and theirs is of the same or a broadly similar nature, and the differences (if any) between the things she does and the things they do are not of practical importance in relation to terms and conditions of employment; and accordingly in comparing her work with theirs regard shall be had to the frequency or otherwise with which any such differences occur in practice as well as to the nature and extent of the differences."

Where a claim is made for equal pay for work rated as equivalent with that of a man, then, by section 1(5):

"A woman is to be regarded as employed on work rated as equivalent with that of any men if, but only if, her job and their job have been given an equal value, in terms of the demand made on a worker under various headings (for instance effort, skill, decision), on a study undertaken with a view to evaluating in those terms the jobs to be done by all or any of the employees in an undertaking or group of undertakings, or would have been given an equal value but for the evaluation being made on a system setting different values for men and women on the same demand under any heading."

By section 2(1) of the Act of 1970 as amended in 1975, any claim under an equality clause, including a claim for arrears of remuneration or damages, may be presented by way of complaint to an industrial tribunal.

Where a woman complains of discrimination, she is entitled to compare her pay and work with the pay and work of any man in the same employment. In Ainsworth v. Glass Tubes & Components Ltd. [1977] I.C.R. 347, a woman complained of discrimination in favour of a male inspector who worked alongside her. The Employment Arbitration Tribunal held that the industrial tribunal erred in law by declining to compare the claimant with the man who worked beside her and insisting on comparing the claimant with some other male inspector.

Thus the position at the end of 1975 was that in Community law the respondents were entitled to equal pay with Mr. Phillips if the work of the respondents was work to which equal value was attributed. In British law under the Act of 1970 as amended in 1975, the respondents were entitled to equal pay with Mr. Phillips if the work of the respondents was rated as equivalent. The fact that the employers did or did not discriminate against the respondents in favour of another man engaged on like work did not deprive the respondents of a remedy if the respondents were entitled to equal pay with Mr. Phillips,

The United Kingdom Government took the view that sections 1 and 2 of the Act of 1970, as amended in 1975, complied with the obligations of the United Kingdom under the Equal Pay Directive. The Commission of the Community as the institution entitled to arraign a Member State before the European Court of Justice for failure to comply with Community law considered that the Act of 1970 as amended in 1975, was defective in one respect. By section l(2)( b ) and section 1(5) a woman employed on work of

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equal value to the work of a man could only claim equal pay if a job evaluation study were carried out and that job evaluation study attributed equal work to the job of the claimant and the job of the man. A job evaluation study can only be carried out with the consent of the employer. A woman who was not receiving equal pay for work of equal value could not therefore pursue a claim for parity if her employer refused to consent to a job evaluation study being carried out. The Commission considered that the Equal Pay Directive required that every woman should be able to obtain equal pay for equal work whether there was a job evaluation study or not. In Commission of the European Communities v. United Kingdom [1982] (Case 61/81) I.C.R. 578, the Commission applied to the European Court of Justice for a declaration that the United Kingdom had failed to fulfil its obligation to adopt laws necessary to comply with the Equal Pay Directive. The United Kingdom Government defended the proceedings and argued, at p. 590, that the Equal Pay Directive did not require:

" ... member states to adopt measures entitling any employee to insist upon some form of job valuation being carried out in order to determine whether his or her job is equal in value to another."

The Commission argued at p. 592 that:

"Article 1 of the Directive obliges the member states to adopt the measures needed to enable a female worker to argue, for the purpose of combating any discrimination based on sex, that two jobs, even though different, may be of equal value."

The European Court of

Justice decided at p. 598, para. 9:

"... a worker must be entitled to claim before an appropriate authority that his work has the same value as other work and, if that is found to be the case, to have the rights under the Treaty and the Directive acknowledged by a binding decision. ..."

It followed, said the European Court of Justice, at p. 598, para. 11, that the United Kingdom had not adopted the measures necessary to comply with the Equal Pay Directive because "there is at present no means whereby a worker who considers that his post is of equal value to another may pursue his claims if the employer refuses to introduce a job classification system."

The United Kingdom Government took steps to comply with the decision of the European Court of Justice in Commission of the European Communities v. United Kingdom

[1982] ICR 578

. The Secretary of State for Employment further amended the Act of 1970 by the Equal Pay (Amendment) Regulations 1983 (S.I. 1983 No. 1794) made in accordance with a draft approved by a resolution of each House of Parliament. These amendments were made in exercise of the powers conferred on the Minister under section 2(2) and paragraph 2(2) of Schedule 2 to the European Communities Act 1972 to make regulations for the purpose of implementing any Community obligation of the United Kingdom with the approval of a resolution of each House of Parliament.

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Section l(2)( a ) of the Act of 1970 as amended in 1975, was not further amended by the Regulations of 1983. Paragraph (a) enables any woman to claim equal pay with a man in the same employment engaged on like work. By section 1(4) like work is work of the same or a broadly similar nature where the differences in work are not of practical importance. The issue of "like work" is decided by the industrial tribunal.

Section l(2)( b ) of the Act of 1970 as amended in 1975, was also not further amended by the Regulations of 1983. Paragraph ( b ) enables a woman to claim equal pay for work rated as equivalent to that of a man by a job evaluation study. By section 1(5) the issue of "equivalent work" is decided by the job evaluation study. Such a study can only be carried out with the consent and cooperation of the employer.

In compliance with the ruling of the European Court of Justice in Commission of the European Communities v. United Kingdom

[1982] ICR 578

, the Regulations of 1983 introduced into the Act of 1970 as amended in 1975, a provision which enables a woman to claim equal pay for work of equal value where the employer refuses to consent to a job evaluation study. The Regulations introduced into the Act section l(2)( c ) which modifies any term in a woman's contract which is less favourable than a term of a similar kind in the contract of a man

"( c) where a woman is employed on work which, not being work in relation to which paragraph ( a ) or ( b ) above applies, is, in terms of the demands made on her (for instance under such headings as effort, skill and decision), of equal value to that of a man in the same employment."

The Regulations of 1983 also introduced into the Act of 1970 as amended in 1975, the following direction for dealing with claims under section l(2)( c ):

"2A(1) Where on a complaint or reference made to an industrial tribunal under section 2 above, a dispute arises as to whether any work is of equal value as mentioned in section l(2)( c ) above the tribunal shall not determine that question unless -

it is satisfied that there are no reasonable grounds for determining that the work is of equal value as so mentioned; or

It has required a member of the panel of independent experts to prepare a report with respect to that question and has received that report.

(2) Without prejudice to the generality of paragraph ( a ) of subsection (1) above, there shall be taken, for the purposes of that paragraph, to be no reasonable grounds for determining that the work of a woman is of equal value as mentioned in section l(2)( c ) above if -

( a ) that work and the work of the man in question have been given different values on a study such as is mentioned in section 1(5) above; and

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( b ) there are no reasonable grounds for determining that the evaluation contained in the study was (within the meaning of subsection (3) below) made on a system which discriminates on grounds of sex.

(3) An evaluation contained in a study such as is mentioned in section 1(5) above is made on a system which discriminates on grounds of sex where a difference, or coincidence, between values set by that system on different demands under the same or different headings is not justifiable irrespective of the sex of the person on whom those demands are made.

(4) In paragraph ( b ) of subsection (1) above the reference to a member of the panel of independent experts is a reference to a person who is for the time being designated by the Advisory, Conciliation and Arbitration Service for the purposes of that paragraph as such a member, being neither a member of the Council of that Service nor one of its officers or servants."

Thus by section 2A the issue of "work of equal value" is determined by the industrial tribunal if there are no reasonable grounds for the complaint, or by a job evaluation study if the study is not itself discriminatory and, finally, and only if necessary, by the tribunal with the assistance of a report of an independent expert appointed by Acas.

According to the employers in the present appeal, the Regulations of 1983 had the additional effect of depriving some women of the right to pursue their claims by judicial process or otherwise although they considered themselves wronged by failure to apply the principle of equal pay. The respondents may have a valid complaint in that they are not receiving equal pay with Mr. Phillips for work of equal value. But if the respondents seek to remedy that discrimination under section l(2)( c ) of the Act of 1970 as amended by the Regulations, they will be debarred because they are employed on "work in relation to which paragraph ( a ) or ( b ) above applies." It is said that paragraph ( a ) operates, not because the respondents are employed on like work with Mr. Phillips but because the respondents are employed on like work with some other man. Since paragraph ( c ) is expressed to apply only when a woman is employed on work which is not "work in relation to which paragraph ( a ) or ( b ) above applies," it follows, so it is said, that where a woman is employed on like work with any man or where a woman is employed on work rated as equivalent with any man, no claim can be made under paragraph ( c ) in respect of some other man who is engaged on work of equal value. In my opinion paragraphs ( a ) or ( b ) only debars a claim under paragraph ( c ) where paragraphs ( a ) or ( b ) applies to the man who is the subject of the complaint made by the woman. If the tribunal decide that the respondents are engaged "on like work" with Mr. Phillips then paragraph ( a ) applies and the respondents are not entitled to proceed under paragraph ( c ) and to obtain the report of an Acas expert. If there is a job evaluation study which covers the work of the respondents and the work of Mr. Phillips then the respondents are debarred from proceeding under paragraph ( c ) unless the job evaluation study itself was discriminatory.

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Whenever there is a claim for equal pay, the complainant, or the complainant's trade union representative supporting the claimant, may wish to obtain a report from an Acas expert under paragraph ( c ) to use for the purpose of general pay bargaining and in the hope" of finding ammunition which will lead to a general increase in wage levels irrespective of discrimination. For this purpose the more Acas reports there are the better. It may be significant that in the present case a claim is made under paragraph ( c ) and not under paragraph ( a ) as well, or, in the alternative, although it is obvious that work of equal value in terms of the demands made on a woman under such headings as effort, skill and decision which may amount to discrimination under paragraph ( c ) may also be work of a broadly similar nature with differences of no practical importance which found a complaint under paragraph ( a ). If there is discrimination in pay the industrial tribunal must be able to grant a remedy. But the remedy available under paragraph ( c ) is not to be applied if the complainant has a remedy in respect of the male employee with whom she demands parity under paragraph ( a ) or if paragraph ( b ) applies to the woman and to that male employee. To prevent exploitation of paragraph ( c ) the tribunal must decide in the first instance whether the complainant and the man with whom she seeks parity are engaged on "like work" under paragraph ( a ). If paragraph ( a ) applies, no Acas report is required. If paragraph ( a ) does not apply, then the tribunal considers whether paragraph (b) applies to the complainant and the man with whom she seeks parity; if so, the tribunal can only proceed under paragraph ( c ) if the job evaluation study obtained for the purposes of paragraph ( b ) is itself discriminatory. If paragraph ( b ) applies then, again, no Acas report is necessary. If paragraphs ( a ) and ( b ) do not apply, the tribunal must next consider whether there are reasonable grounds for determining that the work of the complainant and the work of the man with whom she seeks parity is of equal value. If the tribunal are not so satisfied, then no Acas report is required. The words in paragraph ( c ) on which the employers rely were not intended to create a new form of permitted discrimination. Paragraph ( c ) enables a claim to equal pay as against a specified man to be made without injustice to an employer. When a woman claims equal pay for work of equal value, she specifies the man with whom she demands parity. If the work of the woman is work in relation to which paragraphs ( a ) or ( b ) applies in relation to that man, then the woman cannot proceed under paragraph ( c ) and cannot obtain a report from an Acas expert. In my opinion there must be implied in paragraph ( c ) after the word "applies" the words "as between the woman and the man with whom she claims equality." This construction is consistent with Community law. The employer's construction is inconsistent with Community law and creates a permitted form of discrimination without rhyme or reason.

Under Community law, a woman is entitled to equal pay for work of equal value to that of a man in the same employment. That right is not dependent on there being no man who is employed on the same work as the woman. Under British law, namely the Equal Pay Act 1970 as amended in 1975, a woman was entitled to equal pay for work rated as equivalent with that of a man in the same employment. That right was not dependent on there being no man who was employed on the same work as the

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woman. Under the ruling of the European Court of Justice in Commission of the European Communities v. United Kingdom

[1982] ICR 578

, the Equal Pay Act as amended in 1975 was held to be defective because the Act did not entitle every woman to claim before a competent authority that her work had the same value as other work, but only allowed a claim by a woman who succeeded in persuading her employer to consent to a job evaluation scheme. The Regulations of 1983 were intended to give full effect to Community law and to the ruling of the European Court of Justice which directed the United Kingdom Government to introduce legislation entitling any woman to equal pay with any man for work of equal value if the difference in pay is due to the difference in sex and is therefore discriminatory. I am of the opinion that the Regulations of 1983, upon their true construction, achieve the required result of affording a remedy to any woman who is not in receipt of equal pay for work equal in value to the work of a man in the same employment.

In Mary Murphy v. Bord Telecom Eireann [1988] (Case 157/86) 1 C.M.L.R. 879, 29 women were employed as factory workers engaged in such tasks as dismantling, cleaning, oiling and reassembling telephones and other equipment; they claimed the right to be paid at the same rate as a specified male worker employed in the same factory as a stores labourer engaged in cleaning, collecting and delivering equipment and components and in lending general assistance as required. The European Court of Justice in their judgment at p. 887, para. 9, said that the principle of equal pay for men and women

"forbids workers of one sex engaged in work of equal value to that of workers of the opposite sex to be paid a lower wage than the latter on grounds of sex, it a fortiori prohibits such a difference in pay where the lower-paid category of workers is engaged in work of higher value."

I cannot think that in Community law or in British law the result would be any different if instead of there being 29 women working on telephone maintenance and one male stores labourer, there were 28 women and one man working on telephone maintenance and one male stores labourer.

The draft of the Regulations of 1983 was not subject to any process of amendment by Parliament. In these circumstances the explanations of the Government and the criticisms voiced by Members of Parliament in the debates which led to approval of the draft Regulations provide some indications of the intentions of Parliament. The debate on the draft Regulations in the House of Commons which led to their approval by Resolution was initiated by the Under Secretary of State for Employment who, in the reports of the House of Commons for 20 July 1983 at column 479 et seq, said this:

"The Equal Pay Act allows a woman to claim equal pay with a man ... if she is doing the same or broadly similar work, or if her job and his have been rated equal through job evaluation in effort, skill and decision. However, if a woman is doing different work from a comparable man, or if the jobs are not covered by a job evaluation study, the woman has at present no right to make a claim for equal

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pay. This is the gap, identified by the European Court which we are closing . . . . "

In the course of his speech at column 485, the Minister outlined the procedure which will apply if a claim is made under paragraph ( c ) in the following words:

"Under the amending Regulations which are the subject of this debate, an employee will be able to bring a claim for equal pay with an employee of the opposite sex working in the same employment on the ground that the work is of equal value. When this happens, conciliation will first be attempted, as in all equal pay claims. If conciliation is unsuccessful, the industrial tribunal will take the following steps. First, it will check that the work is not in fact so similar that the case can be heard under the current Act. Secondly, it will consider whether the jobs have already been covered by a job evaluation scheme and judged not to be of equal value. If this is the case, the claim may proceed only if the original job evaluation scheme is shown to have been sexually discriminatory. Having decided that the case should proceed, the tribunal will first invite the parties to see if they can settle the claim voluntarily. If not, the tribunal will consider whether to commission an independent expert to report on the value of the jobs. It will not commission an expert's report if it feels that it is unreasonable to determine the question of value - for example, if the two jobs are quite obviously of unequal value. Nor . . . will it commission an expert's report if the employer shows at this stage that inequality in pay is due to material factors other than sex discrimination . . . . "

Thus it is clear that the construction which I have placed upon the Regulations corresponds to the intentions of the Government in introducing the Regulations. In the course of the debate in the House of Commons, and in the corresponding debate in the House of Lords, no one suggested that a claim for equal pay for equal work might be defeated under the Regulations by an employer who proved that a man who was not the subject of the complaint was employed on the same or on similar work with the complainant. The Minister took the view, and Parliament accepted the view, that paragraph ( c ) will only apply if paragraphs ( a ) and ( b ) are first held by the Tribunal not to apply in respect of the work of the woman and the work of the man with whom she seeks parity of pay. This is also the only view consistent with Community law.

In von Colson and Kamann v. Land Nordrhein - Westfalen (Case 14/83) (1984) ECR 1891 , 1910, 1911, the European Court of

Justice advised that in dealing with national legislation designed to give effect to a Directive:

"3. ... It is for the national court to interpret and apply the legislation adopted for the implementation of the Directive in conformity with the requirements of Community law, in so far as it is given discretion to do so under national law."

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In Duke v. G.E.C. Reliance Systems Ltd.

[1988] 2 WLR 359

this House declined to distort the construction of an Act of Parliament which was not drafted to give effect to a Directive and which was not capable of complying with the Directive as subsequently construed by the European Court of Justice. In the present case I can see no difficulty in construing the Regulations of 1983 in a way which gives effect to the declared intention of the Government of the United Kingdom responsible for drafting the Regulations and is consistent with the objects of the European Community Treaty, the provisions of the Equal Pay Directive and the rulings of the European Court of Justice. I would dismiss the appeal.

LORD OLIVER OF AYLMERTON

My Lords,

The respondents to this appeal are assumed to be engaged upon work which is, for all practical purposes, identical with work upon which at least one man employed in the same establishment is engaged and they are employed upon the same terms as he is. They claim, however, that there are other men employed in the same establishment whose work, though not the same as theirs, is of equal value to theirs and who are remunerated at a higher rate and they claim that the difference is due to discrimination against them on the grounds of their sex. The appellants have resisted the claim for parity with this latter group, from whom the respondents selected a Mr. Phillips as the comparator, on the preliminary point that, even assuming the discrimination claimed by the respondents to be established, they have no remedy. There are, they contend, three reasons for this. First, the claim is precluded by the terms of the Equal Pay Act 1970 (as amended) so that the industrial tribunal has no jurisdiction to entertain the claim. Secondly, it is said that even on the construction of article 119 of the Treaty of Rome and the Equal Pay Directive (75/117/E.E.C.) which clarified it, assuming the article and Directive to be directly applicable as a matter of domestic law, a claim to parity for work of equal value cannot be made by a woman who is employed on the same work as another man. Thirdly, it is said that even could such a claim subsist as a matter of the construction of article 119, the article is not directly enforceable in such a case in domestic law. Your Lordships were therefore invited by the appellants to submit both the question of construction of the article and the question of direct enforceability to the European Court of Justice under the provisions of article 177 of the Treaty. The Court of Appeal, whilst upholding the appellants' contentions as regards the construction of the Act, entertained no doubts that the discrimination claimed, if proved, contravened the terms of the Treaty and the Directive, and referred the matter back to the industrial tribunal to deal with the claim on the footing that the respondents' rights were directly enforceable as a matter of domestic law.

My Lords,

whilst, like the Court of Appeal, I entertain no doubt that the discrimination claimed falls squarely within the general principle of equal pay for equal work (or work of equal

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value) which is enshrined in article 119, I confess to some doubt whether, if the appellants' construction of the Act of 1970 is correct, the article is directly enforceable in the circumstances of the instant case and before reading the draft of the speech of my noble and learned friend, Lord Templeman, I should, for my part, have been minded to accede to the appellants' request that that question at least be submitted to the European Court of Justice. Broadly, my doubts arise from this, that the cases in the European Court to which your Lordships have been referred clearly establish that there is an area within which the article is not directly applicable. The bounds of that area are far from clear to me, however, but the cases appear to indicate that the article may not be directly applicable in an "equal value" claim, at any rate where there is no machinery in the domestic law by which the criterion of what is work of equal value can be readily ascertained. The difficulty in this case arises from the fact that the industrial tribunal is a statutory tribunal whose jurisdiction and procedure is circumscribed by statutory instrument, so that although machinery is provided for the ascertainment of what is "work of equal value," that machinery is confined by definition to a claim falling within section l(2)( c ) of the Act of 1970 (see Industrial Tribunals (Rules of Procedure) Regulations 1985 (S.I. 1985 16), regulation 3(2) and the definition of "equal value claim" in Schedule 2 to the Regulations). If, therefore, the Act does, as the appellants claim, restrict the entertainment of claims by the tribunal to cases in which there is no man performing the same work as the claimant, the tribunal's machinery for establishing the criterion of what is work of equal value is equally restricted.

The critical question, therefore, is whether the Court of Appeal, in common with the industrial tribunal and the Employment Appeals Tribunal, were right in concluding that the respondents' claim was not one which could be made under the provisions of the Act of 1970. I have to confess to sympathising with that conclusion which coincided with the very definite opinion which I myself had formed at the conclusion of the hearing. Indeed, it is only the persuasive speech delivered by my noble and learned friend, Lord Templeman, which has enabled me to change the opinion which I had formed. It is beyond dispute that the Act in its amended form in 1975 was intended to give effect to the United Kingdom's obligations under article 119 and the Equal Pay Directive and that the amendment introduced in 1983, following the ruling of the European Court of Justice in Commission of the European Communities v. United Kingdom

[1982] ICR 578

, was intended to fill the gap to which that case had drawn attention and to complete what was quite obviously intended to be a comprehensive code for dealing with sex discrimination in the area of pay and conditions at work. What has to be said, if the appellants are right, is that Parliament simply failed in its purpose and that is a conclusion the court must strive to avoid - particularly having regard to the provisions of section 2(4) of the European Communities Act 1972 - unless it is compulsively driven to it. It has, I think, to be said that if the section falls to be construed in isolation apart from the evident purpose of the Act, there is very little scope for a construction other than that to which the Court of Appeal felt itself driven. In contrast to the way in which, for instance, the Belgian legislature complied with the Treaty obligation by simply reproducing the terms of the article as part of the domestic legislation, the way in which the

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United Kingdom Act seeks to accomplish its object is by reading into every woman's contract of employment a deemed contractual term, described as "an equality clause." The terms of the clause are not spelled out but the effect of it - broadly that the terms of a woman's contract are to be brought into line with those of comparable man - is stated and is related to three, and only three, prescribed situations, viz.: ( a ) where the woman is employed on like work with a man in the same employment; ( b ) where the woman is employed on work rated as equivalent with that of a man in the same employment; and ( c ) "where a woman is employed on work which, not being work in relation to which paragraph ( a ) or ( b ) above applies, is ... of equal value to that of a man in the same employment. Now, on the face of it, where a man is employed on the same work as a woman, paragraph ( a ) applies to that work and the equality clause in the woman's contract has the effect specified in that paragraph. If she then makes a claim for equal pay with someone whose work she claims to be of equal value with hers but which is not the same, she does not change the nature of her work. It remains work which has the effect specified in paragraph ( a ) and to which, therefore, that paragraph "applies." If, therefore, the section is to be read literally and in accordance with its terms, paragraph ( c ) cannot apply to that work so long as paragraph ( a ) applies to it. It can be made to apply in only one of two ways. Either there has to be given to the word "applies" an artificial meaning which will enable it to be read in the sense of "is applied by the claimant as part of her claim" or there has to be read into the Act some qualifying words which will restrict the word "applies" to a particular comparator selected by the claimant. Either way, a construction which permits the section to operate as a proper fulfilment of the United Kingdom's obligation under the Treaty involves not so much doing violence to the language of the section as filling a gap by an implication which arises, not from the words used, but from the manifest purpose of the Act and the mischief it was intended to remedy. The question is whether that can be justified by the necessity - indeed the obligation - to apply a purposive construction which will implement the United Kingdom's obligations under the Treaty.

For the reasons given by my noble and learned friend, Lord Templeman, I am now persuaded that it can and that paragraph ( c ) is to be construed as if modified in the manner suggested by my noble and learned friend or as if it included a parenthetic phrase and read "( c ) where a woman is employed on work which, not being work in relation to which (in respect of the man hereinafter mentioned) paragraph ( a ) or ( b ) above applies, is ... etc." It must, I think, be recognised that so to construe a provision which, on its face, is unambiguous involves a departure from a number of well-established rules of construction. The intention of Parliament has, it is said, to be ascertained from the words which it has used and those words are to be construed according to their plain and ordinary meaning. The fact that a statute is passed to give effect to an international treaty does not, of itself, enable the treaty to be referred to in order to construe the words used in other than in their plain and unambiguous sense. Moreover, even in the case of ambiguity, what is said in Parliament in the course of the passage of the Bill, cannot ordinarily be referred to to assist in construction. I think, however, that it has also to be recognised that a statute which is passed in order to give effect to the United Kingdom's obligations under the Treaty of Rome falls into

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a special category and it does so because, unlike other treaty obligations, those obligations have, in effect, been incorporated into English law by the European Communities Act 1972. Section 2(1) of that Act provides that:

"all such . . . obligations . . . from time to time created by the Treaties ... as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly. . .

Although, at any rate on one construction, this may be said to apply only to rights which are clearly directly applicable, subsection (2) goes on to provide for a designated Minister to make provision by regulation "for the purpose of implementing any Community obligations of the United Kingdom" and "for the purpose of dealing with matters arising out of or related to any such obligations." Subsection (4) provides that a provision made under subsection (2) includes such provision as might be made by Acts of Parliament, and that "any enactment passed or to be passed . . . shall be construed and have effect subject to the foregoing provisions of this section." One is thus thrown back to the provisions of subsection (1). Subsection l(2)( c ) of the Equal Pay Act 1970 was inserted into the Act under this power by the Equal Pay (Amendment) Regulations 1983, which recited that the Secretary of State was the designated Minister "in relation to measures to prevent discrimination between men and women as regards terms and conditions of employment." The history of the legislation up to that point has been fully recited in the speech of my noble and learned friend, Lord Templeman, and it is perfectly plain that the amendments to the Act were inserted for the purpose of completing the compliance by the United Kingdom with its Treaty obligations under article 119 and the Equal Pay Directive by remedying what was then perceived as the only remaining lacuna, namely that a woman was excluded from making an equal value claim unless she could persuade her employer to initiate a work evaluation study. It is worth noting that the explanatory note (which is not, of course, part of the Regulations but is of use in identifying the mischief which the Regulations were attempting to remedy) states that:

"Regulation 2 amends section 1 of the Equal Pay Act 1970 to enable a woman to take advantage of an equality clause where she is employed on work of equal value to that of a man in the same employment."

Those Regulations having been passed with the manifest and express purpose of producing a full compliance with the United Kingdom's obligation, they fall to be construed accordingly and that which I have suggested as falling to be implied into section l(2)( c ) is necessary to achieve that purpose. In Garland v. British Rail

[1983] 2 AC 751

, 771, Lord Diplock observed:

"My Lords, even if the obligation to observe the provisions of article 119 were an obligation assumed by the United Kingdom under an ordinary international treaty or convention and there were no question of the treaty obligation being directly applicable as part of the law to be

- 19 -

applied by the courts in this country without need for any further enactment, it is a principle of construction of United Kingdom statutes, now too well established to call for citation of authority, that the words of the statute passed after the Treaty has been signed and dealing with the subject matter of the international obligation of the United Kingdom, are to be construed, if they are reasonably capable of bearing such a meaning, as intended to carry out the obligation, and not to be inconsistent with it. A fortiori is this the case where the Treaty obligation arises under one of the Community treaties to which section 2 of the European Communities Act 1972 applies.

"The instant appeal does not present an appropriate occasion to consider whether, having regard to the express direction as to the construction of enactments 'to be passed' which is contained in section 2(4), anything short of an express positive statement in an Act of Parliament passed after January 1, 1973, that a particular provision is intended to be made in breach of an obligation assumed by the United Kingdom under a Community treaty, would justify an English court in construing that provision in a manner inconsistent with a Community treaty obligation of the United Kingdom, however wide a departure from the prima facie meaning of the language of the provision might be needed in order to achieve consistency. ..."

In the instant case, the strict and literal construction of the section does indeed involve the conclusion that the Regulations, although purporting to give full effect to the United Kingdom's obligations under Article 119, were in fact in breach of those obligations. The question, following Lord Diplock's formulation of principle, is whether they are reasonably capable of bearing a meaning which does in fact comply with the obligations imposed by the Treaty. I was, initially, in some doubt whether, if the section is to be construed in the way for which the respondents' contend, any sensible purpose could be given to the exclusionary words "not being work in relation to which paragraphs ( a ) or ( b ) above applies."

However, the Regulations which introduced paragraph ( c ) into the Act introduced at the same time the procedural provisions in section 2A and the significance of the exclusionary word in the context of the industrial tribunals procedure and of the definition of "like work" which is contained in section 1(4) is demonstrated in the analysis of my noble and learned friend, Lord Templeman. That doubt removed, I am satisfied that the words of section l(2)( c ), whilst on the face of them unequivocal, are reasonably capable of bearing a meaning which will not put the United Kingdom in breach of its Treaty obligations. This conclusion is justified, in my judgment, by the manifest purpose of the legislation, by its history, and by the compulsive provision of section 2(4) of the Act of 1972. It is comforting indeed to find, from the statement made by the Minister to which my noble and learned friend has referred, that this construction does in fact conform not only with what clearly was the parliamentary intention but also with what was stated to be the parliamentary intention. I do not, however, think that it is necessary to rely upon this, since the conclusion is, in my judgment, amply justified

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by the other factors which I have mentioned. For these reasons and for those given by my noble and learned friend, Lord Templeman, I agree that the appeal should be dismissed.

LORD JAUNCEY OF TULLICHETTLE

My Lords,

I have had the advantage of reading in draft the speeches prepared by my noble and learned friends Lord Keith of Kinkel, Lord Templeman and Lord Oliver of Aylmerton. Like my noble and learned friend Lord Oliver I had, at the conclusion of the hearing, reached the firm conclusion that the Court of Appeal had correctly construed the relevant provisions of the Equal Pay Act 1970 but I have similarly been persuaded to the contrary view by the speeches of my noble and learned friends. For the reasons set out in those speeches I too would dismiss the appeal.

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Cited in 109 later judgments

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