R v Secretary of State for Employment ex parte Equal Opportunities Commission [1994] UKHL 2

House of Lords
Between
RAppellantSecretary of State for Employment ex parte Equal Opportunities CommissionRespondent
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 of the 6th day of November 1992 complained of in the said Appeal insofar as it relates to Patricia Elizabeth Day be, and the same is hereby, Affirmed and that the said Petition and Appeal, insofar as it relates to Patricia Elizabeth Day be, and the same is hereby, dismissed this House with no order as to costs: And it is further Ordered, That the said Order of Her Majesty's Court of Appeal of the 6th day of November 1992 complained of in the said Appeal and the Order of a Divisional Court of the Queen's Bench Division of Her Majesty's High Court of Justice of the 10th day of October 1991 insofar as they relate to the Equal Opportunities Commission be, and the same are hereby, Set Aside: And it is Declared:1. That the provisions of the Employment Protection (Consolidation) Act 1978 whereby employees who work for fewer than sixteen hours per week are subject to different conditions in respect of qualification for redundancy pay from those which apply to employees who work for sixteen hours per week or more are incompatible with Article 119 of

Judgment: 3 March 1994

HOUSE OF LORDS

REGINA

V.

SECRETARY OF STATE FOR EMPLOYMENT, (RESPONDENT)

EX PARTE

EQUAL OPPORTUNITIES COMMISSION AND ANOTHER

(APPELLANTS)

Lord Keith of Kinkel Lord Jauncey of Tullichettle Lord Lowry Lord Browne-Wilkinson Lord Slynn of Hadley

LORD KEITH OF KINKEL

My Lords,Article 119 of the Treaty of Rome provides:
"Each Member State shall during the first stage ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work.
"For the purpose of this Article, 'pay' means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives, directly or indirectly, in respect of his employment from his employer.
"Equal pay without discrimination based on sex means: (a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement;

- 1 -

(b) that pay for work at time rates shall be the same for the same job."

The Council Directive 75/117/EEC of 10 February 1975 ("the Equal Pay Directive") spells out the right to equal pay in greater detail. Article 2.1 of the Council Directive 76/207/EEC of 9 February 1976 ("the Equal Treatment Directive") provides:
"For the purposes of the following provisions, the principle of equal treatment shall mean that there shall be no discrimination whatsoever on grounds of sex either directly or indirectly by reference in particular to marital or family status."
Article 5.1 and 2 provide:
" 1. Application of the principle of equal treatment with regard to working conditions, including the conditions governing dismissal, means that men and women shall be guaranteed the same conditions without discrimination on grounds of sex.
"2. To this end, Member States shall take the measures necessary to ensure that:
any laws, regulations and administrative provisions contrary to the principle of equal treatment shall be abolished;

. . .”

Section 2 of the European Communities Act 1972, so far as material for present purposes, provides:
"(1) All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under 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; and the expression 'enforceable Community right' and similar expressions shall be read as referring to one to which this subsection applies. (2) ... at any time after its passing Her Majesty may by Order in Council, and any designated Minister or department may by regulations, make provision - (a) for the purpose of implementing any Community obligation of the United Kingdom, or enabling any such obligation to be implemented ... or (b) for the purpose of dealing with matters arising out of or related to any such obligation or rights ... or the operation from time to time of subsection (1) above; and in the exercise of any statutory power or duty, including any power to give directions or to legislate by means

- 2 -

of orders, rules, regulations or other subordinate instrument, the person entrusted with the power or duty may have regard to the objects of the Communities and to any such obligation or rights as aforesaid. In this subsection 'designated Minister or department' means such Minister of the Crown or government department as may from lime to time be designated by Order in Council in relation to any matter or for any purpose, but subject to such restrictions or conditions (if any) as may be specified by the Order in Council ... (4) The provision that may be made under subsection (2) above includes . . . any such provision (of any such extent) as might be made by Act of Parliament, and any enactment passed or to be passed, other than one contained in this Part of this Act, shall be construed and have effect subject to the foregoing provisions of this section ..."By the European Communities (Designation) (No. 3) Order 1982 the Secretary of State for Employment was designated for purposes of section 2(2) of the Act of 1972 in relation to measures to prevent discrimination between men and women as regards terms and conditions of employment.The United Kingdom legislation aimed at preventing such discrimination is to be found in the Equal Pay Act 1970 and the Sex Discrimination Act 1975, but nothing in the present case turns on any provision of either of these Acts. What is in issue is those provisions of the Employment Protection (Consolidation) Act 1978 which set out the conditions which govern the right not to be unfairly dismissed, the right to compensation for unfair dismissal and the right to statutory redundancy pay. These conditions require that an employee should have worked a specified number of hours a week during a specified period of continuous employment. In general, the qualifying periods for entitlement to each of the rights in question are(a) two years of continuous employment for employees who work for 16 or more hours per week, and(b) five years of continuous employment for employees who work between eight and 16 hours per week. Employees who work for fewer than eight hours per week do not qualify for any of the rights in question. The provisions of the Act which set out these conditions are to be found in sections 54, 64, 68, 71, 81 and 151, and Schedule 13, which need not be referred to in detail. It is common ground that the great majority of employees who work for more than 16 hours a week are men, and that the great majority of those who work for less than 16 hours a week are women, so that the provisions in question result in an indirect discrimination against women.On 21 March 1990 the chief executive of the appellants the Equal Opportunities Commission ("E.O.C.") wrote to the Secretary of State for Employment referring to the provisions of the Act of 1978 concerning redundancy pay and compensation for unfair dismissal and expressing the view that these constituted indirect discrimination against women employees, contrary to Community law. The Secretary of State was asked to give urgent consideration to that matter and to inform the E.O.C. whether the government

- 3 -

would be willing to introduce the necessary legislation to remove the discrimination inherent in the Act of 1978, giving reasons for his decision if the reply was in the negative. The Secretary of State replied by letter dated 23 April 1990, stating, inter alia:
"[We do not accept that] statutory redundancy pay and statutory compensation for unfair dismissal constitute "pay" within the meaning of article 119 . . . or . . . that they fall within the Equal Treatment Directive ... we believe that our current statutory thresholds are entirely justifiable. These thresholds have existed in one form or another ever since employment protection legislation was first introduced. Their purpose is to ensure that a fair balance is struck between the interests of employers and employees. We have no plans to change the thresholds."
On 6 June 1990 the E.O.C. obtained leave to move for judicial review, the matter in respect of which relief was sought being stated as:
"The decision of the Secretary of State for Employment dated 23 April 1990 declining to accept that the United Kingdom is in breach of its obligations under Community law by providing less favourable treatment of part-time workers than of full-time workers in relation to the conditions for receipt of statutory redundancy pay and compensation for unfair dismissal."
The substantive relief sought was expressed in these terms:
"1. A declaration that the United Kingdom is in breach of its obligations under Article 119 of the Treaty of Rome and Directive 75/117/EEC by providing less favourable treatment of part-time workers (most of whom are women) than of full-time workers (most of whom are men) in relation to the conditions for receipt of statutory redundancy pay and compensation for unfair dismissal.
"2. A declaration that the United Kingdom is in breach of its obligations under Directive 76/207/EEC by providing less favourable treatment of part-time workers (most of whom are women) than of full-time workers (most of whom are men) in relation to the conditions for receipt of statutory redundancy pay and compensation for unfair dismissal."
At a later stage the application was amended so as to bring in as second applicant Mrs. Day, who had been employed by Hertfordshire County Council as a cleaner for just under five years working 11 hours a week and had been made redundant, and so as to seek certain further declarations and also mandamus to compel the Secretary of State to introduce legislation to abolish the discriminatory provisions of the Act of 1978.

-4-

The application was heard by a Divisional Court consisting of Nolan LJ. and Judge J. who on 10 October 1991 dismissed it (1992 I.C.R. 341). On appeal by the E.O.C. and Mrs. Day to the Court of Appeal the decision of the Divisional Court was by a majority affirmed (Kennedy and Hirst LJJ., Dillon LJ. dissenting), (1993 I.C.R. 251). The E.O.C. and Mrs. Day now appeal to your Lordships' House.The principal issue of substance raised by the proceedings is whether the indirect discrimination against women involved in the relevant provisions of the Act of 1978 has been shown to be based upon objectively justified grounds, that being the test propounded by the European Court of Justice in Bilka-Kauflaus G.m.b.H. v. Weber von Harz [1987] ICR 110 for determining whether or not measures involving indirect discrimination constitute an infringement of Article 119 of the Treaty. A number of procedural points were, however, argued in the courts below and before this House.It is convenient first to consider whether Mrs. Day is properly joined in the present proceedings against the Secretary of State. Redundancy pay is "pay" within the meaning of Article 119 of the Treaty: Barber v. Guardian Assurance Group [1990] ICR 616 , 669. If the discriminatory measures in the Act of 1978 are not objectively justified, Mrs. Day has a good claim for redundancy pay against her employers the Hertfordshire Area Health Authority under Article 119, which by virtue of section 2(1) of the European Communities Act prevails over the discriminatory provisions of the Act of 1978. She would also have a good claim under the Equal Pay Directive and the Equal Treatment Directive, which are directly applicable against her employers as being an emanation of the State: Marshall v. Southampton and South West Hampshire Area Health Authority (Teaching) [1986] ICR 335 . Mrs. Day's claim against her employers is a private law claim, and indeed she has already started proceedings to enforce it in the appropriate industrial tribunal, these having been adjourned to await the outcome of the present case. The industrial tribunal has jurisdiction to decide questions as to objective justification for discriminatory measures, and has done so on many occasions, in particular in the Marshall case. I see no good reason why a purely private law claim should be advanced in the Divisional Court against the Secretary of State, who is not the claimant's employer and is not liable to meet the claim, if sound. The determination of such claims has been entrusted by statute to the industrial tribunal, which is fully competent to deal with them. It is suggested that different industrial tribunals might reach different decisions on the facts in relation to objective justification, but a suitable test case upon the question of principle, supported by the E.O.C. under the power conferred upon it by section 75 of the Sex Discrimination Act 1975, would be capable of settling the question definitively. I conclude that the Divisional Court was not the appropriate forum to adjudicate upon what so far as Mrs. Day is concerned is her private law claim, and would dismiss her appeal, but without costs.

- 5 -

Turning now to the position of the E.O.C., the procedural points taken by the Secretary of State are(1) that the E.O.C. has no locus standi to bring the present proceedings,(2) that the E.O.C.'s case does not involve any decision or justiciable issue susceptible of judicial review,(3) that the Divisional Court had no jurisdiction to declare that the United Kingdom or the Secretary of State was in breach of any obligations under European Community law, and(4) that the Divisional Court was not the appropriate forum to determine the substantive issues raised by the application.Dealing first with the question of locus standi, Order 53 r. 3(7) provides that the court shall not grant leave to apply for judicial review "unless it considers that the applicant has a sufficient interest in the matter to which the application relates." Section 31(3) of the Supreme Court Act 1981 contains a provision in the same terms. The matter to which the E.O.C.'s application relates is essentially whether the relevant provisions of the Act of 1978 are compatible with European Community law regarding equal pay and equal treatment. Has the E.O.C. a sufficient interest in that matter? Under section 53(1) of the Sex Discrimination Act 1975 the duties of the E.O.C. include:
"(a) to work towards the elimination of discrimination; (b) to promote equality of opportunity between men and women generally."
If the admittedly discriminatory provisions of the Act of 1978 as regards redundancy pay and compensation for unfair dismissal are not objectively justified, then steps taken by the E.O.C. towards securing that these provisions are changed may very reasonably be regarded as taken in the course of working towards the elimination of discrimination. The present proceedings are clearly such a step. In a number of cases the E.O.C. has been the initiating party to proceedings designed to secure the elimination of discrimination. The prime example is Regina v. Birmingham City Council, Ex parte Equal Opportunities Commission [1989] AC 1155 , where the E.O.C. successfully challenged the policy of the Council as regards the relative availability of grammar school places for girls and for boys, in proceedings which reached this House and in which it was not suggested at any stage that the E.O.C. lacked locus standi. In Regina v. Secretary of State for Defence, Ex parte Equal Opportunities Commission (unreported 20 December 1991) it was common ground that the E.O.C. had locus standi. Another instance is Regina v. Secretary of State for Social Security, Ex parte Equal Opportunities Commission [1992] ICR 782 , which went to the European Court of Justice. In my opinion it would be a very retrograde step now to hold that the E.O.C. has no locus standi to agitate in judicial review proceedings questions related to sex discrimination which are of public importance and affect a large section of the population. The determination of this issue turns essentially upon a consideration of the statutory duties and public law role of the E.O.C. as regards which no helpful guidance is to be

- 6 -

gathered from decided cases. I would hold that the E.O.C. has sufficient interest to bring these proceedings and hence the necessary locus standi.The next question is whether there exists any decision or justiciable issue susceptible of judicial review. The E.O.C.'s application sets out the Secretary of State's letter of 23 April 1990 as being the reviewable decision. In my opinion that letter does not constitute a decision. It does no more than state the Secretary of State's view that the threshold provisions of the Act of 1978 regarding redundancy pay and compensation for unfair dismissal are justifiable and in conformity with European Community Law. The real object of the E.O.C.'s attack is these provisions themselves. The question is whether judicial review is available for the purpose of securing a declaration that certain United Kingdom primary legislation is incompatible with European Community law. It is argued for the Secretary of State that Order 53, r. 1(2), which gives the court power to make declarations in judicial review proceedings, is only applicable where one of the prerogative orders would be available under r. 1(1), and that if there is no decision in respect of which one of these writs might be issued a declaration cannot be made. I consider that to be too narrow an interpretation of the court's powers. It would mean that while a declaration that a statutory instrument is incompatible with European Community law could be made, since such an instrument is capable of being set aside by certiorari, no such declaration could be made as regards primary legislation. However, in the Factortame series of cases (Regina v. Secretary of State for Transport, Ex parte Factortame Ltd. and Others [1990] 2 A.C. 85; [1991] 1 AC 603 ; [1992] QB 680 ) the applicants for judicial review sought a declaration that the provisions of Part II of the Merchant Shipping Act 1988 should not apply to them on the ground that such application would be contrary to Community law, in particular Articles 7 and 52 of the Treaty of Rome (principle of non-discrimination on the ground of nationality and right of establishment). The applicants were companies incorporated in England which were controlled by Spanish nationals and owned fishing vessels which on account of such control were denied registration in the register of British vessels by virtue of the restrictive conditions contained in Part II of the Act of 1988. The Divisional Court, under Article 177 of the Treaty, referred to the European Court of Justice a number of questions, including the question whether these restrictive conditions were compatible with Articles 7 and 52 of the Treaty. The European Court answered that question in the negative (1992 1 Q.B. 680), and although the final result is not reported, no doubt the Divisional Court in due course granted a declaration accordingly. The effect was that certain provisions of United Kingdom primary legislation were held to be invalid in their purported application to nationals of member states of the European Economic Community, but without any prerogative order being available to strike down the legislation in question, which of course remained valid as regards nationals of non-member states. At no stage in the course of the litigation, which included two visits to this House, was it suggested that judicial review was not available for the purpose of obtaining an adjudication upon the validity of the legislation in so far as it affected the applicants.

- 7 -

The Factortame case is thus a precedent in favour of the E.O.C.'s recourse to judicial review for the purpose of challenging as incompatible with European Community law the relevant provisions of the Act of 1978. It also provides an answer to the third procedural point taken by the Secretary of State, which maintains that the Divisional Court had no jurisdiction to declare that the United Kingdom or the Secretary of State is in breach of obligation under Community law. There is no need for any such declaration. A declaration that the threshold provisions of the Act 01 1978 are incompatible with Community law would suffice for the purposes sought to be achieved by the E.O.C. and is capable of being granted consistently with the precedent afforded by Factortame. This does not involve, as contended for the Secretary of State, any attempt by the E.O.C. to enforce the international treaty obligations of the United Kingdom. The E.O.C. is concerned simply to obtain a ruling which reflects the primacy of European Community law enshrined in section 2 of the European Communities Act 1972 and determines whether the relevant United Kingdom law is compatible with the Equal Pay Directive and the Equal Treatment Directive.Similar considerations provide the answer to the Secretary of State's fourth procedural point by which it is maintained that the Divisional Court is not the appropriate forum to decide the substantive issues at stake. The issues at stake are similar in character to those which were raised in Factortame . The Divisional Court is the only English forum in which the E.O.C., having the capacity and sufficient interest to do so, is in a position to secure the result which it desires. It is said that the incompatibility issue could be tested in proceedings before the European Court of Justice instituted by the European Commission against the United Kingdom under 169 of the Treaty of Rome. That may be true, but it affords no reason for concluding that the Divisional Court is an inappropriate forum for the application by the E.O.C. designed towards a similar end and, indeed, there are grounds for the view that the Divisional Court is the more appropriate forum, since the European Court of Justice has said that it is for the national court to determine whether an indirectly discriminatory pay practice is founded on objectively justified economic grounds: (see Bilka-Kaufhaus G.m.b.H. v. Weber von Harz [1987] I.C.R. 110, 126).I turn now to the important substantive issue in the appeal, which is whether or not the threshold provisions in the Act of 1978 have been shown to be objectively justified, the onus of doing so being one which rests on the Secretary of State.In Bilka-Kaufhaus G.m.b.H. v. Weber von Harz [1987] ICR 110 , the European Court of

Justice at p. 126 said:

"36. It is for the national court, which has sole jurisdiction to make findings of fact, to determine whether and to what extent the grounds put forward by an employer to explain the adoption of a pay practice which applies independently of a worker's sex but in fact affects more

- 8 -

women than men may be regarded as objectively justified economic grounds. If the national court finds that the measures chosen by Bilka correspond to a real need on the part of the undertaking, are appropriate with a view to achieving the objectives pursued and are necessary to that end, the fact that the measures affect a far greater number of women than men is not sufficient to show that they constitute an infringement of article 119."Somewhat broader considerations apply where the discriminatory provisions are to be found in national legislation. In Rinner-Kuhn v. F. W. W. Spezial- Gebaudereinigung [1989] E.C.R. 2743, the question at issue was whether German legislation which permitted restrictions on the right of part time workers to sick pay contravened Article 119 of the Treaty, considering that a great majority of part time workers were women. The Court at pp. 2760- 2761, said:
"12. In such a situation, it must be concluded that a provision such as that in question results in discrimination against female workers in relation to male workers and must, in principle, be regarded as contrary to the aim of Article 119 of the Treaty. The position would be different only if the distinction between the two categories of employees were justified by objective factors unrelated to any discrimination on grounds of sex (see the judgment of 13 May 1986 in Case 170/84 Bilka-Kaufhaus G.m.b.H. v. Karin Weber von Hartz [1986] ECR 1607 ).
" 13. In the course of the procedure, the German Government stated, in response to a question put by the Court, that workers whose period of work amounted to less than 10 hours a week or 45 hours a month were not as integrated in, or as dependent on, the undertaking employing them as other workers.
"14. It should, however, be stated that those considerations, in so far as they are only generalizations about certain categories of workers, do not enable criteria which are both objective and unrelated to any discrimination on grounds of sex to be identified. However, if the Member State can show that the means chosen meet a necessary aim of its social policy and that they are suitable and requisite for attaining that aim, the mere fact that the provision affects a much greater number of female workers than male workers cannot be regarded as constituting an infringement of Article 119.
"15. It is for the national court, which has sole jurisdiction to assess the facts and interpret the national legislation, to determine whether and to what extent a legislative provision, which, though applying independently of the sex of the worker, actually affects a greater number of women than men, is justified by reasons which are objective and unrelated to any discrimination on grounds of sex.

- 9 -

"16. The reply to the question referred by the national court must therefore be that Article 119 of the E.E.G. Treaty must be interpreted as precluding national legislation which permits employers to exclude employees whose normal working hours do not exceed 10 hours a week or 45 hours a month from the continued payment of wages in the event of illness, if that measure affects a far greater number of women than men, unless the Member State shows that the legislation concerned is justified by objective factors unrelated any

discrimination on grounds of sex."

The original reason for the threshold provisions of the Act of 1978 appears to have been the view that part time workers were less committed than full time workers to the undertaking which employed them. In his letter of 23 April 1990 the Secretary of State stated that their purpose was to ensure that a fair balance was struck between the interests of employers and employees. These grounds are not now founded on as objective justification for the thresholds. It is now claimed that the thresholds have the effect that more part time employment is available than would be the case if employers were liable for redundancy pay and compensation for unfair dismissal to employees who worked for less than 8 hours a week or between 8 and 16 hours a week for under five years. It is contended that if employers were under that liability they would be inclined to employ less part time workers and more full time workers, to the disadvantage of the former.The bringing about of an increase in the availability of part time work is properly to be regarded as a beneficial social policy aim and it cannot be said that it is not a necessary aim. The question is whether the threshold provisions of the Act of 1978 have been shown, by reference to objective factors, to be suitable and requisite for achieving that aim. As regards suitability for achieving the aim in question, it is to be noted that the purpose of the thresholds is said to be to reduce the costs to employers of employing part time workers. The same result, however, would follow from a situation where the basic rate of pay for part time workers was less than the basic rate for full time workers. No distinction in principle can properly be made between direct and indirect labour costs. While in certain circumstances an employer might be justified in paying full time workers a higher rate than part time workers in order to secure the more efficient use of his machinery (see Jenkins v. Kingsgate (Clothing Production) Ltd. [1981] ICR 715 ) that would be a special and limited state of affairs. Legislation which permitted a differential of that kind nationwide would present a very different aspect and considering that the great majority of part time workers are women would surely constitute a gross breach of the principle of equal pay and could not possibly be regarded as a suitable means of achieving an increase in part time employment. Similar considerations apply to legislation which reduces the indirect cost of employing part time labour. Then as to the threshold provisions being requisite to achieve the stated aim, the question is whether on the evidence before the Divisional Court they have been proved actually to result in greater availability of part time work than would be the case

- 10-

without them. In my opinion that question must be answered in the negative. The evidence for the Secretary of State consisted principally of an affidavit by an official in the Department of Employment which set out the views of the Department but did not contain anything capable of being regarded as factual evidence demonstrating the correctness of these views. One of the exhibits to the affidavit was a report with draft Directives prepared by the Social Affairs Commissioner of the European Commission in 1990. This covered a wide range of employment benefits and advantages, including redundancy pay and compensation for unfair dismissal, but proposed a qualifying threshold for those benefits of 8 hours of work per week. The basis for that was stated to be the elimination of disproportionate administrative costs and regard to employers economic needs. These are not the grounds of justification relied on by the Secretary of State. The evidence put in by the E.O.C. consisted in large measure in a Report of the House of Commons Employment Committee in 1990 and a Report of the House of Lords Select Committee on the European Communities on Part-Time and Temporary Employment in 1990. These revealed a diversity of views upon the effect of the threshold provisions on part time work, employers' organisations being of the opinion that their removal would reduce the amount available with trade union representatives and some employers and academics in the industrial relations field taking the opposite view. It also appeared that no other member state of the European Community, apart from the Republic of Ireland, had legislation providing for similar thresholds. The Republic of Ireland, where statute at one time provided for an 18-hour per week threshold, had recently introduced legislation reducing this to 8 hours. In the Netherlands the proportion of the workforce in part time employment was in 1988 29.8 per cent. and in Denmark 25.5 per cent., neither country having any thresholds similar to those in the Act of 1978. In France legislation was introduced in 1982 providing for part time workers to have the same rights as full time, yet between 1983 and 1988 part time work in that country increased by 36.6 per cent., compared with an increase of 26.1 per cent. over the same period in the United Kingdom. While various explanations were suggested on behalf of the Secretary of State for these statistics, there is no means of ascertaining whether these explanations have any validity. The fact is, however, that the proportion of part time employees in the national workforce is much less than the proportion of full time employees, their weekly remuneration is necessarily much lower, and the number of them made redundant or unfairly dismissed in any year is not likely to be unduly large. The conclusion must be that no objective justification for the thresholds in the Act of 1978 has been established.A subsidiary issue of substance in the appeal is whether or not compensation for unfair dismissal is "pay" within the meaning of Article 119 of the Treaty and the Equal Pay Directive. The definition of "pay" in Article 119 has been set out above. In Arbeiterwohlfahrt der Stadt Berlin e.V. v. Botel [1992] I.R.L.R. 423, at p. 425, the European Court of

Justice said:

- 11 -

"12. According to the case law of the court... the concept of 'pay ' within the meaning of article 119 of the Treaty comprises any consideration whether in cash or in kind, whether immediate or future, provided that the employee receives it, albeit indirectly, in respect of his employment from his employer, whether under a contract of employment, legislative provisions or made ex gratia by the employer."
In Barber v. Guardian Royal Exchange Assurance Group [1990] ICR 616 the Court held that redundancy pay was "pay" within the meaning of Article 119 on the ground (paragraph 18 of the judgment at p. 668) that receipt of it arose "by reason of the existence of the employment relationship". There is much to be said in favour of the view that compensation for unfair dismissal is of a comparable nature, but the European Court of Justice has not yet pronounced upon this issue, and there may be a question whether the answer to it can properly be held to be acte clair, or whether resolution of it would require a reference to the European Court under Article 177 of the Treaty.Such a reference is in any event, however, unnecessary for the disposal of the present appeal. Discrimination as regards the right to compensation for unfair dismissal, if not objectively justified, is clearly in contravention of the Equal Treatment Directive.In the light of the foregoing I am of the opinion that the appeal by the E.O.C. should be allowed and that declarations should be made in the following terms:That the provisions of the Employment Protection (Consolidation) Act 1978 whereby employees who work for fewer than sixteen hours per week are subject to different conditions in respect to qualification for redundancy pay from those which apply to employees who work for sixteen hours per week or more are incompatible with Article 119 of the Treaty of Rome and the Council Directive 75/117/EEC of 10 February 1975.That the provisions of the Employment Protection (Consolidation) Act 1978 whereby employees who work for fewer than sixteen hours per week are subject to different conditions in respect of the right to compensation for unfair dismissal from those which apply to employees who work for sixteen hours per week or more are incompatible with the Council Directive 76/207/EEC of 9 February 1976.It remains to note that the E.O.C. proposed that the House should grant a declaration to the effect that the Secretary of State is in breach of those provisions of the Equal Treatment Directive which require member states to introduce measures to abolish any laws contrary to the principle of equal treatment. The purpose of such a declaration was said to be to enable part time workers who were employed otherwise than by the State or an emanation of the State, and who had been deprived of the right to obtain compensation

- 12 -

for unfair dismissal by the restrictive thresholds in the Act of 1978, to take proceedings against the United Kingdom for compensation, founding upon the decision of the European Court of Justice in Francovich v. Italian Republic [1992] IRLR 84 . In my opinion it would be quite inappropriate to make any such declaration. If there is any individual who believes that he or she has a good claim to compensation under the Francovitch principle, it is the Attorney General who would be defendant in any proceedings directed to enforcing it, and the issues raised would not necessarily be identical with anyof those which arise in the present appeal.

LORD JAUNCEY OF TULLICHETTLE

My Lords,The Equal Opportunities Commission ("the Commission") was established by the provisions of Part VI of the Sex Discrimination Act 1975 ("the Act"). Section 53(1) of the Act provides that it should have the following duties:
"(a) to work towards the elimination of discrimination, (b) to promote equality of opportunity between men and women generally, and (c) to keep under review the working of this Act and the Equal Pay Act 1970 and, when they are so required by the Secretary of State or otherwise think it necessary, draw up and submit to the Secretary of State proposals for amending them."
Section 55 requires the Commission to keep under review the discriminatory aspects of provisions in health and safety legislation and to report to the Secretary of State on any matter specified by him. Section 56 requires the Commission to make an annual report to the Secretary of State on its activities. Section 57(1) provides:
"Without prejudice to their general power to do anything requisite for the performance of their duties under section 53(1), the Commission may if they think fit, and shall if required by the Secretary of State, conduct a formal investigation for any purpose connected with the carrying out of those duties."
Section 60(1) provides:

- 13 -

"If in the light of any of their findings in a formal investigation it appears to the Commission necessary or expedient, whether during the course of the investigation or after its conclusion,
. . .(b) to make to the Secretary of State any recommendations, whether for changes in the law or otherwise,

the Commission shall make those recommendations accordingly."

The Commission is also empowered by section 75 to provide assistance to claimants in proceedings under the Act.In pursuance of its statutory duties the Commission has in the past initiated judicial review proceedings without challenge to its capacity so to do. This House upheld its right to obtain a declaration that a provision by a local Education Authority of selected secondary education was unlawful (Regina v. Birmingham City Council, Ex parte Equal Opportunities Commission [1989] 1 A.C. 1155). In a Divisional Court hearing in December 1991 on an application for judicial review of a decision made on behalf of the Secretary of State for Defence in relation to pregnant service women it was accepted by the Crown that the Commission had legal standing. However, the fact that the Commission may properly initiate judicial review proceedings in pursuance of their duties against local authorities or other ministers is not, in my view, conclusive of its ability so to do in relation to the Secretary of State.The provisions of the Act to which I have referred envisage the Commission performing its duties on its own initiative or, in certain cases, as required by the Secretary of State. Section 53(1)(c) empowers or requires the Commission to submit proposals to the Secretary of State and section 60(1) similarly empowers or requires the Commission to make recommendations to the Secretary of State. The Act neither requires the Secretary of State to implement these proposals or recommendations nor confers power on the Commission to have them implemented. Thus, vis-à-vis the Secretary of State, the role of the Commission is advisory and it is no part of its duties to initiate proceedings against him in matters relating to sex discrimination. The broad words of section 53(l)(a) which might be thought habile to cover any steps taken by the Commission against anybody towards the specified end must, so far as the Secretary of State is concerned, be read in the context of the particular relationship which has been created between him and the Commission. The Act makes the Commission answerable to the Secretary of State and not vice versa. If Parliament had intended that the Commission should be empowered to challenge decisions of the Secretary of State and impose its will upon him it is quite remarkable that Part VI of the Act which sets out in some detail the powers and duties of the Commission, both at large and in relation to the Secretary of State, should have remained totally silent upon this particular matter.

- 14 -

While reluctant to disagree with your Lordships I am driven to the conclusion, in agreement with Kennedy L.J. in the Court of Appeal, that the Commission does not have the capacity to pursue these proceedings. I would therefore dismiss the appeal. I should only add that if I had reached a different conclusion in relation to this preliminary matter I should have been in entire agreement with the reasons given by my noble and learned friends, Lord Keith of Kinkel and Lord Browne-Wilkinson for allowing the appeal.

LORD LOWRY

My Lords,I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Keith of Kinkel. I agree with it and for the reasons which he gives I, too, would allow the appeal and make the declarations which he proposes.Accepting as I do the analysis of my noble and learned friend, I do not find it necessary to consider the question (which I think is arguable) whether the Secretary of State's letter of 23 April 1990 was a "decision" for the purposes of judicial review. I would, however, take the opportunity of expressing my respectful and complete agreement with the observations on procedure which are about to be delivered by my noble and learned friend. Lord Browne-Wilkinson.I feel bound, however, to add (as can perhaps be inferred from my speech in Roy v. Kensington and Chelsea and Westminster Family Practitioner Committee [1992] 1 AC 624 ) that I have never been entirely happy with the wide procedural restriction for which O'Reilly v. Mackman [1983] 2 AC 237 is an authority, and I hope that that case will one day be the subject of your Lordships' further consideration.

LORD BROWNE-WILKINSON

My Lords,I agree with the speech of my noble and learned friend Lord Keith of Kinkel but wish to add a few words on the procedural question whether the Court can make a declaration on an application for judicial review even though in the circumstances of the case the court could not gram one of the prerogative orders.

- 15 -

The question arises in this way. It being established (for the reasons given by my noble and learned friend Lord Keith) that the Equal Opportunities Commission has locus standi to bring proceedings for judicial review but has not demonstrated that there is any "decision" by the Secretary of State which can be quashed, has the Court got jurisdiction to make a declaration that the domestic law of the United Kingdom is not in conformity with European law?Before 1977, there were two routes whereby relief could be sought from the Courts in the field of what is now known as public law. The first was by application to the Queen's Bench Divisional Court for one of the prerogative orders. The second was by way of a civil action in the High Court for a declaration. This procedure in a civil action for a declaration was under what is now Order 15, Rule 16 of the Rules of the Supreme Court, which provides as follows :
"No action or other proceeding shall be open to objection on the ground that a merely declaratory judgment or order is sought thereby, and the Court may make binding declarations of right whether or not any consequential relief is or could be claimed."
As early as 1911 it was established that, in a civil action brought by a competent plaintiff, the Court could grant declaratory relief against the Crown as to the legality of actions which the Crown proposed to take: Dyson v. Attorney-General [1911] 1 KB 410 . Of course, in such civil proceedings in the High Court there could be no question of the plaintiff being entitled to any of the prerogative orders, which could only be made in proceedings on the Crown side.Civil proceedings for a declaration as to public rights were a widely adopted method down to 1977. Indeed, many of the most recent developments in public law were made in such civil actions brought to obtain declaratory relief only. See, for example. Ridge v. Baldwin [1964] A.C. 40; Anisminic v. Foreign Compensation Commission [1969] 2 AC 147 ; see also Zamir and Woolf The Declaratory Judgment, 2nd ed. pages 29-31.The ability to obtain a declaration of public rights in civil proceedings was restricted by the need to show sufficient locus standi. Although the plaintiff did not have to show an actual or threatened infringement of his private rights, he did have to show that any actual or threatened infringement of public rights would cause him special damage: Gouriet v. Union of Post Office Workers [1978] AC 435 . However, questions of locus standi are not what I am now considering.In 1977 the new Order 53 was introduced, laying down the modern procedure for judicial review.

(a) the nature of the matters in respect of

- 16 -

which relief may be granted by way of an order of mandamus, prohibition or certiorari, (b) the nature of the persons and bodies against whom relief may be granted by way of such an order, and (e) all the circumstances of the case". This Rule was given statutory confirmation by section 31 of the Supreme Court Act 1981.In the period between the introduction of the new Order 53 and the decision in O'Reilly v. Mackman [1983] 2 AC 237 there were therefore two routes whereby a declaration of public rights could be obtained. The first was in judicial review proceedings under Order 53; the second was by civil proceedings for declaratory relief under Order 15 Rule 16. As to the latter, the position remained as it was before 1977. During this period, civil proceedings for a declaration as to public rights continued to be brought. Thus, in Royal College of Nursing v. D.H.S.S. [1981] AC 800 civil proceedings were brought in the Queen's Bench Division for a declaration as to the correctness in law of a circular from the D.H.S.S. purporting to explain to the medical profession the effect of the Abortion Act, 1967. No one contended that such a declaration could not be made even though, as in the present case, none of the prerogative orders could have been made even if the proceedings had been brought under Order 53. This House restored a declaration as to the legality of the circular which had been made by the trial judge.Accordingly, right down to the decision of this House in O'Reilly v. Mackman (supra) the two procedures for obtaining declaratory relief, the one by way of civil proceedings in the High Court the other by way of judicial review in the Divisional Court, continued. In O'Reilly v. Mackman itself this House was considering the propriety of four civil actions brought in the High Court for declarations as to matters of public law. This House held that in such public law cases, it is an abuse of process to proceed by way of civil action and that such proceedings must be brought by way of judicial review. In so deciding, Lord Diplock reviewed the law affecting declaratory judgments in both civil proceedings and judicial review proceedings. He said (at p. 283G):
"Nevertheless, there may still be cases where it turns out in the course of proceedings to challenge a decision of a statutory authority that a declaration of rights rather than certiorari is the appropriate remedy. Pyx Granite Company Ltd. v. Ministry of Housing and Local Government [1960] A.C. 260 provides an example of such a case. So Order 53 since 1977 has provided a procedure by which every type of remedy for infringement of rights of individuals that are entitled to protection in public law can be obtained in one and the same proceeding by way of an application for judicial review, and whichever remedy is found to be the most appropriate in the light of what has emerged upon the hearing of the application, can be granted to him."

- 17 -

In my judgment, this passage makes it clear that under Order 53 any declaration as to public rights which could formerly be obtained in civil proceedings in the High Court can now also be obtained in judicial review proceedings. If this were not so, the effect of the purely procedural decision in O'Reilly v. Mackman, requiring all public law cases to be brought by way of judicial review, would have had the effect of thenceforward preventing a plaintiff who previously had locus standi to bring civil proceedings for a declaration as to public rights (even though there was no decision which could be the subject of a prerogative order) from bringing any proceedings for such a declaration. No statutory provision has ever removed the right to seek such a declaration which right has been established and exercised from 1911. Order 53 Rule 1(2) does not say that a declaration is only to be made in lieu of a prerogative order. All it requires is that the Court should have regard to "the nature of the matters in respect of which" prerogative orders can be made. In the second Factortame case [1991] 1 AC 603 this House, admittedly without argument to the contrary, plainly envisaged that a declaration as to public rights could be made, even though on the facts of that case none of the prerogative orders could have been made.Finally, the terms of Order 15 Rule 16 itself indicate the same result. Judicial review proceedings under Order 53 are "proceedings". Therefore the effect of Order 15 Rule 16 is that the Court in judicial review proceedings for a declaration can make a declaratory order "whether or not any consequential relief . . . could be claimed".I have sought to demonstrate that the history of declaratory relief, authority and the terms of Order 15 Rule 16 all point to the Court having power to make a declaratory judgment in judicial review proceedings brought by a plaintiff who has locus standi, whether or not the Court could also make a prerogative order. The only indications to the contrary are certain dicta in I.R.C. v. National Federation of Self-employed and Small Businesses [1982] A.C. 617. The only matter at issue in that case was locus standi to bring proceedings under Order 53. It was suggested in argument that Lord Diplock indicated, obiter, that a declaration was only available as an alternative to mandamus. I do not so read his speech and, in the light of the passage I have quoted from his speech in O'Reilly v. Mackman a year later, it would be surprising if he meant so to indicate. Lord Scarman (at p. 648A-B) clearly expressed the view that a declaration could be granted in judicial review proceedings "only in circumstances in which one or other of the prerogative orders can issue. I so interpret R.S.C. Order 53 Rule 1(2) because to do otherwise would be to condemn the rule as ultra vires". There was no examination of the history of the declaratory judgment in that case and the reason given by Lord Scarman (that otherwise Order 53 Rule 1(2) would be ultra vires) ceased to have any force when shortly thereafter section 31 of the Supreme Court Act 1981 was enacted and gave the provision statutory force. Therefore, in my judgment this obiter dictum should not lead your Lordships to reach a conclusion different from that indicated by the other arguments I have mentioned.

- 18 -

For these reasons and the reasons given by my noble and learned friend Lord Keith of Kinkel I would allow the appeal and make the declarations that are proposed.

LORD SLYNN OF HADLEY

My Lords,For the reasons given by my noble and learned friend Lord Keith of Kinkel, I, too, would allow this appeal and make the declaration he proposes.

- 19 -