Copple and Others v Littlewoods Plc and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Elias,Lord Justice Davis,Lord Justice Mummery |
| Judgment Date | 08 November 2011 |
| Neutral Citation | [2011] EWCA Civ 1281 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2011/0226/EATRF |
| Date | 08 November 2011 |
[2011] EWCA Civ 1281
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HHJ McMullen QC, Mr K Edmondson JP & Mr D Smith
UKEAT/0116/10/ZT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Mummery
Lord Justice Elias
and
Lord Justice Davis
Case No: A2/2011/0226/EATRF
Ms Karon Monaghan QC and Mr Paul Draycott (instructed by Messrs Russell, Jones & Walker) for the Appellant
Mr Thomas Linden QC and Mr Stefan Brochwicz-Lewinski (instructed by Messrs Weightmans LLP) for the Respondent
Hearing dates : 11 October 2011
This appeal raises a short point of some importance relating to the rights which certain female part-time workers can assert once they are able to establish that their employer's pension scheme indirectly discriminated against part-timers on grounds of sex by denying them access to the employer's occupational pension scheme. The critical feature of these part-time workers is that they would not in fact have chosen to join the pension scheme even if they had been eligible to do so. I will refer to them as the "opt-out women".
The established approach which courts have adopted with respect to such women is to conclude that they are not entitled to any remedy arising from their exclusion from the pension scheme since they have suffered no loss. I shall call this denial of remedy to the opt-out workers the "opt-out principle". Two different reasons have been given for adopting this principle. One is that there is no breach of the equality principle with respect to such women since no detriment has been suffered. The other is that although the mere denial of the right of access does constitute a breach of the equality principle, given that such women have suffered no loss as a consequence of the breach, they ought not to be entitled to any remedy. The appellants submit that the opt-out principle is wrong as a matter of law: there is a breach of the equality clause for which a proper and effective remedy must be provided in accordance with EU law.
The facts.
The essential facts fall within a very short compass. The respondent employer runs the famous Littlewoods Pools organisation and has a large mail order business and some retail shops. Many hundreds of claimants, all part-time women, alleged discrimination resulting from being denied access to the employer's pension scheme during certain periods in the past (the "closed periods"). Certain women were chosen as test cases. The EAT described their circumstances as follows:
"The Claimants were employed in various positions, principally in occupations where they were described as "graded employees", as opposed to the supervisory and management positions of "zoned employees". Their dates of employment begin as long ago as 1968. For the purposes of legal proceedings, 8 April 1976 is the relevant start date, for this is when the judgment of the ECJ in Defrenne v Sabena [1976] ECR I-455 took effect. The availability of a pension scheme to employees of the Respondents changed at different stages and the relevant periods are as follow:
(1) 8 April 1976 to 1 January 1977: membership of the scheme was compulsory for supervisors and voluntary for others, but part-time staff were excluded.
(2) 1 January 1977 to 6 April 1988: membership of the scheme was made compulsory for new entrants in the zoned categories; part-timers were excluded. It was closed to graded employees but those already in the scheme were entitled to remain and to continue contributing. In effect, it became a "top hat" scheme available only to managers.
(3) 6 April 1988 when section 15 of the Social Security Act 1986 came into effect to 1 June 1988: This rendered void any term within an occupational pension scheme which made membership of the scheme compulsory. The Respondents' scheme, therefore, was voluntary by law.
(4) 1 June 1988: membership of the scheme was made available on a voluntary basis to all zoned and graded staff, but not to part-timers.
(5) 1 April 1990 to 1 July 1995: eligibility for the scheme was opened up in stages to part-timers, first to those working 22.5 hours, then 15 hours, then 12 hours a week and finally to all on 1 July 1995."
The closed period therefore varies depending upon the part-timer's hours of work. The part timers most adversely affected would be those working under 12 hours a week; they would have been excluded from 8 April 1976 to 1 January 1977 and then again from 1 June 1988 to 30 June 1995.
The employer conceded that during the closed period part-timers were the subject of indirect discrimination which was not justified. However, it applied the opt-out principle and refused to allow those whom it believed fell into the category of opt-out women to join the scheme with retrospective effect. The employer took the pragmatic view that if a woman had failed to join the scheme within three months of being eligible to do so, it would assume that she would not have joined it earlier even if eligible and was therefore covered by the opt-out principle.
The law.
The detailed statutory provisions relating to the area of pension equality are extremely complex. They are summarised admirably by HH Judge McMullen QC in the EAT in Preston v Wolverhampton Healthcare NHS Trust No. 3 [2004] ICR 993 and are reproduced in paragraph 13 of the EAT decision below. For the purposes of this appeal, it is necessary to focus only on a limited number of provisions. First, the Equal Pay Act 1970 section 1 establishes the principle of equal pay, which includes pension benefits under an occupational pension scheme: see Worringham and Humphreys v Lloyd's Bank [1981] ICR 558 (ECJ). The principle operates by implying an equality clause into the woman's contract so that if, apart from the equality clause, her contract includes a term which is less favourable than a similar term in the man's contract, her contract is modified so as to ensure that the term is no less favourable than his. The principle has been modified with respect to access to pension schemes so as to ensure that the terms on which access is granted are no less favourable: see regulation 10 of the Occupational Pension Schemes (Equal Access to Membership) Regulations 1976.
Given the period under consideration, it is common ground that the remedy for breach of the equal access principle is found in regulation 12 of the 1976 Regulations which provides, so far as is now material:
"The Equal Pay Act shall be so modified as to provide that where a court or an industrial tribunal finds that there has been a breach of a term in a contract of employment which has been included in the contract, or modified, by virtue of an equality clause and which relates to membership of a scheme, or where it makes an order declaring the right of an employee to admission to membership of a scheme in pursuance of the equal access requirements, it may declare that the employee has a right to be admitted to the scheme in question with effect from such date ("the deemed entry date") as it may specify, not being earlier than…8 April 1976."
There are two points to note about this provision. First, it does not oblige a court or tribunal to grant a declaration once a breach of the equality clause is found; the remedy is discretionary. Second, it defines the earliest period from which the court can declare a right of admission but it does not in terms limit the period of the declaration to the period during which the equality clause was infringed.
If a woman is seeking a declaration recognising her right to retrospective membership, she is required to pay back contributions which she would have had to pay had she been in the scheme at the relevant time. That is compatible with EU law: see National Pensions Office v Jonkman [2007] 3 CMLR 25 para 27.
The hearing before the Employment Tribunal.
The claimants before the Employment Tribunal made a root and branch attack on the opt-out principle. The arguments run at that stage were essentially those advanced before the EAT and again before us. First, it was submitted that to apply the opt-out principle denies an effective remedy to part-timers who have been the subject of discrimination and is accordingly contrary to EU law. The claimants should have been granted a declaration that they were entitled to membership of the pension scheme as of right (provided they paid the necessary contributions) for the period during which they were subject to discrimination whether they would have chosen to join the scheme or not. If successful, this submission would have ensured that the claimants would be treated as members during the closed period.
That still raised the question whether they were entitled to a declaration that they should retrospectively be treated as members during the open period when they were eligible to join the scheme but had chosen not to do so. The appellants submit that they were so entitled because of the application of the principle developed by the EAT in Sorbie v Trust House Forte Hotels Ltd [1977] ICR 55 since affirmed by the Court of Appeal in Sodexo Ltd v Gutridge [2009] ICR 1486. I consider the merit of these arguments below.
The Employment Tribunal rejected both these arguments. As to the first, it concluded that since those who opted out had not suffered a detriment, there was no breach of the equality principle. In any event, it was satisfied that it would not be appropriate to grant the discretionary remedy of a declaration of entitlement to retrospective membership since no prejudice had been suffered.
The...
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