Hall v Woolston Hall Leisure Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PETER GIBSON,LORD JUSTICE MANCE |
| Judgment Date | 23 May 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0523-6 |
| Docket Number | Case No: EATRF/1998/0297 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 May 2000 |
[2000] EWCA Civ J0523-6
Lord Justice Peter Gibson
Lord Justice Mance and
Mr. Justice Moore-bick
Case No: EATRF/1998/0297
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
Royal Courts of Justice
Strand,
London, WC2A 2LL
Mr. Andrew Hochhauser Q.C. and Mr. Charles Ciumei (instructed by Messrs. Stanley Tee & Co. of Bishops Stortford for the Appellant)
The Respondent did not appear and was not represented
Miss Monica Carss-Frisk (instructed by the Treasury Solicitor) appeared as Amicus Curiae
This appeal gives rise to an issue of some general importance: where the performance by the employer of a contract of employment involves illegality of which the employee is aware, does public policy bar the employee, when discriminated against on the ground of her sex by dismissal by the employer in contravention of the Sex Discrimination Act 1975 ("the 1975 Act"), from recovering compensation under the 1975 Act?
The facts
It is an appeal by the Applicant, Jill Hall, who was employed by the Respondent, Woolston Hall Leisure Ltd. ("the Employer"), as a sous chef from 15 July 1994 and later as head chef at Epping Forest Golf Club until she was dismissed on 1 March 1995. In early 1995 the Employer's managing director, Mr. Pomfrett, was made aware that she was pregnant. She was dismissed, ostensibly on grounds of redundancy and incapability. She applied to an Industrial Tribunal, alleging that the true reason for her dismissal was her pregnancy and that she was being discriminated against on the basis of that pregnancy. By a decision promulgated on 5 June 1996 the Tribunal found that she was unlawfully discriminated against on the ground of her sex contrary to s. 6(2)(b) of the 1975 Act as she would not have been dismissed had she not been pregnant and that she had therefore been treated less favourably by the Employer than it would have treated a man. Mrs. Hall had also complained of unfair dismissal, but having heard the Tribunal's decision she withdrew that complaint.
Mrs. Hall's application was then adjourned to a remedies hearing. At that hearing, as at the earlier hearing, Mrs. Hall had only a lay representative appearing for her and although given an opportunity to seek professional representation she opted to go ahead with her lay representative. At the adjourned hearing the Employer through its counsel took the point that the contract of employment was tainted with illegality and that Mrs. Hall could recover nothing. The jurisdiction of the court to hear the claim was questioned. But counsel for the Employer eventually conceded that the Tribunal had jurisdiction to deal with compensation for loss and injury to feelings and, in the light of the decision of the Employment Appeal Tribunal ("the EAT") in Leighton v Michael [1995] I.C.R. 1091, the Tribunal, with some hesitation, accepted that it had jurisdiction to hear a claim for compensation under the 1975 Act.
Evidence was given by Mrs. Hall that on her promotion she negotiated a pay rise. She asked for £250 per week net of deductions and that is what she received in cash from the Employer. The weekly payslips which accompanied her pay, however, showed gross pay of £250, deductions of £63.35, and a net sum paid of £186.65. She said that when she queried this with Mr. Pomfrett, he said "It's the way we do business". She further said that she was 5 months pregnant when dismissed, and was very upset by the dismissal, already having two children to look after, and was worried about coping. Mrs. Hall's evidence was accepted by the Tribunal.
The Tribunal in its decision promulgated on 3 December 1996 made the following holding:
"We hold that the contract of employment was tainted with illegality. Mrs. Hall was turning a blind eye to the fact that the Respondents were not paying tax on part of her income. Where the payslips differed from the money she received each week there is only one logical conclusion, namely that there was an intention by the Respondents not to pay all the tax that was due. Indeed Mrs. Hall was told by the Respondents that was the way they did business and she in our view knew that the Inland Revenue were being defrauded."
The Tribunal accepted the Employer's submissions that as Mrs. Hall was not entitled to enforce the contract whilst it was running, she had no legal rights that were destroyed when the contract was brought to an end. Consequently it held that she suffered no loss and was not entitled to compensation under the 1975 Act. However it awarded £2,000 for injury to feelings.
Mrs. Hall appealed to the EAT. For the first time at the appeal hearing on 5 February 1998 she was represented by counsel. But the Employer had ceased to trade on 31 January 1998 and did not appear. His Honour Judge Peter Clark, giving the judgment of the EAT ( [1998] I.C.R. 651 at p. 653), referred to the decision of the EAT in Leighton v Michael that the fact that a contract of employment was tainted with illegality did not prevent the entertaining of a complaint of sex discrimination. Judge Peter Clark expressed the EAT's doubts about the correctness of the decision in Leighton v Michael, but said that in the interests of comity the EAT did not depart from the principle there laid down. However he went on to say (at p. 654):
"It is a basic principle of the administration of justice that the court will not lend itself to enforcing an illegal contract involving a fraud on the revenue. To order compensation for loss of earnings, based on a contract of employment performed illegally to the knowledge of the claimant, offends that principle."
The EAT accordingly dismissed the appeal.
Mrs. Hall then appealed to this court with the leave of the EAT. That appeal first came on for hearing on 15 October 1999 when Mr. Hochhauser Q.C. and Mr. Ciumei appeared for Mrs. Hall. She has had the advantage of them and their instructing solicitors appearing for her pro bono. The Employer again was not represented. We had the benefit of full argument from Mr. Hochhauser, but we took the view that because of the general importance of the points taken on behalf of Mrs. Hall we should seek the assistance of an amicus. Consequently the hearing was adjourned. Regrettably it has not been possible to have the adjourned hearing until 7 April, when we have had the assistance of Miss Carss-Frisk as amicus. We are most grateful to her, as we are to Mr. Hochhauser, for the admirable arguments which have been presented to us. To save time we called for a transcript of the earlier hearing, and we have treated what was said then as having been repeated to us at this adjourned hearing, to which Mr. Hochhauser added some further submissions, before we heard Miss Carss-Frisk's submissions.
S. 1 (1) of the 1975 Act provides:
"A person discriminates against a woman in any circumstances relevant for the purposes of any provision of this Act if -
(a) on the ground of her sex he treats her less favourably than he treats or would treat a man …."
Part II of the 1975 Act deals with discrimination in the employment field. By s. 6(2):
"It is unlawful for a person, in the case of a woman employed by him at an establishment in Great Britain, to discriminate against her -
….
(b) by dismissing her …."
By s. 41 anything done by an employee in the course of his employment is to be treated for the purposes of the 1975 Act as done by his employer as well as by him.
In Part VII the enforcement provisions of the 1975 Act are to be found. S. 63 gives jurisdiction to the Tribunal to entertain complaints of discrimination. By s. 65(1):
"When an industrial tribunal finds that a complaint presented to it under section 63 is well-founded the tribunal shall make such of the following as it considers just and equitable -
….
(b) an order requiring the respondent to pay to the complainant compensation of an amount corresponding to any damages he could have been ordered by a county court …. to pay to the complainant if the complaint had fallen to be dealt with under section 66 …."
By s. 66(1):
"A claim by any person ("the claimant") that another person ….
(a) has committed an act of discrimination against the claimant which is unlawful by virtue of Part III, or
(b) is by virtue of section 41 …. to be treated as having committed such an act of discrimination against the claimant,
may be made the subject of civil proceedings in like manner as any other claim in
tort …."
The Equal Treatment Directive (Council Directive No. 76/207/EEC) ("the Directive") is also in point. This provides (so far as is relevant):
"Article 1
1 The purpose of this Directive is to put into effect in the Member States the principle of equal treatment for men and women as regards access to employment …. and as regards working conditions ….
….
Article 2
1 For the purposes of the following provisions, the principle of equal treatment shall mean there shall be no discrimination whatsoever on grounds of sex either directly or indirectly ….
….
Article 5
1. Application of the principle of equal treatment with regard to working conditions, including the conditions covering dismissal, means that men and women shall be guaranteed the same conditions without discrimination on grounds of sex.
….
Article 6
Member States shall introduce into their national legal systems such measures as are necessary to enable all persons who consider themselves wronged...
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