Newcastle upon Tyne NHS Hospitals Trust v Armstrong and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Pill,Lord Justice Sullivan |
| Judgment Date | 07 September 2010 |
| Neutral Citation | [2010] EWCA Civ 1203 |
| Date | 07 September 2010 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2010/1009 |
[2010] EWCA Civ 1203
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
(Mr Justice Underhill)
Before: Lord Justice Pill
and
Lord Justice Sullivan
Case No: A2/2010/1009
Mr John Cavanagh QC and Mr Andrew Blake (instructed by Samuel Philips Law Firm) appeared on behalf of the Appellant.
The Respondent did not appear and was not represented.
(As Approved)
Lord Justice Pill:
This is an application for permission to appeal against a decision of the Employment Appeal Tribunal (“EAT”) of 22 January 2010, Underhill J (President) presiding. They dismissed an appeal from an employment tribunal dated 17 December 2007. The lapse of time between the two hearings was, we understand, because the parties were waiting for a decision of this court in another matter (not the case of Gibson).
The case has been in the Court of Appeal before. On 21 December 2005 the court remitted to the employment tribunal three questions, the employment tribunal's decision having been made on 22 December 2003 and upheld by the Employment Appeal Tribunal. At paragraph 129 of Armstrong & Ors v Newcastle Upon Tyne NHS Hospital Trust [2005] EWCA Civ 1608 the remittal to the employment tribunal provided a question, that if the answer to the third question was in the affirmative:
“…the employment tribunal should then consider whether the decision to put the domestic services out to tender, or to discontinue the domestic services' bonus scheme, was an act of discrimination on grounds of gender”
In late 2000 a large number of female ancillary workers employed by the Trust commenced proceedings against it under the Equal Pay Act 1970. They were employed at four hospitals maintained by the Trust; they claimed the benefit of bonus payments paid to nominated male comparators. The period covered by the claims extends in principle six years back from the commencement of proceedings.
On the remittal, the employment tribunal held that the Trust were in breach of the Act and that finding has been upheld by the Employment Appeal Tribunal. On behalf of the applicant Trust, Mr Cavanagh QC submits that his clients have not received a proper hearing on the remitted issue; that is, whether the reason for the pay differential was unconnected with sex. He submits that the case is different from others which have been considered because in other cases there was a history of inequality. It is, he submits, a nice point of law, the circumstances in which a claimant group is paid the market rate: does that give rise to an inference of sexual discrimination? He put the proposition on behalf of his clients in this way when pressed; women earn less because the pay was reduced as a result of circumstances arising from CCT—that is the tendering procedure—which did not apply to men. The reason for the difference was not sex taint but moving to the private sector, and that is what happened. The tendering process occurred. Prior to that there was bonus paid to the claimants, predominantly female, as well as to men doing comparable work. In one case it was a predominantly female workforce; in the other a predominantly male workforce.
Obviously a good result was sought on the tender, and a decision was made that, in order to obtain the best result for the claimant group of workers, their bonus should be excluded. It was believed that an appropriate result could be achieved by the male-dominated occupations if the bonus was included, and that, it seems to me, creates the issue. Detailed reference has been made, understandably, to the decision of this court in Armstrong and to the judgment of Buxton LJ. It is not challenged that the statistical evidence in this case shows that men are being paid more than the comparable women. Armstrong establishes, it is submitted, that that in itself does not create discrimination, within the meaning of the Equal Pay Act, when there are differences in pay. Before the need to provide to establish an objective justification arises, it is submitted. The claimant has to go on to establish that the difference is due to a sex taint.
This court has recently considered the situation in the case of Gibson v Sheffield City Council [2010] EWCA Civ 63. All members of the court found that Armstrong was not decided per incuriam; there were differences between members of the court as to the circumstances in which the principle stated could apply. The issue has also been considered in other cases to which I will briefly refer.
Mr Cavanagh's submission is that, in considering the question remitted to them, the tribunal applied the wrong test. The EAT have made two favourable inferences to uphold the decision of the employment tribunal; further, their own reasoning is defective. The case should again, Mr Cavanagh submits, be remitted so that his clients can have what he would describe as a proper hearing on the Armstrong issue. There is, he submits, in this case a genuine material factor (“GMF”) explaining the difference between the male rates and the female rates, that being the one already identified. It is different from the run of cases, he submits, where there is a history of inequality. Here the bonus was lost to make the claimants' work competitive under the CTT provisions. That approach is not tainted by sex. Other female jobs include their bonus because in those cases, as in the case of the males comparable to the complainants, it was thought that a result could be achieved while retaining the bonus.
Reference has been made to the decision of the European Court of Justice in Enderby [1994] ICR 112 and to the decision of the House of Lords in Marshall [2009] ICR 196, which were the subject of submissions to this court in Armstrong and also in Gibson and has been considered by the EAT in the decision now complained of.
This is a renewed application. On a consideration of the papers, Smith LJ stated:
“On the Radcliffe issue, it appears to me that, having recognised the difficulties created by the terms on which the case was remitted to the ET, the EAT was correct to hold that the ET had been entitled to reach its conclusion. It appears to me that, even if this court were to reconsider the issue, in the end it would be bound to conclude that the ET was justified in holding that the Trust had not shown that the pay differential was not sex-tainted.”
Smith LJ also rejected the second ground of appeal which had been put forward to establish an objective justification for the difference in pay, which of course the 1970 Act permits. That aspect of the case has not been pursued further in this renewed application.
In considering these issues, it can be borne in mind that employers do have a safeguard by way of the opportunity to establish an objective justification. However, the present applicants, having failed on that ground, seek to rely on what I will refer to as the Armstrong point and to show what comes down to quite a narrow point—though not necessarily an easy one—that the difference has not arisen through any sex taint.
The question whether there is this further stage in the procedures has been considered in the courts since Armstrong, the court and the EAT seeking to apply the principles laid down in Enderby and Marshall. Elias J, as he then was, has been concerned in several cases, including Villalba v Merrill Lynch Inc and Ors [2007] ICR 469. In relation to Armstrong, he stated at paragraph 113:
“In effect, therefore, Enderby establishes that statistics...
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