North Cumbria University Hospitals NHS Trust v Mrs J Fox and Others
| Jurisdiction | England & Wales |
| Judge | Lady Justice Smith,Lord Justice Rimer |
| Judgment Date | 30 June 2010 |
| Neutral Citation | [2010] EWCA Civ 729 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2009/1441 |
| Date | 30 June 2010 |
[2010] EWCA Civ 729
[2009] UKEAT 0385 08 2404
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Employment Appeal Tribunal
The Honourable Mrs. Justice Slade,
Mr a Harris & Mrs D M Palmer
Before: Lord Justice Carnwath
Lady Justice Smith
and
Lord Justice Rimer
Case No: A2/2009/1441
Andrew Clarke QC and Naomi Ellenbogen QC (instructed by Dickinson Dees LLP) for the Appellant
Thomas Linden QC (instructed by Thompsons Solicitors) for the Respondents
Hearing dates: Wednesday 21st April, 2010
Carnwath LJ:
This is an appeal from the Employment Appeals Tribunal on 27 April 2009 which allowed an appeal from the Employment Tribunal on a pre-hearing review. The underlying proceedings relate to some of the many equal pay claims made by nurses employed by the North Cumbria Trust (“the Trust”). As the EAT observed, the appeal concerns “but one element of a very long running saga of litigation to resolve these claims”.
The immediate issue arises out of the claimants’ attempt to add to the existing proceedings comparators from different job groups. It is common ground (following Bainbridge v Redcar and Cleveland Borough Council (No 2) [2007] IRLR 494) that the addition of a new comparator to an equal pay claim represents a new cause of action. The questions before the Employment Tribunal were, first, whether the application to add such a new cause of action was out of time; and, secondly, if so whether it had a discretion to allow the addition out of time, and how it should be exercised.
Factual background
The claims are linked to the change from the Whitley Council pay system to the so-called “Agenda for Change”, agreed between government, management and unions in November 2004. I can take the relevant facts from EAT's judgment (para 10–11):
“Prior to the introduction of Agenda for Change, pay in the National Health Service was controlled by the Whitley Council. There was a general Whitley Council and nine functional councils applicable to various categories of staff. For example there was a functional council for maintenance staff, one for scientific and professional staff and one for nursing and midwifery staff, which applied to these claimants. The Whitley Council system incorporated 170 pay scales and hundreds of different grades and allowances. After lengthy discussions between the Department of Health, NHS employers, trade unions and staff representatives, an agreement was reached for Agenda for Change. The basis of Agenda for Change is a job evaluation scheme and pay scale which applies to all employees in the NHS apart from doctors and dentists. Agenda for Change includes three national pay bands. At the same time as new pay scales, national core terms and conditions of service were also introduced together with some flexibility permitting the application of local terms and conditions. A single national negotiating council was formed.
In June 2004 it was announced that the operational date for the implementation of the new terms and conditions of Agenda for Change would be 1st October 2004. The final Agenda for Change agreement was signed in November 2004. Individuals who agreed to the change were assimilated onto their new place in the Agenda for Change pay scales. The assimilation process required an extensive job evaluation exercise. Following evaluation employees were given a place on the pay bands to which they were to be assimilated. If the job holder did not agree with the banding, they were entitled to have it reviewed by a Review Panel. On assimilation to a pay band each employee received a letter from the Trust setting out the band to which he or she had been assimilated and giving details of some of the terms and conditions under Agenda for Change.”
A particular feature of the new terms and conditions was the so-called Knowledge and Skills Framework (“KSF”). Again I quote the EAT (para 21–2):
“To progress up the pay scale, employees had to demonstrate the necessary skills to pass through certain pay progression gateways. Under Whitley Council, employees automatically progressed by incremental steps until they reached the top of the scale. Under KSF each individual employee has to demonstrate the knowledge and skills required for their job. The first gateway at which this is to be demonstrated is within 12 months of appointment. To progress further up the pay scale they also have to pass a gateway which is fixed at different levels for different grades. If an employee fails to demonstrate the required skills and knowledge they will not progress up the pay scale.”
The original standard form of contract had contained a statement that the terms and conditions were “subject to change”, and that “any major changes” would be recorded in the documents kept at the appropriate office. Following the agreement in November 2004, individual employees were sent “assimilation letters” in these or similar terms:
“Following the introduction of the new NHS pay system I am writing to notify you of the results of the job matching/evaluation process and provide you with details of your new rate of pay and main terms and conditions.
Terms and Conditions
A summary of the main changes to your terms and conditions of employment follows.”
No assent or confirmation was sought from the recipients.
The case before the tribunals
The claims were made under the Equal Pay Act 1970. Section 1 gives women employees the benefit of an “equality clause” as defined in the section, the broad effect of which is to ensure that they are employed on terms not less favourable for equivalent work than those applying to their male counterparts.
The issues in the present case arose under section 2, which deals with disputes. A claim in respect of alleged contraventions of the equality clause or for arrears of remuneration or damages, may be presented by complaint to an employment tribunal. By sections 2(4) and 2ZA(3A), the proceedings must be instituted on or before “the qualifying date”, which in a “standard case” (as this was taken to be) is —
“…the date falling six months after the last day on which the woman was employed in the employment.”
Accordingly, the issue before the tribunals was whether the previous “employment” came to an end on the day on which the new terms came into effect in each case, with the result that the six month period ran that from that time. This was treated as turning on whether the changes were sufficiently “fundamental” to result in the substitution of a new contract, or whether they constituted a mere variation of a continuing contract. A number of authorities were discussed by both tribunals. Recent guidance was found in the summary of principles by Elias P in Cumbria County Council v Dow (No 2) [2008] IRLR 109 para 12, encapsulated in the following self-direction (para 36):
“If the change is not of a fundamental nature, the only proper inference is that there was a variation unless we are satisfied that there was, objectively viewed, an express agreement that the mechanism to be adopted was the termination and new contract route.”
The Employment Tribunal decided that the changes had resulted in a new contract. They regarded the introduction of KSF as “a fundamental change” from the “incremental” approach of Whitley (para 108); and cited other changes which “in their totality” added up to a “significant and fundamental change in the terms and conditions”:
“Leads and allowances have been removed and higher pay given. On call and standby payments are changed. Overtime calculation is also changed. Previously overtime had to be taken as time in lieu by nurses, in contrast to other employees of the NHS, but now they get paid overtime for the extra hours that they work although they still have the options of taking time in lieu. Holiday pay and sick pay calculations are now calculated using the regular pay that an employee receives not just the basic pay…” (para 109)
They concluded therefore that Agenda for Change represented “a fundamental change of the terms and conditions of employment” with the result that the Whitley Council terms and conditions had been “rescinded”, and a new contract put in its place (para 112).
The EAT disagreed:
“In our view the Employment Tribunal perversely categorised as fundamental a change in the criteria for pay progression which in any event only impacts at two points in a pay band and otherwise was presented as normally leading to progress to the next point on the pay band on the employee's incremental date.
The changes to pay listed in paragraph 109 which affect the claimants are restricted to pay. Allowances were consolidated into pay and there were changes to on call and standby payments, provision of pay for overtime and the calculation of holiday pay on regular rather than basic pay. The change in standard hours of work in the NHS does not affect the claimant nurses. Whilst these changes are important, in our judgment the Tribunal came to a perverse conclusion if and insofar as it regarded them either on their own or taken together with the introduction of KSF as fundamental to the contracts of employment as a whole.” (para 92–3)
The case was remitted to the Employment tribunal to determine the application to amend, on the basis that it was not out of time under section 2.
The case in this court
On the Trust's appeal to this court, the case has taken a new turn. The claimants, now all represented by Mr Linden QC instructed by...
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