Rutherford v Secretary of State for Trade and Industry (No 1)
| Jurisdiction | UK Non-devolved |
| Judge | LORD WALKER OF GESTINGTHORPE,BARONESS HALE OF RICHMOND,LORD SCOTT OF FOSCOTE,LORD NICHOLLS OF BIRKENHEAD,LORD RODGER OF EARLSFERRY |
| Judgment Date | 03 May 2006 |
| Neutral Citation | [2006] UKHL 19 |
| Court | House of Lords |
| Date | 03 May 2006 |
and another (FC)
and others
[2006] UKHL 19
Appellate Committee
Lord Nicholls of Birkenhead
Lord Scott of Foscote
Lord Rodger of Earlsferry
Lord Walker of Gestingthorpe
Baroness Hale of Richmond
HOUSE OF LORDS
Appellants:
Robin Allen QC
Rachel Crasnow
Paul Troop
(Instructed by Linklaters for Mr Rutherford and Islington Law Society for Mr Bentley)
Respondents:
David Pannick QC
Melanie Hall QC
Kassie Smith
(Instructed by Treasury Solicitor)
My Lords,
Most people in this country who work as employees stop working by the time they are 65 years of age. The percentage of the workforce carrying on after that age is very small. One disadvantage suffered by those who do continue working is that they no longer have the benefit of redundancy pay or compensation for unfair dismissal. A higher proportion of men continue in employment after 65 than women. So, it is said, the cut-off age fixed by the employment legislation indirectly discriminates against men. An apparently neutral statutory provision has in fact a disparate impact on men. That is the claim in these proceedings. The legislative cut-off age, it is said, infringes the equal pay obligations imposed by article 141 of the EC Treaty.
This summary over-simplifies the facts. The detailed facts are set out by my noble and learned friend Lord Walker of Gestingthorpe. But the summary suffices to identify the essential issue.
My Lords, these facts seem to me to give rise in principle to an issue of indirect sex discrimination. Workers who retire under 65 have the statutory protection of redundancy pay and compensation for unfair dismissal throughout their working lives. Those who continue to work beyond that age do not. They lose that protection when they are 65. Of course most employees do not want, or are not able, to work beyond the age of 64. For present purposes that is nothing to the point. All employees wish to have the statutory protection so long as they are working. Those who retire under 65 have that protection, those who retire later do not. For present purposes, that is the appropriate characterisation of the impact of the statutory cut-off age.
In my view, however, the claim in the present case founders at an early stage. The percentage of employees who are not adversely affected by the cut-off age is about 98.8%. In the make-up of this group there is virtually nothing to choose between men and women. The percentage of male employees not adversely affected is 98.6%. The corresponding figure for women is 99.0%. The percentage of employees who are adversely affected comprises the residual figures. This group comprises 1.2% of the workforce, and the split between men and women is 1.4% men and 1.0% women. This group comprises about 320,000 employees altogether.
I do not think these figures show that the impugned legislation has an adverse impact on a substantially higher proportion of men than women. Substantial numbers of employees are involved. But the ratio of women and men who are adversely affected is 1:1.4. In the context of a national scheme applicable alike to men and women in an employed workforce of over 26 million workers, of whom only 1.2% are affected by the cut-off age, I consider this ratio does not suffice to establish the necessary degree of disparate impact as between men and women. For this reason, explored more fully in the speech of Lord Walker of Gestingthorpe, I would dismiss this appeal.
My Lords,
These appeals raise a short point. Sections 109 and 156 of the Employment Rights Act 1996 impose, in their application to the two appellants, a cut-off age of 65 for "the right not to be unfairly dismissed…" (s.94(1) and s.109(1) of the 1996 Act) and for the right, on dismissal for redundancy, to a redundancy payment (s.156(1) of the 1996 Act). Mr Rutherford was dismissed when he was aged 67. He wants to claim a redundancy payment and compensation for unfair dismissal. Mr Bentley was dismissed when was aged 73. He wants to claim a redundancy payment. At first blush the statutory provisions appear to stand in their way. But both appellants contend that under EC law, Article 141, the statutory bar constitutes indirect discrimination against them on the ground of their sex and is therefore unlawful. They accept, of course, that the statutory bar does not constitute direct discrimination against men. The statutory provisions are neutral in their terms, expressed to apply to all men and all women in employment after the age of 65. The appellants point, however, to statistics that show that relatively more women than men leave employment under the age of 65 and, consequently, that relatively more men than women over the age of 65 are still in employment. This shows, they say, that relatively more men than women are prevented by the statutory bar from making unfair dismissal or redundancy claims and that this disparate effect constitutes indirect discrimination. The short point is whether they are right.
This short point produced a judgment of some 14 pages by the Employment Tribunal (which held that the appellants' contention was right), a judgment of over 100 pages by the Employment Appeal Tribunal (which held it was not) and a judgment by Mummery LJ in the Court of Appeal, agreed to by the other members of the Court, that, in a mere 14 pages, upheld the EAT. Mummery LJ commented on the lamentable state of complexity and obfuscation which appeared to attend this area of employment law. In paragraph 3 of his judgment, set out by my noble and learned friend Lord Walker of Gestingthorpe in his opinion (para 37) which I have had the opportunity of reading in advance, one finds references to the "increasingly voluminous and incredibly intractable" legal materials on indirect discrimination, to the arguments becoming "more convoluted, while continuing to multiply" and to the "cascades of case law" from this House and from the European Court of Justice. Any judge who reads references of that character is likely instinctively to feel that something has gone awry with the jurisprudence about indirect discrimination.
It is not that the concept of indirect discrimination on the ground of sex is difficult to express or to understand. The concept is succinctly defined in the Burden of Proof Directive (97/80/EC) -
"…indirect discrimination shall exist where an apparently neutral provision, criterion or practice disadvantages a substantially higher proportion of the members of one sex unless that provision, criterion or practice is appropriate and necessary and can be justified by objective factors unrelated to sex."
The text of the Directive that I have cited contains, first, a statement of the situation that must be found to exist - it must be shown that a substantially higher proportion of the members of one sex than the members of the other sex are disadvantaged by the provision in question - and, second, if that situation is shown to exist, a requirement that the need for the provision be justified. So, where a complaint of indirect discrimination is made two issues potentially arise. Both have been argued before your Lordships on these appeals but I want to concentrate for the moment on the first. Unless the requisite situation of relative disadvantage can be shown, the second issue, the issue of justification, does not arise.
The Directive speaks of a "substantially higher proportion of the members of one sex" being disadvantaged. This is the language of comparison. It poses the question whether the proportion of men disadvantaged by the statutory bar is substantially higher than the proportion of women disadvantaged by it. The two proportions must be compared. Each proportion, expressed as a vulgar fraction, needs a numerator and a denominator. So the appropriate numerator and denominator must be identified.
In relation to each of the fractions required by the Directive to be compared the numerator will be the number of the men (in the one case) and the number of the women (in the other case) who are disadvantaged by the statutory bar. There are two possible views as to who should be included in this disadvantaged group. One view is that the disadvantaged will be those employees over the age of 65 who are dismissed. If their employment is terminated for any reason other than dismissal, i.e. voluntary retirement or death (it is difficult to think of any other terminating event), it is not obvious that they are disadvantaged by a bar on claims for compensation for unfair dismissal or for redundancy payments. An alternative view is that everyone who is in employment over the age of 65 is disadvantaged by the statutory bar. He or she will be working under conditions that allow no remedy for unfair dismissal or for dismissal on redundancy grounds. These seem to me to be the only two possible alternatives for the numerator.
The identification of the denominator depends on the choice of numerator. If the appropriate numerator is the number of over 65 year olds who have been dismissed, then the obvious denominator would be the total number of over 65 year olds in employment. The comparison would ask whether the proportion of over 65 year old men in employment who had been dismissed was substantially higher than the proportion of over 65 year old women in employment who had been dismissed. I will refer to this comparison as "comparison A".
But if the correct numerator in each fraction is the total number of men, in the one case, and of women in the other case, over the age of 65 and still in employment, the identification of the correct denominator becomes more difficult. One view might be that the denominator should, as in...
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