Employment Cases Update

North & Ors v Dumfries and Galloway Council [2011] CSIH 2

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Date published: 14/01/2011

Appeal against decision of EAT which rejected the selection of comparators in an equal pay claim. Appeal dismissed.

The appellants were classroom and learning assistants employed by the respondents who brought equal pay claims, partly on the grounds that they did not receive bonuses received by their selected comparators who were largely groundsmen, refuse collectors and road workers. The selection of comparators was heard as a preliminary issue and the tribunal found that the case was made that the comparators were in the same employment. On appeal to the EAT, that finding was reversed largely because the comparators could not have worked at the school and that the test, in the EAT's view and following Lord Slynn in British Coal Corporation v Smith was that there had to be "a real possibility of the comparator being transferred to the claimant's establishment ..."

In this appeal, Lady Paton provides a comprehensive review of the submissions for both sides, the relevant case law including British Coal Corporation and City of Edinburgh v Wilkinson and comments on how the authorities in this case case should be construed in line with European jurisprudence. She concludes that the EAT had erred in applying the "real possibility" test as such a construction

"imports a test which is not articulated (or even implied) in the statute, the decided cases to date, or the EEC Treaty"

and which

"would undoubtedly place an additional burden upon an equal pay claimant. In our view, that additional burden should not be so imposed, partly because such a test is not articulated in statute or precedent, and partly for the policy reasons set out by Lady Smith in Wilkinson, namely:

"... the intention of section 1(6), which must be assumed to be to promulgate rather than undermine the Article 141 principle, could be undermined if claimants were required to establish, as fact, that there was a real possibility of their comparators being employed at the same establishments as them."

However she then goes to dismiss the appeal largely because the tribunal has not sufficiently accounted for the evidence of the respondent's human resources director who had stated that it would be unlikely that any male comparator, if hypothetically transferred to work at the school, would be employed on the same terms as the colleagues he left behind.

____________________

SECOND DIVISION, INNER HOUSE, COURT OF SESSION
 
Lady Paton
Lord Hardie
Lord Abernethy
 
[2011] CSIH 2
XA104/09
 
OPINION OF THE COURT
 
delivered by LADY PATON
 
in the appeal under section 37(1) of the Employment Tribunals Act 1996
 
by
 
MRS ELAINE NORTH AND OTHERS (Appellants)
 
against
 
DUMFRIES AND GALLOWAY COUNCIL (Respondents)
 
_______
 
Appellants: Napier QC; Thompsons
Respondents: Truscott QC; Marsh, Solicitor to Edinburgh City Council for Dumfries & Galloway Council Legal Services
Intervening Party: Equality and Human Rights Commission
 
7 January 2011
 
Equal pay claim: whether claimants and comparators "in the same employment"
 
[1] The appellants, namely women employed by Dumfries and Galloway Council ("the respondents") as school classroom assistants, support for learning assistants, and nursery nurses, made a claim for equal pay, selecting as their male comparators groundsmen, road workers, refuse drivers, refuse collectors, and a leisure attendant also employed by the respondents. The appellants could have selected male janitors employed at their school premises, but those janitors did not qualify for bonuses (whereas the groundsmen and others did); hence the particular selection.

[2] The appellants based their claim solely upon domestic legislation, namely the Equal Pay Act 1970, and relevant United Kingdom case-law. They expressly reserved their right to make submissions about the direct application of Article 141 of the European Community Treaty (formerly Article 119 and now Article 157) to the effect that the respondents constitute a "single source" paymaster of the wages of both claimant and comparator, thus able to rectify any unjustifiable differences in pay. The appellants continued to reserve their Article 141 argument before the Employment Appeal Tribunal (EAT) and before this court.

[3] A preliminary issue taken before the employment tribunal was whether the appellants were entitled to select the groundsmen and others as their comparators. The respondents contended that the groundsmen and others were not valid comparators for the purpose of the 1970 Act, as they had not been shown to be "in the same employment" as the appellants within section 1(6). Having heard evidence and submissions, the employment tribunal decided that the appellants had proved that they were in the same employment as their comparators. The respondents appealed to the EAT. The EAT reversed the tribunal's decision. The appellants now appeal to the Court of Session. The Commission for Equality and Human Rights have intervened to the extent of lodging written submissions, broadly in support of the appellants.
 
The relevant domestic legislation: section 1(6)
[4] Section 1 of the Equal Pay Act 1970 provides inter alia:

"1. Requirement of equal treatment for men and women in same employment

(1) If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include (directly or by reference to a collective agreement or otherwise) an equality clause they shall be deemed to include one.

(2) An equality clause is a provision which relates to terms (whether concerned with pay or not) of a contract under which a woman is employed (the 'woman's contract'), and has the effect that - ...

(c) where a woman is employed on work which ... is, in terms of the demands made on her (for instance under such headings as effort, skill and decision) of equal value to that of a man in the same employment -

(i) if (apart from the equality clause) any term of the woman's contract is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and

(ii) if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed, the woman's contract shall be treated as including such a term...

(6) ... and men shall be treated as in the same employment with a woman if they are men employed by her employer or any associated employer at the same establishment or at establishments in Great Britain which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes."

Background
[5] As the appellants and the comparators are employed by the same employer, the first prerequisite of section 1(6) is satisfied. However the comparators are not "employed ... at the same establishment" as the appellants: the appellants are employed at school premises, whereas the comparators are employed at various depots and workplaces including (in the case of the leisure attendant) a swimming-pool. The groundsmen work at school premises on a seasonal basis, visiting from their own depots. Similarly road workers, refuse collectors, and refuse drivers call at school premises on occasions in order to carry out road works and collect refuse. But they are employed at their depots, not at the schools. Accordingly the appellants cannot rely upon the simple fact of being employed "at the same establishment" in order to justify their choice of comparators, as in Lawson v Britfish Ltd [1987] ICR 726. The appellants have to show that the men are employed by the respondents "at establishments in Great Britain which include that one [i.e. the school premises] and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes".

[6] In that context, evidence led before the employment tribunal established that the appellants' employment terms and conditions (their "employment regime" or "employment package") comprised a collective agreement known as "the blue book". The comparators' terms and conditions were contained in a collective agreement known as "the green book". Negotiations during a period from 1999 to 2009 produced a single status agreement applying to both groups of employees ("the red book"). However in the present case, the tribunal found as a fact that, at the relevant time, pay and associated matters under the red book were still under negotiation. That finding is not challenged. Accordingly questions relating to pay and other conditions are to be regarded as governed by the blue book (appellants) and the green book (comparators) respectively.

[7] Paragraphs 6 et seq of the employment tribunal's judgment give some detail about those terms and conditions. For example, the appellants' employment regime consists of work for 190 days each year, with an additional 5 in-service days for teaching staff. The appellants are employed during term-time only, and work fewer than 35 hours per week. They provide support to teaching staff and/or a caring support role for pupils. The head teacher of the relevant school has overall day-to-day management of their work. The appellants are paid on the basis of salary scales with an annual incremental progression to a scale maximum. There is no provision for bonuses or allowances. The appellants are entitled to increased annual leave (subject to seniority); time off in lieu; removal and relocation expenses; essential car user allowance; and an assisted car purchase scheme. There are provisions for flexible working. Under the Disclosure Scotland procedure, the appellants are checked at the "enhanced" level for any relevant criminal record.

[8] The comparators for their part travel from the depot at which they are employed to the locations where the manual work is required (which include school premises). Gardeners and groundsmen inter aliacut grass, sweep and collect leaves, trim trees, cut hedges, kill weeds, and mark football and rugby pitches and athletic tracks. Road workers inter alia repair walkways and carpark areas, erect signs, barriers, bollards and road furniture generally. Refuse collectors collect refuse from inter alia school premises. The leisure attendant is based at a swimming-pool and does not travel to other work locations. The comparators work full-time. They are paid on an hourly rate, determined for each grade of worker. They are entitled to receive bonuses and additional allowances. They are not entitled to increased annual leave; removal or relocation expenses; an assisted car purchase scheme; or flexible working. The Disclosure Scotland procedure does not apply to the comparators, with the exception of the leisure attendant and certain groundsmen who may have contact with elderly people.
 
Decision of the employment tribunal
[9] Having heard the evidence, the employment tribunal found that the appellants and their comparators were "in the same employment" in terms of section 1(6) of the 1970 Act. The tribunal's judgment dated27 May 2008 notes inter alia:

"61. In the present case, the claimants and comparators are neither employed under the same terms and conditions nor in the same establishment. It is therefore necessary for the claimants to satisfy the tribunal that if their comparators were employed at their establishment, they would be employed under broadly similar terms to those that they are employed under at present. In other words, that the comparators, if employed at the same establishment as the claimants, would not be employed on terms and conditions that differ to such an extent as to prevent a fair comparison with the claimants' terms and conditions. In [British Coal Corporation v Smith [1996] ICR 515 (HL)] Lord Slynn held that this may well involve consideration of a hypothetical situation. It is not enough therefore for the respondents to say that the comparators would never be employed at the claimants' establishment. In any event, in this case, it is not in dispute that the comparators (excluding the leisure attendant) are employed to undertake work in a variety of locations including schools. The tribunal was satisfied, and did not understand it to be in dispute, that the comparators undertake work that is necessary for the operation of school premises. This is notwithstanding that the comparators, on an individual basis, spend a small percentage of their time working at schools. The comparators do not undertake a significant amount of work at the base to which they are currently allocated. They are employed to work at a variety of locations, including schools. There was no suggestion that their work at schools was of any less significance than work undertaken at any other location where they are employed to work. When the comparators work in schools, there is no change to their terms and conditions of employment. They remain employed under Green Book (R1) terms and conditions. There was no persuasive evidence before the tribunal that in the event they were based at the same establishment as the claimants, the comparators would be employed under terms and conditions other than the Green Book (R1). In these circumstances, the tribunal did not, as suggested by the respondents, find it impossible to conclude that the comparators, including leisure attendants on the basis that schools have leisure facilities and swimming pools, could be employed in the same establishment as the claimants, and if they were, would be employed on broadly similar terms to those terms and conditions under which they are currently employed. Accordingly, for the purposes of Section 1(6) of the Act, the claimants and comparators are employed at different establishments at which common terms and conditions of employment are observed for the claimants and comparators."

Decision of the EAT and dicta in Wilkinson
[10] The respondents appealed to the EAT, contending that the employment tribunal had erred in law in finding that the appellants and their comparators were in the same employment. The judgment of the EAT states inter alia:

"43. On behalf of the respondents, Mr Truscott submitted that ...[the] comparators would not be employed in their jobs at schools; there was, for instance, no need for a refuse collector to be employed at a school. It was ludicrous to suggest that that could happen. The fact that some of the comparators attended schools for certain purposes was irrelevant. Even so, some of them, such as the leisure attendant, never attended at schools. It had never been argued before the Tribunal that there was any possibility of the comparators being employed at schools. They were not obviously translocatable. It was an essential part of Lord Slynn's test that there was a real possibility of the comparator being transferred to the claimant's establishment...
Discussion and Decision
...
59. I conclude, in these circumstances, that where a woman seeks to use a male comparator that is not employed at her establishment, she requires to show a real possibility of him being employed there in the job he carries out at the other establishment or in a broadly similar job. Then, it is necessary for her to show that the terms and conditions on which he would be employed at her establishment would be broadly similar to those under which the class of which he is a member are employed at his establishment. That will involve taking account of any particular conditions that apply to all employees at her establishment. ...."

[11] In a subsequent judgment, City of Edinburgh Council v Wilkinson [2010] IRLR 756, the EAT made the following observations at paragraph 77:

" ... Whilst I consider that the application of the hypothesis [of a male comparator being deemed to be employed at the claimant's establishment] does require a factual substratum, I am persuaded that my analysis [in Dumfries and Galloway Council v North [2009] ICR 1363] was wrong, having revisited both the speech of Lord Slynn in British Coal and the fact that the Court of Appeal in theSouth Tyneside case would, had they had to adopt the hypothetical approach, have been prepared to do so on the basis of a hypothesis involving the inherently unlikely scenario of a street cleaner being employed at a school (paragraph 27). I accept that the intention of section 1(6), which must be assumed to be to promulgate rather than undermine the Article 141 principle, could be undermined if claimants were required to establish, as fact, that there was a real possibility of their comparators being employed at the same establishments as them."

Submissions for the appellants
[12] Senior counsel for the appellants submitted that the EAT had erred in paragraph 59 of the judgment in finding that section 1(6) required a woman to show "a real possibility" of the male comparator being employed at the woman's establishment in the job he carried out at the other establishment, or in a broadly similar job. If there were members of the male comparator class at the same establishment as members of the appellants' class, what had to be shown was that "the male comparators at other establishments and at the [appellants'] establishment share common terms and conditions": Lord Slynn at page 526 of British Coal. If there were no such men at the appellants' place of work, then all that had to be shown was that "like terms and conditions would apply if men were employed there in the particular jobs concerned": Lord Slynn, cit sup. Neither statute nor precedent supported the proposition that there must be a real possibility that the male comparators would actually be employed at the women's establishment. Such a requirement placed a major obstacle in the path of claims for equal pay.

[13] It was accepted that the tribunal had to make findings-in-fact in relation to the terms and conditions of employment applying to the relevant groups of employees. What the appellants had to demonstrate was that the comparators, as a class of employee, had the green book employment structure or regime in relation to pay, terms and conditions, and that if a green book manual worker were transposed from being employed at a depot to being employed at a school, the green book terms would still apply to that worker. That would be sufficient for the purposes of section 1(6). Counsel contended that such evidence existed, namely paragraph 32 of the witness statement of David Archibald, the respondents' human resources manager. That paragraph indicated that if a comparator were to work at the appellants' establishment, he would remain on core green book conditions. There was no evidence that his terms and conditions would be modified to be aligned with the blue book.

[14] The EAT had therefore fallen into error. It was no part of Lord Slynn's test to establish that the putative comparator could or would be employed to do his work at the appellants' establishment. Counsel advanced several arguments in support of that contention: (i) If Lord Slynn meant to impose a test of "a real possibility", he would have said so. In any event, that test ran counter to the principles set out in Leverton v Clwyd County Council [1989] 1 AC 706 (HL) and British Coal Corporation v Smith, supra. (ii) The whole purpose of the reference to "common terms" in section 1(6) was to exclude the making of any comparison where a comparator was employed under a different employment regime. But that concept was quite different from the question whether the physical circumstances of the claimant's establishment would permit the comparator to do his normal job there. (iii) The test of "a real possibility" ran counter to European law, particularly Article 141. It was axiomatic that the domestic legislation had to be interpreted according to European law: cf City of Edinburgh Council v Wilkinson, supra, paragraph 65. But if the test set by the EAT were correct, UK law would be contrary to European law: cfdicta in paragraph 64 of Wilkinson. (iv) The test of "a real possibility" was not in keeping with the approach of the Court of Appeal in South Tyneside Metropolitan Borough Council v Anderson [2007] ICR 1581. In that case, the Court of Appeal accepted the unlikely hypothesis of a street cleaner being employed at a school. (v) If the EAT were correct, an unfair and arbitrary result emerged. It should not matter that a female employee was employed in one particular geographical area rather than another. (vi) It was not necessary to use the test of "a real possibility" to avoid anomalies and unjust outcomes. If a variation in pay was genuinely due to a material factor which was not the difference of sex, that could be dealt with under section 1(3) of the 1970 Act.

[15] Counsel therefore submitted that sufficient had been established by the evidence to support the tribunal's decision. The EAT had erred in overturning that decision. The appeal should be allowed; the decision of the EAT quashed; and the case remitted back to the tribunal for further procedure. If it was felt that further findings-in-fact were required, the case should be remitted back to the tribunal for findings to be made.

[16] European law: If, however, this court took the view that section 1(6) was satisfied only if there was a real possibility of the putative comparator being employed at the appellants' establishment on conditions broadly similar to those enjoyed at the home depot, then the appellants' argument moved to the next stage. As Lord Nicholls explained at paragraph 17 of Autologic Holdings plc v Inland Revenue [2005] UKHL 54, if domestic law was inconsistent with European law, "formal statutory requirements must where necessary be disapplied or moulded to the extent needed to enable those requirements to be applied in a manner consistent with Community law". In other words, an attempt must be made to find a construction in line with European law: cf Wilkinson paragraph 65.

[17] In the present case, if section 1(6) was ambiguous, the court should reach the right result by a process of construction. If, on the other hand, there was no ambiguity, section 1(6) should be read as varied or moulded by European law: cf Scullard v Knowles [1996] ICR 399, Mummery J at pages 403E, 405B-C.
[18] Counsel's primary contention was that section 1(6) could properly be construed to comply with European law. Reference was made to Defrenne v Sabena [1976] ICR 547, pages 566-577; Macarthys Ltd v Smith C-129/79 [1980] ECR 12752 ECJ, paragraphs 10 and 13; Lawrence v Regent Office Care Ltd [2003] ICR 1092, the Advocate General's opinion at page 1103 paragraphs 52 and 54, and the court's judgment at page 1108 paragraphs 17 and 18; South Ayrshire Council v Morton [2002] ICR 956 at paragraphs 44-50; Department for Environment Food and Rural Affairs v Robertson [2005] ICR 750 paragraphs 17 to 36; Armstrong v Newcastle-upon-Tyne NHS Hospital Trust [2006] IRLR 176, paragraphs 8, 10, 30; North Cumbria Acute Hospitals NHS Trust v Potter [2009] IRLR 176, paragraphs 107, 108, 110, 112; City of Edinburgh Council v Wilkinson [2010] IRLR 756, paragraphs 78 to 80. In the present case, there was a "single source" setting the terms and conditions of employment, including pay, namely the respondents. The respondents had the power to put matters right. If this court were satisfied that the respondents were the single source, then Article 141 was triggered, and section 1(6) had to be construed appropriately. The appellants did not consider it necessary to refer the case to the European Court of Justice.
 
Submissions for the respondents
[19] Senior counsel for the respondents submitted that section 1(6) had to be construed on the basis of the evidence, and in compliance with European law: cf Litster v Forth Dry Dock & Engineering Co Ltd 1989 SC (HL) 96. The dicta of Lord Slynn at page 526E-F of British Coal went to the heart of this case. But there Lord Slynn envisaged hypothetical transpositions between the same kind of establishment, namely collieries which employed a wide range of surface-workers such as electricians, fitters, carpenters, and gardeners. Thus it was reasonable to hypothesise the transposition of a surface-worker employed at Colliery A to be employed as a surface-worker at Colliery B, where he would continue to enjoy common terms and conditions with the surface-workers at Colliery A. However the present case involved establishments of different types, namely schools, refuse collection depots, road work depots, and a swimming-pool. It was not easy to see why one would wish to employ, for example, a full-time refuse collector at a school with 195 work-days per year interspersed with vacations, 35 working hours per week, management by a head mistress, and all the other differences set out in paragraph 6 et seq of the employment tribunal's judgment (see paragraphs [7] and [8] above). Lord Slynn referred to the hypothetically transposed worker as doing "the particular [job] concerned" (i.e. his normal job): page 526F of British Coal. But that would be impossible if he were employed at a school. The employment regimes or packages had to be compared. There were many features of the comparators' regimes which were very different from the regimes of the appellants. Reference was made to paragraphs 32 and 36 of Mr Archibald's witness statement. It was impossible to envisage a full-time refuse collector being employed at the school.

[20] Accordingly counsel invited this court to adhere to the formula of "a real possibility" as set out in the judgment of the EAT. Counsel commended the reasoning in that judgment, in particular in paragraphs 23, 28, 31, 40, 42, 43, 54, 56, 59, and 62, as being correct. The decision in South Tyneside Metropolitan Borough Council v Anderson [2007] ICR 1581 should not alter or detract from that reasoning. The ratio in South Tyneside was based on Leverton: i.e. two groups of manual workers were employed at different establishments, but under the same collective agreement. As a result, there had been no need for the Appeal Court to resort to British Coal. Thus the dicta of Sedley LJ at paragraph 27 of South Tyneside were obiter and unnecessary, and appeared to be linked to a possibly erroneous passage in the third sentence of paragraph 26. Nevertheless that dicta may have resulted in the passage (prayed in aid by the appellants) in paragraph 77 of Wilkinson. Counsel advised that the issue of "a real possibility" had not in fact been fully re-argued at the EAT hearing in Wilkinson, and again invited this court not to be influenced by the EAT's apparent reconsideration in relation to the test of "a real possibility".

[21] Counsel submitted that to argue that green book terms would still apply to a refuse collector or road worker hypothetically employed at a school would be to ignore the evidence of Mr Archibald, the respondents' human resources manager, and to rely upon an erroneous assumption. Both the appellants and the interveners (the Commission for Equality and Human Rights) commended paragraph 77 ofWilkinson as being a correct statement of the law; but the respondents' position was that paragraph 77 had a number of deficiencies. Counsel invited the court to refuse the appeal and to sustain the EAT's judgment.

[22] European law: Counsel responded to the appellants' next stage in the argument (based upon the assumption that this court would find in the respondents' favour in the context of the proper construction of section 1(6) as containing the test of "a real possibility"). However counsel emphasised that the appellants in the present case based their arguments solely upon the proper construction of domestic legislation (namely section 1(6) of the Equal Pay Act 1970). They had simply reserved any argument based upon Article 141 itself.

[23] It was accepted that domestic legislation had to be interpreted in such a way as to be compliant with European law: Defrenne v Sabena [1976] ICR 47 at page 566; Leverton v Clwyd County Council [1989] 1 AC 706, May LJ at page 719B-C (subsequently approved in the House of Lords). As the present appeal was based upon domestic law, and not directly upon European law (in particular Article 141), certain authorities were not wholly in point: in particular Armstrong v Newcastle-upon-Tyne NHS Hospital Trust [2006] IRLR 124; Lawrence v Regent Office Care Ltd [2003] ICR 1092; South Ayrshire Council v Morton [2002] ICR 956; Department for Environment Food and Rural Affairs v Robertson [2005] ICR 750 paragraph 28; North Cumbria Acute Hospitals NHS Trust v Potter [2009] IRLR 176. The appellants in the present case did not contend that section 1(6) was incompatible with Article 141.

[24] The question was whether the "real possibility" restriction endorsed by the respondents was compatible with European law. The appellants had not advanced the "single source" argument in the employment tribunal or the EAT. Accordingly those tribunals had not engaged in European law. In the respondents' submission, the concept of a "single source" came into Article 141 claims, but was not imported into section 1(6) claims. If, as the appellants seemed to suggest, section 1(6) had to be modified or moulded in order to be compliant with Article 141, then all meaning would be removed from the domestic provision (section 1(6)), and Article 141 would in effect rule. The respondents' position was that their interpretation of section 1(6) was the only proper construction. There was indeed a restriction arising from the domestic legislation, which did not appear in Article 141. The question therefore was whether the intention was to sweep away all the comparative restrictions in an equal pay claim: cfArmstrong, paragraph 8; and whether any restriction of comparisons between workers employed by the same employer was incompatible with Article 141. If this court felt that guidance from the European Court of Justice (ECJ) was necessary, the case should be put out By Order to discuss the scope of a referral. But the appellants did not consider a referral to the ECJ to be necessary.
 
Discussion
[25] The issue between the parties in this appeal is whether the EAT was correct to apply a test of "a real possibility" as outlined in paragraph 59 of its judgment, namely:

"... where a woman seeks to use a male comparator that is not employed at her establishment, she requires to show a real possibility of him being employed there in the job he carries out at the other establishment or in a broadly similar job. Then, it is necessary for her to show that the terms and conditions on which he would be employed at her establishment would be broadly similar to those under which the class of which he is a member are employed at his establishment ..."

If that test should not have been applied to the facts of this case, the appellants contend that the employment tribunal's decision that they were "in the same employment" as the selected male comparators should not have been overturned.

[26] Importantly, this court has not been requested to grant a declarator of incompatibility of section 1(6) of the Equal Pay Act 1970 with Article 141. Nor has the court been asked to give a ruling on the effect of the direct application of Article 141 to the facts of this case (for, as noted in paragraph [2] above, that argument was reserved). Thus this appeal concerns only the proper construction and application of section 1(6) of the 1970 Act in the particular circumstances of this case.

[27] Both counsel accepted that section 1(6) of the Equal Pay Act 1970 must be construed in compliance with Article 141 of the EEC Treaty. Article 141 provides:

"1. Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.

2. For the purpose of this Article, 'pay' means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer.

Equal pay without discrimination based on sex means -

(a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement;

(b) that pay for work at time rates shall be the same for the same job.

3. The Council, acting in accordance with the procedure referred to in Article 251, and after consulting the Economic and Social Committee, shall adopt measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, including the principle of equal pay for equal work or work of equal value.

4. With a view to ensuring full equality in practice between men and women in working life, the principle of equal treatment shall not prevent any Member State from maintaining or adopting measures providing for specific advantages in order to make it easier for the under-represented sex to pursue a vocational activity or to prevent or compensate for disadvantages in professional careers."

[28] It will be seen that Article 141 makes no reference to the establishment at which the claimant or her comparator works, or to the general terms and conditions of employment. But for present purposes, it being no part of the appellants' case that section 1(6) fails to comply with Article 141, we take the view that the references in section 1(6) to the same establishment and/or commonality of terms and conditions of employment simply give practical effect and focus to the general principle stated in Article 141.

[29] The crucial guidance for the present case are the words of Lord Slynn in British Coal Corporation v Smith [1996] ICR 515, at page 526:

"It is accepted by the corporation that for the purposes of this appeal as between the different establishments common terms and conditions do in any event apply to the two classes of claimants, canteen workers and cleaners. What therefore has to be shown is that the male comparators at other establishments and at her establishment share common terms and conditions. If there are no such men at the claimant's place of work then it has to be shown that like terms and conditions would apply if men were employed there in the particular jobs concerned [emphasis added]."

[30] Lord Slynn further observes at page 527C-D:

" ... The purpose of requiring common terms and conditions was to avoid it being said simply 'a gardener does work of equal value to mine and my comparator at another establishment is a gardener'. It was necessary for the applicant to go further and to show that gardeners at other establishments and at her establishment were or would be employed on broadly similar terms. It was necessary but it was also sufficient."

[31] As counsel for the respondents explained, Lord Slynn made those comments in the context of collieries. Counsel's detailed study of British Coal revealed that each colliery employed a wide range of surface-workers, including electricians, fitters, carpenters and a gardener. A female claimant at colliery A might wish to compare her rate of pay with a male colliery electrician: but there might be no such electrician at colliery A. She would then be entitled to select, as a male comparator, a male electrician based at colliery B. The female claimant would then have to show that the hypothetical transposition of that male electrician from colliery B to colliery A would not alter his terms and conditions of employment beyond recognition. In other words, she would have to show that "like terms and conditions would apply if [that male electrician] were employed [at colliery A] in [the work of an electrician at the colliery]". Bearing in mind the wide range of surface-workers available as comparators in the collieries, and theprima facie unexceptional hypothesis involving the transposition of a fitter or electrician or carpenter or gardener employed at one colliery to employment at another colliery, it may be true, as the respondents contend, that in British Coal Lord Slynn did not envisage the circumstances arising in the present case (where a hypothetical transposition of a road worker or refuse collector to be employed at a school seems unrealistic, if not impossible). The respondents therefore contend that the hypothetical transposition of the male comparator to the female claimant's establishment can only be valid if there is "a real possibility of his being employed there in the job he carries out at the other establishment or in a broadly similar job": paragraph 59 of the judgment of the EAT.

[32] We consider that the construction contended for by the respondents imports a test which is not articulated (or even implied) in the statute, the decided cases to date, or the EEC Treaty. A test of "a real possibility" as referred to in paragraph 59 of the EAT judgment would undoubtedly place an additional burden upon an equal pay claimant. In our view, that additional burden should not be so imposed, partly because such a test is not articulated in statute or precedent, and partly for the policy reasons set out by Lady Smith in Wilkinson, namely:

"... the intention of section 1(6), which must be assumed to be to promulgate rather than undermine the Article 141 principle, could be undermined if claimants were required to establish, as fact, that there was a real possibility of their comparators being employed at the same establishments as them."

Thus we accept the appellants' contention that the EAT erred in law in the present case in finding at paragraph 59 of the judgment that the wording of section 1(6) required a woman to show "a real possibility" of the chosen male comparator being employed at the woman's establishment in the job he carries out at the other establishment, or in a broadly similar job.

[33] It does not follow, however, that the appellants succeed on the facts of this case. As Lord Bridge pointed out in Leverton v Clwyd County Council [1989] 1 AC 706, at page 746:

"So long as [employment] tribunals direct themselves correctly in law to make the appropriate broad comparison, it will always be a question of fact for them, in any particular case, to decide whether, as between two different establishments, 'common terms and conditions of employment are observed either generally or for employees of the relevant classes' [emphasis added]."

See too the observations of the EAT at paragraph 77 of City of Edinburgh Council v Wilkinson [2010] IRLR 756:

"... if it is shown that members of the comparator group are always employed on common terms and conditions, then it is legitimate to assume that they would be employed on those terms and conditions at the claimants' establishment and men and women would thus be shown to be in the same employment ... [emphases added]"

[34] Accepting all the propositions in law which counsel for the appellants advanced in this context - for example, that the "employment regime" or the "employment package" is the relevant concept (a collective agreement being the paradigm example: Leverton, cit sup, Lord Bridge at page 745G); that terms and conditions should be considered broadly, so that minutiae and minor discrepancies would not disqualify someone from being a comparator; that it is the employment regime within the comparators' group which must be shown to be unchanged by the hypothetical transposition of the male comparator to the female claimant's establishment - we have nevertheless come to the conclusion that the evidence in this case did not support the appellants' selection of the road workers, groundsmen, refuse collectors, refuse drivers, and leisure attendant as comparators. We have reached that view for the following reasons.

[35] The evidence before the employment tribunal included a witness statement from David Archibald, the respondents' human resources manager. That statement included the following passages:

"32. If the comparator were at any stage to work at the claimants establishment in any true or meaningful sense, which I contend is simply not possible, they would remain on core Green Book conditions and they would not automatically transfer to any of the Blue Book conditions common to the Classroom Assistant/Nursery Nurse claimants. I must stress this has never happened and under the terms of the national and local agreements could never happen. If a manual worker comparator were for any reason to transfer to do their job solely and only in a school context, which would seem an impossible suggestion, then I cannot envisage other than that they would retain core Green Book conditions, but because of the nature of the work undertaken across all educational establishments, their terms and conditions would require to be very significantly varied to make working in such locations possible. I have been asked to provide examples of this and do so after consideration of the differences in national or core terms between the two collective bargains. ...

36. I am asked what would be the effect on terms and conditions if the manual worker comparator were to be employed by schools services in one or more school and excluding any personally preserved conditions applying to specific postholders arising out of unique circumstances. That which is hypothetical is also unrealistic, indeed impossible, since the occupational types/categories are not required in schools. Conceivably some new, hybrid, 'handyperson' type job incorporating all the tasks of the comparators could be created - but as to what the terms of such a job would be would be difficult to assess - if it was to remain on Manual Worker terms, because of the job content then the Green Book terms any such postholder would be on (whether doing a hybrid job or his/her current job) would not be similar to those s/he currently enjoys, because so many of the provisions of the Green Book which s/he now enjoys would no longer be apt. I cannot imagine even in the hypothetical context the job or jobs being able to remain similar to what they would be now - they simply would not fit into any JES manual worker profile - and that would have an effect on their terms and conditions.

37. The difficulty is caused by not comparing like with like. The claimants are termly or part-time employees and are comparing themselves, and their pay, to comparators who work full-time and in some cases receive bonuses. Thus there is an element of 'cherry picking' in the comparisons. Specifically there are Manual Workers in schools, not employed by the Education Service but by Combined Services whose work is carried out in schools, but their terms and specifically their pay reflect the fact that schools are not open 365 days a year - just 190 days, almost half. No APT&C claimant has claimed equal value with a Manual Worker who actually works in her school. They are claiming equal pay with Manual Workers who work almost twice the number of days per year that they work; they have 'cherry picked' a Manual Worker comparator in effect working almost twice the hours they work. Any like for like comparison would require to be with a Manual Worker who only works 190 days per annum; even with bonus payments any such comparator is likely to be earning significantly less than the claimant.

38. I am asked if it is not the case that the comparators so selected by the claimants could, if they worked in the claimants establishment in the work they currently do, have their days per year increased such as to make their working conditions and terms comparable to those they now enjoy (that is, they work 37 hours a week and have opportunities for overtime etc). My answer is 'no'. This is because of the peculiar pattern of work that relates to an establishment which only operates on a limited or restricted year - perhaps I can use an analogy - you cannot increase the number of hours that the comparators could work in the schools on the hypothetical assumption that they would ever be required in such establishments, because to do so would be like saying, that someone employed to be a lamplighter in Victorian Glasgow could be employed for more hours to do the same task by extending his working day into times when lamplight was not required. This is why I say the hypothetical case is too difficult to give any definitive answer to."

[36] Paragraph 32 of Mr Archibald's witness statement prima facie refers to a situation where a road worker or refuse collector is sent to work almost exclusively at a school although continuing to beemployed at his depot. In such circumstances, Mr Archibald considered that the worker would remain on core green book conditions. But paragraph 32 does not deal with the situation where the worker isemployed at the school. The latter situation is referred to in paragraphs 36 to 38 of Mr Archibald's statement (see paragraph [35] above). In that situation Mr Archibald's position appears to be that the terms and conditions common to other workers governed by the green book would not necessarily apply to the hypothetically transposed worker.

[37] It seems to us therefore that the circumstances of the present case are very different from the apparent interchangeability of colliery surface-workers (fitters, electricians, carpenters, gardeners) envisaged in British Coal. If evidence were to be led about the hypothetical transposition of a male colliery electrician, with a certain employment package or regime, from colliery B to colliery A, it could be assumed (unless the evidence showed otherwise) that his terms and conditions would remain broadly the same as his class of employees, and that he would therefore provide an appropriate male comparator for a female claimant at colliery A: cf the observations in paragraph 77 of Wilkinson. But Mr Archibald's evidence does not give clear support for such a result, were a refuse worker or road worker hypothetically to be transposed to be employed at a school. We note that Mr Archibald's evidence on this matter was not referred to in any detail in the judgment of the employment tribunal, nor were any findings-in-fact made in respect of that evidence. What is said at the second paragraph 61 at page 41 of the tribunal's judgment is as follows:

"... There was no persuasive evidence before the tribunal that in the event that [the comparators] were based at the same establishment as the claimants, the comparators would be employed under terms and conditions other than the Green Book (R1). In these circumstances, the tribunal did not, as suggested by the respondents, find it impossible to conclude that the comparators, including leisure attendants on the basis that schools have leisure facilities and swimming pools, could be employed in the same establishment as the claimants, and if they were, would be employed on broadly similar terms to those terms and conditions under which they are currently employed. Accordingly for the purposes of section 1(6) of the Act, the claimants and comparators are employed at different establishments at which common terms and conditions of employment are observed for the claimants and comparators."

It seems to us that the tribunal erred in its judgment by failing to address and resolve the issues raised in Mr Archibald's witness statement in the context of Lord Slynn's guidance, namely that "if there are no such men [at the schools] then it has to be shown that like terms and conditions would apply if men were employed [at the schools] in the particular jobs concerned [i.e. as road workers, groundsmen, refuse collectors, refuse drivers, and a leisure attendant]."

[38] In the result, we agree with counsel for the appellants that an error in law occurred at paragraph 59 of the EAT's judgment where it is stated that the wording of section 1(6) requires a female equal pay claimant to show "a real possibility of [the chosen male comparator] being employed [at the woman's establishment] in the job he carries out at the other establishment, or in a broadly similar job". But we are unable to ignore the content of Mr Archibald's witness statement, and the fact that he dealt with the important issue of employment conditions (or regime or package) applicable upon the hypothetical transposition of the comparators to the appellants' establishment in a way which does not support the appellants. Yet the employment tribunal does not mention that evidence, nor resolve the issues arising from it. In our view it is not possible in this case to make any assumption (as is suggested might be possible in certain circumstances in paragraph 77 of Wilkinson) that a transposed male comparator would be employed on broadly the same terms as his class of workers employed at the depots. We consider therefore that the appellants have failed to satisfy the requirements in Lord Slynn's dicta at page 526. It follows that the appellants have, in our opinion, failed to demonstrate that they are "in the same employment" as their chosen comparators within the meaning of section 1(6) of the Equal Pay Act 1970 as interpreted by authorities such as Lawson v Britfish Ltd [1987] ICR 726; Leverton v Clwyd County Council [1989] 1 AC 706; and British Coal Corporation v Smith [1996] ICR 515.

[39] For completeness, we add some observations relating to the cases of South Tyneside Metropolitan Council v Anderson [2007] ICR 1581 and City of Edinburgh Council v Wilkinson [2010] IRLR 756 paragraph 77. We accept that the dicta of Sedley LJ at paragraph 27 of South Tyneside were obiter. We do not find it necessary in the present appeal to examine those dicta in any detail. As for paragraph 77 of Wilkinson, we agree with the passage therein, quoted at paragraph [11] above. In our view, each case turns on the proper application to the facts of Lord Slynn's formula set out in British Coal. Thus if it can be shown that, no matter how unlikely the employment of the male comparator at the female claimant's establishment, the comparator would (or could be assumed to) remain on broadly the same terms and conditions of employment as other members of his class of employee, then the British Coal hypothesis would be satisfied, and the claimant and the comparator would be shown to be "in the same employment". But that has not been demonstrated in the present case, for the reasons given above.
 
Addendum
[40] Counsel for the appellants, as noted in paragraph [16] above, submitted that if this court took the view that section 1(6) was satisfied only if there was "a real possibility" of the putative comparator being employed at the claimants' establishment on conditions broadly similar to those enjoyed at the home depot, then the appellants' argument moved to the next stage. Counsel then addressed the court on the content of European law relating to Article 141, and invited the court to modify or mould section 1(6) such that it complied with Article 141.

[41] As this court has not taken that view, we consider it unnecessary to adjudicate upon the next stage of the argument. Nor is it necessary or desirable for us to make any observations about the direct application of Article 141. Any such observations would be entirely obiter. Neither the employment tribunal, nor the EAT, nor this court, has been asked to consider the direct application of Article 141 to the facts of this case. Nor, as noted in paragraphs [18] and [23] above, was any argument advanced that section 1(6) fails to comply with Article 141. Indeed the appellants' position, as reflected in their first ground of appeal and in their submissions to this court, was that the construction given to section 1(6) by the House of Lords in British Coal Corporation v Smith complies with Article 141. Having considered the matter in the light of the authorities to which we were referred and the arguments advanced, we are content to proceed upon that basis.
 
Decision
[42] While we accept that the judgment of the EAT contains an error of law, namely the application of the test of "a real possibility of the [male comparator] being employed [at the claimant's establishment] in the job he carries out at the other establishment or a broadly similar job" (paragraph 59 of the judgment), we are not persuaded that the ultimate result reached by the EAT was erroneous, for the reasons given above. Accordingly the appeal is refused.