Appeal No. EAT/0134/05/DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 10 June 2005

Before
HIS HONOUR JUDGE McMULLEN QC
(SITTING ALONE)

	DR N THATCHER                                                                                                          APPELLANT

MIDDLESEX UNIVERITY (1)	RESPONDENTS
SECRETARY OF STATE FOR EDUCATION (2)

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	Mr B BURGHER
 (of Counsel)
	
For the Respondents	Mr R NEWMAN
(Representative)	

SUMMARY

Equal Pay Act

Part-time worker’s pension.
The Employment Tribunal Chairman erred in concluding the claim was submitted out of time when a stable employment relationship had been established.  The analysis of the contractual differences alone was inaccurate, and this failure to consider and apply unchallenged evidence was an error.

HIS HONOUR JUDGE McMULLEN QC
1.	This is an appeal from a Judgment of a Chairman, Ms A M Lewzey, sitting alone at London Central on 18 November 2004, sent to the parties on 7 December 2004.  It concerns the application of the rulings in what are generally described as the Preston litigation, that is Preston -v- Wolverhampton Healthcare NHS Trust (No. 3) [2004] IRLR 96 to a part-time lecturer.  I will describe the parties as the Claimant and the Respondent.
2.	The procedure for dealing with claims has been set out by me in Thacker -v- Secretary of State for Education and Skills (1) and Cambridge Regional College (2) (UK EAT/00339/05).  The law relating to the application of what is by statute now described as a “stable employment relationship” was summarised in my Judgment in Preston No 3 as I sought to apply the Judgments of the House of Lords and the European Court of Justice.  
3.	The issue before the Chairman was to determine whether or not a stable employment relationship existed.  The Claimant had what is accepted to be a stable employment relationship from 1978 to 1992.  She was engaged by Middlesex University or its predecessor in title as a person who would teach French.  In 1994, she was given permanent pensionable employment and continued to 1996.  Her Originating Application was presented in 1994 and thus would be in time if the relationship was in being in 1994.  However, intervening was a contract for a fixed term, which ran from 1 September 1992 for two years. It is said that that breaks the stable employment relationship for it is a paradigm case as set out in Preston of a series of short-term contracts being succeeded by a permanent contract.
4.	The Chairman compared the contracts, that is, the nature of the contracts pre-1992 and the 1992 contract itself, and came to the conclusion that the latter was radically different in four respects, for she said this:
“In the present case, in September 1992 Dr Thatcher radically changed her employment status because she ceased to be a part-time worker and worked under a fixed-term contract which provided fractional pay and entitled her to contribute to the Teachers’ Superannuation Pension Scheme.”

5.	The Chairman had considered the history because unchallenged evidence was given by the Claimant by way of a witness statement.  In that, she described her duties and thus it seems to me the task the Chairman was one of assessment, not only of contractual documents but also of the circumstances in which the Claimant worked.  That is a perfectly proper approach because in Preston the issue was to determine whether or not there had been a radical change, as I said:
“115	
It is therefore necessary to consider the ‘features that characterise a stable employment relationship’ (ECJ judgment paragraph 70) and these can be broken down as follows:
(1)	A succession of short-term contracts.
(2) 	Concluded at regular intervals.
(3)	Relating to the same employment.
(4)	To which the same pension scheme applies.
As to (1), this devolves into two parts.  The subject-matter must be short-term contracts.  The House of Lords in its Order for Reference and in its consideration of the ECJ judgment when referred back to it has in mind as ‘short-term’ contracts which are termly, or for the academic or sessional year.  It follows that those contracts and anything for a shorter period are ‘short-term’.  There must be a ‘succession’ or a ‘sequence’ (ECJ judgment paragraph 70).  I interpret this to mean three or more, for the existence of two such contracts is not usually described as a sequence or a succession of such contracts.  It would ordinarily be described as the repetition of a contract.
116
As to (2), the intervals which must be regular, this is described as ‘periodicity’ which of course implies regularity. The periods are regular because they are clearly predictable and can be calculated precisely; and they are also regular where the intervals between work, and the length of the spells of work, are not to be predicted with accuracy; but nevertheless it is possible to say that the teacher, for example, is frequently, or even customarily, called upon whenever a need arises.  This arises, by definition in the field of supply teaching, several times a term and thus may be described as regularly; but the precise dates cannot be calculated or predicted and so the work may accurately be described as intermittent.
117
As to (3), ‘same employment’, no guidance is given.   As to (4), the same pension scheme, it seems that the adoption of the expression ‘over-arching’ is encompassed within the same scheme.
118
In order to succeed in bringing the test cases within the above framework, Mr Cavanagh submits that the chairman was wrong to find that the stable employment relationship ceases when the terms of the contract, or the work done, alter radically: that is, when a succession of short-term contracts is superseded by permanent contract (Reasons paragraph 251(3)(e).  But in the context of the analysis of the ECJ’s judgment as applied by the House of Lords, the submission fails because feature (1) is missing.  The succession of short-term contracts ceases, or is interrupted, when a new permanent contract is negotiated.  It is not apt to describe a succession of short-term contracts and a permanent contract as a succession of short-term contracts.  The succession is broken, and the nature of the contract changes from short-term to permanent.  The submission also fails because there is no periodicity about the contracts.  There is no interval, let alone a regular interval, between the contracts since on the footing of the test cases each relationship is regulated by a single permanent contract.  Thirdly, the cases may also founder under feature (3) as not being in ‘the same employment’.  I will examine this matter in more detail below.  I would further agree with the chairman that, in respect of Mrs Cockrill, her claim would fail because the pattern of her working was too spasmodic and could not be characterised as meeting each of the features set out above.  She would fail principally on feature (2): the lack of periodicity of the employments.
119
4.	Similarity of terms and/or work
The chairman held (Reasons paragraph 233, 235) that:
‘It is simply inconsistent with the nature of a stable employment relationship that the fundamentals of the succeeding contracts should vary….
The work must be for the same employer and be broadly the same throughout; that is it will be supply teaching though not necessarily at the same schools, or the same subject at the same key stages; or home teaching, but not necessarily the same subjects, or to the same pupils … broadly the same throughout.’
It was contended that these words represent a gloss impermissibly put upon the words ‘stable employment relationship’.  Or alternatively that they ‘imposed too strict a test of similarity’.  In my view, that is an unfair criticism for one of the features of a stable employment relationship is ‘same employment’ which can be construed in different ways.  It must be borne in mind that the report for the hearing in the ECJ described the stable employment relationship cases as follows (at p.510):
‘… in other cases, the appellants worked regularly, but periodically or intermittently, for the same employer, with each period of work technically being under a separate contract of employment but with each contract containing the same terms and with the employment in total being relevant for pension purposes (but for it being part-time work’ (emphasis added).
The applicants contended (at p. 520):
‘To require the applicants who are employed under a series of identical, or substantially similar, contracts to bring applications within six months of the end of each such contract – some of which may be contracts for only one day’s work – would plainly impose an unrealistic requirement which would make the enforcement of rights excessively difficult or impossible in practice and thus infringe the principle of effectiveness.’
It is for that reason that ‘same employment’ was given the characteristic cited above: it was not a gloss but the exemplification of the issues placed before the European Court of Justice.”

6.	That was a reflection on the holding by the Chairman in Preston, Mr J K Macmillan, who had summarised the position as follows:
 “3.	A stable employment relationship ceases and time for commencing proceedings therefore begins to run when:
a.	A party indicates that further contracts will either not be offered or not accepted if offered;
b.	A party acts inconsistently with the continuation of the relationship;
c.	a further contract is not offered when the periodicity of the preceding cycle of contracts indicates that it should have been offered;
d.	a party ceases to intend to treat an intermittent relationship as stable;
e.	the terms of the contract or the work to be done under it alters radically: eg a succession of short-term contracts is superseded by a permanent contract.”

7.	Thus, a stable employment relationship ceases where the terms of the new contract or (and I emphasis the word ‘or’) the work done under it radically differs, and thus the Tribunal Chairman’s approach was bound to be one of looking at all of the circumstances.  
8.	It is contended that to take a simple comparative approach was correct, for Mr Newman, who has presented a careful argument in writing to me, has drawn up a table showing the before and after position.  Mr Burgher of Counsel, who appears for Dr Thatcher and who has done an equally impressive written skeleton argument, indicates that the wider approach was what was required.  He is right.  This is not only because of the citations which I have given above but also because live evidence was given by Dr Thatcher indicating what her duties were; so, when I turn to the before and after position as set out by Mr Newman, it does require some adjustment.  
9.	For example, it is contended that the contract did not give regular employment or hours prior to 1992.  I reject that. Each of the contracts which has been put in front of me indicates a fixed number of hours with regularity and with periodicity, as it is referred to by the European Court.  The hours which the Claimant was engaged upon varied under each of the contracts and the length of time of the contracts varied.  She was either employed for a term or for a semester, which at Middlesex means half a year, and she also, in 1990 to 1991, had annual contracts.  It seems to me, therefore, that there was regular employment not only by virtue of the contract but also by virtue of the continuing nature of the relationship which is accepted to be a stable employment relationship.  So there was a guarantee of work for the period of each of the contracts.
10.	The second aspect of the contract is that the monthly income would potentially vary.  In a sense, that is correct but as indicating a difference with the new contract it is unsustainable.  There is no problem with a contract indicating a different amount of monthly income according to the work done.  
11.	The third aspect, which has now been amended by Mr Newman in his oral submissions, relates to the work which was being done.  It is common ground that under both the old and the new contracts teaching and administrative duties were included.  As to whether research was included, this is an express feature of the new contract but does not appear in the old.  However, Dr Thatcher gave evidence about which she was not cross-examined, and indicated that she was engaged in professional activities and research expected of her as a lecturer in Higher Education.  Thus, those duties were, I hold, the same.
12.	What did differ was that she was eligible in the new contract to join the pension scheme in 1992.  But as Mr Burgher points out, that in itself is not likely to make the contract radically different, for in two examples given in the Preston litigation pensionable employment was taken up – see paragraph 86 in Preston No 3, which deals with one of the test cases called Jones, and the reference in the original Preston judgment of Mr Macmillan to a case known as Maltby.  Admittedly the evidence in relation to the Maltby case is sparse, but it does indicate that going on to pensionable employment is not necessarily a radically different contract.
13.	It must be recalled that the approach to looking at whether a radically different contract has been entered into involves either an examination of the language of the contract or of the work done and, as I have indicated in this case, the correct analysis must have included both aspects.  The example given in the Preston case was a succession of short-term contracts superseded by a permanent contract.  It is claimed that the new contract was not a permanent contract.  It says it is temporary and, if assistance can be drawn from the later Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, it can be seen that a person who is a fixed-term employee is not a permanent employee.  That is for the purposes of those Regulations, but they are illustrative of the correct distinction.
14.	At first sight, therefore, the Claimant is not excluded by Preston because she has not entered into a permanent contract.  What about a succession of short-term contracts?  As is clear from Preston, an annual contract is a short-term contract.  She had a succession of short-term contracts.  The new contract was for two years.  Of course, how long constitutes short-term is a matter of fact and degree. But this contract indicates that the first year of it was a probationary period and so, Mr Burgher submits with some force, the Claimant's position was no different from what it was when she was on an annual contract for the previous year.  In other words, the precariousness remained at least for the first year of the fixed term, and I consider his submission is correct.
15.	It is also correct to consider the intention of the parties because, as the Mr Macmillan in his Preston judgment indicated, intention is important – see paragraph 90 in Preston No. 3.  If the intention of the parties is analysed in this case, it is clear that they intended to be engaged with each other for the performance of similar contracts which went substantially unchanged as to the work done by the Claimant.  
16.	By each of those routes, therefore, it appears to me that the Claimant has demonstrated that she was in a stable employment relationship.  Has the Chairman committed an error of law?
17.	In my judgment, the Chairman has focused only upon the nature of the terms of the contract.  Even so, she has committed an error because the four aspects which I have cited from paragraph 6 are all subject to a weakness.  The Claimant did not cease to be a part-time worker: she was always a part-time worker.  She worked under a contract which provided fractional pay but then she was in an ordinary sense receiving a fraction of what would have been a full-time lecturer’s pay, and she went into or she was eligible to join the Teachers’ Pension Scheme in 1992.  Once those corrections are made, it is difficult to see how there could be such a radical change since, as I have indicated and the contract itself indicates, all that happened was a conversion, as it is put, of the Claimant's part-time hours into fractional pay.  
18.	The story does not end there, however, because in the light of the evidence put to the Chairman, she should have considered all of the circumstances and that includes the fact that there was no change in the duties of the Claimant before and after the 1992 contract.  
19.	Having detected the error, the question is whether this matter should be sent back to the Chairman for her to make decisions.  Mr Burgher submits that I should substitute my judgment for hers because the material upon which this case could be decided has been the written witness statement, as to which there was no cross-examination.  I agree with that.  I am in as good a position as the Chairman to look at this evidence and to decide whether or not there had been a radical change in the work done, and I have decided that there was not.  Neither the contract itself, nor the duties, nor the combination of the contract and the duties, constituted at the time a radical change.  I further find that the intention of the parties was not to cease the relationship but to continue it in a very similar form. It is also my judgment that the nature of this particular two-year fixed-term contract makes it a short-term contract; that is because of its division in two as between one year probation and one year regular employment.  
20.	For all those reasons, the submissions of Mr Burgher are correct.  He also indicated that it was his case that inadequate reasoning had been provided by the Chairman.  That is correct as well because, in the light of the evidence presented to her, she was bound to consider those circumstances which the Claimant has put forward.  I do not accept Mr Burgher’s criticism that the Chairman did not set out all of the law for in this area there really is only the Preston litigation to consider and the Chairman plainly had that case in mind and cited it.
21.	So, the appeal is allowed.  I am grateful to both Mr Newman and to Mr Burgher for their helpful submissions and so I allow the appeal and make a declaration that the Claimant has a stable employment relationship from 1978 to 1994.  So the Originating Application in 1994 was validly presented and this can go back to the Chairman for further directions. I am pleased to note that Mr Newman anticipates no further hearing will be needed as the University will make the required declaration.