Appeal No. UKEAT/0604/10/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 2 March 2011
	   Judgment handed down on 12 May 2011

Before
THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)
(Sitting alone)

MRS. E. A. PREST & OTHERS	APPELLANT

(1) MOUCHEL BUSINESS SERVICES LTD	
(2) MIDDLESBROUGH BOROUGH COUNCIL 	RESPONDENTS

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR. PHILIP ENGELMAN
(of Counsel)
Instructed by:
Stefan Cross Solicitors
Buddle House
Buddle Road 
Newcastle upon Tyne
NE4 8AW	
For the First Respondent	MR. ANDREW BLAKE
(of Counsel)
Instructed by:
Geldards LLP
Dumfries House
Dumfries Place
Cardiff
Glamorgan
CF10 3ZF	

For the Second Respondent	No appearance or representation

SUMMARY

EQUAL PAY – Compensation 

Where a comparator in an equal pay claim is added by amendment the question whether the “arrears date” for the purpose of section 2 (5) of the Equal Pay Act 1970 in respect of that comparison runs from the date of the presentation of the original claim or from the date of the application for permission to amend depends on whether the addition/substitution of the comparator in question involves a difference in the work by reference to which the claim is made – Discussion of the “new cause of action” authorities: Bainbridge; Potter (no. 2); and Brett. 

THE HONOURABLE MR JUSTICE UNDERHILL

1.	The eighteen Claimants in the proceedings which give rise to this appeal were originally employed by Middlesbrough Borough Council in various administrative and clerical roles for which the terms and conditions were contained in the so-called Purple Book.  On 1 June 2001 their employment transferred by virtue of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (“TUPE”) to a company called Hyder Business Services Limited, now re-named Mouchel Business Services Ltd, which is the First Respondent.

2.	At various dates between March 2003 and May 2006 the Claimants presented claims in the Employment Tribunal under the Equal Pay Act 1970.  I defer at this stage summarising the details of the claims; but I should note that, although in principle the Claimants were entitled to claim arrears in respect of a period of six years running back from the date of presentation of their claims, and on that basis they joined the Council as Second Respondent, the effect of the decision of the Court of Appeal in Sodexo Ltd v Gutridge [2009] ICR 1486 is that they were out of time in relation to any claim in respect of the pre-transfer period.  Accordingly their only live claims are against Mouchel and extend back only to 1 June 2001.  The claims form a separate “sub-multiple” in the mass equal pay litigation proceeding in the Newcastle-upon-Tyne Employment Tribunal under the name of Surtees.  Five of the Claimants have been selected as lead Claimants.

3.	I have seen the ET1 presented in the case of only one of the Claimants, but I am told that I can assume that the others are in substantially identical form.  As is common in this litigation, it has been completed making use of standard-form wording, with no attempt to tailor it specifically to her circumstances or indeed, it appears, those of the others in the sub-multiple.   Under “box” 6 two distinct claims are pleaded, but only the second is in fact relevant to the Claimants’ case.  This is set out, in outline only, at paras. 7-10.  The pleading is clumsy and I will not reproduce it in full.  The claim is made by reference to male comparators who are identified in two ways:

(1)	A list of “job classifications” is pleaded at para. 9.  The only two jobs which I need to identify for present purposes are “refuse drivers” and “street sweepers”.  No individual men doing those jobs are named.

(2)	The Claimant also cross-refers to para. 4, i.e. part of the first claim.  That paragraph identifies three kinds of job, namely “road sweeper” (which it is common ground is the same as “street sweeper” pleaded at para. 9), gardeners and “road workers”.  Four individual men are named as holding such jobs, though it is not said which did which.  For present purposes I need identify only a Mr. Grayson, who was in fact a road/street sweeper. 

All of the jobs that I have identified are covered by the “White Book”, which prescribed terms and conditions for manual workers in local authority employment.  At para. 7 it is pleaded – at least if the pleading is read charitably – that the jobs in question are done “exclusively or almost exclusively by men”.  Para. 8 pleads that the comparators (sc. the holders of the pleaded jobs) receive (a) higher basic pay and (b) a guaranteed bonus of at least 12.5%.  I was told, however, that none of the Claimants received lower basic pay than their comparators and that the claim is in fact only for bonus: as is now familiar from the plethora of reported cases in this field, many or most White Book employees received bonus, while Purple Book employees did not.   

4.	There was some delay in progressing the claims, no doubt while other issues in the litigation were being resolved; but on 23 January 2007 the Claimants, pursuant to an order from the Tribunal, served amended Particulars of Claim which were designed, inter alia, to identify the comparators with more precision.  Schedules were served covering each of the Claimants.  Not all of them rely on the same comparators.  For present purposes I need note only that most of them rely, again, on Mr. Grayson, who is identified as belonging to “MG [manual grade] 1”; and that they also relied on Mr. Rowling, who is described as a “Driver MG 5”.  

5.	At a CMD on 14 May 2009 the Claimants indicated that they wished to make further changes to the comparators on whom they were relying.  They were directed to provide details.  They did so in the form of further schedules supplied on 22 June.  All the Claimants now identified the same eight “possible comparators”.  Neither Mr. Grayson nor Mr. Rowling was any longer identified.  I need not set out the complete list, because I was told that the Claimants wish to rely now only on two, namely Michael Welsh, described as “Road Sweeper MG 1”, and Andrew Blenkinsop, described as “Driver 1 MG 3”.  Neither of those comparators had transferred to Mouchel or, therefore, was in the same employment as the Claimants in the period covered by the claim; but it is common ground that they can be relied on in order to establish the terms to which, having regard to the equality clause, the Claimants were entitled at the moment of transfer, i.e. on 1 June 2001.

6.	A pre-hearing review was held on 24 June 2010 before Employment Judge Hargrove sitting alone, in order to consider two issues arising out of the claims.  

7.	The first issue concerned the effect of the introduction of the new comparators.  It was common ground that the Claimants needed permission to amend in order to rely on them, but Mouchel did not oppose the granting of such permission and the Judge made an order accordingly.  The question, however, was how far back the Claimants could claim by reference to those comparators.  Section 2 (5) of the 1970 Act provides, so far as material, as follows:

“A woman shall not be entitled, in proceedings brought in respect of a contravention of a term modified or included by virtue of an equality clause …, to be awarded any payment by way of arrears of remuneration or damages – 

(a)	in proceedings in England and Wales, in respect of a time earlier than the  arrears date (determined in accordance with section 2ZB below) …”

Section 2ZB (3) provides that in “a standard case” (which it is common ground that the present cases are) the arrears date is “the date falling six years before the day on which the proceedings were instituted”.  If the introduction of a new comparator constitutes the “institution” of distinct “proceedings” as at the date that the application is made (i.e, here, 22 June 2009), the Claimants could only claim in respect of the period back to June 2003, and thus would lose the chance of recovering arrears for 2001-3.  However, they contended that:

(a)	the introduction of a new comparator did not constitute the “institution” of distinct “proceedings” – specifically, the way that it was put before the Tribunal was that it did not amount to the raising of a new cause of action; and 

(b)	even if it did, the proceedings should be deemed to have been instituted at the date of presentation of the original ET1 by virtue of the common law doctrine of “relation back”.  

8.	The second issue arose as follows.  The Claimants’ contracts of employment provided that: 
“During your employment with the Council your Terms and Conditions of Employment will be in accordance with collective agreements negotiated from time to time set out in the Scheme of Conditions of Services and the Northern and North Eastern Provincial Council as supplemented by the Local Conditions of Service and collective agreements reached with trade union recognised by the Council … .”

Until last year both parties had understood that the effect of that provision was that by reason of reg. 5 of TUPE the Claimants were entitled to any increases in their pay negotiated in accordance with the collective agreements referred to, even after the transfer; and they had been accorded the benefit of such increases accordingly.  That understanding was in accordance with a line of authority in this Tribunal most commonly cited by reference to Whent v T Cartledge Ltd [1997] IRLR 153.  However, on 29 January 2009 the Court of Appeal handed down judgment in Alemo-Herron v Parkwood Leisure Ltd [2010] ICR 793.  It held that the effect of reg. 5 of TUPE was merely to secure employees the benefit of the contract as at the moment of transfer and that they were not entitled to the benefit of any subsequent increases.  The Claimants sought to contend – though for reasons which will appear I need not set out their reasoning – that Alemo-Herron had no impact on their situation by reason of their claims under the 1970 Act.  

9.	As regards the first issue, Judge Hargrove held that the arrears date should be calculated back from the date of the application for permission to amend, i.e. 22 June 2009.  As regards the second, he followed Alemo-Herron. 

10.	The Claimants have appealed against both aspects of the Judge’s decision.  They were represented before me by Mr. Philip Engelman.  Mouchel was represented by Mr. Andrew Blake.  Both counsel also appeared before Employment Judge Hargrove.

11.	At the date of the hearing before me Alemo-Herron was due to be argued before the Supreme Court, and it has in fact since been heard.  It was agreed that the appeal as regards the second issue should be stayed pending the outcome of that appeal.  I am accordingly concerned only with the first issue.  As to that, Mr. Engelman abandoned any separate reliance on the common law doctrine of relation back (see para. 6 (b) above).  Thus the sole issue which I have to decide is how section 2ZB applies in the case of a claim by reference to a comparator added by amendment.  It was common ground that there were only two possible answers:

(a)	that the arrears date is for all purposes the date of the institution of the proceedings themselves, i.e. the presentation of the ET1, and that the fact that the particular comparator was named later is irrelevant; or

(b)	that, in relation to that comparator, the proceedings are only instituted when the application to amend is made.

12.	The starting-point in choosing between those alternatives is that in my judgment Parliament in enacting section 2ZB (3) must have been concerned with when the substantive claim which attracts the liability for arrears was first formally brought before the Tribunal.  In the case of a claim introduced by way of amendment to existing proceedings, the date at which those proceedings were first instituted is logically an accident, and it does not makes sense to determine the relevant time limits by reference to it.  If the claim is new in substance then it is artificial and unreal to regard it as having been instituted at some earlier date simply because an earlier claim with which it has become procedurally entwined was instituted at that date: cf. the reasoning, albeit that the specific statutory provisions are different, of Brandon LJ in disapproving the “relation back” theory in Liff v Peasley [1980] 1 WLR 781 (see at pp. 799-803), subsequently approved by the House of Lords in Ketteman v Hansel Properties Ltd. [1987] 1AC 189.  My view on this point is in accordance with the decision of Slade J in Potter v North Cumbria Acute Hospitals NHS Trust (no. 2) [2009] IRLR 900: see paras. 114-116 (at p. 913).

13.	Thus the real question is whether the claims by reference to Mr. Welsh and Mr. Blenkinsop are substantively different from that which was initially pleaded.  As to that question, there is a certain amount of recent authority to which both the parties referred.  I review it as follows.

14.	In Bainbridge v Redcar and Cleveland Borough Council (no. 2) [2007] IRLR 494 the claimants originally brought equal pay claims on the basis that they were doing work rated as equivalent with that done by their comparators, within the meaning of section 1 (2) (b) of the Act (“RAE claims”).  Those claims were determined by settlement or tribunal decision, but the claimants sought to pursue continuing claims in relation to the same period by reference to (different) comparators whose work they said was of equal value to their own, within the meaning of section 1 (2) (c) (“EV claims”).  The council took the point that any fresh claim for equal pay in relation to the same period was subject to estoppel per rem judicatam.  This Tribunal by a majority rejected that argument.  At para. 124 of his judgment Elias P. said that the majority preferred the argument of Mr. Robin Allen QC for the claimants.  After referring to certain policy considerations he said, at p. 505:
“125.  In our view these separate claims are distinct causes of action. It is not accurate to say that each breach of the equality clause is the same breach of contract. It is a breach of the same term but committed in different ways. Conquer v Boot [1928] KB 336 shows that you cannot seek to dissect what is in substance a single promise into a series of separate obligations and treat them all distinctly. The analysis in fact is closely linked to the principle in Henderson v Henderson. All aspects of the single promise must be considered together. It would be an abuse to run the litigation in any other way. But the promise to pay the same as man A is not the same as the promise to pay the same as man B. The second claim is not simply a reframing of the original cause of action, as in Conquer v Boot.

126.  Adopting the approach of Talbot J in the Conquer case, in our view the evidence in the two cases would be quite different, the breach may occur at a different time – for example, man B may be employed much later than man A – and the limitation periods would not necessarily then be the same. This is one contractual term, but it potentially contains a number of contractual promises, and the employer is obliged to honour each.”

The arguments of Mr. Allen which Elias P. said that the majority accepted included the following, at para. 116 (p. 504):

“The short answer to the council's case, therefore, is that each claim is a separate cause of action; a different comparator is identified and the evidence necessary to prove the case is not the same. A different evidential and factual analysis has to be adopted by the tribunal; and therefore the causes of action are quite distinct.”

15.	When the same case reached the Court of Appeal ([2009] ICR 133) the decision was upheld.  The Court’s reasoning at paras. 213-266 (pp. 195-206) is very lengthy, and much of it is concerned with the arcana of the res judicata doctrine.  For present purposes the following summary will suffice:

(1)	At an early stage in its analysis (para. 216) the Court identified the “three different ways” in which an equal pay claim can be put, i.e. as “like work”, “rated as equivalent” and “equal value” claims under heads (a)-(c) respectively of section 1 (2).  

(2)	The essential ratio of the decision appears, as I understand it, at paras. 255-8.  The Court makes three points.  The first is to emphasise the statutory origin of an equal pay claim.  It culminates, at the end of para. 256 (picking up the point made earlier – see (1) above), as follows:

“Within and by virtue of the statute there is more than one cause of action.  There are three different legal bases for an equal pay claim.”

(3)	At paras. 259-264 the Court discusses a submission by the council to the effect that claimants could “bring claim after claim without end if the law was that each time a different set of facts was alleged there was a different cause of action”.  At para. 261 it says:
“There are two answers to that. The first is that, in our judgment, it is not permissible to allege a new cause of action in respect of a particular pay period in another action under the same head for the same pay period simply by selecting a different comparator. For a new cause of action for the same period it would be necessary to bring the equal pay claim under a different head, which would normally involve different comparators as well. Even if that were not the case, there is the second answer which lies in firm and fair management of equal pay cases from an early stage. We appreciate that, like most advice from on high, this is easier said than done, especially at a time when the limited resources of the ETs are stretched to breaking point by the avalanche of equal pay cases against public authorities.”

In connection with the first answer I should note that, in setting out the decision of the employment tribunal, the Court had specifically pointed out (at para. 240) that:

“The tribunal did not … have to go so far as to say that a cause of action relying on one comparator is always a different cause of action from one under the same subsection relying upon a second comparator.”

(4)	As I understand it, the difference between the two “answers” given in para. 261 is that the first is that in some cases the new claim will be absolutely barred as a matter of law, because it is indeed the same claim as that which has already been determined; whereas the second involves more general Henderson v Henderson principles (see (1843) 3 Hare 100), which require even different claims arising out of the same subject matter to be determined, other things being equal, in the same proceedings. 

16.	In Potter (no.2) (above) a group of claimants in multiple equal pay claims sought permission to amend so as to name different comparators, doing different work, from those originally pleaded.  The employment tribunal refused permission.  One of the issues before this Tribunal was whether the application constituted the raising of a new cause of action.  Mr. Allen appeared for the claimants, and he is recorded at para. 36 of the judgment of Slade J. as conceding, in the light of the decision in Bainbridge, that it did.  Slade J. then continued, under the heading “Conclusion” (p. 905):
“37.  The Employment Appeal Tribunal and the Court of Appeal in Bainbridge (No 2) held that the addition of a new comparator to an equal pay claim is a new claim. This is so whether or not the new comparator is to be relied on for the purpose of the same of the three different bases of an equal pay claim. The addition of a new comparator is a new cause of action even if he or she is added for the purpose of an existing claim brought on the same basis, whether it be under EqPA s 1(2)(a), like work, (b) work rated as equivalent or (c) work of equal value.”

She then went to cite the passages from Bainbridge in this Tribunal that I have set out above and continued:
“39.  Mummery LJ giving the judgment of the Court of Appeal in para 256 referred to three legal bases of claim under EPA. These are claims based on like work, work rated as equivalent and work of equal value. He referred in para 257 to the possibility of different outcomes as a result of the selection of different comparators and to different evidence being adduced. The observation in para 261 that … [and she quotes the passage set out at para. 14 (3) above] … is as applicable to claims where comparison is made with different comparators under the same basis of claim, for example equal value, as it is to claims brought on different bases.

40.	 Thus the parties before us rightly agree that amendment of the proceedings by the addition of new comparators would be adding new causes of action.”

Potter (no. 2) went to the Court of Appeal under the name of North Cumbria Acute Hospitals NHS Trust v Fox [2010] IRLR 804.  Carnwath LJ recorded at the start of his leading judgment (para. 2):

“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.”

17.	Finally, in Brett v Hampshire County Council (UKEAT/0500/08), which was (in the relevant respect) concerned with whether a particular claim was debarred by section 32 (2) of the Employment Act 2002, I said (at para. 11):

“Analytically, each claim by reference to a different comparator is a different claim (or a different cause of action, as it is sometimes put).  This was held by Elias P in this Tribunal in Redcar and Cleveland Borough Council v Bainbridge (no. 2) [2007] IRLR 494: see at paragraph 125 (page 505), effectively adopting the submissions of counsel at paragraph 116 (page 504).  That reasoning seems to have been upheld in the Court of Appeal: see [2009] ICR 133 at paragraph 261 (page 205).  In the light of those decisions, the point was noted as having been common ground – but with the evident endorsement of this Tribunal, chaired by Slade J – in Potter v North Cumbria Acute Hospitals NHS Trust (no. 2) [2009] IRLR 290, at paragraphs 37-40 (pages 905-906).  In my judgment it follows that, even if a complaint to the Tribunal or a grievance document brings together more than one comparison, the correlation issue must be considered in respect of each comparison separately.”

18.	It is clear from that review of the authorities that Elias P has been understood to have held in Bainbridge (no. 2) that each and every comparison between a claimant and a comparator gives rise to a distinct cause of action; (b) that the Court of Appeal in Bainbridge has been understood to have endorsed that conclusion; and (c) that the proposition in question has been treated as of application not only to the issue of res judicata but also more generally in other contexts where it is necessary to decide whether a claim by reference to a different comparator should be treated as the same claim.

19.	Before me Mr. Engelman challenged that orthodoxy.  He pointed out that it had been unnecessary in Bainbridge to decide more than that claims depending on the different “heads” under section (2) – i.e. “like work”, “work rated as equivalent” and “equal value” – were different; that it is clear that that was all that the Court of Appeal decided; and that if Elias P’s reasoning went further it was obiter and wrong.  That error infected equally Slade J’s reasoning in Potter (no. 2) and mine in Brett; and he noted that in Potter and apparently also in Brett the contrary case was not argued.  He submitted that the substitution of a new comparator, provided the head under which equal pay was claimed remained the same, did not give rise to a new cause of action.

20.	I can go some of the way with Mr. Engelman’s submission.  On reconsidering the reasoning of the Court of Appeal in Bainbridge for the purpose of this judgment, I can see that it does indeed appear to be based on the fact that the original and substituted claims were, respectively, “RAE” and “EV” claims; and I have reflected that in my analysis at para. 14 above.  What is more, the Court said in terms at para. 261 that a claimant could not start all over again “simply by selecting a different comparator”.  However, the scope and effect of this latter statement is debatable; and the fact remains that Elias P., Slade J. and myself have been prepared to put the point more widely.  That constitutes a stream of previous authority from which I should not depart unless I were convinced that it was based on a misunderstanding of the Court of Appeal’s reasoning and was incompatible with it.

21.	In these circumstances I have thought it right to start with a clean slate, putting the authorities to one side for the present.  I also put to one side the phrase “cause of action”, not because I think that the cases which employ it are irrelevant but because it comes with a certain amount of baggage which may get in the way.  

22.	On the basis set out at para. 12 above, the essential question with which I am concerned is whether the two claims – the one originally pleaded and the one introduced by way of amendment – are in substance the same.  In my view that does not depend as such on the identity of the individual comparator named.  Take a case where a hundred men are doing an identical job.  As a matter of procedure, it has, at least in domestic law, been conventionally regarded as necessary for a claimant to identify one of those men – let us say A – as her comparator.  But in fact which individual she chooses is a matter of indifference.  What matters is whether the work that they (all) do is comparable to hers: it is the receipt of unequal pay for equal work which is the foundation of an equal pay claim.  If the claimant subsequently decides for reasons of convenience to substitute a fresh comparator – B – doing the same work as A (or as A was thought to have been doing) that does not mean that the nature of the claim has changed: whichever is taken as the individual comparator, the work is the same.

23.	In my view, therefore, what matters is whether the work said to be being done by the new comparator is different from that said to be being done by the comparators originally named.  It is only if it is indeed different that a substantially new claim is being advanced for the purpose of section 2ZB (3) (as explained at para. 12 above); and the same applies to cognate questions such as that which arose in Brett.  

24.	I can see no inconsistency between the approach proposed above and that taken by either the Court of Appeal or this Tribunal in Bainbridge.  Specifically:

(1)	As for the Court of Appeal, it based its decision on a different kind of difference, which will not be present in all cases – that is, not the difference in the work of the claimant and the comparator but the difference between the “heads” under which the claim was being brought.  But to say that claims under different heads are to be treated as distinct does not involve saying that all claims under the same head are to be treated as the same.  It is true that the Court said, as its “first answer” in para. 261 (see para. 14 (3) above), that a claimant could not avoid the effect of res judicata simply by naming a different comparator.  But that corresponds with my own conclusion that naming a new comparator in relation to the same work does not as such raise a new claim: it need not mean that a claimant seeking to bring fresh proceedings based on a comparator doing different work was raising the same claim.  (Of course to bring such a claim in fresh proceedings when an earlier claim for the same period had already been determined might indeed be an abuse of process on Henderson v Henderson principles; but that is the Court’s “second answer”.)

(2)	As regards the reasoning of this Tribunal in Bainbridge (no. 2), in so far as it adopted Mr. Allen’s proposition that if the claim depends on different material facts it is a different cause of action, that is essentially the same reasoning as I have adopted – though there was no need on the facts of that case to add my qualification that the identity of the individual comparator is not, as such, a material fact.

25.	It follows that I see no reason to question the approach taken by Slade J. in Potter (no. 2) or my own approach in Brett.  

26.	If that approach is applied to the facts of the present case, it would seem to be clear that the substitution of Mr. Welsh for Mr. Grayson does not involve any new claim, since both were road/street sweepers, and street sweepers were one of the two classes of comparators named in the original ET1s: see para. 3 above.  (It is true that no grade was identified, but that is properly regarded as a matter of particularisation rather than amendment, and in any event Mr. Grayson, who was named from the start, was in fact on grade MG 1, like Mr. Welsh.)  The position is rather less clear about Mr. Blenkinsop, because although he was described to me as a “Driver 1 MG 3” I was not told whether that falls within the general description “refuse driver” pleaded in the ET1.  I suspect that it does, and on that basis I would hold that this amendment too gave rise to no new claim.  But I will give Mouchel fourteen days’ liberty to apply if they seek to contend that Mr. Blenkinsop is not a refuse driver. 

27.	I accordingly allow the appeal on the first issue and declare that, for the purpose of the claims by reference to Mr. Welsh and (subject to the liberty to apply) Mr. Blenkinsop, the arrears date for the purpose of section 2ZB (3) is six years prior to the presentation of the ET1.  The appeal on the second issue is stayed pending the decision of the Supreme Court in Alemo-Herron.