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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Harrod & Ors v Chief Constable of West Midlands Police & Ors (Rev 1) [2017] EWCA Civ 191 (24 March 2017) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2017/191.html Cite as: [2017] WLR(D) 219, [2017] Pens LR 11, [2017] EWCA Civ 191, [2017] ICR 869, [2017] IRLR 539 |
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ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE LANGSTAFF (PRESIDENT)
UKEAT/0189/14/DA
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE UNDERHILL
and
LORD JUSTICE BEAN
____________________
MS DEBORAH ![]() ![]() MR MICHAEL ![]() |
Appellants |
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- and - |
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CHIEF CONSTABLE OF WEST MIDLANDS POLICE AND OTHERS |
Respondents |
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Ian Skelt (instructed by Rebian Solicitors) for the Federated Ranks Appellants
John Cavanagh QC and Mr Christopher Knight (instructed by the respective Director of Joint Legal Services for Devon & Cornwall Police and Dorset Police; for Nottinghamshire Police and Derbyshire Police; and for Staffordshire Police and West Midlands Police; Force Solicitor for North Wales Police; and Head of Special Legal Casework for South Wales Police) for the Respondents
Hearing dates : 31 January & 01 February 2017
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Crown Copyright ©
Lord Justice Bean :
"Compulsory retirement on grounds of efficiency of the force
A19.- (1) This Regulation shall apply to a regular policeman, other than a chief officer of police, deputy chief constable or assistant chief constable, who if required to retire would be entitled to receive a pension of an amount not less than two thirds of his average pensionable pay……
(2) If a Police Authority determine that the retention in the force of a regular policeman to whom this Regulation applies would not be in the general interests of efficiency, he may be required to retire on such date as the police authority determine."
Regulation A19 only applies to police officers, not to civilian employees of the police authority. But Mr Paul Gilroy QC for the PSA Appellants and Mr Ian Skelt for the Appellants of the federated ranks were at pains to point out that it was not their clients' case that savings should have been achieved by making civilian staff bear the entire burden of such job cuts as were required.
"A19 has been used very little in the past. It was the common evidence of the Respondents' witnesses that they had not been aware of A19 being used to require retirement en masse. To the limited extent [that] witnesses were aware of its use it had been used in the context of a lack of effectiveness of a particular officer."
"30. Generally, the Forces were aware that they were likely to obtain greater savings than required by the budget cuts through the near universal application of A19. A view was taken that to select between Officers who had reached ? APP, and so limit the number that were forced to retire to those that were necessary to achieve the budget reduction, would be risky, because it could lead to some form of discrimination challenge, although what form it might take was not enunciated.
31. The Forces adopted the approach that all officers who had 2/3APP would be required to retire unless their particular skills could not immediately be replaced, in which case they might be retained for such further period as was necessary to allow other officers to be trained to take over their responsibilities. Police Forces have a high degree of resilience and must be expected to carry on a high degree of operations if they [lose] any particular officer. Accordingly, it was believed, and proved to be the case, that it would be exceptional for any Officer to be retained. The view was that such an Officer would only be retained for a relatively short time.
32. This near universal application of A19 also meant that it could be predicted that more officers would leave than required so that, despite the substantial budget reduction, most of the Forces recorded under spends in the period during which they operated A19."
"19 Indirect discrimination
(1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B's.
(2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of B's if -
(a) A applies, or would apply, it to persons with whom B does not share the characteristic,
(b) it puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it,
(c) it puts, or would put, B at that disadvantage, and
(d) A cannot show it to be a proportionate means of achieving a legitimate aim.
(3) The relevant protected characteristics are -
…age……….."
"We consider the appropriate analysis is as follows. As Mr Cavanagh contends, A19 is a provision. It includes within it a criterion: namely that retirement can only be enforced where the officer has obtained ? APP. We consider that the Forces have added a practice that they would require all officers to retire at ?APP, subject to the very limited exception that those who could not immediately be replaced would be kept on for a short period while replacements were trained. Put in public law terms, A19 provides a legislative discretion in relation to which the forces have adopted a policy of applying it in all cases subject to the limited exceptions. The Bedford Police case is authority for the proposition that this is legal in public law. However, that does not preclude an analysis of whether the indirect discrimination that is involved is justified. We do not accept that the discriminatory impact arises only from regulation A19 itself: it also results from the practice that the Forces adopted as to its application.
Regulation A19 has a focus on increasing the efficiency of the force through the enforced retirement of an officer. While the regulation may allow the enforced retirement of a cohort of officers, the regulation places emphasis on whether the retirement of the individual officers will increase the efficiency of the force. To the limited extent that A19 has been applied in the past it has been focused on individual officers. This supports our view that introducing a policy whereby all A19 Officers will be required to retire, save for very limited exceptions, adds substantially to the discriminatory impact of A19 generally, and requires objective justification."
"The determination of whether the application of a PCP is appropriate and necessary is essentially a factual question. The authorities clearly thought that once legitimate aims had been established the matter needed little further consideration. Justification requires more than a search for legitimate aims that can be put forward to support a decision that the Force wishes to make and to protect against legal challenge. When looking at the appropriateness and necessity of the application of a PCP it has to be appreciated that prime facie discrimination has been made out and that such discrimination should be avoided if reasonably possible."
"73. Had the decision-makers had sufficiently in mind that the savings from the enforced retirements were only for the relatively small number of offices who would not retire in any event, that would have focused their minds on the possibility of finding some alternative means of avoiding the detriment to the limited group who planned to stay. …
75. To the extent that evidence as to the decision making process was put before us we see a failure by the decision makers to grapple with the fact that they were taking a decision that would lead to discrimination if it could not be justified. They did not sufficiently appreciate that not only must there be a legitimate aim but the mechanism adopted needed to be both appropriate and necessary. Had they done so this would have turned their mind to the possibility of alternatives. ….While we accept that increasing efficiency is a legitimate aim we do not consider that on the facts of these cases the Forces have established to our satisfaction that its use was appropriate and necessary.
76. When one takes into account the relatively small number of officers who would not have retired in any event, it focuses the mind on the fact that there were a number of alternatives. To the limited extent they were considered, they were generally disregarded on the ground of certainty."
"If, after the other alternatives have been exhausted, the Forces had decided that they needed to require a limited number of A19 Officers to retire, we consider that there was no reason why they could not have selected between A19 officers. This might have been done by an analysis of their job skills."
The appeal to the Employment Appeal Tribunal
a) There was "factually an overwhelming case" that part of the Forces' aim was to achieve certainty of reduction in budgetary expense;
b) There was no other way of achieving that certainty than by the use of A19;
c) "… it was not for the Tribunal to substitute a scheme other than that adopted by the Forces to achieve that aim, but … rather ... for it to consider whether the application of A19 was reasonably necessary and appropriate to do so, balancing the importance of achieving the aim against the adverse measures adopted had upon those affected";
d) Since the imposition of the condition for the use of A19 that the officer concerned must have reached ? APP was a decision of Parliament, this should have led to a different and less strict standard of scrutiny from that which would have applied had an individual employer adopted an indirectly discriminatory rule: Parliament had made a deliberate choice to restrict compulsory retirement to those who would have a financial cushion to alleviate its worse impact;
e) The Tribunal had focused impermissibly on the decision making process which the Forces adopted in deciding to utilise A19; what has to be shown to be justified in a discrimination case of this kind is the outcome, not the process by which it is achieved;
f) "The evidence before it required the Tribunal to hold that certainty of achieving the necessary efficiencies was an essential part of the aim or means, and that there was no other way in which the aim could be achieved." Langstaff J could see "no tenable argument for holding the use of A19 to be anything other than appropriate and reasonably necessary". He therefore allowed the appeal and dismissed the claims.
Terminology
"I think it is in general unhelpful to analysis section 19 of the Equality Act 2010 as if it were critical whether that which provides discrimination is a "provision" on one hand, a "criterion" on the other or a "practice" on the next: the question for the Tribunal is whether apparent discrimination results from something which might properly be described by any or all of those labels and if so whether it can be justified."
I agree, and will therefore use the term PCP as an abbreviation of "provision, criterion or practice" which is, of course, the wording used in section 19.
The grounds of appeal
Ground 1 – Having accepted that Claimant's contention that what the Forces had to justify was more than simply Regulation A19 itself, the EAT erred in law in overturning the Employment Tribunal's conclusion that the Forces had failed to establish justification.
Ground 2 – The EAT erred in law in holding that the Employment Tribunal "failed to have regard to the fact that the discriminatory element was entirely Parliament's choice".
Ground 3 – The EAT erred in law in holding that the Employment Tribunal "failed to consider whether the means adopted was appropriate and reasonably necessary to the scheme actually adopted by the Forces" and thereby fell into the error of law exposed in the cases of Land Registry v Benson [2012] ICR 627 (EAT) and West Midlands Police v Blackburn [2008] ICR 505.
Ground 4 - The EAT erred in law in holding that the Employment Tribunal "wrongly took into account and criticised the process by which the Forces had adopted their schemes rather than asking whether to do so was justified objectively".
Ground 5 - The EAT erred in law in holding that the Employment Tribunal "applied too high a standard of scrutiny anyway".
Ground 6 - The EAT erred in law in holding that "the fact that Police Forces are not obliged to use (A19) to require officers to retire but have a discretion whether to do so does not detract from the fact that it is the social policy objectives set out A19 which need to be justified, rather than the use by the Forces of A19 in particular cases."
Ground 7 - The EAT erred in law in holding that the Employment Tribunal "suggested as alternative means of achieving the aim of the Forces matters which could not provide that certainty of saving which the evidence had established as essential".
Ground 8 - The EAT erred in law in holding by making an impermissible finding that "there was no way in which the Forces could have achieved their aims other than by use of A19".
Ground 9 - The EAT erred in law in placing apparent reliance on a concession made on behalf of the PSA Appellants.
Ground 10 - The EAT erred in law in proceeding on the mistaken assumption that the Forces did not adopt a blanket policy of using A19.
The grounds of appeal by the federated rank Appellants, though not identically worded, are to the same effect.
Land Registry v Benson
"32. The first step in the analysis must be to identify the PCP or PCPs which had the discriminatory effect complained of. As noted above, the Appellant defined the relevant PCP(s) as "all factors taken into account … at the decision-taking meetings"; and the Tribunal accepted that definition. But, as we have said, that seems too general a description. For the purpose of a claim of indirect discrimination the PCP should be defined so as to focus specifically on the measures taken – that is, the thing or things done – by the employer which result in the disparate impact complained of (cf. Kraft Foods UK Ltd v Hastie [2010] ICR 1355, at paras. 9-10). In the present case that would appear to mean that the relevant PCP is the cheapness criterion. No doubt other features of the selection process…..potentially affected the outcome; but the only feature which had a disparate impact as between applicants of different ages was the underlying selection on the basis of relative cost of the benefits payable under the CSCS.
33. The next step must be to identify the aim for the pursuit of which the cheapness criterion constituted the means. Plainly the criterion was a means of selecting between applicants, but it is necessary to identify what aim selection was intended to achieve. This is rather less straightforward. The immediate aim of selection was to bring the number of applicants down to a level the cost of which came within the £12m budgeted for the exercise. But it could be argued that it is necessary to include within the definition of the aim the carrying out of the redundancy/early retirement exercise itself, and perhaps also to ask what the aim of the exercise was. In that case the answer would be that the aim of the exercise was to reduce headcount, which in turn was a means of ensuring that the Appellant's costs did not exceed its revenue. The truth is that the distinction between means and aim is not always easy to draw.
34. The next question is whether the relevant aim or aims were "legitimate". The uncertainty about how to characterise them discussed in the preceding paragraph does not, fortunately, matter since in our view all the various potential elements are plainly legitimate. It is (to put it no higher) legitimate for a body such as the Appellant, like any business, to seek to break even year-on-year and to make redundancies in order to help it do so where necessary. It is likewise legitimate to offer voluntary redundancy/early retirement schemes of the kind with which we are here concerned……..Like any business, it was entitled to make decisions about the allocation of its resources……… …….
35. The question then is whether the adoption of the cheapness criterion was a proportionate means of selection in order to meet the £12m limit (and, if this adds anything, the other aims which selection served). As we have said, it was not in principle the only means; and others were in fact considered. But the Tribunal found in terms that it was the only practicable criterion [and] that finding is not challenged. That being so, it is hard to escape the conclusion that its use was justifiable……….
36. The Tribunal's analysis of means and aims was different from ours. It treated the question of the £12m limit as an aspect of the means adopted by the Appellant to achieve more broadly defined aims. We do not think that that is right, and it might have found its conclusions less comfortable if it had asked whether the imposition of the limit was "legitimate" rather than whether it was "proportionate". But we do not think that the outcome of this appeal should turn on nuances of language or on the problems of drawing the distinction between aim and means. ………………………..
37. The essence of the Tribunal's reasoning was that the Appellant had not demonstrated a "real need" to limit its spending on the Scheme to £12m – or, to put it another way, to limit its spending on all three schemes to £50m. It held that it had not done so because it had not shown that payment of the additional £19.7m was "unaffordable". By that it evidently meant that the Appellant had not shown that the funds were absolutely unavailable, in the sense that they could not be paid without insolvency: it pointed out that the Appellant's reserves far exceeded that amount (albeit that Treasury approval was needed to spend them) and that later in the same year, in the ATP, it contemplated spending a far greater figure. In our view, to apply a test of unaffordability in that sense is to fall into the error of treating the language of "real need", or "reasonable needs", as Balcombe LJ put it in Hampson, as connoting a requirement of absolute necessity. It is well established that that is not the case: see the judgments of the Court of Appeal in Barry v Midland Bank ([1999] ICR 319, at p. 336 A-B) and in Cadman v Health and Safety Executive [2005] ICR 1546……..[where] Maurice Kay LJ said, at para. 31 (p. 1560 B-C):
"The test does not require the employer to establish that the measure complained of was "necessary" in the sense of being the only course open to him. That is plain from Barry. … The difference between "necessary" and "reasonably necessary" is a significant one …"
The effect of that principle, applied to a case like the present, seems to us to be that an employer's decision about how to allocate his resources, and specifically his financial resources, should constitute a "real need" – or, to revert to the language of aim and means, a "legitimate aim" – even if it is shown that he could have afforded to make a different allocation with a lesser impact on the class of employee in question. To say that an employer can only establish justification if he shows that he could not make the payment in question without insolvency is to adopt a test of absolute necessity. The task of the employment tribunal is to accept the employer's legitimate decision as to the allocation of his resources as representing a genuine "need" but to balance it against the impact complained of. This is of course essentially the same point, adjusted to the different formulation of the test, as we make at para. 34 above. If the Tribunal had carried out that exercise it would, we believe, inevitably have come to the same conclusion as we have reached, on our approach, at para. 35.
38. We have not in reaching this conclusion lost sight of the fact that the cheapness criterion was indeed disproportionately unfavourable to employees in the Claimants' age group, and we can well understand their disappointment at their non-selection. But it is fundamental that not all measures with a discriminatory impact are unlawful…………."
The analogy with redundancy
Direct or indirect discrimination?
Equality Act 2010 Schedule 22 paragraph 1
Conclusion
Lord Justice Underhill
a) "Asking officers their intentions". This meant asking those who were about to achieve ? pensionable service whether they intended (as the great majority no doubt did) to retire voluntarily, and those who had already done so whether they were likely to be retiring shortly. The thinking is that it would almost certainly then have emerged that there were only a comparatively small number who wished to stay on, or to do so for a significant period, and that it would be unnecessary to dismiss them.
b) Part-time working. This meant that some officers, if asked (which they were not), might have been happy to move to part-time working, which would have reduced the amount that their retention cost the force.
c) Career breaks. This meant that some officers, if asked (which they were not), might have been happy to take a career break, which again would have reduced the amount that their retention cost the force.
Lord Justice Elias
"When looking at the appropriateness and necessity of the application it has to be appreciated the prima facie discrimination has been made out and that such discrimination should be avoided if reasonably possible."