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United Kingdom Employment Appeal Tribunal


You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Potter & Ors v North Cumbria Acute Hospitals NHS Trust & Ors [2009] UKEAT 0385_08_2404 (24 April 2009)
URL: http://www.bailii.org/uk/cases/UKEAT/2009/0385_08_2404.html
Cite as: [2009] IRLR 900, [2009] UKEAT 385_8_2404, [2009] UKEAT 0385_08_2404

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BAILII case number: [2009] UKEAT 0385_08_2404
Appeal No. UKEAT/0385/08

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
             At the Tribunal
             On 16 and 17 December 2008
             Judgment delivered on 24 April 2009

Before

THE HONOURABLE MRS JUSTICE SLADE

MR A HARRIS

MRS D M PALMER



MRS S POTTER AND OTHERS APPELLANT

NORTH CUMBRIA ACUTE HOSPITALS NHS TRUST
THE CASSON CLAIMANTS
RESPONDENT


Transcript of Proceedings

JUDGMENT

© Copyright 2009


    APPEARANCES

     

    For the Appellant MR ROBIN ALLEN
    (One of Her Majesty's Counsel)
    Ms Yvette Genn
    (of Counsel)
    Ms Dee Masters
    (of Counsel)
    Instructed by:
    Messrs Stefan Cross Solicitors
    Buddle House
    Buddle Road
    Newcastle upon Tyne
    Tyne & Wear NE4 8AW
    For the First Respondent MR ANDREW CLARKE
    (One of Her Majesty's Counsel)
    Ms Naomi Ellenbogen
    (of Counsel)
    Instructed by:
    Messrs Dickson Dees Solicitors
    St Ann's Wharf
    112 Quayside
    Newcastle upon Tyne
    NE99 1SB

    For the Second Respondent MR MICHAEL SUPPERSTONE
    (One of Her Majesty's Counsel)
    Instructed by:
    Messrs Thompsons Solicitors
    The St Nicholas Building
    St Nicholas Street
    Newcastle upon Tyne
    NE1 1TH

    SUMMARY

    CONTRACT OF EMPLOYMENT: Implied term/variation/construction of term

    PRACTICE AND PROCEDURE: Amendment

    The addition of new comparators to equal pay claims constitutes the addition of new causes of action. The Employment Tribunal erred in law in holding that in these cases the change from Whitley Council agreements to Agenda for Change terms and conditions of employment was a termination of contracts of employment and their replacement with new contracts.


     

    THE HONOURABLE MRS JUSTICE SLADE

  1. Miss Potter and other lead claimants appeal from the judgment of an Employment Tribunal on a pre-hearing review which on 14 July 2008 refused their application to amend by changing the comparators named in originating applications in which they claimed equal pay. Leave to amend was sought in November 2007 in order that they could compare themselves for equal pay purposes with comparators whom each individual did not originally rely upon but who were cited by other claimants. The claims of these lead claimants are a few of many hundreds of women employees of the North Cumbria Acute Hospitals NHS Trust claiming equal pay. The Appellants are called the 'Cross claimants' because they are represented by Stefan Cross, and they are directly affected by the refusal of the application for leave to amend. The claimants are nurses. They sought to add comparators from different job groups: medical technical officers, laboratory scientific officers and maintenance and estates labourers, painters and estates officers.
  2. The Cross claimants have been represented before us by Robin Allen QC, Yvette Genn and Dee Masters. There is another group of claimants for equal pay in these proceedings, the Casson claimants, who have participated in this appeal although they are not appellants. Since they are not directly affected by the decision under appeal, they are designated Second Respondents in the appeal although they support the contentions of the Appellants. We refer to them as the Casson claimants. They were represented by Michael Supperstone QC. The First Respondents are the North Cumbria Acute Hospitals NHS Trust ('the Trust'), represented by Andrew Clarke QC and Miss Naomi Ellenbogen.
  3. These claims are brought by women in female dominated occupational groups claiming equal pay with men in male dominated occupational groups. The possibility of bringing equal pay claims in respect of past pay disparity under the Whitley Council ('WC') pay system came to light when the pay system for workers in the National Health Service was changed from being regulated by Whitley Councils to what has become known as Agenda for Change ('AfC'). Under the WC regime, there were different collective bargaining units for different occupational groups. It was suspected that workers in those in which women predominated had less beneficial terms than those in male occupational groups. When new pay structures under AfC were introduced, all the jobs of workers apart from doctors and certain other professional workers were evaluated and placed on appropriate points on a unified pay scale. On assimilation to the new pay scale the banding given was seen by claimants as supporting claims for equal pay.
  4. These equal pay claims are some of many similar equal pay claims made by workers in the Health Service arising from the introduction of AfC. This appeal is but one element of a very long running saga of litigation to resolve those claims. For the purpose of considering and disposing of this appeal, it is not necessary to examine the detail of the pay structures pre and post AfC.
  5. The Issues on Appeal

  6. Robin Allen QC on behalf of the Cross claimants very helpfully and rightly conceded that in light of the judgment of the Court of Appeal in Bainbridge v Redcar and Cleveland Borough Council (No 2) [2007] IRLR 494, adding a new comparator to an equal pay claim represents the addition of a new cause of action. Thus, there is no issue between the parties on Ground 1 of the appeal.
  7. Ground 2 is the most important in determining this appeal. It raises the issue of whether the Employment Tribunal erred in deciding that when the claimants were assimilated onto AfC terms from WC their contracts were terminated and they were re-engaged under new contracts.
  8. By Ground 3 the Cross claimants contend that the Tribunal erred in holding that if adding a new comparator constituted the addition of a new cause of action, and if on assimilation to AfC terms, new contracts of employment were entered into, it erroneously concluded that it had no discretion to allow the application to amend because a claim based on the new cause of action was presented out of time. This was on the basis that the old contracts terminated on assimilation to AfC which was more than six months prior to the application to amend. The Casson claimants support Ground 3 in the Cross claimants' Notice of Appeal.
  9. By Ground 4 the Cross claimants challenge the alternative conclusion of the Employment Tribunal that if it had a discretion to allow the amendment it would not do so.
  10. Ground 5 questions whether the Employment Tribunal erred in law in that it failed to decide whether the Statutory Grievance Procedure had been completed in respect of each claimant and each new comparator comparison.
  11. Relevant Facts

  12. The relevant facts relating to this appeal are taken from the judgment of the Employment Tribunal. There is no appeal from their findings of fact. Prior to the introduction of AfC, pay in the National Health Service was controlled by the WC. There was a general Whitley Council and nine functional councils applicable to various categories of staff. For example there was a functional council for maintenance staff, one for scientific and professional staff and one for nursing and midwifery staff, which applied to these claimants. The WC system incorporated 170 pay scales and hundreds of different grades and allowances. After lengthy discussions between the Department of Health, NHS employers, trade unions and staff representatives, an agreement was reached for AfC. The basis of AfC is a job evaluation scheme and pay scale which applies to all employees in the NHS apart from doctors and dentists. AfC includes three national pay bands. At the same time as new pay scales, national core terms and conditions of service were also introduced together with some flexibility permitting the application of local terms and conditions. A single national negotiating council was formed.
  13. In June 2004 it was announced that the operational date for the implementation of the new terms and conditions of AfC would be 1st October 2004. The final AfC agreement was signed in November 2004. Individuals who agreed to the change were assimilated onto their new place in the AfC pay scales. The assimilation process required an extensive job evaluation exercise. Following evaluation employees were given a place on the pay bands to which they were to be assimilated. If the job holder did not agree with the banding, they were entitled to have it reviewed by a Review Panel. On assimilation to a pay band each employee received a letter from the Trust setting out the band to which he or she had been assimilated and giving details of some of the terms and conditions under AfC.
  14. The three Cross claimants, who were identified as lead claimants for the purpose of determining whether the application to amend should be permitted, were assimilated into AfC, as were 3450 other employees of the Trust. Ms Elliott was assimilated on 26 August 2005 and Mrs Potter on 26 August 2005. She was re-graded on 21 December 2006 after a review and retired in May 2007. Ms Fox was assimilated on 28 June 2006.
  15. Grievance letters on behalf of the Cross claimants were submitted to the Trust. They are all in similar form. They state that the claimants' work is of equal value to, and that they are paid less than men employed on maintenance and estates work. These include maintenance labourers, painters and estates officers. Some of the grievance letters add a more general allegation relating to comparators, referring to the settlement reached in the case of Wilson and others and test cases in Richardson and others.
  16. The Equal Pay Proceedings

  17. Originating applications for equal pay were presented on 26 April 2005 by Mrs Elliott, on 7 June 2005 by Mrs Fox, and 9 April 2004 by Mrs Potter. Original comparisons in the ET1 were amended. An amended master ET1 was produced on 13 February 2007. The parties and the independent experts have worked on the basis of those pairings.
  18. Because the claimants' representatives came to the conclusion that there was some lack of clarity and transparency in the WC pay systems in force at the time of the pay inequality of which complaint was made, they sought the assistance of the Trust's Deputy Finance Director, Malcolm Pearson. Over a whole day on 1 June 2007 Mr Pearson took the Cross claimants' counsel Miss Genn and Miss Masters through the payslips of all the women in the Potter multiple case and all persons named as comparators in that multiple.
  19. After the meeting with Mr Pearson, a table was produced identifying terms and conditions which the claimants contend give rise to liability under the Equal Pay Act. Following the drawing up of this document, the Cross claimants' representatives realised that some of the women in the multiple had not named the most relevant comparators. Accordingly different combinations of comparators from those already identified were selected and an application made in November 2007 to amend the originating applications to enable the claimants to rely upon those different comparators.
  20. In a case management discussion on 20 December 2007, Employment Judge Garside ordered that there be a pre-hearing review following the application to amend the comparators. It is from the decision reached at that preliminary pre-hearing review that the claimants appeal to the Employment Appeal Tribunal.
  21. The Legislation

  22. Equal Pay Act 1970 ('EqPA') by Section 1 provides:
  23. "(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 "women's contract"), and has the effect that-
    (a) where the woman is employed on like work with 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 a 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;
    (b) where the woman is employed on work rated as equivalent with that of a man in the same employment-
    (i) if (apart from the equality clause) any term of the woman's contract determined by the rating of the work 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 and determined by the rating of the work, the woman's contract shall be treated as including such a term;
    (c) where a woman is employed on work which, not being work in relation to which paragraph (a) or (b) above applies, 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 i9n 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.

    Section 2 Disputes as to, and enforcement of, requirement of equal treatment provides

    "(1) Any claim in respect of the contravention of a term modified or included by virtue of an equality clause, including a claim for arrears of remuneration or damages in respect of the contravention, may be presented by way of a complaint to an [employment tribunal].
    (4) No determination may be made by an employment tribunal in the following proceedings-
    (a) on a complaint under subsection (1) above
    unless the proceedings are instituted on or before the qualifying date (determined in accordance with section 2ZA below)

    (5) A woman shall not be entitled, in proceedings brought in respect of a contravention of a term modified or included be virtue of an equality clause (including proceedings before an employment tribunal), 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)
    2ZA 'Qualifying date' under section 2(4)
    (1) This section applies for the purpose of determining the qualifying date, in relation to proceedings in respect of a woman's employment, for the purposes of section 2(4) above.
    (3) In a standard case, the qualifying date is the date falling six months after the last day on which the woman was employed in the employment.
    2ZB 'Arrears date' in proceedings in England and Wales under section 2(5)
    (1) This section applies for the purpose of determining the arrears date, in relation to an award of any payment by way of arrears of remuneration or damages in proceedings in England and Wales in respect of a woman's employment, for the purposes of section 2(5)(a) above.
    (3) In a standard case, the arrears date is the date falling six years before the day on which proceedings were instituted."
  24. Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004
  25. "Rule 3 Overriding Objective
    (1) The overriding objectives of these Regulations and the rules in Schedules 1, 2, 3, 4, 5 and 6 is to enable tribunals and chairmen to deal with cases justly.
    (2) Dealing with a case justly includes, so far as practicable-
    (a) ensuring that the parties are on an equal footing;
    (b) dealing with the case in ways which are proportionate to the complexity or importance of the issues;
    (c) ensuring that it is dealt with expeditiously and fairly; and
    (d) saving expense.
    [(3) A tribunal or chairman shall seek to give effect to the overriding objective when it or he:
    (a) exercises any power given to it or him by these Regulations or the rules in Schedules 1, 2, 3, 4, 5 and 6; or
    (b) interprets these Regulations or any rule in Schedules 1, 2, 3, 4, 5 and 6.]
    (4) The parties shall assist the tribunal or the chairman to further the overriding objective.
    Schedule 1
    1 Starting a claim
    (1) A claim shall be brought before an employment tribunal by the claimant presenting to an Employment Tribunal Office the details of the claim in writing. Those details must include all the relevant required information (subject to paragraph (5) of this rule and to rule 53 (Employment Agencies Act 1973)).
    10 General power to manage proceedings
    (1) Subject to the following rules, the Chairman may at any time either on the application of a party or on his own initiative make an order in relation to any matter which appears to him to be appropriate.
    (2) Examples of orders which may be made under paragraph (1) are orders-
    (j) that different claims be considered together;
    (q) giving leave to amend a claim or response".

    The Judgment of the Employment Tribunal

    Is the addition of a new comparator a new cause of action?

  26. The Employment Tribunal held at paragraph 113 that the addition of a new comparator is a new cause of action. It reached that conclusion by relying on the majority judgment of the Employment Appeal Tribunal (Elias P as he then was) on the issue in Bainbridge v Redcar and Cleveland Borough Council (No 2) [2007] IRLR 494. The Employment Tribunal held that:
  27. "It is clear from Bainbridge that a claim by a claimant naming comparator A is a different cause of action than her claim against comparator B."

    New contract or variation?

  28. In reaching the conclusion that AfC brought about a rescission of original contracts of employment and replaced them with new contracts under the Agenda for Change terms, the Employment Tribunal took into account the nature of the changes and also the attitude of the parties towards those changes. The Employment Tribunal at paragraph 102 referred to a schedule agreed between the parties which set out the changed terms and conditions. They referred to some of the changes from the WC terms. The Tribunal also referred to the new system for pay progression, Knowledge and Skills Framework ('KSF'). To progress up the pay scale, employees had to demonstrate the necessary skills to pass through certain pay progression gateways. Under WC, employees automatically progressed by incremental steps until they reached the top of the scale.
  29. Under KSF each individual employee has to demonstrate the knowledge and skills required for their job. The first gateway at which this is to be demonstrated is within 12 months of appointment. To progress further up the pay scale they also have to pass a gateway which is fixed at different levels for different grades. If an employee fails to demonstrate the required skills and knowledge they will not progress up the pay scale.
  30. In paragraph 108 the Tribunal observed:
  31. "We consider that KSF is a significant and major change to the terms and conditions of the claimants. It is a fundamental change from the incremental changes that occurred under Whitley. Under Whitley an employee progressed up the pay scale because of length of service and did not need to demonstrate on an annual basis any knowledge and skill to do the job for which he or she was employed."

    The Tribunal held of changes set out in paragraph 109:

    "There have been significant changes to the terms and conditions of employment from Whitley to Agenda for Change. Leads and allowances have been removed and higher pay given. On call and standby payments are changed. Overtime calculation is also changed. Previously overtime had to be taken as time in lieu by nurses, in contrast to other employees of the NHS, but now they get paid overtime for the extra hours that they work although they still have the options of taking time in lieu. Holiday pay and sick pay calculations are now calculated using the regular pay that an employee receives not just the basic pay. The standard hours of work in the NHS have also been amended but that does not affect the nurses as they were working under those hours in any event. We regard these changes much more than just variation of contract of employment. In their totality they add up to a significant and fundamental change in the terms and conditions of employees of the NHS."

  32. The Employment Tribunal noted that unions conducted ballots of their members to enable them to express a view on whether AfC should be accepted or rejected. Those ballots provided a mandate for the unions to proceed to sign the final agreements. In addition to considering what changes had been brought about by AfC, the Tribunal took into account in deciding whether there had been a rescission of original contracts and entering into new contracts the attitude of those implementing AfC. At paragraph 110 they observed:
  33. "The attitude of the employers, the Department of Health and the Union as well as Ministers leads to the conclusion that they considered that Agenda for Change was a fundamental change of the terms and conditions of employment within the NHS."

  34. The Tribunal also took into account the attitude of one of the members of the Tribunal, Dr Cartner, who before her retirement was a consultant haematologist. The Tribunal recorded at paragraph 111:
  35. "She is of the firm view that Agenda for Change is a fundamental change of the terms and conditions from those that applied under Whitley Council."
  36. The Employment Tribunal held at paragraph 112:
  37. "Our conclusion in respect of Agenda for Change is that we are clearly of the view that it is a fundamental change of the terms and conditions of employment. The old Whitley Council terms and conditions have been rescinded and the new terms and conditions applied. Agenda for Change is a new contract of employment which passes the test in Marriot, Preston, Degan and Dow. Therefore we conclude that as from the date of assimilation into Agenda for Change each of the claimants entered into a new contract of employment from which time runs. The intention was to make a new contract."

    Would the claim presented today be out of time?

  38. It was accepted by the parties that if contracts were terminated this occurred on the respective dates the claimants were assimilated into AfC. The respective assimilation dates were: Ms Elliott on 26 August 2005, Mrs Potter on 26 August 2005 and Ms Fox on 28 June 2006. Further, it was accepted by the parties that the claimants' cases are standard cases within the meaning of EqPA Section 2ZA. Claims must therefore be presented on a date falling six months after the last day in which the woman was employed in the employment. That meant that the claim must be presented within six months of the termination of the contract of employment in which the equality clause relied on is applied. The European Court of Justice decided in Preston Wolverhampton Healthcare NHS Trust and Secretary of State for Health, Fletcher and Midland Bank Plc [2000] IRLR 506 that a limitation period of six months is compatible with Article 141 of the Treaty of Rome.
  39. The Tribunal held at paragraph 117 that there was no discretion to extend the time for presentation of the claims. It held that it would have no jurisdiction to hear claims naming new comparators presented on the day of the hearing. The Tribunal held that it would have to dismiss the claims as out of time. The Tribunal then considered what the position would have been if it had a discretion to extend the time for the presentation of equal pay claims.
  40. Exercise of discretion to amend the claim

    (1) If the claim is out of time

  41. Having considered the authorities the Employment Tribunal concluded at paragraph 127 that to allow an amendment to bring in a new cause of action which was out of time would deprive the Trust of its limitation defence. That was sufficient to refuse the amendment.
  42. (2) If the amendment of the comparator is not a new cause of action, or if it is a new cause of action which is in time

  43. The Employment Tribunal recorded that the argument for the claimants was based on the premise that in litigation such as this there are immense difficulties in identifying comparators until such time as there has been full disclosure made by the Respondents. The Tribunal recorded at paragraph 130:
  44. "The argument is that until full information was disclosed the comparators could not be chosen. To deny an amendment to include the new comparators would be prejudicial to the claimants as they would not be able to rely on their best selection of appropriate comparators. The information was only obtained, say the claimants, after hard fought case management discussions when specific disclosure was ordered."

  45. The Tribunal noted that all of the new comparators had been comparators for some claimants at some time. The Tribunal also noted that no specific explanation had been given to them as to why the changes were now being applied for, or why it had taken such a long time to evaluate the information disclosed. The Tribunal noted that the re-configuration of the combination of claimants and comparators would cause extra work for the independent experts if the amendment were granted. They noted that the Trust complained that it would be financially prejudiced by the amendment as the new comparators would be deemed comparators from the start of the claim. If claimants were successful they could claim six years back pay counting back from that date.
  46. At paragraph 136 the Tribunal held:
  47. "On balance we would not grant an amendment if we could. There must come a time when there is finality to the pleaded case. If we had been given specific details of the reason why in November 2007 further consideration had resulted in the change of comparators we may have, in specific instances, allowed an amendment. We have not been given such an explanation just a generalised statement that it was all so difficult. We consider at this stage of the progress of this case that this is insufficient."

    Are the comparator job groups in the grievance the same?

  48. The Tribunal then went on to consider whether the comparator job groups named by the claimants in the grievance are the same as those of the new comparator pairings. The Tribunal recorded the Trust's argument that the job groups named in the grievance, maintenance and estate, (T & C including maintenance labourers, painters and estate officers) are not the same as employees in the job groups medical technical officer, laboratory scientific officers and estates and maintenance. The Tribunal held in paragraph 139 that if the job group comparator relied on in the grievance is maintenance and estate T & C maintenance, labourers, painters and estates officers and in the claim the job group comparator is a laboratory scientific officer or medical technical officer, they are not substantially the same and are materially different.
  49. At paragraph 140 the Tribunal held:
  50. "Lady Smith makes it clear in Highland that if there is an application for amendment to add a comparator with an existing claim there does not need to be a specific grievance as the proceedings have already been presented. It is however a factor to be considered in applying the discretion to grant leave to amend."
  51. The Tribunal did not decide whether a statutory grievance had been raised by the claimants in respect of their new comparators.
  52. Grounds of appeal

    Ground 1

    The Employment Tribunal erred in law in concluding that the Cross claimants' application to amend, so as to rely upon different comparators within the context of an equal pay claim under s 1(2) (c) of the EqPA, constituted a new cause of action.

    The contentions of the parties

  53. Very helpfully and sensibly Mr Allen QC made clear at the outset of the hearing of the appeal that, in the light of the judgment of the Court of Appeal in Bainbridge (No 2) [2008] IRLR 776 upholding the judgment of the Employment Appeal Tribunal on the issue, he was no longer contending on behalf of the Cross claimants that the addition of a new comparator to the equal pay claims would not be the addition of a new cause of action. Mr Supperstone QC on behalf of the Casson claimants did not dissent.
  54. Conclusion

  55. 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 Section 1(2)(a), like work, (b) work rated as equivalent or (c) work of equal value.
  56. In Bainbridge (No 2) Mr Allen contended before the Employment Appeal Tribunal:
  57. "…that it makes no difference that the same statutory provision is in play in each of these claims. An employer may infringe each of his statutory duties of care in different ways on different occasions but each may be a separate cause of action.
    116. Furthermore, Mr Allen says that it would be a complete lottery if Mr Cavanagh were right; depending upon which claim is pursued first – and that may depend upon pragmatic considerations such as the availability of witnesses – she may or may not obtain equality. 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."

    The majority of the Employment Appeal Tribunal concluded:

    "If one looks at the case from that broad standpoint, it would in our view be unjust to impose what would effectively be a lottery on claimants, forcing them to take a chance on which case to advance. Do they choose the most favourable potential claim even if there is the greatest risk of losing, or the least favourable because it perhaps has the greatest chance of winning? We do not think that the purpose of the doctrine is to place claimants in such an invidious position."

  58. Mummery LJ giving the judgment of the Court of Appeal in paragraph 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 paragraph 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 paragraph 261 that:
  59. "…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."

    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.

  60. 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.
  61. Ground 2

    If the Cross Claimants' application to amend did constitute the addition of a new cause of action, the Tribunal erroneously concluded that the new cause of action was out of time because, over 6 months prior to the application to amend, the Claimants' contracts of employment had been terminated by the introduction of AfC.

    The judgment of the Employment Tribunal

  62. The Employment Tribunal concluded that each of the claimants entered into a new contract of employment on the date they were assimilated into Agenda for Change. They held at paragraph 112:
  63. "112. Our conclusion in respect of Agenda for Change is that we are clearly of the view that it is a fundamental change of the terms and conditions of employment. The old Whitley Council terms and conditions have been rescinded and the new terms and conditions applied. Agenda for Change is a new contract of employment which passes the test in Marriot, Preston, Degan and Dow. Therefore we conclude that as from the date of assimilation into Agenda for Change each of the claimants entered into a new contract of employment from which time runs. The intention was to make a new contract."

    The Employment Tribunal held at paragraph 13 that Ms Elliott was assimilated on 26 August 2005, Mrs Potter on 26 August 2005 but she was regraded on 21 December 2006 after a review and Ms Fox was assimilated on 28 June 2006.

    Points not in issue

  64. It is not contended by the parties that there was an express agreement either to terminate or vary the Cross or the Casson claimants' contracts of employment.
  65. The Trust did not give notice to terminate any of the contracts of employment which incorporated the WC terms nor did any Cross claimants treat the introduction of the AfC terms as a fundamental breach of contract entitling them to resign and claim constructive dismissal.
  66. The terms and conditions of employment which applied prior to and after AfC were set out in a schedule agreed by the parties' representatives.
  67. Contentions of the parties

  68. The Notice of Appeal and skeleton argument of the Cross claimants set out a number of respects in which they contended that the Employment Tribunal erred in concluding that the old contracts terminated and the claimants entered into new contracts on their assimilation into AfC terms.
  69. It was said by Mr Allen on behalf of the Cross claimants that in determining whether the change from WC to AfC amounted to a rescission of the contracts which incorporated the WC terms ('old contracts') and their replacement by a different and new contract which incorporated the AfC terms ('new contracts'), the Tribunal failed to have regard to the fact that the terms of the old contract were determined by collective agreement. Therefore the change from terms incorporated by reference to one collective agreement, WC, to those incorporated by reference to another, AfC, should be regarded as within the contemplation of the parties. It was a variation not a rescission of the old contracts. Mr Allen accepted that some contractual changes would be outside the contemplation of the parties. Such would be the case if a nurse were sent to work on a South Sea island. However the change from WC to AfC terms was not in that category.
  70. Mr Allen contended that the Employment Tribunal failed to pay any or any sufficient regard to the fact that the new AfC terms were spliced into the old WC terms. AfC had a creeping effect as it was incrementally introduced. Indeed, at the time of the hearing, March 2008, AfC had not yet been fully implemented. The Employment Tribunal erred in considering the cumulative changes in deciding whether there had been a 'radical' change in terms and conditions. It failed to take into account in deciding whether there had been a radical change in contractual terms the fact that changes were introduced incrementally and that some were back dated. In those circumstances it was difficult to identify a date on which the old contract could be said to have come to an end and the new contract commenced. These matters indicate the absence of a 'radical change' in terms and conditions necessary to support a finding of a rescission of old and the introduction of new contracts.
  71. Mr Allen contended that the Employment Tribunal erred in law or came to a perverse conclusion in deciding that the move to AfC amounted to a 'fundamental change of the terms and conditions of employment.' The analysis of changes by the Tribunal ignored the fact that there were no changes in respect of a significant number of terms and conditions of employment. A full and detailed analysis of all the applicable terms and conditions would have demonstrated that there was no 'radical change' in terms and conditions.
  72. It was said on behalf of the Cross claimants that the conclusion of the Employment Tribunal that the new KSF system for pay progression was a 'fundamental change' was perverse or reached in error of law. The Notice of Appeal and skeleton argument on behalf of the Cross claimants set out evidence which it is said does not support a conclusion that KSF was a fundamental change. Further it was said in paragraph 72 of the Notice of Appeal that:
  73. "…. the introduction of KSF cannot constitute a 'radical change' in terms and conditions as it was simply a different appraisal system. This type of change cannot amount to a 'radical change', even when taken in conjunction with other minor changes highlighted by the Trust."

  74. None of the lead claimants had been subject to KSF at the date of their assimilation onto AfC terms. At the date of the hearing only Ms Fox had been the subject of a KSF review. This had been carried out in April 2007.
  75. It was said that the Employment Tribunal erred in law in taking into account the subjective perception of the Department of Health and the unions in deciding whether AfC would effect a 'fundamental change' in terms and conditions of employment.
  76. If and insofar as the Tribunal relied upon the views of Dr Cartner as to whether AfC was a 'radical change', it erred.
  77. In concluding that 'the intention was to make a new contract' the Employment Tribunal erred in law or came to a perverse conclusion. This was not the Trust's case and the Tribunal heard no evidence on the point. If in so concluding the Tribunal relied upon its view of the perception of the Department of Health and UNISON it erred in doing so.
  78. Mr Supperstone on behalf of the Casson claimants supported Ground 2 in the Cross claimants' Notice of Appeal for the reasons given in that Notice and for additional reasons.
  79. Those additional reasons are summarised in paragraph 22 of the skeleton argument lodged on behalf of the Casson claimants:
  80. "Where the issue is whether a contract was terminated by mutual consent or varied, the court is required to apply a two-stage test:
    (1) Can the intention of the parties be established?
    i. If the intention was to vary the contract of employment, then the contract was varied.
    ii. If the intention was to terminate the contract (and agree a new contract), then the original contract of employment was terminated.
    (2) If the intention can be established, that is determinative. If not, the Courts will find that a contract was terminated by mutual consent (and replaced by a new contract) in circumstances where the terms and conditions fundamentally changed."

    In this regard Mr Supperstone relied on Marriott v Oxford and District Co-operative Society Ltd (No 2) [1969] 1 WLR 254, Hogg v Dover College 1988 ICR 39, Alcan Extrusions v Yates [1996] IRLR 327, and Cumbria County Council v Dow (No. 2) [2008] IRLR 109. After the hearing in this case, although the Court of Appeal in Slack & Others v Cumbria County Council (Equality and Human Rights Commission as Intervener) EWCA Civ 293 on 3 April 2009 on grounds not argued before the EAT allowed an appeal from Dow (No 2), Mummery LJ observed in paragraph 78 that, on the arguments advanced before it, the EAT's decision was correct.

  81. Mr Supperstone contended that where the intention of the parties cannot be ascertained, the Courts will find that a contract terminated by mutual consent is replaced by a new contract where the terms and conditions are fundamentally changed. In support of this contention Mr Supperstone relied in particular on Dow v Cumbria County Council (No. 2) [2008] IRLR 109 and Degnan v Redcar and Cleveland Borough Council (heard with Newcastle upon Tyne City Council v Allan) 2005 ICR 1170. The material question is whether the changes are so fundamental that nobody could claim that the original contract was in being.
  82. Andrew Clarke on behalf of the Trust submitted that at the heart of the determination of Ground 2 of the Notice of Appeal will be the 'fundamentality' of the changes.
  83. Mr Clarke contended that (1) the Employment Tribunal correctly summarised the law (as to which the parties were not in disagreement), (2) the Employment Tribunal then applied it to the facts, (3) their reasoning represented a permissible and comprehensive application of the law to the facts as found, and hence (4) it is not permissible for the Employment Appeal Tribunal to reconsider the matter.
  84. Discussion and conclusion

  85. The parties are in broad agreement about the legal principles and the authorities applicable to the issue of whether, in the absence of express agreement, a contract has been rescinded and replaced by a new contract or whether the contract has been varied. However, there are nuanced but important differences between the parties in their approaches to the two considerations which are to be taken into account in determining the issue: the intention of the parties and the 'fundamentality' of the contractual changes.
  86. Mr Allen on behalf of the Cross claimants contended that the question of whether contractual change had been effected by variation or by rescission and entering into a new contract must be judged by assessing the extent of the changes against the background of the old contracts whose terms would change in accordance with collective agreements in force from time to time. In accordance with this approach, the changes were not to be assessed in isolation but in the context of the degree of permissible change permitted by the old contracts. Mr Allen contended that the phasing in of changes and the continuation of the terms of the old contracts were factors pointing against rescission. Further he contended that the Employment Tribunal erred in its assessment of the degree and importance of the contractual change. The intention of the parties was also to be judged having regard to the high degree of contractual flexibility incorporated into the old contracts. This argument links intention and degree of contractual change in determining whether parties have varied or rescinded and replaced an old contract.
  87. The argument advanced by Mr Supperstone on behalf of the Casson claimants separated the two considerations to be taken into account in determining whether a contractual change has been effected by variation or rescission and replacement. He contended for a two stage approach. First the intention of the parties was to be ascertained. If such intention can be ascertained it was determinative of the issue. If the intention of the parties cannot be established, it was accepted that the courts 'will find that a contract was terminated by mutual consent (and replaced by a new contract) in circumstances where the terms and conditions fundamentally changed.' On this argument the intention of the parties and the degree of contractual change are to be considered separately. Mr Supperstone contended that there was no evidential basis for finding an implied intention to rescind. Indeed the evidence of the nature and timing of the changes pointed to a variation.
  88. Mr Clarke on behalf of the Trust put the nature of the contractual changes rather than the intention of the parties at the forefront of his argument. He contended that the 'fundamentality' of the changes was at the heart of the issue of whether there had been a rescission and replacement of the old contracts or whether contractual change had been effected by consensual variation. He contended that the conclusion of the Employment Tribunal that there had been a rescission and entering into new contracts had been open to it on the evidence.
  89. The judgment of the Employment Appeal Tribunal, presided over by Elias P (as he then was), in Cumbria County Council v Dow and others (No 2) [2008] IRLR 109 contains an important analysis of the principles to be applied in ascertaining whether a contract of employment has been terminated and replaced by a new contract or whether it has been varied. We set out the entirety of this important passage in paragraph 12 of the judgment.
  90. "The Principles of Termination
    The key issue, therefore, is to determine the principles for analysing when changes in a contract amount merely to a variation of a continuing contract and when they involve a termination of the contract and the creation of a new one. Certain principles are not in dispute.
    (i) A contract may be terminated expressly or impliedly. It may be terminated by dismissal, resignation or by mutual consent.
    (ii) Implied mutual consent will be the most common form of termination where the individual enters a new contract with the same employer.
    (iii) The issue is ultimately one of intention. In Marriott v Oxford and District Co-operative Society Ltd (No 2) [1969] 1 WLR 254 Lord Parker referred to the judgment of the House of Lords in Morris v Baron & Co [1918] AC 1 and said this:
    "The question whether added new consensual terms are a mere variation of an original contract or constitute a new contract and a rescission of the old is a matter which has always given rise to some difficulty. One goes back, albeit the case was dealing with the sale of goods and Statute of Frauds, to Morris v Baron & Co [1918] AC 1, Lord Finley LC, in his speech emphasised that the answer to the question is always one of intention: was the intention to make a new contract, in which case the old contract was rescinded, or was the intention merely to treat the old contract as in being but with certain variations. At p.12 he said:
    "The evidence in the present case points to the conclusion that the parties intended not merely to vary the original contract but to set it aside and substitute another for it, giving a mere option to take delivery of the parcel undelivered."
    (iv) Not infrequently agreements to alter the terms of the contract will be made orally without any documentation between the parties (although the employee should subsequently be given a note of change: see s.4 of the Employment Rights Act 1996). In practice nothing will be said about whether the intention is to create a new contract or not. In those circumstances the test for determining whether the contract has been terminated or merely varied is that set out by Lord Parker CJ in Marriott:
    "… an important consideration is the nature of the alleged variation. In order to amount to a rescission it must be so fundamental that nobody could claim that the original contract was still in being. On the other hand, the new terms may be on such minor matters that really the only common sense of the case is that the original contract is in being, subject to slight variations. In other words, each case must depend upon the circumstances of the case."

    (The decision itself was reversed in the Court of Appeal [1979] 1 QB 186, but without any doubt being cast on this passage.)

    13. That dictum in Marriott has been followed in numerous other decisions in which changes have been made but the relationship has continued. These include Hogg v Dover College [1990] ICR 39 (hours and salary significantly reduced; held to amount to a termination); Preston v Wolverhampton NHS Trust (No. 3) [2004] ICR 993 (there could not be a variation of a contract which had been terminated); and Degnan v Redcar and Cleveland Borough Council [2005] IRLR 504 (where the EAT (Burton P) referred certain cases back to the employment tribunal because it had not given adequate reasons for determining that certain promotions constituted merely a variation and not a new contract).

    14. In Hogg the employers sought unilaterally to vary the contract; in Degnan the change was by agreement. The relevance of that is simply that a unilateral change may constitute a dismissal whereas an agreed change will not; it does not otherwise affect Lord Parker's analysis. The intention of the parties has to be determined objectively; the subjective perceptions of the parties are not relevant."

  91. In Dow (No 2) the Employment Appeal Tribunal held at paragraph 36:
  92. "The task in each case is to determine the intention of the parties. This involves establishing whether there is evidence objectively to show that there was an agreement as to the mechanism to be adopted. If the change is not of a fundamental nature, the only proper inference is that there was a variation unless we are satisfied that there was, objectively viewed, an express agreement that the mechanism to be adopted was the termination and new contract route."

  93. Elias P referred to the judgment of the House of Lords in Morris v Baron & Co [1918] AC 1. The principles in that case are of general application. The case concerned the question of whether there was a consensual rescission of an enforceable written contract and its replacement by an unenforceable parole contract rather than a consensual variation of the original contract. In addition to the passage from the speech of Lord Finlay relied upon in Marriott we consider the following passage from the speech of Viscount Haldane at page 19 to be important in considering the issue before us:
  94. "What is, of course, essential is that there should have been made manifest the intention in any event of a complete extinction of the first and formal contract, and not merely the desire of an alteration, however sweeping, in terms which still leave it subsisting."

  95. The importance of the parties' intention in deciding whether a consensual contractual change is a rescission or a variation is explained in Chitty on Contracts Thirteenth Edition paragraph 22-028.
  96. "The decision on this point will depend on the intention of the parties to be gathered from an examination of the terms of the subsequent agreement and from all the surrounding circumstances. Rescission will be presumed when the parties enter into a new agreement which is entirely inconsistent with the old, or, if not entirely inconsistent with it, inconsistent with it to an extent that goes to the very root of it. The change must be fundamental and:
    "… the question is whether the common intention of the parties was to 'abrogate', 'rescind', 'supersede' or 'extinguish' the old contract by a 'substitution' of a 'completely new' or 'self-subsisting' agreement." ". ...British & Beningtons Ltd v N W Cachar Tea Co Ltd [1923] AC 48 at para 62)

  97. In Hogg v Dover College the Employment Appeal Tribunal considered the consequence of an employee accepting unilaterally imposed fundamental changes in terms and conditions of employment. Garland J considered what it was that the employee would be accepting. He held at page 42H that:
  98. "It could only be of a totally different contract. This is not the continuance of the contract where one term has been broken; this is a situation where somebody is either agreeing to be employed on totally new terms or not at all."

  99. In Alcan Extrusions v Yates [1996] IRLR 327 the employers unilaterally imposed a radically different shift system on employees requiring them to work at weekends and bank holidays thereby affecting their overtime. There were other changes in wages and holiday arrangements. The employees worked under the new system under protest. A Tribunal chairman held that the employees' contracts of employment had been terminated by the employer. The Employment Appeal Tribunal agreed with counsel for the respondents in that case that:
  100. " ... whether or not the action of an employer in imposing radically different terms has the effect of withdrawing and thus terminating the original contract must ultimately be a matter of fact and degree for the industrial tribunal to decide provided always they ask themselves the correct question, namely, was the old contract being withdrawn or removed from the employee?"
  101. Marriott, Hogg and Alcan are examples of cases in which contractual change was imposed unilaterally. The issue in those cases was whether the contractual changes rescinded or varied the old contract. That issue was resolved by determining whether the changes were so fundamental that no one could claim that the original contract was still in being. In our view that assessment is to be judged objectively in context so that changes may be regarded as fundamental in some circumstances but not in others.
  102. In Dow (No 2) the Employment Appeal Tribunal made it clear that whether the acceptance of unilaterally imposed terms amounts to a variation or termination and acceptance of new terms depends upon the relevant facts and circumstances. Elias P held at paragraph 40:
  103. "If an employee continues to work the agreed new terms after having been issued with a new contract, continuing to work in accordance with those terms is not only referable to an acceptance that the new terms have been achieved by the new contract route; it is equally consistent with the mechanism of change being the variation route. It is, therefore, not legitimate to infer from continuing performance alone that there has been agreement to the new contract route."

    and at paragraph 112:

    "Both parties must consent to this mechanism [termination rather than variation] being adopted"
  104. The question of whether an Employment Tribunal had erred in deciding whether contracts had been varied or rescinded was considered by the Employment Appeal Tribunal, Burton J, in Degnan v Redcar and Cleveland Borough Council [2005] ICR 1170. The Employment Tribunal appear to have concluded that the claimants' contracts were 'terminated, presumably by consensual rescission,' (para 45). It directed itself:
  105. "…by reference to the words of Lord Parker CJ in Marriott (No.2) [1969] 1 WLR 254, 259, as adopted by Judge McMullen QC in Preston (No.3) [2004] ICR 993, 1037, para 108, whereby:
    "In order to amount to a rescission it must be so fundamental that nobody could claim that the original contract was still in being: on the other hand the new terms may be on such minor matters that really the only common sense of the case is that the original contract is in being, subject to slight variations…" "

  106. Fundamental as well as minor contractual changes can be effected by consensual variation. Parties can agree both the content and the mechanism for effecting contractual change. Such agreement may be express or implied and will be the best evidence of their intention. If parties agree the mechanism for contractual change the degree or 'fundamentality' of such change does not determine whether it takes effect by rescission and replacement with a new contract or by variation of an existing contract. Where parties do not expressly agree the mechanism for a change in terms and conditions of employment, their intention in this regard is to be objectively ascertained from all the relevant circumstances. If the only evidence of the intention of the parties is the degree of change, in our judgment there will be no difference in practice between the approach of Mr Allen of considering intention and degree of change together and the two stage approach contended for by Mr Supperstone in which the degree of change is only considered if the intention of the parties cannot be ascertained. The approach of Mr Clarke is, in our judgment, the correct one to adopt only if, in all the circumstances, the degree of change is the most significant evidence of the intention of the parties as to the mechanism for the change. Where terms and conditions have fundamentally changed, in the absence of indications to the contrary, the inferred intention of the parties is likely to be to terminate the old contract.
  107. Therefore, the first issue which the ET should have considered was whether the intention of the parties to the employment contracts was to terminate the old contracts and replace them with new ones or to vary them. We now consider the specific challenges made by the Cross and Casson claimants to the basis upon which the Employment Tribunal reached its decision that the contracts of the claimants were terminated on the change from WC to AfC on the dates of their assimilation.
  108. Intention

  109. The Casson claimants contend that the intention of the parties is apparent from three documents before the Employment Tribunal: the Final Agreement signed in November 2004 by the NHS Joint Unions, the NHS Management Representatives and NHS Employers, the AfC Terms and Conditions of Service Handbook and the assimilation letter sent to Mrs Casson. It is said that on this evidence the objective intention of the parties was to vary the terms of employment.
  110. A draft assimilation letter which was the template for letters sent to the claimants was before the Tribunal. The introduction informed the recipient:
  111. "Following the introduction of Agenda for Change the new NHS pay system I am writing to notify you of the results of the job matching/evaluation process and provide you with details of your new rate of pay and main terms and conditions.
    Terms and Conditions
    A summary of the main changes to your terms and conditions of employment follows."

    Employees were therefore notified of changes to their terms and conditions. They were not required to notify their acceptance.

  112. In our judgment the documentation on its own does not establish that the parties agreed that the mechanism for change was variation rather than termination. Whilst there is no document giving notice of termination there is no evidence that express agreement was reached on the mechanism for change. Therefore it was necessary for the Tribunal to consider the other relevant facts and circumstances in determining the parties' intention as to the mechanism for effecting contractual change.
  113. Cross claimants Ground 2A

  114. In deciding whether the change from WC to AfC amounted to a rescission of the old contract Mr Allen contended that the Employment Tribunal erred in failing to view the changes in the context of the fact that terms and conditions had always been determined by collective bargaining.
  115. Typically the old contracts provided that employees would be 'notified' of changes by stating that:
  116. "Any changes in your terms and conditions of service will be recorded in the documents kept in the Unit Personnel Department", and
    "Your Terms and Conditions are governed by the Trust Terms and Conditions and are subject to change.
    Any major changes in terms and conditions of your employment will be recorded in the documents kept in the offices referred to in clause 3."

  117. Dow (No 2) contains important guidance on the relevance of a contractual provision enabling unilateral variation of terms of a contract of employment in determining whether contractual changes outside the scope of the agreement were such as to terminate the contract of employment or to vary it. A term incorporating a collective agreement in force from time to time is such an example. The Employment Appeal Tribunal rejected an argument that the existence of a contractual term permitting changes to terms and conditions was irrelevant to the issue of whether contractual changes were a variation rather than a rescission of a contract. It held at paragraph 19:
  118. "19. Mr Jeans submitted that the approach [of taking such a clause into account] was flawed. First, he said that the scope of any clause permitting unilateral changes to terms and conditions was irrelevant. We do not accept that; if an alteration is imposed which falls within the four corners of the contract then there is not even a contractual variation, merely the exercise of a power conferred under the contract. Even where the change falls out with a power to vary, we agree with the Tribunal that the extent of the contractual power of unilateral variation is potentially material to the question of how fundamental a proposed change really is."

  119. In our judgment the degree of such change and the elasticity of the old contract may give rise to inferences of the mechanism which the parties intended to adopt.
  120. Whilst the changes brought about by AfC were beyond the scope of the original contracts, in our judgment the Employment Tribunal erred in failing to take into account the degree of unilateral change permitted by the WC contracts when it considered whether the implementation of AfC amounted to a termination of existing contracts rather than a consensual variation of those contracts.
  121. Cross claimants Grounds 2B and 2C

    These grounds and sub-grounds are closely related. We consider them under the general heading of:

    Error in consolidating all the contractual changes introduced over a period of time in considering whether there had been a 'radical' or 'fundamental' change in terms and conditions of employment.

  122. In paragraph 109 of the judgment the Employment Tribunal referred to all the contractual changes brought about by AfC and observed:
  123. 'In their totality they add up to a significant and fundamental change in the terms and conditions of employees of the NHS.'

  124. The Cross claimants contended that the Employment Tribunal failed to consider the argument that contractual changes were introduced incrementally, wrongly consolidated all of the changes under AfC to one point in time and then considered whether there had been a radical change. They contended that the Tribunal failed to recognise that incremental change is mutually inconsistent with rescission and replacement. It was said that the old and the new terms were spliced together. In those circumstances there was no date on which there was a change from old to new contracts. Linked with these arguments was the contention that the Tribunal erred in failing to conclude that the existence of 'back dated' terms and conditions precluded a 'radical' change in terms and conditions.
  125. It appears from paragraph 114 of the judgment of the Employment Tribunal that the parties agreed that the effective date of the variation or termination of the contracts of employment was the date of assimilation of each of the claimants' contracts of employment onto AfC terms. This was the date when their position on the new pay band was determined by job evaluation. There was a notional assimilation date of 1 October 2004 which was the same for all affected NHS employees and the date to which all pay changes were to be backdated. The Trust contended that in fact the only change fully introduced in advance of actual assimilation was that relating to holidays. That relating to the 'excess hours' regime was introduced but related to the old WC pay rates until actual assimilation. These changes were in anticipation of the entry into the new contract. In the circumstances the Employment Tribunal was entitled to consider the changes to be a consequence of its introduction.
  126. From paragraph 4 of its judgment it is clear that the Employment Tribunal proceeded on the basis that changes to the claimants' contracts occurred on the respective dates of their assimilation to AfC. The Tribunal considered the totality of the changes set out in paragraph 109 of its judgment in concluding at paragraph 112 that AfC 'is a fundamental change of the terms and conditions of employment.'
  127. We have some sympathy with the contention of Mr Allen that the judgment of the Employment Tribunal contains no apparent specific consideration of the various arguments advanced that prospective, backdated and staged changes in terms and conditions of employment should not all be amalgamated in considering the degree of contractual change. However, there is no contractual inhibition on some terms introduced by the same contract having retrospective and some prospective effect and for there to be some phasing out of old terms and the gradual introduction of the new. If all changes are introduced pursuant to the same agreement, in our judgment their consequences are to be considered together as at the date of the introduction of the agreement and not according to the dates on which subsidiary provisions are to have effect. Since all the relevant changes to the contracts of employment of the claimants derived from a single measure, the introduction of AfC terms, in our judgment it is not material that some changes were introduced later than others. Therefore the Employment Tribunal did not err in considering the cumulative effect of the introduction of changes over a period of time implemented pursuant to the adoption of AfC terms.
  128. Ground 2D The Tribunal erred in law or came to a perverse conclusion in deciding that the changes in terms and conditions were fundamental.

  129. Both the Cross and the Casson claimants contend that the Employment Tribunal erred in their approach to the consideration of whether the changes brought about by the new terms were fundamental and reached a perverse conclusion in holding that they were.
  130. The Employment Tribunal at paragraph 108 held:
  131. "We consider that KSF is a significant and major change to the terms and conditions of the claimants. It is a fundamental change from the incremental changes that occurred under Whitley."

    and held that the changes set out in paragraph 109 were:

    "much more than just variation of contract of employment. In their totality they add up to a significant and fundamental change in the terms and conditions of employees of the NHS."

  132. Mr Allen contended that the Employment Tribunal erred in failing to take into account the similarities as well as the differences between the old and the new terms. He contended that the Tribunal failed to have regard to the degree of difference the changes made in practice. In this regard reliance was placed on the inapplicability to one of the claimants of some of the changes relied upon by the Tribunal. More importantly the jobs of the claimants and their place of work did not change. The Tribunal noted in paragraph 109 of its judgment that the standard hours of work of the claimant nurses did not change. The claimant nurses retain the option of taking time off in lieu but now may be paid overtime instead.
  133. The Cross and Casson claimants contended that the decision of the Employment Tribunal that the Knowledge and Skills Framework ('KSF') system for determining pay progression was 'a significant and major change to the terms and conditions of the claimants' was in error of law or was perverse. They submitted that the introduction of KSF could not constitute a 'radical change' in terms and conditions as it was simply a different means of achieving the same thing, namely appraisal.
  134. The standard form assimilation letters explained the pay progression system as follows:
  135. "Pay Progression
    You will normally progress to the next point on your pay band on your incremental date but the new salary system provides for two points (gateways) on each pay band where assessment of knowledge and skills attainment necessary for pay progression will be made."

    In accordance with the KSF Development Review Policy the first of those two gateways is reached 12 months after an individual has been appointed to a pay band. The second gateway is set at a fixed point towards the top of a pay band.

  136. An employer can change the method by which employees are to carry out their duties such as imposing a requirement to carry out work using a computer rather than manually as was considered in Cresswell v Inland Revenue Board [1984] ICR 508. In our view the Employment Tribunal perversely categorised as fundamental a change in the criteria for pay progression which in any event only impacts at two points in a pay band and otherwise was presented as normally leading to progress to the next point on the pay band on the employee's incremental date.
  137. The changes to pay listed in paragraph 109 which affect the claimants are restricted to pay. Allowances were consolidated into pay and there were changes to on call and standby payments, provision of pay for overtime and the calculation of holiday pay on regular rather than basic pay. The change in standard hours of work in the NHS does not affect the claimant nurses. Whilst these changes are important, in our judgment the Tribunal came to a perverse conclusion if and insofar as it regarded them either on their own or taken together with the introduction of KSF as fundamental to the contracts of employment as a whole.
  138. The Cross and Casson claimants contended that the Employment Tribunal erred in relying in paragraph 110 of its judgment on its 'conclusion that they [the employers, the Department of Health and the Union as well as Ministers] considered that Agenda for Change was a fundamental change of the terms and conditions of employment within the NHS.' Further they contended that if and insofar as the Tribunal in paragraph 111 of its judgment relied on the views of a member of the Tribunal, Dr Cartner, a retired consultant haematologist, that AfC is a fundamental change of the terms and conditions from those that applied under WC, it erred in law.
  139. In Dow (No 2) the Employment Appeal Tribunal held at paragraph 41:
  140. "The intention of the parties has to be determined objectively; the subjective perceptions of the parties are not relevant".

    In our judgment the Employment Tribunal erred in law in taking into account its finding as to how the bodies it referred to in paragraph 110 of its judgment viewed the changes in determining whether those changes were fundamental.

  141. The Employment Tribunal stated at paragraph 111:
  142. "Members of the panel are entitled to input into judgments their own knowledge acquired over the years.
    [Dr Cartner] has a vast experience of working within the NHS system particularly Whitley Council. She is of the firm view that Agenda for Change is a fundamental change of the terms and conditions from those that applied under Whitley Council."

    We infer from the reference to the 'firm view' of Dr Cartner that it was taken into account by the Employment Tribunal in deciding whether the contractual changes brought about by AfC were fundamental. Whilst members of Employment Tribunals bring valuable experience to bear in considering cases before them, as was made clear in Hammington v Berker Sportcraft Ltd [1980] ICR 248, any particular knowledge relied upon by a Tribunal member should be brought to the parties' attention so that they can, if necessary, deal with it. The judgment does not set out why Dr Cartner formed her view. Nor, it seems, did she make her view or the reasons for it clear during the course of the hearing so that the parties could have an opportunity to deal with it.

  143. It is clear from paragraph 112 of the judgment that the Employment Tribunal based its conclusion that the old WC terms and conditions had been rescinded and the AfC was a new contract on its view that AfC '...is a fundamental change of the terms and conditions of employment.' It held on that basis that 'The intention was to make a new contract'.
  144. It is well established that an appeal on grounds of perversity will only succeed:
  145. "... where an overwhelming case is made out that the employment tribunal reached a decision which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached." (Yeboah v Crofton [2002] IRLR 634 per Mummery LJ at para 93.)

    In our judgment the Tribunal erred in law and came to a perverse conclusion in the respects set out above in considering whether and deciding that there had been a fundamental change in the terms and conditions of employment of the Cross and the Casson claimants when they moved from WC to AfC. Their finding that the changes were fundamental to the claimants' contracts of employment was the basis for their conclusion that the WC terms and conditions had been rescinded and replaced by AfC. From their perception of the fundamental nature of the changes they inferred that the intention of the parties was to make a new contract. In our judgment the basis upon which the Employment Tribunal concluded that time for the presentation of claims under EqPA started to run in respect of each claimant from the date of their assimilation into AfC was erroneous in law and was perverse.

    Ground 3

    If the Cross Claimants' application to amend did constitute the addition of a new cause of action, it erroneously concluded that it had no discretion to allow the application to amend because the new cause of action was out of time.

  146. As is rightly pointed out in the skeleton argument on behalf of the Cross claimants, the issue of whether the Employment Tribunal had no discretion to allow the application to amend because the new cause of action is out of time is only significant if Ground 2 of this appeal fails. Since we have held that the Employment Tribunal erred in law and came to a perverse conclusion in holding that the contracts of employment of the claimants terminated and they entered into new contracts on their assimilation to AfC terms on such change time did not start running for the purpose of EqPA claims. On the basis of our conclusion on Ground 2, the limitation periods in respect of fresh equal pay claims by the claimants save for Mrs Potter has not yet expired. Mrs Potter left her employment in May 2007. There is no suggestion that time for presentation of a fresh claim would have expired by 5th November 2007, the date of the applications to amend.
  147. Having referred to Cocking and Selkent and Ali and Kelly in the Court of Appeal, the Employment Tribunal recognised that judgments in the Employment Appeal Tribunal have taken two different courses in the approach to amendments to add to a new cause of action. It observed:
  148. "121 ….First is Lindsay J in Harvey and Judge McMullen QC in Cook v Clarke and Duffin. That line of authority is that an amendment of an existing claim to add a new cause of action, which is out of time, cannot be allowed unless time can be extended under the relevant statutory provisions.
    123. The other line of judgments [in] the EAT [is] Lehman Brothers v Smith (Judge Clarke) Transport and General Workers Union v Safeway Stores (Underhill J) and the other cases referred to above. All the judgments say that an application to amend by adding a new cause of action which is out of time requires the time limit to be considered. The time limit is regarded, in the exercise of the discretion to allow the amendment, as important but not decisive."

    The Employment Tribunal also considered authorities on the demise of the 'relation back' theory that amendments are deemed to have been incorporated in a writ from its date of issue and it considered the Civil Procedure Rules. It also noted that, unlike those considered in the authorities referred to, there is no discretion to extend the primary limitation period in equal pay cases.

  149. The Employment Tribunal held at paragraph 127:
  150. "The statutory provision does not allow any extension beyond the six month period. It must follow that there is no discretion to extend time and therefore the amendment cannot be permitted. If the new claim had been made today we could not allow it to proceed as we would have no jurisdiction to do so. It would be out of time. The respondent in such a situation is entitled to its limitation defence. To allow an amendment to bring in an out of time new cause of action would deprive the respondent of its limitation defence. That is sufficient to refuse the amendment."

  151. In light of our conclusion that fresh equal pay claims based on the comparators sought to be added by the 5th November 2007 amendment would not be out of time it is not necessary for us to decide whether there is discretion to allow an amendment to add a fresh cause of action which is out of time. We leave it to others to decide this interesting and complex issue.
  152. Ground 4

    If there was discretion to allow the amendment the conclusion of the Employment Tribunal that, in all the circumstances, it would not do so is perverse.

  153. The Employment Tribunal considered how it would exercise its discretion if the amendment of comparators was a new cause action which was in time or the amendment was not a new cause of action. In paragraph 128 the Tribunal directed itself to consider:
  154. "… the competing prejudice to each party if the amendment is allowed or if it is not allowed. The nature of the amendment is a consideration as is the timing of the application."

  155. The Tribunal noted that all the new comparators were comparators for some claimants at some time. By the amendment the claimants sought to compare themselves with some comparators already relied on by other complainants but not by them. The basis for the decision of the Tribunal is set out is the following passages:
  156. "131. ...We have not had explained to us why these comparators were chosen for particular claimants and not for others when the information (presumably) was available to nominate specific comparators against specific complainants.
    ……..
    132. …As we say, no specific explanation has been given to us as to why these changes are applied for now or why it has taken such a long time to evaluate the information disclosed.
    ……..
    133. The refiguration of the combination of claimants/comparators will cause extra work for the independent experts if the amendment is granted.
    134. The respondent says that it would be prejudiced by the amendment. The new comparators add an existing [extra] financial burden as they would be deemed comparators from the start of the claims and enable the claimants to claim (if they are successful) six years back pay.
    135. …It has taken over a year for the application to amend to be made. … "

  157. The Employment Tribunal concluded at paragraph 136:
  158. "On balance we would not grant an amendment if we could. There must come a time when there is finality to the pleaded case. If we had been given specific details of the reason why in November 2007 further consideration had resulted in the change of comparators we may have, in specific instances, allowed an amendment. We have not been given such an explanation just a generalised statement that it was all so difficult. We consider that this stage of the progress of this case that this is insufficient."
  159. The Cross claimants contended that the decision of the Employment Tribunal that if it had a discretion to allow the amendments not to do so was perverse. Mr Allen submitted that there was a good explanation for the delay in making the application to amend. Further or alternatively the balance of hardship tips in favour of allowing the amendment.
  160. Resisting this Ground of Appeal, Mr Clarke pointed out that the matters relied upon by the Cross claimants were advanced before, considered and rejected by the Employment Tribunal. The discretion not to allow the amendment was being exercised by a full tribunal which had seen the history of the litigation unfold in various applications before it.
  161. The Tribunal noted in paragraph 129 of the judgment the argument for the claimants that:
  162. "The banding of potential male comparators, their respective terms and conditions and pay all need to be disclosed before an informed choice can be made. Much of the disclosure, particularly pay required the expert help of Mr Pearson to make sense of what had been disclosed."

  163. Whether or not the disclosure of information on potential comparators' pay is accurately described by the claimants as piecemeal, it appears not to have been in dispute that such information was explained to their representatives by Mr Pearson at a meeting in June 2007. The claimants contended that the application to amend was made as speedily as possible after that meeting. This enabled them in due course to identify other pairings of comparators and that such information gave rise to the applications to amend. That these explanations for the time taken in applying to add different pairings of comparators were put before the Tribunal can be seen from paragraph 32 of the skeleton argument on behalf of the Cross claimants of 8th March 2008 and paragraph 40 of the judgment of the Tribunal.
  164. The Employment Tribunal failed to record the date on which Mr Pearson met the claimants' representatives to explain to them the previously disclosed material relating to the pay of potential comparators. It does not appear to have been suggested by the Trust either that such a meeting did not take place or that its content was not as claimed by the claimants.
  165. In paragraph 135 the Tribunal referred to the acceptance that 'as at 9 March 2006 that there was a definitive list of test claimants/comparators'. In deciding, on balance, not to allow the amendment to add different combinations of comparators the Employment Tribunal observed at paragraph 136:
  166. "There must come a time when there is finality to the pleaded case. If we had been given specific details of the reason why in November 2007 further consideration had resulted in the change of comparators we may have, in specific instances, allowed an amendment. We have not been given such an explanation just a generalised statement that it was all so difficult. We consider [at] this stage of the progress of this case that this is insufficient.'"

  167. In context it is clear to us that the Tribunal based its decision that there was unexplained delay in applying to amend on its view that the Cross claimants had advanced no explanation for the delay from 9th March 2006 to November 2007. In so doing the Tribunal wrongly failed to have regard to and to take into account the apparently undisputed fact that the meeting with Mr Pearson took place in June 2007 and that it was at this meeting that pay information relating to claimants and comparators which had been disclosed was explained to the claimants' representatives.
  168. The Employment Tribunal make no criticism of delay between June and November 2007. Rather they criticise delay between 9th March 2006 and November 2007 which they consider was unexplained. In our judgment the Tribunal erred in failing to have regard to the meeting of the representatives of the claimants with Mr Pearson on June 2007 and its relevance to the time taken in seeking to amend the claims.
  169. The Tribunal referred to the argument of the Trust that they would be prejudiced by the amendment because the newly added comparators would be deemed comparators from the start of the proceedings and therefore, if the amended claims succeeded, the claimants could recover six years' back pay from the date of the initiation of the claims rather than from the date of the amendment. The Employment Tribunal record in paragraphs 59 and 60 of its judgment an argument advanced on behalf of the Trust on exercise of discretion that if the change in comparator was a new cause of action it was out of time. An amendment would allow the claimants 'to go back six years from their original claim'. An amendment would 'conflict with the relation back doctrine, that is, deprive[d] the respondent of the limitation period defence'. In paragraph 71.2 of their skeleton argument for this appeal Mr Clarke and Ms Ellenbogen supported the conclusion of the Employment Tribunal in paragraph 134 that there would be serious prejudice by the addition of a new comparator by way of amendment rather than by bringing a fresh claim since the historical 6 year recovery periods would be different.
  170. In fact Mr Clarke and Miss Ellenbogen made it clear in paragraph 31g(ii) of their skeleton argument dated 7th March 2007 before the Employment Tribunal that such financial prejudice would arise if, and we would add only if, the amendment relates back to the date of the original ET1. The Employment Tribunal recorded in paragraph 50 of its judgment the submission made by Mr Clarke that the relation back theory was dead and that it does not apply to Employment Tribunals. Mr Clarke relied on a number of authorities including Beecham Group plc v Norton Healthcare Limited [1997] FSR 81 in which Jacob J, as he then was, observed at page 94:
  171. "There was once a notion that anything added to a writ by way of amendment was deemed to have always been in the writ- the doctrine of 'relation back'. However that notion is now dead, as appears from what Brandon LJ said in Liff v Peasley [1980] 1 WLR 781 at 803."

  172. The submission on behalf of the Trust recorded in paragraphs 59 and 60 of the judgment of the Employment Tribunal, with respect, appears to us to be inconsistent with Mr Clarke's contention before the Employment Tribunal repeated before us, that 'the relation back doctrine' whereby an amendment relates back to the date of issue of the proceedings which are amended is dead. In our judgment, on the basis of authority, the 'relation back' theory is indeed defunct and has no application to this case. Therefore if and insofar as the Employment Tribunal based its decision on financial prejudice to the Trust it proceeded on a misunderstanding of the argument being advanced by them in this regard and erred.
  173. The Tribunal refer to their view that:
  174. "133 …The refiguration of the combination of claimants/comparators will cause extra work for the independent experts if the amendment is granted."

    Since no new comparators would be added, the work carried out by the independent experts in evaluating the jobs of the claimants and all the comparators would not be in vain. It is likely that the amendments sought would require additional work on different combinations of claimant and comparator although there is no finding as to the degree of extra work which would be involved or whether it would lead to significant delay. It is not clear whether and if so to what extent the Tribunal took such extra work into account in exercising its discretion.

  175. Whilst we recognise the need for finality in pleadings particularly in the light of the protracted history of the Potter cases, the particular complexities of equal pay litigation also are to be taken into account in the exercise of discretion to allow amendments to change comparators. Elias P (as he then was) observed in Bainbridge (No 2):
  176. " …if one looks at the case from a broad standpoint, it would in our view be unjust to impose what would effectively be a lottery on claimants, forcing them to take a chance on which case to advance. Do they choose the most favourable potential claim even if there is the greatest risk of losing, or the least favourable because it perhaps has the greatest chance of winning? We do not think that the purpose of the doctrine is to place claimants in such an invidious position."

  177. In our judgment the Employment Tribunal erred in law in the respects set out above in deciding whether, if it had a discretion to do so, it would have allowed the amendment requested.
  178. Ground 5

    The Employment Tribunal failed to reach any or any clear reasons in respect of whether the statutory grievance procedure had been completed in respect of each Claimant and comparator combination

  179. It appears from paragraph 185 of the skeleton argument of the Cross claimants that it was agreed between the parties that one of the factors which was relevant to the exercise of the discretion of the Employment Tribunal to allow a change in pairings with comparators was whether the statutory grievance procedure had been complied with in respect of the amendments. The Trust contended in paragraph 72 of their skeleton argument that it is clear that the Employment Tribunal did not consider compliance with the statutory grievance procedure in the exercise of their discretion. It is said that this matter was one which, if determined in the employer's favour, would have provided a further factor pointing against allowing the amendment.
  180. We do not understand the Trust to be suggesting that their success on the issue of whether statutory grievances had been made in respect of the new claimant/comparator pairings would preclude the amendments by reason of Employment Act 2002 Section 32. This approach is consistent with the judgment of Lady Smith in Highland Council v TGWU [2008] IRLR 272. At paragraph 34 Lady Smith held:
  181. "If Tribunal proceedings have commenced then it is not a question of considering whether a claim can be presented or not. It has already been presented. There is no question of the pre-existing grievance procedure being "invalidated". What the claimant can do is to seek to amend her existing claim, the decision on which the Employment Tribunal makes in the exercise of its discretion without reference to section 32(2) which would not come into play in these circumstances. Contrary to what seemed at one point to be apprehended by the claimants, the Tribunal would not require to refuse such amendment by reason of the fact that the new comparator(s) had not featured in the original grievance document. That would be but one of the factors that the Tribunal could be expected to take into account and if there was a good reason for the reference to the new comparator(s) not having been made at that stage then that would, no doubt, weigh in the claimants' favour."

    Elias P in Hurst v Suffolk Mental Health Partnership UKEAT/0332/08/RN at paragraph 43 referred without dissent to the distinction made by Lady Smith between the significance of compliance with the grievance procedure depending upon whether it was being considered in the context of a fresh claim or an amendment to an existing claim. Compliance with the procedure in the context of an amendment to an existing claim therefore may be a relevant consideration in exercising discretion to amend the claim but not as a bar to such an amendment.

  182. The Trust realistically recognised in paragraph 73 of their skeleton argument that the issue of how much detail is required in a statutory statement of grievance is one on which there is no determinative authority. They take issue with the view expressed by Elias P (as he then was) in Hurst v Suffolk Mental Health Partnership UKEAT/0332/08/RN at paragraph 74 that undue artificiality in interpreting the requirements of the statutory grievance procedure can be avoided by
  183. " … treating a detailed statement of grievance as constituting in substance a statement of the basic grievance that there is an equal pay claim and together with the detail, or some of it, which strictly is only required to be provided as part of the basis of claim …"

    The judgment of the EAT was on 7th April 2009 upheld on appeal in [2009] EWCA Civ 309.

  184. The Employment Tribunal set out in paragraphs 42 to 44 and 84 to 92 the relevant law relating to statutory grievances. In paragraph 137 it noted the evidence of Mr Pearson on whether certain job groups were the same. The Tribunal continued:
  185. "Dr Cartner can apply her own knowledge to the job groups having had many years of service in the NHS. She confirms Mr [Pearson's] evidence from her own knowledge. They are separate and distinct job groups.
    139. If a claim is made after 1 October 2004 and a grievance was not raised before that date a grievance complying with the Employment Act 2002 and the Dispute Regulations is required. To comply with the statutory grievance procedure the grievance must contain "some specification of comparator, at least by reference to job of job type"; Highland Council. The comparators must be substantially the same or not materially different from the comparators named in the grievance and in the claim. There must be a qualitative assessment between the grievance and the claim form. Therefore, if the job group comparator relied on in the grievance is "maintenance and estate T & C maintenance, labourers, painters and estates officers", and in the claim the job group comparator is a laboratory scientific officer or medical technical officer they are not substantially the same and are materially different.
    .
    140. Lady Smith makes it clear in Highland that if there is an application for amendment to add a comparator with an existing claim there does not need to be a specific grievance as the proceedings have already been presented. It is however a factor to be considered in applying the discretion to grant leave to amend."

  186. It is clear that the Tribunal did not take compliance with the statutory grievance procedure into account in exercising its discretion to refuse the amendments. The Tribunal appear to have relied upon the knowledge of Dr Cartner as corroborating the evidence given by Mr Pearson as to whether the job groups named in the grievance are the same as those of the new comparators. The Tribunal erred in law in failing to carry out a qualitative assessment of whether in each case the amendments sought related to the grievances raised, and to take its decision in this regard into account in exercising its discretion whether to allow the amendment.
  187. Conclusion

  188. 1. Ground 1 was not pursued. It was agreed that the addition of new comparators would constitute the addition of new causes of action.
    2. Ground 2 of the appeal succeeds. The move to AfC terms constituted a variation of existing contracts of employment and not their termination and their replacement with new contracts. Time for presentation of equal pay claims therefore does not start running from the date on which each claimant was assimilated to AfC terms. The applications to amend the claims of the test claimants were not made out of time if they had been presented as fresh claims.
    3. In the light of our conclusion on Ground 2 we do not decide Ground 3.
    4. Ground 4: the Employment Tribunal erred in its approach to the exercise of its discretion whether to allow the amendments.
    5. Ground 5: in exercising its discretion whether to allow the amendments the Employment Tribunal did not have regard to the issue of whether the claims for equal pay naming some different comparators for the claimants which are the subject of the application to amend were within the grievances which had been raised.

    Accordingly the appeal succeeds. The case is remitted to an Employment Tribunal to exercise its discretion in deciding the application of the Cross claimants for leave to amend to name some different comparators in their claims for equal pay.

    Disposal

  189. On the remitted hearing to consider whether to permit the amendment of the claims, the Employment Tribunal will hear evidence and argument on matters relevant to the exercise of their discretion in accordance with this judgment.
  190. Having regard to our concerns about the observation of the Tribunal in paragraph 137 in which it referred to the untested knowledge of a member of the panel she should not be a member of the panel on the remitted hearing. Subject to this we remit the matter to be heard by an Employment Tribunal constituted as directed by the Regional Chairman.


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