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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Coutts & Co Plc & Anor v Cure & Anor [2004] UKEAT 0395_04_1709 (17 September 2004) URL: https://www.bailii.org/uk/cases/UKEAT/2004/0395_04_1709.html Cite as: [2004] UKEAT 395_4_1709, [2004] UKEAT 0395_04_1709 |
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At the Tribunal | |
On 6 August 2004 | |
Before
HIS HONOUR JUDGE McMULLEN QC
MR D CHADWICK
MISS G MILLS MBE
(2) ROYAL BANK OF SCOTLAND |
APPELLANT |
(2) MR PETER FRASER |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
Revised
For the Appellant | MR BRIAN NAPIER QC (one of Her Majesty's Counsel) Instructed by: Messrs Brodies Solicitors 15 Atholl Crescent Edinburgh EH3 8HA |
For the Respondent | MR OLIVER SEGAL (of Counsel) Instructed by: Messrs Morrish & Co Solicitors 1st Floor Oxford House Oxford Row Leeds LS1 3BE |
Fixed term employee regulations. Date of act complained of (non-payment of non-contractual bonus) was not the date an intention in principle was enunciated but when the employer decided on the date, detail and application to relevant employees of the bonus.
HIS HONOUR JUDGE McMULLEN QC
Introduction
was paid to comparable permanent employees. The Respondents contended the decision was lawful on the merits, for a number of reasons, none of which is relevant to the appeal, but also took a jurisdiction point that the Applicants were out of time to present their claims.
(1) Were the Applicants out of time?
(2) Were the Applicants, as part of a larger group of workers who were similarly excluded from the bonus, treated less favourably than permanent employees, on the ground that they were fixed-term employees?
The Legislation
" (2) …"fixed-term contract" means a contract of employment that, under its provisions determining how it will terminate in the normal course, will terminate -.
(a) on the expiry of a specific term,(b) on the completion of a particular task, or(c) on the occurrence or non-occurrence of any other specific event other than the attainment by the employee of any normal and bona fide retiring age in the establishment for an employee holding the position held by him,
and any reference to "fixed-term" shall be construed accordingly;
"fixed-term employee" means an employee who is employed under a fixed- term contract;
"permanent employee" means an employee who is not employed under a fixed-term contract, and any reference to "permanent employment" shall be construed accordingly;
"pro rata principle" means that where a comparable permanent employee receives or is entitled to pay or any other benefit, a fixed-term employee is to receive or be entitled to such proportion of that pay or other benefit as is reasonable in the circumstances having regard to the length of his contract of employment and to the terms on which the pay or other benefit is offered … "
"3 Less favourable treatment of fixed-term employees
(1) A fixed-term employee has the right not to be treated by his employer les favourably than the employer treats a comparable permanent employee -
(a) as regards the terms of his contract; or(b) by being subjected to any other detriment by any act, or deliberate failure to act, of his employer.
….
(3) The right conferred by paragraph (1) applies only if -
(a) the treatment is on the ground that the employee is a fixed-term employee,and(b) the treatment is not justified on objective grounds."
"7 Complaints to employment tribunals etc
(1) An employee may present a complaint to an employment tribunal that his employer has infringed a right conferred on him by regulatin3, or (subject to regulation 6(5»), regulation 6(2).
(2) Subject to paragraph (3), an employment tribunal shall not consider a complaint under this regulation unless it is presented before the end of the period of three months beginning-
(a) in the case of an alleged infringement of a right conferred by regulation 3(1) or 6(2), with the date of the less favourable treatment or detriment to which the complaint relates or, where an act or failure to act is part of a series of similar acts or failures comprising the less favourable treatment or detriment, the last of them;(b) in the case of an alleged infringement of the right conferred by regulation 3(6), with the date, or if more than one the last date, on which other individuals, whether or not employees of the employer, were informed of the vacancy-
(3) A tribunal may consider any such complaint which is out of time if, in all the circumstances of the case, it considers that it is just and equitable to do so.
(4) For the purposes of calculating the date of the less favourable treatment or detriment under paragraph (2)(a)-
….
(b) a deliberate failure to act contrary to regulation 3 or 6(2) shall be treated as done when it was decided on."
"(14) The signatory parties … have demonstrated their desire to improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination, and to establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.
…
(16) …. this Directive limits itself to the minimum required for the attainment of those objectives and does not go beyond what is necessary for that purpose;
"Purpose clause 1)
The purpose of this framework agreement is to -
(1) improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination;
(2) establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships."
Member states are free to improve upon those provisions (Clause 8).
The facts
"16 … :
(1) The Royal Bank of Scotland ("RBS Group") comprises amongst other businesses the Royal Bank of Scotland plc ("RBS"), National Westminster Bank plc ("NatWest plc") and Coutts & Co ("Coutts").
(2) Following the acquisition of the NatWest Bank operation by the Royal Bank of Scotland plc, it was part of the business plan to fully integrate the business of the two banking operations.
(3) The Chief Executive of the RBS Group, Fred Goodwin, issued a statement concerning the final timetable for complete integration of the banking operations, on or about 27 April 2001. That statement was published on the intranet site of each of the banks which formed the Group.
(4) That statement indicated that a bonus of 5% f basic salary would be paid to permanent staff, upon successful completion of the integration process.
(5) A further memorandum from the Chief Executive was posted via the banks Intranet on 13 November 2002. The memorandum was in two parts. The first part took the form of a statement from the Chief Executive confirming that there had been full integration, and that the bonus referred to in the memorandum of 27 April 2001 would be paid with December salaries.
(6) The second part of this memorandum was a statement of eligibility.
(7) The eligibility criteria excluded certain business groups within the RBS Group. Those eligible were defined as "All permanent staff employed on 13 November 2002, including those on probation or seconded to other areas that do not meet the eligibility criteria". Such employees had to be in the Group's employment on 13 November 2002 and at the payment date in December.
(8) Amongst the employee groups excluded from payment were those employees who were "on call or fixed terms contractors on 13 November 2002"
(9) Each of the two Applicants (Mr P R Cure and Mr P Fraser) were working for their respective part of the Bank Group under a contract for a fixed term, as at 13 November 2002 and as at 18 December 2002, which was the date on which payment of the bonus was made.
(10) Neither of the two Applicants received the bonus payment.
"(1) The Applicant worked with Coutts & Co under a contract for a fixed term, on 29 October 2001. The original fixed term was for the period 29 October 2001 until 12 September 2002.
(2) Before the fixed term expired a further fixed term contract was agreed, running from 12 September 2002 until 12 June 2003.
(3) Therefore, in November and December 2002, the Applicant was engaged under the terms of a contract for a fixed term, with Coutts"
and Mr Fraser:
"(1) The Applicant was offered a fixed term contract by the Royal Bank of Scotland commencing on 14 February 2002. The original contract was for a fixed term running from 14 February 2002 until 13 February 2003. This contract was revised with effect from 1 December 2002 and extended to 31 August 2003.
(2) The Applicant was therefore in November and December 2003 employed under the terms of a fixed term contract with RBS."
"Under the provisions of regulations 7(2) of the Regulations, the less favourable treatment or detriment or failure to act as referred to in that sub-regulation is not the decision and/or memorandum of March/April 2001. Therefore, time does not run from that point. The final determination as to the payment of the bonus; the conditions and requirements for its payment and the actual payment were not in 2001 but in November and/or December 2002 there was therefore no less favourable treatment or detriment as regards either Applicant in March/April 2001 both because they were not employed as fixed term workers at that time and because the specific qualifications for the implementation bonus had not been settled at that time. There only existed an intention to make such a payment on general terms at that time.
Therefore, time does not run from that time, as there was no less favourable treatment of either Applicant or detriment suffered by them.
The decision and memorandum of March/April 2001 was no more than a statement of intent and was substantially conditional upon the successful integration of the businesses of RBS, NatWest and Coutts. The detailed conditions had not been determined in March or April 2001. This was shown by the amendments to the general statement that was made in April 2001 by the subsequent statement and memorandum of 13 November 2002. Accordingly, the only dates to be considered. by the Tribunal were those of 13 November 2002 and/of 18 December 2002.
The specific terms and conditions were not finalised and notified to a!1 employees until 13 November 2002. Those conditions included a specific requirement that the employee who was to receive the integration bonus had to be a permanent employee (subject to the variations mentioned earlier in the findings of-fact above) on 18 December 2002. It could be said on 13 November 2002 that they were unlikely to satisfy the conditions but subsequent variations showed that matters became only finalised on the payment. However, the terms and conditions were determined and any acts of less favourable treatment or detriment were as at 13 November 2002. Accordingly the Tribunal finds that the time for bringing a claim as provided for by regulations 7(2) of the Regulations commences on 13 November 2002."
The Respondents' case
"(f) The Employment Tribunal erred in finding (para. 20, letter F) that the reason for the non-payment of integration bonus was "entirely causally connected to the fact that both Applicants were fixed term contract employees, therefore, non-permanent employees." Their status as fixed term employees was irrelevant to their non-receipt of bonus: the real cause of their exclusion being their status as non-permanent employees. The category of non-permanent employees included, but was not limited to, fixed-term employees. Applying a test of the "effective and predominant cause" (cf. O' Neill v Governors of St Thomas More RCVA Upper School and Bedfordshire CC [1996] IRLR 372, EAT), the fact of being a fixed term employee was not the cause of non-payment of bonus. Being a fixed term employee was only the cause of the First and Second Respondents being in the category of non-permanent staff."
The Applicants' cases
Legal principles
"So, if the employers operated a rule that the position of head of department was open to men only, for as long as the rule was in operation there would be a continuing discrimination and anyone considering herself to have been discriminated against because of the rule would have three months from the time when the rule was abrogated within which to bring the complaint."
"On a different point, Mr Gilroy argued that a failure to promote could only be unlawful as at particular dates when promotion was possible rather than as a continuing act, by analogy with Swithland Motors plc v Clarke [1994] IRLR 275. We do not need to decide this point (though it is hard to see why a policy not, for example, to promote blacks or women should be an unlawful act of discrimination only when promotions were possible) because the tribunal in our case never looked into the facts to see whether continuously or at any particular dates promotion was or was not possible. Nor does it help Pilkingtons to refer to Amies v Inner London Education Authority [1977] 2 All ER 100 EA T , which shows that where there is an offensive practice, rule or policy anyone considering himself discriminate against on account of it has three months from the abrogation of the rule within which to complain. That is not authority for the proposition that no one can claim until the rule is abrogated (if only because, if that were so, the discriminator would be better off continuing to discriminate than if he stopped). In any event, there was no finding of abrogation and in its paragraph 12.3 the tribunal, as we have mentioned, took as a fact that there had been a continuing failure to promote Mrs Kells."
The correctness of that principle is accepted by Mr Napier in the following terms:
"In general it will be in the interest of an employee to be able to challenge a deliberate decision to exclude him from the possibility of receiving a payment in the future without having to wait for the date of payment to arrive."
(1) A complainant has a contract of employment for a fixed term, as defined by Regulation 1(1).
(2) His employer treats him less favourably than it treats a comparable permanent employee: Regulation 3(1).
(3) The less favourable treatment takes the form of detriment.
(4) Less favourable treatment in the terms of a contract automatically qualifies as "less favourable treatment", without the necessity for it to be found to be a "detriment."
(5) As for "any other detriment", under Regulation 3(1)(b) detriment occurs when "…a reasonable worker would or might the view that he had thereby been disadvantaged in the circumstances in which he had thereafter to work". Shamoon -v- Chief Constable of the Royal Ulster Constabulary [2003] IRLR 285 paragraph 34 per Lord Hope.
(1) A one-off act of discrimination, such as a refusal to promote, which has continuing consequences for the disappointed candidate.
(2) An act extending over a period of time, constituting a rule or policy, by reference to which decisions are made from time to time.
(3) A series of discriminatory acts, whether or not set against a background of a discriminatory policy.
A complaint in respect of category (1) must be made within three months of the act or, where specific statutory provision is made for a deliberate omission to act, within three months from the date when the relevant less favourable treatment was "decided on". Time runs for a category (2) complaint when the discriminatory rule is abrogated; and it will also run in the case of the specific application of the rule to any given employee, e.g in refusing promotion, from the date of that application. Time runs in a category (3) complaint where there is specific statutory provision for this, from the last in the series of acts.
"22 The authorities distinguish between a complaint of a 'one-off' discriminatory decision whether or not it has a long-term effect, which is governed by the general provision in s.76 (1), and one of the application of a discriminatory policy or regime pursuant to which decisions may be taken from time to time, 'an act extending over a period' for which s.76(6)(b) provides.
23 Lord Griffiths in Barclays Bank pIc v Kapur [1991] IRLR 136 HL, referred, at 138, 17, to the difference between a 'one-off' decision and 'the continuing state of affairs which is governed by s.68(7)(b ) (the equivalent in the 1976 Act of s. 76(6)(b) of the 1975 Act). In Owusu v London Fire & Civil Defence Authority [1995] IRLR 574, a complaint of an employer's failure to regrade the complainant on a number of occasions, Mummery J, giving the judgment of the Employment Appeal Tribunal, made the same distinction:
'... the tribunal erred in law in failing to treat the acts complained of on regrading and failure to give the opportunity to act up as continuing acts ...in our view the allegations amount to a prima facie case that there was a continuing act. The continuing act was in the form of maintaining a practice which, when followed or applied, excluded Mr Owusu from regrading or opportunities to act up.
The position is that an act does not extend over a period simply because the doing of the act has continuing consequences. A specific decision not to upgrade may be a specific act with continuing consequences. The continuing consequences do not make it a continuing act. On the other hand, an act does extend over a period of time if it takes the form of some policy, rule or practice, in accordance with which decisions are taken from time to time. What is continuing is alleged in this case to be a practice which results in consistent decisions discriminatory of Mr Owusu .
It would be a matter of evidence for the tribunal as to whether such a practice. ..in fact exists. It may be that, when explanations are given by the respondents, it will be shown that there is no link between one instance and another, no linking practice but a matter of one-off decisions with different explanations which cannot constitute a practice (my emphasis).
24 As to a 'one-off discriminatory act', it is important to keep in mind that it may be an application of an established discriminatory policy or it may be inherently discriminatory regardless of any such policy. If the complaint is of a specific discriminatory act, the fact that it may have been an application of an established policy adds nothing for this purpose. The starting point is, therefore, to determine what is the specific act of which complaint is made.
25 The fact that a specific act out of time may have continuing consequences within time does not make it an act extending over a period; see Amies v Inner London Education Authority [1977] ICR 308 EAT - failure to appoint to a position; and Sougrin v Haringey Health Authority [1992] IRLR 416 CA- refusal to upgrade an employee.
26 As to an act extending over a period, the authorities make clear - at least in the case of discrimination in the field of employment under s.6 of the 1975 Act and s.4 of the 1976 Act (see Brooke LJ in Rovenska v General Medical Council [1997] IRLR 367, CA, at 370-371, in particular, paragraphs 18, 19, 27 and 31) -that it is the existence of a policy or regime, not a specific act of an employer triggering its application to the complainant, that matters. A moment's consideration of the concluding words of s.76(6)(b) - 'any act extending over a period shall be treated as done at the end of that period' (my emphasis) -shows that that must be so. If the 'act extending over a period' required a specific act by an employer to give it effect there would be no need or room to 'treat ...it as done at the end of the period'. See, as examples of claimed continuing acts of discrimination, Calder v James Finlay Corporation Ltd [1989] IRLR 55 EAT -refusal of benefit of employment; and Barclays Bank v Kapur [1991] IB-LR 139- -employer's refusal to take previous pensionable employment into account in calculating pension entitlement."
"34 …….. Policy or no, a decision may be an act of discrimination whether or not it is made on the same facts as before, providing it results from a further consideration of the matter and is not merely a reference back to an earlier decision."
"Neither decision is of help on the particular issue in this case. In the former, Wood J, at 492, 11, giving the judgment of the Employment Appeal Tribunal remitting the matter to an industrial tribunal for redetermination, simply stressed the importance of determining, as between incidents on different dates, when the act of discrimination 'crystallised'. In the latter, the Employment Appeal Tribunal held that there could be no act of discrimination under the s.6(1)(c) of the 1976 Act in omitting to offer employment until the person allegedly responsible for the omission was in a position to offer such employment."
"Contrary to views sometimes stated, the third ingredient ('by reason that') does not raise a question of causation as that expression is usually understood. Causation is a slippery word, but normally it is used to describe a legal exercise. From the many events leading up to the crucial happening, the court selects one or more of them which the law regards as causative of the happening. Sometimes the court may look for the 'operative' cause, or the 'effective' cause. Sometimes it may apply a 'but for' approach. For the reasons I sought to explain in Nagarajan v London Regional Transport [1999] IRLR 572, 575-576, a causation exercise of this type is not required either by s.1 (1)(a) or s.2. The phrases 'on racial grounds' and 'by reason that' denote a different exercise: why did the alleged discriminator act as he did? What, consciously or unconsciously, was his reason? Unlike causation, this is a subjective test. Causation is a legal conclusion. The reason why a person acted as he did is a question of fact."
Conclusions
(1) The date of the act complained of
(1) March/April 2001 (the Respondents' primary case);
(2) 29 October 2001 and 14 February 2002 the date when each Applicant commenced fixed term employment (the Respondents' secondary case);
(3) 13 November 2002 (the Applicants' case and the Respondents' ultimate case but not argued on appeal);
(4) 18 December 2002 (the Applicants' original case, not argued on appeal).
It will be seen that cases (1) and (2) are variants of the general case put by the Respondents that any right arose before 1 October 2002, the date the Regulations came into effect, and thus the complaints were out of time. There is no dispute that if the correct date is 13 November 2002, it is not on appeal contended that a decision to extend time, pursuant to the discretion given by Regulation 7(3), is incorrect as a matter of law.
(2) Discrimination on the proscribed ground
"Who is eligible?
All permanent staff employed on 13 November ….
Who is excluded from payment?
….
Employee groups that are excluded:
* Employees who are on-call or fixed term contractors on 13 November 2002."
The historical difference between permanent and non permanent staff is not made explicit in this document.
"In respect of employment conditions, fixed-term workers should not be treated in a less favourable manner than comparable workers solely because they have a fixed-term contract or relation unless justified on objective grounds" (emphasis added)
The Regulations do not include the word "solely". It is clear that the Regulations were made under powers given in the Employment Rights Act 1996 and these Regulations are not passed pursuant to the European Communities Act 1972. The formulation in the Directive is narrower than that in the Regulations. It is not contended that in giving greater scope for protection against discrimination, these Regulations are outside the power of the Secretary of State. Thus we must construe the Regulations as they are. The Directive applies to "workers", the Regulations apply to "employees", but the Regulations do not require discrimination to be focused "solely" on the grounds of being a fixed-term employee. There was no scope in this case for an examination of the significance of one contributory cause over another, since the Tribunal decided the Applicants were denied the bonus because they were fixed-term employees. But if there were such scope and the question were relevant, then being a fixed-term employee was the predominant reason for the denial of the bonus.
Disposal