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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> R v Secretary of State for Employment ex parte Equal Opportunities Commission [1994] UKHL 2 (03 March 1994)
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Cite as: [1995] 1 CMLR 391, [1994] 1 All ER 910, [1994] 2 WLR 409, [1994] ICR 317, [1994] IRLR 176, 92 LGR 360, [1995] 1 AC 1, [1994] UKHL 2, [1995] AC 1

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JISCBAILII_CASE_EMPLOYMENT
JISCBAILII_CASE_CONSTITUTIONAL
JISCBAILII_CASE_NI_LEGAL_SYSTEM

    Parliamentary Archives,
    HL/PO/JU/18/254

    Regina

    v.

    Secretary of State for Employment (Respondent)
    ex parte Equal Opportunities Commission and another

    (Appellants)

    JUDGMENT

    Die Jovis 3° Martii 1994

    Upon Report from the Appellate Committee to whom was
    referred the Cause Regina against Secretary of State for
    Employment ex parte Equal Opportunities Commission and another,
    That the Committee had heard Counsel as well on Monday the 25th,
    Tuesday the 26th, Wednesday the 27th and Thursday the 28th days
    of October last as on Monday the 1st day of November last upon
    the Petition and Appeal of the Equal Opportunities Commission of
    Overseas House, Quay Street, Manchester M3 3HN and Patricia
    Elizabeth Day of 15 Redding House, Tolpits Lane, Watford,
    Hertfordshire WD1 8PX, praying that the matter of the Order set
    forth in the Schedule thereto, namely an Order of Her Majesty's
    Court of Appeal of the 6th day of November 1992 might be reviewed
    before Her Majesty the Queen in Her Court of Parliament and that
    the said Order might be reversed, varied or altered or that the
    Petitioners might have such other relief in the premises as to
    Her Majesty the Queen in Her Court of Parliament might seem meet;
    as upon the case of the Secretary of State for Employment lodged
    in answer to the said Appeal; and due consideration had this day
    of what was offered on either side in this Cause:

    It is Ordered and Adjudged, by the Lords Spiritual and
    Temporal in the Court of Parliament of Her Majesty the Queen
    assembled, That the said Order of Her Majesty's Court of Appeal
    of the 6th day of November 1992 complained of in the said Appeal
    insofar as it relates to Patricia Elizabeth Day be, and the same
    is hereby, Affirmed and that the said Petition and Appeal,
    insofar as it relates to Patricia Elizabeth Day be, and the same
    is hereby, dismissed this House with no order as to costs: And
    it is further Ordered, That the said Order of Her Majesty's Court
    of Appeal of the 6th day of November 1992 complained of in the
    said Appeal and the Order of a Divisional Court of the Queen's
    Bench Division of Her Majesty's High Court of Justice of the 10th
    day of October 1991 insofar as they relate to the Equal
    Opportunities Commission be, and the same are hereby, Set Aside:
    And it is Declared:

    1. That the provisions of the Employment Protection
    (Consolidation) Act 1978 whereby employees who work for
    fewer than sixteen hours per week are subject to different
    conditions in respect of qualification for redundancy pay
    from those which apply to employees who work for sixteen
    hours per week or more are incompatible with Article 119 of

    Judgment: 3 March 1994

    HOUSE OF LORDS

    REGINA

    V.

    SECRETARY OF STATE FOR EMPLOYMENT,
    (RESPONDENT)

    EX PARTE

    EQUAL OPPORTUNITIES COMMISSION AND ANOTHER

    (APPELLANTS)


    Lord Keith of Kinkel
    Lord Jauncey of Tullichettle
    Lord Lowry
    Lord Browne-Wilkinson
    Lord Slynn of Hadley



    LORD KEITH OF KINKEL

    My Lords,

    Article 119 of the Treaty of Rome provides:

    "Each Member State shall during the first stage ensure and
    subsequently maintain the application of the principle that men and
    women should receive equal pay for equal work.

    "For the purpose of this Article, 'pay' means the ordinary basic
    or minimum wage or salary and any other consideration, whether in
    cash or in kind, which the worker receives, directly or indirectly, in
    respect of his employment from his employer.

    "Equal pay without discrimination based on sex means:

    (a) that pay for the same work at piece rates shall be
    calculated on the basis of the same unit of
    measurement;

    - 1 -

    (b) that pay for work at time rates shall be the same for the
    same job."

    The Council Directive 75/117/EEC of 10 February 1975 ("the Equal
    Pay Directive") spells out the right to equal pay in greater detail. Article 2.1
    of the Council Directive 76/207/EEC of 9 February 1976 ("the Equal
    Treatment Directive") provides:

    "For the purposes of the following provisions, the principle of
    equal treatment shall mean that there shall be no discrimination
    whatsoever on grounds of sex either directly or indirectly by reference
    in particular to marital or family status."

    Article 5.1 and 2 provide:

    " 1. Application of the principle of equal treatment with regard to
    working conditions, including the conditions governing dismissal,
    means that men and women shall be guaranteed the same conditions
    without discrimination on grounds of sex.

    "2. To this end, Member States shall take the measures necessary
    to ensure that:

    1. any laws, regulations and administrative provisions contrary to
      the principle of equal treatment shall be abolished;

    . . .”

    Section 2 of the European Communities Act 1972, so far as material
    for present purposes, provides:

    "(1) All such rights, powers, liabilities, obligations and restrictions
    from time to time created or arising by or under the Treaties, and all
    such remedies and procedures from time to time provided for by or
    under the Treaties, as in accordance with the Treaties are without
    further enactment to be given legal effect or used in the United
    Kingdom shall be recognised and available in law, and be enforced,
    allowed and followed accordingly; and the expression 'enforceable
    Community right' and similar expressions shall be read as referring to
    one to which this subsection applies. (2) ... at any time after its
    passing Her Majesty may by Order in Council, and any designated
    Minister or department may by regulations, make provision - (a) for
    the purpose of implementing any Community obligation of the United
    Kingdom, or enabling any such obligation to be implemented ... or
    (b) for the purpose of dealing with matters arising out of or related to
    any such obligation or rights ... or the operation from time to time
    of subsection (1) above; and in the exercise of any statutory power or
    duty, including any power to give directions or to legislate by means

    - 2 -

    of orders, rules, regulations or other subordinate instrument, the
    person entrusted with the power or duty may have regard to the objects
    of the Communities and to any such obligation or rights as aforesaid.
    In this subsection 'designated Minister or department' means such
    Minister of the Crown or government department as may from lime to
    time be designated by Order in Council in relation to any matter or for
    any purpose, but subject to such restrictions or conditions (if any) as
    may be specified by the Order in Council ... (4) The provision that
    may be made under subsection (2) above includes . . . any such
    provision (of any such extent) as might be made by Act of Parliament,
    and any enactment passed or to be passed, other than one contained in
    this Part of this Act, shall be construed and have effect subject to the
    foregoing provisions of this section ..."

    By the European Communities (Designation) (No. 3) Order 1982 the
    Secretary of State for Employment was designated for purposes of section 2(2)
    of the Act of 1972 in relation to measures to prevent discrimination between
    men and women as regards terms and conditions of employment.

    The United Kingdom legislation aimed at preventing such
    discrimination is to be found in the Equal Pay Act 1970 and the Sex
    Discrimination Act 1975, but nothing in the present case turns on any
    provision of either of these Acts. What is in issue is those provisions of the
    Employment Protection (Consolidation) Act 1978 which set out the conditions
    which govern the right not to be unfairly dismissed, the right to compensation
    for unfair dismissal and the right to statutory redundancy pay. These
    conditions require that an employee should have worked a specified number
    of hours a week during a specified period of continuous employment. In
    general, the qualifying periods for entitlement to each of the rights in question
    are (a) two years of continuous employment for employees who work for 16
    or more hours per week, and (b) five years of continuous employment for
    employees who work between eight and 16 hours per week. Employees who
    work for fewer than eight hours per week do not qualify for any of the rights
    in question. The provisions of the Act which set out these conditions are to
    be found in sections 54, 64, 68, 71, 81 and 151, and Schedule 13, which need
    not be referred to in detail. It is common ground that the great majority of
    employees who work for more than 16 hours a week are men, and that the
    great majority of those who work for less than 16 hours a week are women,
    so that the provisions in question result in an indirect discrimination against
    women.

    On 21 March 1990 the chief executive of the appellants the Equal
    Opportunities Commission ("E.O.C.") wrote to the Secretary of State for
    Employment referring to the provisions of the Act of 1978 concerning
    redundancy pay and compensation for unfair dismissal and expressing the view
    that these constituted indirect discrimination against women employees,
    contrary to Community law. The Secretary of State was asked to give urgent
    consideration to that matter and to inform the E.O.C. whether the government

    - 3 -

    would be willing to introduce the necessary legislation to remove the
    discrimination inherent in the Act of 1978, giving reasons for his decision if
    the reply was in the negative. The Secretary of State replied by letter dated
    23 April 1990, stating, inter alia:

    "[We do not accept that] statutory redundancy pay and statutory
    compensation for unfair dismissal constitute "pay" within the meaning
    of article 119 . . . or . . . that they fall within the Equal Treatment
    Directive ... we believe that our current statutory thresholds are
    entirely justifiable. These thresholds have existed in one form or
    another ever since employment protection legislation was first
    introduced. Their purpose is to ensure that a fair balance is struck
    between the interests of employers and employees. We have no plans
    to change the thresholds."

    On 6 June 1990 the E.O.C. obtained leave to move for judicial review, the
    matter in respect of which relief was sought being stated as:

    "The decision of the Secretary of State for Employment dated 23 April
    1990 declining to accept that the United Kingdom is in breach of its
    obligations under Community law by providing less favourable
    treatment of part-time workers than of full-time workers in relation to
    the conditions for receipt of statutory redundancy pay and
    compensation for unfair dismissal."

    The substantive relief sought was expressed in these terms:

    "1. A declaration that the United Kingdom is in breach of its
    obligations under Article 119 of the Treaty of Rome and Directive
    75/117/EEC by providing less favourable treatment of part-time
    workers (most of whom are women) than of full-time workers (most
    of whom are men) in relation to the conditions for receipt of statutory
    redundancy pay and compensation for unfair dismissal.

    "2. A declaration that the United Kingdom is in breach of its
    obligations under Directive 76/207/EEC by providing less favourable
    treatment of part-time workers (most of whom are women) than of
    full-time workers (most of whom are men) in relation to the conditions
    for receipt of statutory redundancy pay and compensation for unfair
    dismissal."

    At a later stage the application was amended so as to bring in as
    second applicant Mrs. Day, who had been employed by Hertfordshire County
    Council as a cleaner for just under five years working 11 hours a week and
    had been made redundant, and so as to seek certain further declarations and
    also mandamus to compel the Secretary of State to introduce legislation to
    abolish the discriminatory provisions of the Act of 1978.

    -4-

    The application was heard by a Divisional Court consisting of Nolan
    LJ. and Judge J. who on 10 October 1991 dismissed it (1992 I.C.R. 341).
    On appeal by the E.O.C. and Mrs. Day to the Court of Appeal the decision
    of the Divisional Court was by a majority affirmed (Kennedy and Hirst LJJ.,
    Dillon LJ. dissenting), (1993 I.C.R. 251). The E.O.C. and Mrs. Day now
    appeal to your Lordships' House.

    The principal issue of substance raised by the proceedings is whether
    the indirect discrimination against women involved in the relevant provisions
    of the Act of 1978 has been shown to be based upon objectively justified
    grounds, that being the test propounded by the European Court of Justice in
    Bilka-Kauflaus G.m.b.H. v. Weber von Harz [1987] ICR 110 for
    determining whether or not measures involving indirect discrimination
    constitute an infringement of Article 119 of the Treaty. A number of
    procedural points were, however, argued in the courts below and before this
    House.

    It is convenient first to consider whether Mrs. Day is properly joined
    in the present proceedings against the Secretary of State. Redundancy pay is
    "pay" within the meaning of Article 119 of the Treaty: Barber v. Guardian
    Assurance Group
    [1990] ICR 616, 669. If the discriminatory measures in
    the Act of 1978 are not objectively justified, Mrs. Day has a good claim for
    redundancy pay against her employers the Hertfordshire Area Health
    Authority under Article 119, which by virtue of section 2(1) of the European
    Communities Act prevails over the discriminatory provisions of the Act of
    1978. She would also have a good claim under the Equal Pay Directive and
    the Equal Treatment Directive, which are directly applicable against her
    employers as being an emanation of the State: Marshall v. Southampton and
    South West Hampshire Area Health Authority (Teaching)
    [1986] ICR 335.
    Mrs. Day's claim against her employers is a private law claim, and indeed she
    has already started proceedings to enforce it in the appropriate industrial
    tribunal, these having been adjourned to await the outcome of the present
    case. The industrial tribunal has jurisdiction to decide questions as to
    objective justification for discriminatory measures, and has done so on many
    occasions, in particular in the Marshall case. I see no good reason why a
    purely private law claim should be advanced in the Divisional Court against
    the Secretary of State, who is not the claimant's employer and is not liable to
    meet the claim, if sound. The determination of such claims has been entrusted
    by statute to the industrial tribunal, which is fully competent to deal with
    them. It is suggested that different industrial tribunals might reach different
    decisions on the facts in relation to objective justification, but a suitable test
    case upon the question of principle, supported by the E.O.C. under the power
    conferred upon it by section 75 of the Sex Discrimination Act 1975, would be
    capable of settling the question definitively. I conclude that the Divisional
    Court was not the appropriate forum to adjudicate upon what so far as Mrs.
    Day is concerned is her private law claim, and would dismiss her appeal, but
    without costs.

    - 5 -

    Turning now to the position of the E.O.C., the procedural points taken
    by the Secretary of State are (1) that the E.O.C. has no locus standi to bring
    the present proceedings, (2) that the E.O.C.'s case does not involve any
    decision or justiciable issue susceptible of judicial review, (3) that the
    Divisional Court had no jurisdiction to declare that the United Kingdom or the
    Secretary of State was in breach of any obligations under European
    Community law, and (4) that the Divisional Court was not the appropriate
    forum to determine the substantive issues raised by the application.

    Dealing first with the question of locus standi, Order 53 r. 3(7)
    provides that the court shall not grant leave to apply for judicial review
    "unless it considers that the applicant has a sufficient interest in the matter to
    which the application relates." Section 31(3) of the Supreme Court Act 1981
    contains a provision in the same terms. The matter to which the E.O.C.'s
    application relates is essentially whether the relevant provisions of the Act of
    1978 are compatible with European Community law regarding equal pay and
    equal treatment. Has the E.O.C. a sufficient interest in that matter? Under
    section 53(1) of the Sex Discrimination Act 1975 the duties of the E.O.C.
    include:

    "(a) to work towards the elimination of discrimination;

    (b) to promote equality of opportunity between men and women
    generally."

    If the admittedly discriminatory provisions of the Act of 1978 as regards
    redundancy pay and compensation for unfair dismissal are not objectively
    justified, then steps taken by the E.O.C. towards securing that these
    provisions are changed may very reasonably be regarded as taken in the
    course of working towards the elimination of discrimination. The present
    proceedings are clearly such a step. In a number of cases the E.O.C. has
    been the initiating party to proceedings designed to secure the elimination of
    discrimination. The prime example is Regina v. Birmingham City Council,
    Ex parte Equal Opportunities Commission
    [1989] AC 1155, where the
    E.O.C. successfully challenged the policy of the Council as regards the
    relative availability of grammar school places for girls and for boys, in
    proceedings which reached this House and in which it was not suggested at
    any stage that the E.O.C. lacked locus standi. In Regina v. Secretary of State
    for Defence, Ex parte Equal Opportunities Commission
    (unreported 20
    December 1991) it was common ground that the E.O.C. had locus standi.
    Another instance is Regina v. Secretary of State for Social Security, Ex parte
    Equal Opportunities Commission
    [1992] ICR 782, which went to the
    European Court of Justice. In my opinion it would be a very retrograde step
    now to hold that the E.O.C. has no locus standi to agitate in judicial review
    proceedings questions related to sex discrimination which are of public
    importance and affect a large section of the population. The determination of
    this issue turns essentially upon a consideration of the statutory duties and
    public law role of the E.O.C. as regards which no helpful guidance is to be

    - 6 -

    gathered from decided cases. I would hold that the E.O.C. has sufficient
    interest to bring these proceedings and hence the necessary locus standi.

    The next question is whether there exists any decision or justiciable
    issue susceptible of judicial review. The E.O.C.'s application sets out the
    Secretary of State's letter of 23 April 1990 as being the reviewable decision.
    In my opinion that letter does not constitute a decision. It does no more than
    state the Secretary of State's view that the threshold provisions of the Act of
    1978 regarding redundancy pay and compensation for unfair dismissal are
    justifiable and in conformity with European Community Law. The real object
    of the E.O.C.'s attack is these provisions themselves. The question is
    whether judicial review is available for the purpose of securing a declaration
    that certain United Kingdom primary legislation is incompatible with European
    Community law. It is argued for the Secretary of State that Order 53, r. 1(2),
    which gives the court power to make declarations in judicial review
    proceedings, is only applicable where one of the prerogative orders would be
    available under r. 1(1), and that if there is no decision in respect of which one
    of these writs might be issued a declaration cannot be made. I consider that
    to be too narrow an interpretation of the court's powers. It would mean that
    while a declaration that a statutory instrument is incompatible with European
    Community law could be made, since such an instrument is capable of being
    set aside by certiorari, no such declaration could be made as regards primary
    legislation. However, in the Factortame series of cases (Regina v. Secretary
    of State for Transport, Ex parte Factortame Ltd. and Others
    [1990] 2 A.C.
    85; [1991] 1 AC 603; [1992] Q.B. 680) the applicants for judicial review
    sought a declaration that the provisions of Part II of the Merchant Shipping
    Act 1988 should not apply to them on the ground that such application would
    be contrary to Community law, in particular Articles 7 and 52 of the Treaty
    of Rome (principle of non-discrimination on the ground of nationality and
    right of establishment). The applicants were companies incorporated in
    England which were controlled by Spanish nationals and owned fishing vessels
    which on account of such control were denied registration in the register of
    British vessels by virtue of the restrictive conditions contained in Part II of the
    Act of 1988. The Divisional Court, under Article 177 of the Treaty, referred
    to the European Court of Justice a number of questions, including the question
    whether these restrictive conditions were compatible with Articles 7 and 52
    of the Treaty. The European Court answered that question in the negative
    (1992 1 Q.B. 680), and although the final result is not reported, no doubt the
    Divisional Court in due course granted a declaration accordingly. The effect
    was that certain provisions of United Kingdom primary legislation were held
    to be invalid in their purported application to nationals of member states of the
    European Economic Community, but without any prerogative order being
    available to strike down the legislation in question, which of course remained
    valid as regards nationals of non-member states. At no stage in the course of
    the litigation, which included two visits to this House, was it suggested that
    judicial review was not available for the purpose of obtaining an adjudication
    upon the validity of the legislation in so far as it affected the applicants.

    - 7 -

    The Factortame case is thus a precedent in favour of the E.O.C.'s
    recourse to judicial review for the purpose of challenging as incompatible with
    European Community law the relevant provisions of the Act of 1978. It also
    provides an answer to the third procedural point taken by the Secretary of
    State, which maintains that the Divisional Court had no jurisdiction to declare
    that the United Kingdom or the Secretary of State is in breach of obligation
    under Community law. There is no need for any such declaration. A
    declaration that the threshold provisions of the Act 01 1978 are incompatible
    with Community law would suffice for the purposes sought to be achieved by
    the E.O.C. and is capable of being granted consistently with the precedent
    afforded by Factortame. This does not involve, as contended for the
    Secretary of State, any attempt by the E.O.C. to enforce the international
    treaty obligations of the United Kingdom. The E.O.C. is concerned simply
    to obtain a ruling which reflects the primacy of European Community law
    enshrined in section 2 of the European Communities Act 1972 and determines
    whether the relevant United Kingdom law is compatible with the Equal Pay
    Directive and the Equal Treatment Directive.

    Similar considerations provide the answer to the Secretary of State's
    fourth procedural point by which it is maintained that the Divisional Court is
    not the appropriate forum to decide the substantive issues at stake. The issues
    at stake are similar in character to those which were raised in Factortame.
    The Divisional Court is the only English forum in which the E.O.C., having
    the capacity and sufficient interest to do so, is in a position to secure the result
    which it desires. It is said that the incompatibility issue could be tested in
    proceedings before the European Court of Justice instituted by the European
    Commission against the United Kingdom under 169 of the Treaty of Rome.
    That may be true, but it affords no reason for concluding that the Divisional
    Court is an inappropriate forum for the application by the E.O.C. designed
    towards a similar end and, indeed, there are grounds for the view that the
    Divisional Court is the more appropriate forum, since the European Court of
    Justice has said that it is for the national court to determine whether an
    indirectly discriminatory pay practice is founded on objectively justified
    economic grounds: (see Bilka-Kaufhaus G.m.b.H. v. Weber von Harz [1987]
    I.C.R. 110, 126).

    I turn now to the important substantive issue in the appeal, which is
    whether or not the threshold provisions in the Act of 1978 have been shown
    to be objectively justified, the onus of doing so being one which rests on the
    Secretary of State.

    In Bilka-Kaufhaus G.m.b.H. v. Weber von Harz [1987] ICR 110, the
    European Court of Justice at p. 126 said:

    "36. It is for the national court, which has sole jurisdiction to make
    findings of fact, to determine whether and to what extent the grounds
    put forward by an employer to explain the adoption of a pay practice
    which applies independently of a worker's sex but in fact affects more

    - 8 -

    women than men may be regarded as objectively justified economic
    grounds. If the national court finds that the measures chosen by Bilka
    correspond to a real need on the part of the undertaking, are
    appropriate with a view to achieving the objectives pursued and are
    necessary to that end, the fact that the measures affect a far greater
    number of women than men is not sufficient to show that they
    constitute an infringement of article 119."

    Somewhat broader considerations apply where the discriminatory provisions
    are to be found in national legislation. In Rinner-Kuhn v. F. W. W. Spezial-
    Gebaudereinigung
    [1989] E.C.R. 2743, the question at issue was whether
    German legislation which permitted restrictions on the right of part time
    workers to sick pay contravened Article 119 of the Treaty, considering that
    a great majority of part time workers were women. The Court at pp. 2760-
    2761, said:

    "12. In such a situation, it must be concluded that a provision such
    as that in question results in discrimination against female workers in
    relation to male workers and must, in principle, be regarded as
    contrary to the aim of Article 119 of the Treaty. The position would
    be different only if the distinction between the two categories of
    employees were justified by objective factors unrelated to any
    discrimination on grounds of sex (see the judgment of 13 May 1986 in
    Case 170/84 Bilka-Kaufhaus G.m.b.H. v. Karin Weber von Hartz
    [1986] ECR 1607).

    " 13. In the course of the procedure, the German Government stated,
    in response to a question put by the Court, that workers whose period
    of work amounted to less than 10 hours a week or 45 hours a month
    were not as integrated in, or as dependent on, the undertaking
    employing them as other workers.

    "14. It should, however, be stated that those considerations, in so far
    as they are only generalizations about certain categories of workers, do
    not enable criteria which are both objective and unrelated to any
    discrimination on grounds of sex to be identified. However, if the
    Member State can show that the means chosen meet a necessary aim
    of its social policy and that they are suitable and requisite for attaining
    that aim, the mere fact that the provision affects a much greater
    number of female workers than male workers cannot be regarded as
    constituting an infringement of Article 119.

    "15. It is for the national court, which has sole jurisdiction to assess
    the facts and interpret the national legislation, to determine whether
    and to what extent a legislative provision, which, though applying
    independently of the sex of the worker, actually affects a greater
    number of women than men, is justified by reasons which are objective
    and unrelated to any discrimination on grounds of sex.

    - 9 -

    "16. The reply to the question referred by the national court must
    therefore be that Article 119 of the E.E.G. Treaty must be interpreted
    as precluding national legislation which permits employers to exclude
    employees whose normal working hours do not exceed 10 hours a
    week or 45 hours a month from the continued payment of wages in the
    event of illness, if that measure affects a far greater number of women
    than men, unless the Member State shows that the legislation
    concerned is justified by objective factors unrelated any

    discrimination on grounds of sex."

    The original reason for the threshold provisions of the Act of 1978
    appears to have been the view that part time workers were less committed
    than full time workers to the undertaking which employed them. In his letter
    of 23 April 1990 the Secretary of State stated that their purpose was to ensure
    that a fair balance was struck between the interests of employers and
    employees. These grounds are not now founded on as objective justification
    for the thresholds. It is now claimed that the thresholds have the effect that
    more part time employment is available than would be the case if employers
    were liable for redundancy pay and compensation for unfair dismissal to
    employees who worked for less than 8 hours a week or between 8 and 16
    hours a week for under five years. It is contended that if employers were
    under that liability they would be inclined to employ less part time workers
    and more full time workers, to the disadvantage of the former.

    The bringing about of an increase in the availability of part time work
    is properly to be regarded as a beneficial social policy aim and it cannot be
    said that it is not a necessary aim. The question is whether the threshold
    provisions of the Act of 1978 have been shown, by reference to objective
    factors, to be suitable and requisite for achieving that aim. As regards
    suitability for achieving the aim in question, it is to be noted that the purpose
    of the thresholds is said to be to reduce the costs to employers of employing
    part time workers. The same result, however, would follow from a situation
    where the basic rate of pay for part time workers was less than the basic rate
    for full time workers. No distinction in principle can properly be made
    between direct and indirect labour costs. While in certain circumstances an
    employer might be justified in paying full time workers a higher rate than part
    time workers in order to secure the more efficient use of his machinery (see
    Jenkins v. Kingsgate (Clothing Production) Ltd. [1981] ICR 715) that would
    be a special and limited state of affairs. Legislation which permitted a
    differential of that kind nationwide would present a very different aspect and
    considering that the great majority of part time workers are women would
    surely constitute a gross breach of the principle of equal pay and could not
    possibly be regarded as a suitable means of achieving an increase in part time
    employment. Similar considerations apply to legislation which reduces the
    indirect cost of employing part time labour. Then as to the threshold
    provisions being requisite to achieve the stated aim, the question is whether
    on the evidence before the Divisional Court they have been proved actually
    to result in greater availability of part time work than would be the case

    - 10-

    without them. In my opinion that question must be answered in the negative.
    The evidence for the Secretary of State consisted principally of an affidavit by
    an official in the Department of Employment which set out the views of the
    Department but did not contain anything capable of being regarded as factual
    evidence demonstrating the correctness of these views. One of the exhibits
    to the affidavit was a report with draft Directives prepared by the Social
    Affairs Commissioner of the European Commission in 1990. This covered
    a wide range of employment benefits and advantages, including redundancy
    pay and compensation for unfair dismissal, but proposed a qualifying threshold
    for those benefits of 8 hours of work per week. The basis for that was stated
    to be the elimination of disproportionate administrative costs and regard to
    employers economic needs. These are not the grounds of justification relied
    on by the Secretary of State. The evidence put in by the E.O.C. consisted in
    large measure in a Report of the House of Commons Employment Committee
    in 1990 and a Report of the House of Lords Select Committee on the
    European Communities on Part-Time and Temporary Employment in 1990.
    These revealed a diversity of views upon the effect of the threshold provisions
    on part time work, employers' organisations being of the opinion that their
    removal would reduce the amount available with trade union representatives
    and some employers and academics in the industrial relations field taking the
    opposite view. It also appeared that no other member state of the European
    Community, apart from the Republic of Ireland, had legislation providing for
    similar thresholds. The Republic of Ireland, where statute at one time
    provided for an 18-hour per week threshold, had recently introduced
    legislation reducing this to 8 hours. In the Netherlands the proportion of the
    workforce in part time employment was in 1988 29.8 per cent. and in
    Denmark 25.5 per cent., neither country having any thresholds similar to
    those in the Act of 1978. In France legislation was introduced in 1982
    providing for part time workers to have the same rights as full time, yet
    between 1983 and 1988 part time work in that country increased by 36.6 per
    cent., compared with an increase of 26.1 per cent. over the same period in the
    United Kingdom. While various explanations were suggested on behalf of the
    Secretary of State for these statistics, there is no means of ascertaining
    whether these explanations have any validity. The fact is, however, that the
    proportion of part time employees in the national workforce is much less than
    the proportion of full time employees, their weekly remuneration is
    necessarily much lower, and the number of them made redundant or unfairly
    dismissed in any year is not likely to be unduly large. The conclusion must
    be that no objective justification for the thresholds in the Act of 1978 has been
    established.

    A subsidiary issue of substance in the appeal is whether or not
    compensation for unfair dismissal is "pay" within the meaning of Article 119
    of the Treaty and the Equal Pay Directive. The definition of "pay" in Article
    119 has been set out above. In Arbeiterwohlfahrt der Stadt Berlin e.V. v.
    Botel
    [1992] I.R.L.R. 423, at p. 425, the European Court of Justice said:

    - 11 -

    "12. According to the case law of the court... the concept of 'pay'
    within the meaning of article 119 of the Treaty comprises any
    consideration whether in cash or in kind, whether immediate or future,
    provided that the employee receives it, albeit indirectly, in respect of
    his employment from his employer, whether under a contract of
    employment, legislative provisions or made ex gratia by the
    employer."

    In Barber v. Guardian Royal Exchange Assurance Group [1990] ICR 616
    the Court held that redundancy pay was "pay" within the meaning of Article
    119 on the ground (paragraph 18 of the judgment at p. 668) that receipt of it
    arose "by reason of the existence of the employment relationship". There is
    much to be said in favour of the view that compensation for unfair dismissal
    is of a comparable nature, but the European Court of Justice has not yet
    pronounced upon this issue, and there may be a question whether the answer
    to it can properly be held to be acte clair, or whether resolution of it would
    require a reference to the European Court under Article 177 of the Treaty.

    Such a reference is in any event, however, unnecessary for the disposal
    of the present appeal. Discrimination as regards the right to compensation for
    unfair dismissal, if not objectively justified, is clearly in contravention of the
    Equal Treatment Directive.

    In the light of the foregoing I am of the opinion that the appeal by the
    E.O.C. should be allowed and that declarations should be made in the
    following terms:

    1. That the provisions of the Employment Protection (Consolidation) Act
      1978 whereby employees who work for fewer than sixteen hours per week are
      subject to different conditions in respect to qualification for redundancy pay
      from those which apply to employees who work for sixteen hours per week
      or more are incompatible with Article 119 of the Treaty of Rome and the
      Council Directive 75/117/EEC of 10 February 1975.

    2. That the provisions of the Employment Protection (Consolidation) Act
      1978 whereby employees who work for fewer than sixteen hours per week are
      subject to different conditions in respect of the right to compensation for
      unfair dismissal from those which apply to employees who work for sixteen
      hours per week or more are incompatible with the Council Directive
      76/207/EEC of 9 February 1976.

    It remains to note that the E.O.C. proposed that the House should
    grant a declaration to the effect that the Secretary of State is in breach of those
    provisions of the Equal Treatment Directive which require member states to
    introduce measures to abolish any laws contrary to the principle of equal
    treatment. The purpose of such a declaration was said to be to enable part
    time workers who were employed otherwise than by the State or an emanation
    of the State, and who had been deprived of the right to obtain compensation

    - 12 -

    for unfair dismissal by the restrictive thresholds in the Act of 1978, to take
    proceedings against the United Kingdom for compensation, founding upon the
    decision of the European Court of Justice in Francovich v. Italian Republic
    [1992] IRLR 84. In my opinion it would be quite inappropriate to make
    any such declaration. If there is any individual who believes that he or she
    has a good claim to compensation under the Francovitch principle, it is the
    Attorney General who would be defendant in any proceedings directed to
    enforcing it, and the issues raised would not necessarily be identical with any

    of those which arise in the present appeal.


    LORD JAUNCEY OF TULLICHETTLE

    My Lords,

    The Equal Opportunities Commission ("the Commission") was
    established by the provisions of Part VI of the Sex Discrimination Act 1975
    ("the Act"). Section 53(1) of the Act provides that it should have the
    following duties:

    "(a) to work towards the elimination of discrimination,

    (b) to promote equality of opportunity between men and women
    generally, and

    (c) to keep under review the working of this Act and the Equal
    Pay Act 1970 and, when they are so required by the Secretary
    of State or otherwise think it necessary, draw up and submit to
    the Secretary of State proposals for amending them."

    Section 55 requires the Commission to keep under review the discriminatory
    aspects of provisions in health and safety legislation and to report to the
    Secretary of State on any matter specified by him. Section 56 requires the
    Commission to make an annual report to the Secretary of State on its
    activities. Section 57(1) provides:

    "Without prejudice to their general power to do anything requisite for
    the performance of their duties under section 53(1), the Commission
    may if they think fit, and shall if required by the Secretary of State,
    conduct a formal investigation for any purpose connected with the
    carrying out of those duties."

    Section 60(1) provides:

    - 13 -

    "If in the light of any of their findings in a formal investigation it
    appears to the Commission necessary or expedient, whether during the
    course of the investigation or after its conclusion,

    . . .

    (b) to make to the Secretary of State any recommendations,
    whether for changes in the law or otherwise,

    the Commission shall make those recommendations accordingly."

    The Commission is also empowered by section 75 to provide assistance to
    claimants in proceedings under the Act.

    In pursuance of its statutory duties the Commission has in the past
    initiated judicial review proceedings without challenge to its capacity so to do.
    This House upheld its right to obtain a declaration that a provision by a local
    Education Authority of selected secondary education was unlawful (Regina v.
    Birmingham City Council, Ex parte Equal Opportunities Commission
    [1989]
    1 A.C. 1155). In a Divisional Court hearing in December 1991 on an
    application for judicial review of a decision made on behalf of the Secretary
    of State for Defence in relation to pregnant service women it was accepted by
    the Crown that the Commission had legal standing. However, the fact that the
    Commission may properly initiate judicial review proceedings in pursuance of
    their duties against local authorities or other ministers is not, in my view,
    conclusive of its ability so to do in relation to the Secretary of State.

    The provisions of the Act to which I have referred envisage the
    Commission performing its duties on its own initiative or, in certain cases, as
    required by the Secretary of State. Section 53(1)(c) empowers or requires the
    Commission to submit proposals to the Secretary of State and section 60(1)
    similarly empowers or requires the Commission to make recommendations to
    the Secretary of State. The Act neither requires the Secretary of State to
    implement these proposals or recommendations nor confers power on the
    Commission to have them implemented. Thus, vis-à-vis the Secretary of
    State, the role of the Commission is advisory and it is no part of its duties to
    initiate proceedings against him in matters relating to sex discrimination. The
    broad words of section 53(l)(a) which might be thought habile to cover any
    steps taken by the Commission against anybody towards the specified end
    must, so far as the Secretary of State is concerned, be read in the context of
    the particular relationship which has been created between him and the
    Commission. The Act makes the Commission answerable to the Secretary of
    State and not vice versa. If Parliament had intended that the Commission
    should be empowered to challenge decisions of the Secretary of State and
    impose its will upon him it is quite remarkable that Part VI of the Act which
    sets out in some detail the powers and duties of the Commission, both at large
    and in relation to the Secretary of State, should have remained totally silent
    upon this particular matter.

    - 14 -

    While reluctant to disagree with your Lordships I am driven to the
    conclusion, in agreement with Kennedy L.J. in the Court of Appeal, that the
    Commission does not have the capacity to pursue these proceedings. I would
    therefore dismiss the appeal. I should only add that if I had reached a
    different conclusion in relation to this preliminary matter I should have been
    in entire agreement with the reasons given by my noble and learned friends,
    Lord Keith of Kinkel and Lord Browne-Wilkinson for allowing the appeal.

    LORD LOWRY


    My Lords,

    I have had the advantage of reading in draft the speech prepared by my
    noble and learned friend, Lord Keith of Kinkel. I agree with it and for the
    reasons which he gives I, too, would allow the appeal and make the
    declarations which he proposes.

    Accepting as I do the analysis of my noble and learned friend, I do not
    find it necessary to consider the question (which I think is arguable) whether
    the Secretary of State's letter of 23 April 1990 was a "decision" for the
    purposes of judicial review. I would, however, take the opportunity of
    expressing my respectful and complete agreement with the observations on
    procedure which are about to be delivered by my noble and learned friend.
    Lord Browne-Wilkinson.

    I feel bound, however, to add (as can perhaps be inferred from my
    speech in Roy v. Kensington and Chelsea and Westminster Family Practitioner
    Committee
    [1992] 1 AC 624) that I have never been entirely happy with the
    wide procedural restriction for which O'Reilly v. Mackman [1983] 2 AC 237
    is an authority, and I hope that that case will one day be the subject of your
    Lordships' further consideration.

    LORD BROWNE-WILKINSON

    My Lords,

    I agree with the speech of my noble and learned friend Lord Keith of
    Kinkel but wish to add a few words on the procedural question whether the
    Court can make a declaration on an application for judicial review even
    though in the circumstances of the case the court could not gram one of the
    prerogative orders.

    - 15 -

    The question arises in this way. It being established (for the reasons
    given by my noble and learned friend Lord Keith) that the Equal Opportunities
    Commission has locus standi to bring proceedings for judicial review but has
    not demonstrated that there is any "decision" by the Secretary of State which
    can be quashed, has the Court got jurisdiction to make a declaration that the
    domestic law of the United Kingdom is not in conformity with European law?

    Before 1977, there were two routes whereby relief could be sought
    from the Courts in the field of what is now known as public law. The first
    was by application to the Queen's Bench Divisional Court for one of the
    prerogative orders. The second was by way of a civil action in the High
    Court for a declaration. This procedure in a civil action for a declaration was
    under what is now Order 15, Rule 16 of the Rules of the Supreme Court,
    which provides as follows :

    "No action or other proceeding shall be open to objection on the
    ground that a merely declaratory judgment or order is sought thereby,
    and the Court may make binding declarations of right whether or not
    any consequential relief is or could be claimed."

    As early as 1911 it was established that, in a civil action brought by
    a competent plaintiff, the Court could grant declaratory relief against the
    Crown as to the legality of actions which the Crown proposed to take: Dyson
    v. Attorney-General
    [1911] 1 K.B. 410. Of course, in such civil proceedings
    in the High Court there could be no question of the plaintiff being entitled to
    any of the prerogative orders, which could only be made in proceedings on
    the Crown side.

    Civil proceedings for a declaration as to public rights were a widely
    adopted method down to 1977. Indeed, many of the most recent
    developments in public law were made in such civil actions brought to obtain
    declaratory relief only. See, for example. Ridge v. Baldwin [1964] A.C.
    40; Anisminic v. Foreign Compensation Commission [1969] 2 AC 147; see
    also Zamir and Woolf The Declaratory Judgment, 2nd ed. pages 29-31.

    The ability to obtain a declaration of public rights in civil proceedings
    was restricted by the need to show sufficient locus standi. Although the
    plaintiff did not have to show an actual or threatened infringement of his
    private rights, he did have to show that any actual or threatened infringement
    of public rights would cause him special damage: Gouriet v. Union of Post
    Office Workers
    [1978] AC 435. However, questions of locus standi are not
    what I am now considering.

    In 1977 the new Order 53 was introduced, laying down the modern
    procedure for judicial review. Order 53 Rule 1(2) expressly provides that an
    application for a declaration can be made in judicial review proceedings and
    gives the Divisional Court power to make a declaration if it considers it just
    and convenient "having regard to (a) the nature of the matters in respect of

    - 16 -


    which relief may be granted by way of an order of mandamus, prohibition or
    certiorari, (b) the nature of the persons and bodies against whom relief may
    be granted by way of such an order, and (e) all the circumstances of the
    case". This Rule was given statutory confirmation by section 31 of the
    Supreme Court Act 1981.

    In the period between the introduction of the new Order 53 and the
    decision in O'Reilly v. Mackman [1983] 2 AC 237 there were therefore two
    routes whereby a declaration of public rights could be obtained. The first was
    in judicial review proceedings under Order 53; the second was by civil
    proceedings for declaratory relief under Order 15 Rule 16. As to the latter,
    the position remained as it was before 1977. During this period, civil
    proceedings for a declaration as to public rights continued to be brought.
    Thus, in Royal College of Nursing v. D.H.S.S. [1981] AC 800 civil
    proceedings were brought in the Queen's Bench Division for a declaration as
    to the correctness in law of a circular from the D.H.S.S. purporting to explain
    to the medical profession the effect of the Abortion Act, 1967. No one
    contended that such a declaration could not be made even though, as in the
    present case, none of the prerogative orders could have been made even if the
    proceedings had been brought under Order 53. This House restored a
    declaration as to the legality of the circular which had been made by the trial
    judge.

    Accordingly, right down to the decision of this House in O'Reilly v.
    Mackman
    (supra) the two procedures for obtaining declaratory relief, the one
    by way of civil proceedings in the High Court the other by way of judicial
    review in the Divisional Court, continued. In O'Reilly v. Mackman itself this
    House was considering the propriety of four civil actions brought in the High
    Court for declarations as to matters of public law. This House held that in
    such public law cases, it is an abuse of process to proceed by way of civil
    action and that such proceedings must be brought by way of judicial review.
    In so deciding, Lord Diplock reviewed the law affecting declaratory judgments
    in both civil proceedings and judicial review proceedings. He said (at p.
    283G):

    "Nevertheless, there may still be cases where it turns out in the course
    of proceedings to challenge a decision of a statutory authority that a
    declaration of rights rather than certiorari is the appropriate remedy.
    Pyx Granite Company Ltd. v. Ministry of Housing and Local
    Government
    [1960] A.C. 260 provides an example of such a case. So
    Order 53 since 1977 has provided a procedure by which every type of
    remedy for infringement of rights of individuals that are entitled to
    protection in public law can be obtained in one and the same
    proceeding by way of an application for judicial review, and whichever
    remedy is found to be the most appropriate in the light of what has
    emerged upon the hearing of the application, can be granted to him."

    - 17 -

    In my judgment, this passage makes it clear that under Order 53 any
    declaration as to public rights which could formerly be obtained in civil
    proceedings in the High Court can now also be obtained in judicial review
    proceedings. If this were not so, the effect of the purely procedural decision
    in O'Reilly v. Mackman, requiring all public law cases to be brought by way
    of judicial review, would have had the effect of thenceforward preventing a
    plaintiff who previously had locus standi to bring civil proceedings for a
    declaration as to public rights (even though there was no decision which could
    be the subject of a prerogative order) from bringing any proceedings for such
    a declaration. No statutory provision has ever removed the right to seek such
    a declaration which right has been established and exercised from 1911.
    Order 53 Rule 1(2) does not say that a declaration is only to be made in lieu
    of a prerogative order. All it requires is that the Court should have regard to
    "the nature of the matters in respect of which" prerogative orders can be
    made. In the second Factortame case [1991] 1 AC 603 this House,
    admittedly without argument to the contrary, plainly envisaged that a
    declaration as to public rights could be made, even though on the facts of that
    case none of the prerogative orders could have been made.

    Finally, the terms of Order 15 Rule 16 itself indicate the same result.
    Judicial review proceedings under Order 53 are "proceedings". Therefore the
    effect of Order 15 Rule 16 is that the Court in judicial review proceedings for
    a declaration can make a declaratory order "whether or not any consequential
    relief . . . could be claimed".

    I have sought to demonstrate that the history of declaratory relief,
    authority and the terms of Order 15 Rule 16 all point to the Court having
    power to make a declaratory judgment in judicial review proceedings brought
    by a plaintiff who has locus standi, whether or not the Court could also make
    a prerogative order. The only indications to the contrary are certain dicta in
    I.R.C. v. National Federation of Self-employed and Small Businesses [1982]
    A.C. 617. The only matter at issue in that case was locus standi to bring
    proceedings under Order 53. It was suggested in argument that Lord Diplock
    indicated, obiter, that a declaration was only available as an alternative to
    mandamus. I do not so read his speech and, in the light of the passage I have
    quoted from his speech in O'Reilly v. Mackman a year later, it would be
    surprising if he meant so to indicate. Lord Scarman (at p. 648A-B) clearly
    expressed the view that a declaration could be granted in judicial review
    proceedings "only in circumstances in which one or other of the prerogative
    orders can issue. I so interpret R.S.C. Order 53 Rule 1(2) because to do
    otherwise would be to condemn the rule as ultra vires". There was no
    examination of the history of the declaratory judgment in that case and the
    reason given by Lord Scarman (that otherwise Order 53 Rule 1(2) would be
    ultra vires) ceased to have any force when shortly thereafter section 31 of the
    Supreme Court Act 1981 was enacted and gave the provision statutory force.
    Therefore, in my judgment this obiter dictum should not lead your Lordships
    to reach a conclusion different from that indicated by the other arguments I
    have mentioned.

    - 18 -

    For these reasons and the reasons given by my noble and learned
    friend Lord Keith of Kinkel I would allow the appeal and make the
    declarations that are proposed.

    LORD SLYNN OF HADLEY

    My Lords,

    For the reasons given by my noble and learned friend Lord Keith of
    Kinkel, I, too, would allow this appeal and make the declaration he proposes.

    - 19 -



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