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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HER HONOUR MRS JUSTICE LAING
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE ELIAS
LORD JUSTICE CHRISTOPHER CLARKE
|| ASDA STORES LTD
||- and -
||BRIERLEY & ORS
LORD FALCONER OF THOROTON QC and PATRICK HALLIDAY
(instructed by Gibson, Dunn & Crutcher LLP) for the Appellant
KEITH BRYANT QC and KEIRA GORE
(instructed by Leigh Day) for the Respondents
Hearing date : 26 May 2016
HTML VERSION OF JUDGMENT
Crown Copyright ©
Lord Justice Elias :
- This appeal concerns equal pay claims made by over 7000 claimants, overwhelmingly women, employed by the supermarket, Asda. They work in hourly-paid jobs in its retail stores. Most of those jobs are carried out by women. They are claiming equal pay with comparators employed in the distribution depots, jobs done overwhelmingly by men.
- The claimants lodged their claims in the employment tribunal alleging that the work they do is of equal value to their comparators and yet the comparators are being paid substantially more than they are. The claimants contend that this is an archetypal claim of equal pay based on the fact that historically the work done by the women was always perceived as women's work and therefore thought to be worth less than the work in the distribution depots which was traditionally perceived as men's work. They submit that the historical discrimination has never been corrected. Asda deny this and contend that there has been no discrimination and that accordingly the claims should fail on the merits. We are not concerned today with the substantive merits of the case, however. We are concerned with a prior question, namely whether the claims should effectively be transferred from the employment tribunal (ET) to the High Court. I say "effectively" because it is accepted that the ET has no power directly to transfer a claim, but Asda contend that it has the power to stay proceedings indefinitely, and if it exercises that power the claimants will be compelled to go to the High Court if they wish to pursue their claims at all.
- The appeal raises two issues. First, does the employment tribunal have the power to impose a stay on the employment tribunal proceedings so as in effect to compel the claimants to pursue High Court proceedings? Second, if it does have that power, would it be appropriate to exercise that power in the particular circumstances of the case?
- Asda submitted before the ET that the tribunal did have that power and ought to have exercised it. The ET rejected both arguments. It concluded that it had no power to impose a stay for the purpose sought; and that even if it did, it would not be appropriate to exercise that power in this case. Asda appealed to the EAT. The President, Mr Justice Langstaff, considered the application on paper and decided that there was no arguable case. There was a rule 3(10) oral renewal before Mrs Justice Laing who, after hearing the appellant only, reached the same conclusion. This is an appeal against that decision, permission having been given by Vos LJ.
- Lord Falconer QC, counsel for Asda, accepts that in most cases the ET is well suited to hear an equal value claim. But he submits that this case is highly exceptional, indeed unique. Virtually all aspects of the claim are disputed – the appropriateness of the comparators, whether the jobs are of equal value; whether any difference in pay is due to a non-discriminatory material factor; and finally the remedies. He says that this is by far the most important, complex and financially significant equal pay claim ever pursued in the private sector. If successful it will have an enormous effect not only on Asda and all its 150,000 employees, but also on the retail trade generally. Indeed, he goes so far as to assert that "because the ripple effects of the case will be huge, it is probably the case which will have the single largest effect on the economy of the UK in recent years".
- He also submits that there are very complex points of both EU and domestic law which would need to be resolved and that a High Court judge would be more suited to decide them than the employment judge.
- Lord Falconer set out in some considerable detail why the experience which tribunals have in dealing with large scale equal pay cases in the public sector – local authorities and the NHS in particular – is of limited relevance when dealing with what he submits is the massively more complex task of dealing with the disputes which arise here. The complexities stem from the very large number of jobs being compared; the question whether the comparators are employed on common terms; whether pay is provided from a single source; the difficulty of selecting lead cases because of local variations in the way in which the stores operate; and the difficulties of understanding to what extent pay has historically been determined by non-discriminatory market forces. He submits that it is vital that the case is heard at the highest level possible, with judges experienced in dealing with heavy and complex litigation who are used to making robust decisions. He contends that a High Court judge is likely to be better than an employment judge in the following areas in particular: clearly identifying the issues; ensuring and monitoring necessary disclosure; imposing discipline on the proceedings; and determining difficult issues of law.
- The claimants submit that this is all overblown hyperbole. The case is necessarily complex but it is not in a different league from other high profile litigation of this nature such as the high value public sector claims in the health and local authority sectors which have been dealt with perfectly adequately by the tribunals. Tribunals frequently have to determine difficult points of law in a whole range of jurisdictions, and in the equal pay context they are well attuned to determining issues of comparability, material factor defences and remedies.
- Even assuming that Lord Falconer is right in his assessment of the difficulty and gravity of the case, however, that has no relevance to the first question, namely whether the ET has a power indefinitely to stay proceedings for the purpose of steering the case to the High Court. I will address that issue first.
Does the ET have power to impose an indefinite stay for the purpose of securing that the claims are heard by the High Court?
The relevant legislation
- There is legislation dealing with the jurisdictions of the High Court and the employment tribunals in equal pay cases, and the relationship between them.
Section 127(1) of the Equality Act 2010 provides:
"(1) An employment tribunal has, subject to subsection (6), jurisdiction to determine a complaint relating to a breach of an equality clause or rule."
Section 127(9) provides:
"(9) Nothing in this section affects such jurisdiction as the High Court [or] the county court … has in relation to an equality clause or rule."
Section 128 provides:
"128. References by court to tribunal, etc
(1) If it appears to a court in which proceedings are pending that a claim or counter-claim relating to an equality clause or rule could more conveniently be determined by an employment tribunal, the court may strike out the claim or counter-claim.
(2) If in proceedings before a court a question arises about an equality clause or rule, the court may (whether or not on an application by a party to the proceedings) -
(a) refer the question, or direct that it be referred by a party to the proceedings, to an employment tribunal for determination, and
(b) stay or sist the proceedings in the meantime."
- These provisions establish three points. First, the High Court has jurisdiction to hear equal pay cases, and indeed the more favourable limitation period (in the case of someone who has left the relevant employment) then applies: see Abdulla v Birmingham City Council  UKSC47;  ICR 1419. Second, the High Court can in effect transfer an equal pay claim to the ET by striking out the claim, provided that it can be conveniently heard in the ET. Third, the High Court can temporarily stay proceedings and refer an equality issue arising in relation to a claim to the ET for determination. The striking feature about this legislation, however, is that there is nothing in the primary legislation which either permits or envisages a transfer the other way from the ET to the High Court.
- Asda does not suggest that an ET could exercise such a power directly by simply referring the claim to the High Court. However, Lord Falconer submits that an ET has a general power to impose an indefinite stay on employment claims in an appropriate case, with the consequence that the claimant will need to issue fresh proceedings in the High Court if she is going to be able to pursue her claim.
- The rule relied upon is the general power to make case management orders found in rule 29 of the Tribunal Rules which is headed "Case management orders" and is as follows:
"The Tribunal may at any stage of the proceedings, on its own initiative or on application, make a case management order. The particular powers identified in the following rules do not restrict that general power. A case management order may vary, suspend or set aside an earlier case management order where that is necessary in the interests of justice, and in particular where a party affected by the earlier order did not have a reasonable opportunity to make representations before it was made."
A case management order is defined in rule 1(3)(a) as
"an order or decision of any kind in relation to the conduct of proceedings, not including the determination of any issue which would be the subject of a judgment."
- The submission is that at least once an application for a stay is made, the tribunal must consider whether it or the High Court would be the more appropriate forum to hear the claims. If the latter, the indefinite stay should be granted.
- There is no doubt that in an appropriate case this general rule 29 power does confer a power to stay proceedings, even indefinitely: see Crofts v Cathay Pacific Airway  ICR 1436 at 1452 per Lord Phillips MR, and the claimants do not seek to contend otherwise. But the ET was satisfied that it would not be lawful to impose the stay for the purpose of compelling a transfer of jurisdiction. The ET judge, Regional Employment Judge Robertson, said this:
"I discern no principle whereby I should deny the claimants what seems to me to be their statutory right to proceed in the Tribunal. There is no equivalent in Tribunal proceedings to section 128 whereby claims could be struck out if the High Court was the more appropriate forum or questions could be referred there. It seems to me that this reflects the reality, which is that the Tribunal was intended to be, and has become, the appropriate and specialist forum for equal pay claims."
- In the EAT, Laing J essentially adopted this analysis. She succinctly summarized what she perceived to be the argument and her response to it in the following way:
"The argument really is this: that a very general power conferred by delegated legislation can be used to restrict a right conferred by primary legislation in circumstances where Parliament in that primary legislation has provided for transfer from the High Court to the Tribunal but has not expressly provided for transfer in the opposite direction."
She concluded that the power could not be so exercised for the following reason:
"It seems to me that the Respondent's analysis of the legislative scheme is not arguably correct. In my judgment, the Claimants do have a clear statutory right to make an equal pay claim, and they have a clear statutory right to choose whether to make that claim in the ET or in the High Court. It is a notable feature of the statutory provisions that there is no reference to the position of the Respondent or the defendant to any litigation. By contrast, the case-management power in Rule 29 is first conferred by delegated legislation and secondly conferred in the most general and abstract of terms. In my judgment, the ET did not arguably err in holding that such a general power conferred by Rules cannot be used to override a clear statutory right; i.e. the right to bring a claim in an ET, or elsewhere, at the Claimants' option."
- The appellant submits that this analysis is flawed because it assumes not merely that a claimant has the right to start proceedings in the ET, which she plainly does, but that she also has the right to have her claim determined by that process. That, submits the appellant, is a misconception. The application simply places the claim in the hands of the tribunal but thereafter the ET is entitled to stay proceedings so as to allow them to be heard in a more appropriate forum. That is precisely what happened in the Croft case. The court recognised that there could be an indefinite stay where the more appropriate court to hear a claim was in a foreign jurisdiction. The same principle should apply where there is a more appropriate domestic court.
- Lord Falconer submits that, properly analysed, section 128 recognises that there will be cases where the High Court will transfer jurisdiction because it is more convenient for an ET to hear the equal value issue. Implicit in that provision is a recognition that there will be cases where the High Court should retain jurisdiction because it is the more convenient forum. He cites by way of example a case where there are parallel proceedings between the same parties in the High Court and the employment tribunal raising certain common issues. He says that it must be the case that in such circumstances the ET would have a power to stay the proceedings so as to prevent unnecessary duplication if it felt that the High Court was the appropriate forum in which the dispute could more conveniently be determined. Since convenience of forum is the touchstone, the same power must exist if the ET thinks that the High Court is the more convenient forum even if proceedings have not yet been commenced there. The employer in a case such as the present should not have to commence proceedings in the High Court in order to give the ET the power to make that choice.
- Notwithstanding the attractive way in which the argument was advanced, I reject it. It is true that a claimant who presents a claim to an employment tribunal will necessarily be subject to the proper exercise of a tribunal's discretions carried out in the course of case management. I accept also that this could include a permanent stay in an appropriate case, as the Croft case demonstrates. But that was a very different situation. It was a conflict of law case where the question was whether the Labour Court in Hong Kong or the ET was the more appropriate forum for dealing with certain contractual claims made by airline pilots. Forum non conveniens is a well established doctrine of private international law which applies to employment tribunals, and the claimant will be subject to the possibility of a claim being permanently stayed in the application of that doctrine. Jurisdiction is transferred to another court in another country because it is the most appropriate forum. Here the question is whether the claim can be transferred from one court to another in this country. There is no doctrine of forum non conveniens operating as between domestic courts, and the relationship between them is typically laid down in legislation in one form or another, either primary or subordinate. A power must be identified which can properly be exercised to achieve the particlar purpose being sought.
- In my judgment, there is a material difference between cases where there are parallel proceedings running concurrently and where there are not. Often in such cases the proceedings before the ET are likely to be vexatious or oppressive and they can be struck out under rule 37 for that reason. But I recognise that there may be situations where the exercise of the strike out power would not be appropriate. I would not discount the possibility that an ET could, in the case of parallel proceedings, grant a stay to allow the High Court to determine the issues in dispute. Normally I would expect the transfer to be the other way around, but I would accept that a stay might be appropriate where, for example, the High Court proceedings were further advanced than those in the ET. It could be embarrassing, as well as potentially wasteful in terms of time and costs, to have potentially inconsistent outcomes. But it does not follow, in my view, that the same power would be available where there are no parallel proceedings giving rise to those concerns.
- Given the structure of the primary legislation, I do not consider that the ET could use the very broad case management power in Rule 29 for the purpose of relinquishing jurisdiction to the High Court merely because it considered that court to be a more appropriate forum. In my view, it is inconceivable that Parliament, having dealt expressly with the transfer of cases from the High Court to the ET, would have permitted the power to transfer the other way to be left to secondary legislation in the form of the Employment Tribunal Rules. Mrs Justice Laing was, in my judgment, right to conclude that the employee does have a right to have the civil claim heard in the Tribunal because, in the particular circumstances of this case, there is no statute or rule of law which would permit the ET to relinquish jurisdiction in favour of the High Court.
- I am reinforced in this conclusion by the very significant practical consequences which follow if this power were capable of being exercised in the manner suggested by the appellant. It would be prejudicial to employees in a number of ways. They would have to start proceedings again, with the additional stress, including additional court fees, that this step would involve; they would incur the risk that a claim initially in time was now out of time; and in any event, since in the normal case any arrears of pay is limited to pay accruing in the six years before proceedings were commenced (see the Equality Act 2010 section 132), the effect would be to start that six years again but from a later date to the potential prejudice of the employee. That is particularly relevant where, as is alleged to be the position here, the inequality has been operating for more than six years. In addition - and this could be a matter of particular importance – a claimant would be at risk of costs in the High Court if he or she were to lose, whereas costs are rarely awarded in the ET. In general, it is only if the claimant has behaved unreasonably. That is widely understood and I do not think the general power in Rule 29 can be exercised so as to deprive a claimant of those benefits.
- Parliament has recognised and accepted that in some circumstances the ET might be a more appropriate forum for determining an equal pay issue than the High Court. To that extent I would accept that considerations of convenience come into the picture. But it has not legislated for the converse and in my judgment it is not for the ET to exercise its general powers to make good that omission. This is particularly so given the potential prejudice to a claimant if that step is taken. I would have expected Parliament to have provided some indication of how these disadvantages might be mitigated if and when the transfer to the High Court is exercised. I do not accept Lord Falconer's submission that Parliament, in dealing with transfers from the High Court, was focusing more generally on the broad issue of convenience and was giving a steer to tribunals as to how their rules might be framed so as to grant a similar power to transfer.
The second issue; was there a lawful exercise of discretion?
- Given my conclusion on the vires point, this issue does not arise. However, we heard argument on it and I shall briefly consider it.
- The judge set out in considerable detail the reasons advanced by Lord Falconer as to why he should grant the stay. He then expressed his conclusion why he would have refused to do so even if he had the power:
"45. But if I have to carry out a straightforward practical inquiry into the forum most convenient for investigation of the merits, that inquiry leads me conclusively to decide that forum is the Tribunal.
46. The claims arise from the claimants' employment with the respondent and the Tribunal has the specialist expertise to determine the issues.
47. Employment Tribunals have 40 years' experience of dealing with such claims and issues such as arise in these cases have been decided in Tribunals across the country within what have been multiple proceedings just as complex in fact and law as these proceedings. Employment Tribunals have gained a significant body of experience and expertise and Employment Judges have specialist training on the principles involved.
48. These claims do not involve novel issues or contentions. The issues, as identified in the agreed List of Issues attached to the January 2015 Case Management Orders, tread well-trodden paths; comparability/"single source"; whether the work done by the claimants and their comparators is of equal value; material factor defence and market factor issues. These are issues in which the Tribunal is experienced and with which it is well equipped to engage. They are, if I may put it this way, meat and drink to Tribunals.
49. Employment Judges with their specialist knowledge of the jurisdiction are well equipped to make robust case management orders which will make sure that these proceedings are dealt with in a timely, proportionate and cost-effective way. I see no advantage in the case management powers available in the High Court.
50. On the contrary, there are advantages in the Tribunal procedures, particularly in the provision of independent expert reports at no cost to the parties. Further, the claimants will incur substantial prejudice in having to commence new proceedings, with the consequent cost, and to submit to a cost-shifting jurisdiction.
51. Finally, I accept, of course, that the High Court has experience in complex cases, but as Mummery LJ said in Abdulla in the Court of Appeal, para 8, equal pay claims are not generally pursued in the High Court (and in Abdulla itself, were pursued only in very particular circumstances), and my experience is that nothing has changed since then. The Tribunal has heard, and continues to hear, thousands such claims, and has experience in the issues which arise, including expert evidence, complex cases, case management, volumes of documents, market factor and material factor issues, and comparability. The Tribunal is, in my view, the obvious and appropriate forum for these claims."
- Lord Falconer says that this analysis betrays a number of legal errors which I think can fairly be analysed under three heads. First, he said that the ET judge did not properly exercise a discretion at all but simply adopted a blanket approach to the effect that all equal pay cases should be heard by the ET. On the judge's analysis there was never going to be a case where the judge would have been willing to grant a stay so as to bring about a transfer of jurisdiction. The judge should at least have been willing to countenance the possibility that the High Court might be a more appropriate forum.
- Second, the judge failed to have regard to the fact that the claims raised novel issues in what was, as Lord Falconer put it, a pathfinder case which will set the template for future private section equal pay litigation. In addition, he did not take into account that there may well be a number of claims which will have to be brought in the High Court because the claimants are outside the limitation period for bringing claims in the ET. Although there are no such cases lodged yet, it is anticipated that there will inevitably be some.
- Finally, he submits that the decision was perverse. Had the judge properly engaged with the question and borne in mind all material factors he could only have concluded that the case should be stayed.
- I reject each of these submissions. As to the first, I would accept that on the assumption that there is a power to order a stay so as to cause the employee to take proceedings in the High Court, the judge would have to consider on the particular facts whether this was an appropriate case to take that step. He could not close his mind to the possibility that the stay might be appropriate. But in my view, there is nothing wrong in starting from the position that in the overwhelming majority of cases there would be no justification for taking the jurisdiction away from the ET, which specialises in this field, with all the potentially prejudicial effects to the claimants. I would accept that the judge did start from that premise, but he was entitled to do so and he did nonetheless consider the points made by the appellant. His conclusions were briefly stated, but they were in response to the detailed arguments which he had recounted earlier in his judgment. The judge was simply not persuaded that the case was so novel or so out of the ordinary as to justify a departure from the normal principle that the claims should stay with the ET. I accept that he started from the premise that something very unusual indeed would have to be demonstrated in order to require the ET to give up a jurisdiction which Parliament has specifically conferred upon it, but I do not accept that he wholly discounted the possibility. He did not close his mind to the argument.
- In that context I do not think it is a fair inference from his decision that he failed to have regard to the novelty of the case or its importance as a pathfinder. He did have regard to these matters and recognised that the claims raised difficult and complex issues. But he did not think that the case was as exceptional as Lord Falconer was suggesting. In my view he was entitled to be somewhat sceptical of that submission. As to the possibility that claims may in future be pursued in the High Court, it is hardly surprising that the judge made nothing of that. It was speculative, and in any event it would be letting the tail wag the dog to allow the possibility of some High Court claims to push over seven thousand claimants into the High Court, particularly since the High Court can refer the equal pay issues back to the tribunal pursuant to section 128.
- The perversity challenge is an extremely high hurdle to surmount given that Parliament has conferred jurisdiction to hear claims of this nature on the ET and has plainly perceived it as being, in most cases at least, the specialist court for dealing with them.
- The judge gave cogent reasons for reaching the decision he did. Both the President of the EAT, refusing to give permission on paper, and Mrs Justice Laing who dismissed the rule 3(10) application, thought that this argument had no prospect of success and I agree. In my judgment the argument has to be that the complexity, importance and subtlety of the arguments in these claims are so out of the ordinary that they could not properly be managed by the ET and could only properly be dealt with by the High Court. It is only on some such basis that it could be said that the only proper exercise of discretion would be to impose the stay, thereby relinquishing jurisdiction to the High Court. Lord Falconer made a powerful argument that the private law claims in this case are more complex than the large public law claims which have hitherto all been dealt with by the ETs but the ET was not satisfied that the case was anything like as exceptional as the appellant claims. If that conclusion was open to the judge, as I think that it was, he was plainly entitled to take the view that an ET was perfectly capable of handling the claims and that it would not be appropriate to transfer them.
- In my judgment, this could not conceivably be said to be a perverse conclusion. Any judge will be challenged by the volume of material and the intricacy of some of the arguments which are, however, the meat and drink of complex equal pay claims, particularly when they involve equal value assessments. Very few High Court judges have experience in this field, whereas a number of highly able ET judges do. They will have built up a degree of expertise in the subject. It seems to me that implicit in the appellant's case is the belief that ET judges will not be capable of taking a firm grip of this action or of making robust decisions when necessary. If that is indeed what lies at the core of their argument, I consider that it is an unwarranted assumption which does less than justice to the quality of some outstanding judges who sit in the ETs. They are able to control difficult cases and to bring highly specialist knowledge to the points of law which arise. I would also observe that in so far as complex EU points of law are involved, the ET can if appropriate refer the issue directly to the CJEU.
Concessions before the Court of Appeal
- Before us, Lord Falconer made certain concessions which had not been made to the ET judge nor indeed to the EAT. He said that his client would give an undertaking to be willing to apply the same costs rules in the High Court as would apply in the employment tribunal. He also indicated that his clients would not seek an indefinite stay but only a stay which could be lifted once the High Court litigation was completed. The reason for this would be to ensure that the claimants would not be disadvantaged so far as accrual of back pay is involved. He accepted that the claimants should be entitled to recover the six years' back pay, were they to be successful, from the date they lodged their tribunal claims rather than the later date when they commenced High Court proceedings. He envisaged that following the High Court proceedings, the claim before the ET would be revived if the employees were successful so that the claimants could recover any back pay plus interest due which would otherwise have been lost as a result of the transfer to the High Court. These modifications of the appellant's original stance were designed to mitigate the adverse consequences of the transfer so far as the claimants were concerned.
- As Lord Falconer accepts, these matters cannot affect the question whether the ET decision was lawful or not. Arguably they would have been material issues to consider if we had found that the ET had not properly approached the question of whether to impose a stay. The usual consequence of such a finding would be to remit the matter for reconsideration by the ET. Lord Falconer contended that in view of the concessions, the only possible conclusion which an ET could reach would be that a stay should be imposed and that accordingly there would be no purpose in remitting the matter. That raises an interesting question whether this court could take that decision even where the ET has never addressed the issue in the light of the concessions. In the event we do not have to engage with that issue. The concessions have therefore no relevance to this appeal.
- For the reasons I have set out, I would dismiss these appeals.
Lord Justice Christopher Clarke:
- I agree.
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