THE INDUSTRIAL TRIBUNALS

CASE REF:	111/07

CLAIMANT:			Desmond McCann

RESPONDENTS:		1.	Northern Ireland Office
2.	Department of Finance & Personnel
3.	Northern Ireland Civil Service

DECISION ON A PRE-HEARING REVIEW
The unanimous decision of the tribunal is that the claimant can compare himself to solicitors in The Departmental Solicitor’s Office for the purposes of an equal pay claim.

Constitution of Tribunal:
Chairman:		Mrs Smyth
Members:		Mr McCormick
			Mr McCrossan

Appearances:
The claimant was represented by Mr P Lyttle, Queen’s Counsel, and Ms S Bradley, Barrister-at-Law, instructed by Rosemary Connolly, Solicitors.
The second-named respondent was represented by Mr M Wolfe, Barrister-at-Law, instructed by Department of Finance & Personnel.

The facts

1.	The issue to be determined at a pre-hearing review is:-

“Whether the claimant is entitled to compare himself with solicitors in The Departmental Solicitor’s Office for the purposes of an equal pay claim.”

2.	The claimant is a solicitor in the Compensation Agency.  It is accepted that his employer is the Department of Finance & Personnel (DFP) albeit that he is seconded to the Northern Ireland Office (NIO).  The NIO is legally incapable of employing Northern Ireland Civil Servants because it is a Home Civil Service Department.  For this reason, employees who work in the NIO are employed by DFP and seconded to NIO.  

3.	For the purposes of his Equal Pay claim, the claimant wishes to compare himself with solicitors employed in the DFP, more particularly in The Departmental Solicitor’s Office.  He also wishes to compare himself with solicitors who work in The Crown Solicitor’s Office who like him are employed by DFP and seconded to the NIO.  The respondent accepts that the claimant is entitled to compare himself with solicitors in The Crown Solicitor’s Office, but contends that solicitors who work in The Departmental Solicitor’s Office are not proper comparators for the purposes of an Equal Pay claim.

4.	The tribunal heard evidence from witnesses called on behalf of the respondent only, namely Mr Ryan Dobson, Head of Personnel Management and also Establishment Officer at the DFP, and Miss Carole Graham formerly Head of Pay and Policy at the NIO.

5.	The tribunal finds the following facts proved on a balance of probabilities:-

(5.1)	Mr Dobson has held the post of Head of Personnel Management and Establishment Officer since 1995.  He is responsible for pay, terms and conditions, performance management and career development at DFP.

(5.2)	Employees of DFP who are seconded to NIO are subject to NIO Personnel Services in terms of day-to-day management.  However, DFP retains a role in relation to grievance and disciplinary matters because DFP remains the employer.  The procedures which operate in cases where an employee who is seconded to the NIO wishes to exercise a right of appeal to the Head of Department are set out in Staff Circular dated 12 January 1989:-

“… In grievance cases and disciplinary cases short of dismissal, DUS (B) [Departmental Under Secretary, Belfast] will be regarded as the Head of the Department.  The advice of DFP will be sought as appropriate.

… cases which NIO management regard as possibly warranting dismissal will be referred to DFP at the appropriate level for consideration in accordance with the NICS Disciplinary Code.  It will be for DFP to decide whether to dismiss the officer or to transfer him/her from NIO.  If the decision is to dismiss, there will be the usual right of appeal to the Permanent Secretary of DFP.”

(5.3)	Prior to 1996, DFP was responsible for negotiating pay settlements, terms and conditions for all civil servants in the Northern Ireland Civil Service (NICS).  In 1996, DFP delegated responsibility for pay bargaining and grading arrangements for civil servants seconded to NIO, to NIO.

(5.4)	The terms of the delegation are set out in correspondence between John Semple, Permanent Secretary of DFP and Sir John Chilcot, Permanent Under-Secretary, at NIO.  By letter dated 30 November 1995, John Semple sets out the conditions to which the delegation is subject.  In particular, the conditions include “a requirement to obtain the approval of the Department before making any change to the pay and grading of the Northern Ireland Civil Servants within its scope.  Normally, I would expect that any proposed change would be contained in the annual negotiating remit of the NIO and that would require the approval of DFP to avoid the possibility of approval being withheld following conclusion of pay negotiations”.  Paragraph 4 of the instrument of delegation sets out the conditions in full:-

“4 (i)	No changes to the pay and grading of the Northern Ireland Civil Servants to whom this delegation applies shall be made without the consent in writing of the Department.

(ii)	In the performance of the delegated function, the delegated function shall be carried out in a manner which:-

(a)	complies with the NICS Equal Opportunity Policy and having regard to the Policy Appraisal Fair Treatment principles;

(b)	provides value for money; and

(c)	does not jeopardise essential public expenditure safeguards.”

(5.5)	In response to the delegation received, Sir John Chilcot expressed a number of concerns regarding the effect of the conditions attached to the delegation.  In particular he expressed reservation about Paragraph 4(1) above, which enabled DFP to retain the power of veto on any actions the NIO wished to take.  He pointed out that this was clearly not just a formality because the covering letter “makes it clear that DFP envisage the ability, potentially to withhold approval to courses of action specified in the negotiating remit”.  Sir John indicated his preference that Paragraph 4(1) was not part of the delegation instrument.

(5.6)	John Semple responded to the reservation expressed by Sir John Chilcot by letter dated 9 January 1996.  Although he anticipated that close contact between officials would “render it extremely unlikely that DFP would not approve a remit when it is formally presented, conditions of approval were essential.  DFP remained legally responsible for the “general control and management of the NICS”.  John Semple pointed out that the approval of DFP was “no different in practice” to Her Majesty’s Treasury role (HMT) in relation to Home Civil Service (HCS) delegation.

(5.7)	Sir John Chilcot again responded expressing reservation about the conditions attaching to the delegation and disputed John Semple’s assertion that “DFP’s role is akin in practice to HMT”.  He contended that HMT would see its role “very much one of monitoring as distinct from control”.  He pointed to recent confirmation that as from April [1997] HMT would be “greatly reducing its role to one of quarterly monitoring”.  He reiterated his point that, “the DFP delegation applies a much tighter rein than that being adopted by Treasury.”  He expressed the hope that, “ … DFP will also move towards a monitoring approach in the exercise of delegation as soon as possible”.

(5.8)	By letter dated 31 January 1996, John Semple responded to the points made by Sir John Chilcot:-

“ … I note your comments about the recent change which the Treasury has announced in relation to negotiating remits, which we have been following with interest ourselves.  However as you will appreciate the DFP position is rather different.  This is because in addition to the need to ensure compliance with public pay policy and ensure affordability at Departmental/Agency level, DFP must consider any implications for NICS and the NI Block.  We do not therefore consider that we can follow the HMT example until we have fully assessed the wider implications.  Like you, however I would hope that we may be able to relax our scrutiny in the light of experience.  We are therefore proposing to review our approach to remits when all 1996 negotiations have been completed.  Prior to the negotiating remit DFP approval therefore currently remains a condition of all delegations.  This enables DFP to fulfil its legal obligations regarding the management and general control of the NICS and to ensure that action by one party does not carry adverse affordability implications for the Block or damage overall credibility with the Treasury.  It is essential that we guard against a potential situation whereby a Department or Agency would first seek to negotiate a settlement with TUS and retrospectively seek DFP approval to something which could have significant implications for other parts of NICS.  That would be untenable … .”

(5.9)	On 4 September 1996, Sir John Chilcot issued a circular to all staff informing them of proposals for change in the NIO in relation to pay and grading arrangements for Grade 6 staff and below.  He confirmed that “our proposals will need DFP approval under the terms of the delegation for NICS staff and we are also in direct discussion with colleagues there about them …”.

(5.10)	The tribunal accepts the evidence of Mr Dobson that in practice officials in the NIO and DFP work very closely in order to agree a remit for NIO before it is formally presented for approval.  After close liaison any difficulties are ‘ironed out’ prior to the presentation of the remit.

(5.11)	Once the officials for each department have reached an agreement on the negotiating remit, the position is formalised by the NIO writing to propose a remit, and the respondent approving the remit.  Both parties know before NIO makes a proposal in writing, that an agreement has been reached as to the appropriate remit.  The tribunal further accepts the evidence of Mr Dobson that DFP has authority to tell NIO that it wants an inequality in pay or grading to be raised as part of the next negotiations on remit.

(5.12)	Once formal approval has been given by DFP, the NIO must then seek the approval of the Secretary of State who ultimately has authority for NICS during direct rule, or the First or Deputy First Minister during devolved Government.  Approval is then sought from HMT.

(5.13)	Once approval for the remit has been given by the Secretary of State (or the First or Deputy First Minister) and HMT, negotiations are entered into with NIPSA about pay and terms and conditions.  DFP represents management in respect of all Civil Servants other than those Civil Servants in the NIO Group.  In respect of the Civil Servants in the NIO Group, management is represented in negotiations by NIO Personnel Division.

(5.14)	The agreements reached with the union must be approved by the relevant minister or Secretary of State.  In order to ensure that there are no problems after an agreement has been reached by the union, the Secretary of State is kept informed throughout the process.

(5.15)	The Secretary of State has authority at any time to change terms and conditions of all Civil Servants including those in the NIO Group.  However in relation to proposed changes to pay, that would only be done following a job evaluation.  The management structure of the NICS is Permanent Secretary, Minister, and then the Secretary of State who has ultimate responsibility.

(5.16)	If DFP did not agree the negotiating remit sought, the decision would ultimately be made by the relevant Minister or Secretary of State or in the case of devolved Government, First or Deputy First Minister.  The Secretary of State has not in fact been required to arbitrate between the two Departments.  

(5.17)	In February 2003 legal proceedings which had been brought by the claimant and colleagues all of whom were solicitors in the NIO were settled.  The claimants had brought proceedings against the NIO and DFP alleging discrimination arising out of a prohibition on them as fixed term workers from applying for posts which were trawled internally.  The terms of settlement related to both respondents and, were signed by Mr Dobson on behalf of DFP.  No representative from the NIO signed the terms of settlement.

(5.18)	One of the terms of settlement related to the respondent’s agreement to ‘liaise with the Equality Commission for Northern Ireland as necessary and appropriate to ensure that their practices and procedures comply with the provisions and requirements of the Sex Discrimination (Northern Ireland) Order 1976 and the Fair Employment and Treatment (Northern Ireland) Order 1988’.  Mr Dobson confirmed that he would have instructed the Equal Opportunities Unit in DFP to liaise with the Equality Commission.

6.	The law

(6.1)	The tribunal considered the following authorities:-

Lawrence and Others  v  Regent Office Care Ltd and Others [Court of Justice of the European Communities Case C/320/00]

Department of the Environment Food and Rural Affairs (DEFRA)  v  Robertson and Others [2005] ICR

Paul Cavanagh  v  DPP and Rates Collections Agency [Industrial Tribunal Case Reference No:667/06]

Brian Grant  v  NIO and DFP [Fair Employment Tribunal Case Reference No: 309/04 FET]

(6.2)	The claimant relies on Article 141 EC which is directly applicable to an emanation of the state.  It is clear from the Lawrence decision that for the purposes of an Equal Pay claim, the pay and conditions of the claimant and his comparator must be attributable to a single common source which has responsibility for the claimed inequality and the capacity to restore equal treatment.

(6.3)	If individuals or entities are separately responsible for the terms and conditions within their own undertaking or establishment they cannot be held individually accountable for differences in the terms and conditions of employment between those undertakings.  As the European Court of Justice stated in Lawrence at paragraph 56, “it is impossible for an employer against whom a claim for equal treatment has been made to examine the reasons why another employer remunerates activities of ‘equal value’ differently to him.  Even were he able to do so, it would not be certain, given his distinct economic situation, that he would be able to align himself accordingly”.  In determining whether there is a single source responsible for the difference in pay or conditions, the tribunal must consider “the location of the body responsible for making decisions on levels of pay in the relevant employment or establishment rather than on the identification of the relevant legal source of that decision-making power.  

7.	The submissions of the parties

(7.1)	The claimant’s submissions

Miss Bradley submitted on behalf of the claimant that the difference in pay and terms and conditions between solicitors in the Northern Ireland Group of the NIO and solicitors in the DFP was attributable to one single source, which could remedy the inequality.  The DFP, through the conditions attached to the delegation which was given to the NIO in 1996, remains in control of the terms and conditions of staff in both its own department, and in the Northern Ireland Group of NIO.  Furthermore, the fact that all negotiating remits must then be approved by the Secretary of State, both in terms of amount and also how the proposed monies will be spent, means that he has authority over all pay and conditions and he has power therefore to remedy any inequality.  The fact that if a disagreement arises between the NIO and DFP about proposed negotiating remits, it is the Secretary of State who will make the final decision demonstrates that the Secretary of State is the single source to whom any inequality is attributable and who has the power to remedy that inequality.  

(7.2)	The respondent’s submissions

Mr Wolfe submits, on behalf of the respondent, that there is no single source responsible for any inequality and who can remedy the inequality.  Although Mr Wolfe concedes that the claimant and his chosen comparators are in the common employment of DFP, that is not a sufficient basis on which to make a comparison.  Mr Wolfe submits that pre-1996 civil servants within the NIO had common terms and conditions with their colleagues in other Northern Ireland Government Departments.  However that changed once DFP granted a delegation for pay and conditions.  The granting of that delegation created two sources “in one fell swoop” for pay bargaining and grading arrangements.  Thereafter staff in the Northern Ireland Group of NIO had their pay and grading dictated by the outcome of negotiations between the NIO and TUS, while colleagues in DFP had their pay and grading dictated by negotiations between DFP and TUS.  Mr Wolfe also submitted that the fact that the Secretary of State ultimately holds power (or the First or Deputy First Minister in a devolved Government situation) does not make him the single source of any inequality between staff in the Northern Ireland Group of NIO and staff in DFP.  What one must consider is the body responsible for making decisions.  A distinction must be drawn it was submitted, between the requirement to obtain authority for the amount of the wage bill, and the requirement to obtain authority as to how that amount is spent.  Although the Secretary of State must approve the amount and how it is to be used, that does not mean he is the single source of terms and conditions in NIO and DFP.

8.	The tribunal’s conclusion

(8.1)	The tribunal accepts that the mere fact that the claimant is in common employment with solicitors in The Departmental Solicitor’s Office is neither a necessary nor a sufficient ground for concluding that the source of any alleged inequality is attributable to a single source.  The tribunal must identify the location of the body responsible for making decisions on levels of pay and grading in both NIO and DFP.

(8.2)	The respondent accepts that DFP is responsible for making those decisions for solicitors within its own Department.  However, it is submitted by the respondent that the effect of the delegation in 1996 is that thereafter, the NIO made those decisions for solicitors within the NIO Group.

(8.3)	The tribunal does not accept that submission.  It is clear from the correspondence between John Semple and Sir John Chilcot that the NIO has no autonomy to decide pay and grading for staff within the NIO Group.  It can submit proposals, but no decision can be taken without the written approval of DFP.  This is evidenced by the Staff Circular from Sir John Chilcot to staff within NIO dated 4 September 1996.  Following a pay review, the NIO wished to make changes to its pay and grading arrangements, but as Sir John Chilcot made clear to staff “our proposals will need DFP  approval under the terms of the delegation for NICS staff”.  It is also clear from the correspondence that the role adopted by DFP is not the same as the role adopted by HMT when a delegation is given.  HMT has adopted a monitoring role whilst DFP has retained a stricter control role.

(8.4)	The evidence that this tribunal has heard does not support the submission that DFP ‘rubber stamps’ whatever NIO wishes to do.  Rather, the evidence is that officials in both Departments discuss and negotiate until  an agreement is reached and only then is a remit formally submitted for approval.  The fact that DFP has never withheld approval is due to these prior discussions, the purpose of which is to ‘iron out any difficulties’.  It would therefore be contrary to the evidence to conclude that DFP approval is a formality.  In the tribunal’s view, the fact that after the remit has been agreed negotiations with TUS for staff within NIO Group are carried out by NIO Personnel Services does not affect the issue of where the source for making decisions on pay and grading lies.  Mr Dobson’s evidence was clear that the NIO only has power to negotiate within the very strict parameters which DFP has authorised in advance.

(8.5)	It is therefore our view that DFP remains the body responsible for pay and grading within NIO Group because of the very limited nature of the delegation.  There is therefore one single source for any alleged inequality.  It is also clear from Mr Dobson’s evidence that DFP has the power to remedy any inequality because it has authority to tell NIO that it wants a particular inequality to be addressed in negotiations for a remit.

(8.6)	The tribunal does not accept that the Secretary of State is the person who makes the decisions regarding pay and conditions within the two Departments.  There is no doubt that the Secretary of State (or First or Deputy First Minister during devolved Government) is ultimately responsible for the Northern Ireland Civil Service.  He is the legal source of power and ultimately he authorises all changes to pay and conditions.  Although the Secretary of State will arbitrate between DFP and NIO if no agreement can be reached on NIO’s proposed remit he has not in fact been required to do so.  The decision in DEFRA  v  Robertson and Others cautions tribunals not to decide the issue of ‘single source’ on the basis of where the relevant legal source of that decision-making power lies.  As Mummery LJ stated at Paragraph 13:-

“ … The comparator issue does not turn on precise legal analysis, or on a comparison of the employment relationships between the workers and their respective employers or, in the case of state workers, on particular constitutional doctrines and arrangements, which condition the nature of the legal relationship between a member state and its civil servants and which are liable to differ from one member state to another.”

(8.7)	The tribunal therefore concludes that the claimant is entitled to compare himself with solicitors in The Departmental Solicitor’s Office

Chairman:

Date and place of hearing:	8 May 2007; 11 May 2007; and 14 May 2007, Belfast

Date decision recorded in register and issued to parties: