Appeal No. UKEATS/0067/09/BI

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF

	At the Tribunal
	On 29 and 30 July 2010

Before
THE HONOURABLE LADY SMITH
(SITTING ALONE)

SOUTH LANARKSHIRE COUNCIL	APPELLANTS

MS P RUSSELL & OTHERS	RESPONDENTS

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellants	MR S MILLER
(Solicitor)
Messrs MacRoberts LLP
Capella
60 York Street
Glasgow 
G2 8JX	
For the Respondents	MR J J MITCHELL 
(One of Her Majesty’s Counsel) MS S DREW 
(of Counsel)
Instructed by:
Messrs Fox Cross Solicitors Ltd
44 York Place
Edinburgh 
EH1 3HU

SUMMARY
EQUAL PAY ACT – Case management
PRACTICE AND PROCEDURE - Disclosure

Equal pay claims.  Pre hearing review with Employment Judge and lay members, to consider validity of Job Evaluation Scheme and whether there were reasonable grounds for suspecting that evaluations in terms of that scheme contravened section 2A(2A) (a) or (b) of the Equal Pay Act 1970.  Employers ordered to provide additional information in terms of an order bearing to be in exercise of the powers conferred by rule 10 of the Employment Tribunal Rules and bearing to be issued by Employment Judge alone.  On appeal, order held to be incompetent;  since the Employment Tribunal was constituted as a tribunal of three, whilst rule 18(2) conferred power to “issue any order in accordance with rule 10” that power required to be exercised by the whole Tribunal and could not be exercised by the Employment Judge alone.  If, alternatively, the Employment Judge’s intention was to issue a standalone case management order under rule 10, she should not have sat with members to hear argument.  Either way, the order was not competently made.

THE HONOURABLE LADY SMITH 
Introduction
1.	This is an employers’ appeal in a group of some 1800 equal pay claims.  I will continue to refer to parties as Claimants and Respondents.

2.	The appeal concerns an order to provide additional information.  The order together with an explanatory note is contained in a document dated 4 November 2009, signed by the Employment Judge.  The first page of the document sets out the following:

“EMPLOYMENT TRIBUNALS (SCOTLAND)
Equal Pay Claims v South Lanarkshire Council
Case No: S/1077667/05 & Others (per attached Schedule)
Employment Judge:  Frances Eccles

Ms P Russell & Others			Claimants
(per attached Schedule)

South Lanarkshire Council 			Respondents
Council Offices 
Almada Street 
Hamilton
ML3 OAA

ORDER TO PROVIDE ADDITIONAL INFORMATION
In accordance with the power conferred on the Employment Judge by Rule 10 of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, I hereby order that on or before 29 January 2010 the respondents shall provide Stefan Cross Solicitors, Buddle House, Buddle Road, Newcastle-Upon-Tyne, NE4 8AW, with a copy to the Secretary of the Tribunals, with the following information:-
(i)	In tabular form, the precise spinal column point level for each employee of the respondents employed as a Catering Assistance applicable immediately before each such post was evaluated under the 555 JES; and the precise spinal column point level for each such employee following the implementation of the JES on each occasion that the post was evaluated under the 555 JES.
(ii)	In tabular form, the precise spinal column point level for each employee of the respondents employed as LS01, LS02, LS03 (levels 1 and 2) broken down by individual job title within those posts, applicable immediately following the implementation of the JES; on each occasion that those posts were evaluated under the 555 JES.”

3.	The Respondents appealed, seeking, in their Notice of Appeal, that “the Employment Appeal Tribunal...set aside the Order in its entirety.”

Background
4.	Shortly put, the background can be summarised as follows:

•	Following conclusion of the “Red Book” single status agreement, the Respondents completed and implemented a Job Evaluation Scheme, known as the “555 Scheme” over the period 1999 to 2005.

•	The Claimants all claim that notwithstanding the implementation of the 555 Scheme, they continue to suffer unequal pay contrary to their entitlements under the Equal Pay Act.

•	There have been at least 8 Case Management Discussions (“CMD”) to date.

•	The Claimants lodged a written application for Orders for further information and documentation dated 7 July 2009.

•	The Respondents lodged a written objection to that application dated 31 July 2009.

•	A CMD took place on 11 August 2009 and by that date, a pre-hearing review (“PHR”) had been fixed to take place on various dates, the first of which was to be 29 September 2009 and was to be for the purpose of considering  two issues:

o	Whether the 555 Scheme was a job evaluation study such as is mentioned in Section 1(5) of the Equal Pay Act 1970, and

o	Whether the Tribunal has reasonable grounds for suspecting that the evaluation of Claimant and comparator jobs by the 555 Scheme was made on a system which discriminated on the grounds of sex or was otherwise unsuitable to be relied upon under section 2A(2A) of the Equal Pay Act 1970.

•	At the CMD on 11 August 2009, Mr D O’Carroll, advocate, who appeared for the Claimants, presented a restatement of the grounds on which they sought to challenge the validity of the 555 Scheme and was allowed to amend his claim accordingly.  The Respondents were given until 8 September 2009 to lodge their response to the restated claim.

•	At the CMD on 11 August 2009, Mr O’Carroll made oral submissions in support of his application for Orders for information and documents.

•	The CMD on 11 August 2009 was not able to commence until 2pm.  Despite sitting until about 5pm, the hearing had to be curtailed.  In particular, although the Respondents’ written objections to the Claimants’ application for orders for information and documents dated 31 July, was before the Tribunal Mr Miller did not have the opportunity to make oral submissions in support of it.

•	On 13 August 2009, the Employment Judge, in terms of the powers set out in rule 10 of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2004 (“the 2004 Regulations”), issued an order requiring that the Respondents produce the information set out in the nine paragraphs of a Schedule attached to the order, by 8 September 2009.  She also issued other orders with which the appeal was not concerned.

•	The Employment Judge issued a note dated 20 August 2009 in respect of the CMD of 11 August 2009 in which she explains inter alia why she granted the information orders issued on 13 August.

•	The Respondents intimated and lodged with the Tribunal a document headed “Response to Order to Provide Additional Information Dated 13 August 2009”.  It contains an application for part 6 of the 9 paragraph order to be “set aside”.

•	An appropriate request was made under rule 18(3) for the Tribunal for the PHR to comprise the Employment Judge and members, and was granted.

•	The PHR commenced and carried on, on various days, before the full tribunal.

•	On 26 October 2009, in the course of the PHR, the Respondents’ application to have part of the Order of 13 August set aside was heard by the Employment Tribunal.  Submissions were made by Mr Miller and by Mr O’Carroll.  It was not suggested by Mr O’Carroll that it was not competent for the Tribunal to consider and determine the application.  Mr Miller has a note that at some point the Employment Judge said words to the effect that “we have considered” the matter and that “we will be giving a ruling” on it.

•	No ruling on the application to have the information order set aside was made on 26 October.

•	On 4 November 2009, the order which I have set out in full above, was issued to parties, as was the note attached to it.

•	The PHR has continued to take place, on various dates.  It has heard evidence and is to continue doing so on 16 August 2010 and on later dates.

•	The Respondents’ position is (a) that the information specified in paragraphs 6 and 8 of the order is not relevant to the issues which the Tribunal has to determine; the outcome of the application of a job evaluation study is irrelevant to the question of whether or not the system within the JES makes it invalid, and is irrelevant to the test of unsuitability in section 2A(2A)(b) which is confined to cases where there are reasonable grounds for suspecting direct discrimination, bad faith or impropriety, and (b) that the order of 4 November 2009 ought not to have been made as it will involve the Respondents in the application of a disproportionate amount of time and resources.

•	I was advised that, at the hearing on 26 October 2009, Mr Miller advanced submissions both as to the proportionality of the order and as to relevancy.

The appeal
5.	Since the Employment Tribunal’s order dated 4 November bore to be a case management order issued by an Employment Judge sitting alone, directions were issued (seal date 8 January 2010) for the appeal to be heard by the Judge sitting alone before this Tribunal (see:  Employment Tribunals Act 1996 s.28(4) and s.4).  The appeal hearing took place, accordingly, before me, sitting alone without lay members.  Had the order appealed against borne to have been an order of an Employment Tribunal comprising Employment Judge and members, this Tribunal would have directed the appeal be heard before a Judge and two members.

6.	The issues in the appeal of which notice had been given were as summarised in the penultimate bullet point above and I heard submissions in support of them from Mr Miller and in opposition to them, from Mr Mitchell.

7.	In the course of his submissions in support of the appeal, Mr Miller referred to the debate on the Claimants’ application of 7 July for an order for information having been heard on 26 October, before the full Employment Tribunal that is, before the Employment Judge and two lay members.  That is not apparent from the order and note of 4 November which, as I have already indicated, bears to be the work and decision of the Employment Judge sitting alone.  I, accordingly, raised with parties the question of whether or not the order was, in these circumstances, competently made.  My concern was that, on the face of matters, the Employment Judge appeared to have regarded herself as making a case management order under rule 10 of the 2004 rules, acting alone, but had sat to hear argument on the matter with lay members who had participated in the hearing.

8.	Both Mr Miller and Mr Mitchell recognised that there was a problem.  Equally, neither party wanted the appeal to be disposed of on the basis of the competency point which they accepted arose; both were keen to have the points of principle raised in the grounds of appeal determined.  As regards the issue of competency, parties ultimately agreed as to their submission.  It was made under reference to rule 18(4) and (2) of the 2004 Regulations and on the basis that, whilst recognising that the Employment Judge had purported to be exercising a case management power sitting alone, it would have been artificial to exclude lay members at that stage of the PHR and, recognising that, on the face of matters, they had participated in the hearing of the application, I should regard the order of 4 November as being de facto an order of the whole Tribunal.  I should, it was submitted, read it as being an instance of error in transmission which could have been corrected under rule 37(1) and could therefore be corrected by me, under s.35 of the Employment Tribunals Act 1996.

9.	The possibility of the order having been determined on by the Employment Judge alone, in chambers, at some point between 26 October and the issuing of the written order and note on 4 November was discussed with Mr Mitchell and he accepted that that possibility could not be excluded.  He also seemed to accept that if that was what happened then there might be a problem in respect that the lay members had participated in the hearing.  He tended rather to the view that the likely explanation was, however, that a standard template had been used which was not appropriate in the particular circumstances.  Mr Miller adopted his submissions.

Discussion and decision
10.	I appreciate how keen parties are to make progress to resolve the outstanding issue between them as to whether/to what extent the Respondents are obliged to provide the information specified in the Tribunal’s order of 4 November 2009 and that if I uphold the appeal on the basis that the order of 4 November was an incompetent one, that will leave the substantive issues outstanding.  That being so, I can fully understand why parties were keen to find a way round the problem that was identified.  However, caution is required where pragmatism is put forward as a reason for turning a blind eye to a failure to adhere to rules.  Process matters if justice is not only done but is seen to be done.  Procedural rules are, accordingly, an important element in the administration of justice and are often of a substantive nature.  Thus, where a Tribunal purports to exercise a power that is not conferred by the rules within which it requires to operate, it is unlikely that that exercise of power will be able to be regarded as a valid one, however much parties may want that to happen.  Whilst there are occasions when clerical and similar errors in formal orders can properly be corrected (such as where, under the 2004 Regulations, rule 37(1) applies), care requires to be taken to avoid inappropriately masking substantive failure with the cloak of “correctable error”.

11.	The relevant rules here are as follows.  First, rule 10 confers a wide case management discretion by empowering an Employment Judge on his own, on the application of a party or on his own initiative, to make an order “in relation to any matter which appears to him to be appropriate” (rule 10(1)).  Rule 10(2) sets out a list of examples of “orders which may be made” under the case management power conferred by rule 10(1) and that list includes: “(n) varying or revoking other orders”.

12.	Secondly, rule 18 deals with the conduct of PHRs.  Whilst the norm is for a PHR to be heard by an Employment Judge sitting alone (rule 18(1)), rule 18(3) provides for a PHR to be conducted by a Tribunal composed of the Employment Judge and members if a party has requested in writing that it be so conducted (rule 18(3)(a)).

13.	Thirdly, rule 18(2)(b) empowers an Employment Judge at a PHR to do a number of things including “(b) issue an order in accordance with rule 10 or do anything else which may be done at a case management discussion.”

14.	Fourthly, where a PHR takes place before a tribunal, that is, before an Employment Judge and members, rule 18(4) has the effect that any exercise of inter alia the power under rule 18(2)(b) requires to be by the whole tribunal, not just by the Employment Judge sitting alone.

15.	Accordingly, in circumstances where a PHR has commenced with the hearing being before a tribunal of three and it becomes apparent that a case management decision of the type covered by rule 10 requires to be made, there would appear to be two options.  The first is that the PHR be adjourned, the lay members leave and the Employment Judge convenes a CMD in the usual way.  Alternatively (and this is the course of action which seems to envisaged by rule 18), the full tribunal hears any applications for case management orders, the full tribunal deliberates on the disposal of any such applications and the full tribunal decides whether or not to grant the order and if so, in what terms.  Any order thereafter would be an order of the tribunal of three (as would be apparent from the face of the order) and any written note or reasons accompanying the order would, accordingly, be their note/reasons.

16.	What, however, cannot be an option is that a CMD separate from the PHR is heard with all members of the tribunal of three present.  Even if the Employment Judge’s intention is to confine her considerations to what passes between her and parties’ representatives without reference to the lay members, the appearance would be of a hearing before all three, not before the Employment Judge alone.  Testing matters objectively, the risk of participation of the lay members in the decision making process could not be ruled out; there would be an apparent breach of natural justice.  Nor can it be an option that the full Tribunal hear an application for an order and the arguments for and against, within the PHR, but deliberation and/or the relevant decision making is carried out by the Employment Judge alone; that would plainly be a breach of rule 18(2) and (4) read together, as they must be.

17.	On the face of matters, however, the order of 4 November falls into one or other of the above impermissible categories.

18.	I was urged to read the order as being an order of the full Tribunal despite its wording.  That is very difficult.  The express words of the document itself, as will be evident from its terms which I have set out above, read to the contrary effect.  It reads in every respect as being the decision of an Employment Judge sitting alone, exercising a rule 10 power.  There is no identification of lay members; only the Employment Judge is named.  The order is said to be issued by her alone: “I hereby order…”.  The reference to the exercise of the power conferred “on the Employment Judge” is indicative of the approach being that she was exercising a case management power outwith the four walls of the PHR.  As I have indicated, I do not see that that would necessarily be incompetent but given that the exercise of the rule 10 power outwith the PHR is limited to an Employment Judge sitting alone, in that event there should have been no participation by members.

19.	The note shows that the Employment Judge had regard to the submissions made although, interestingly, no reference at all to them being made at a PHR, which again suggests that she regarded herself as exercising a CMD power separate from that hearing.  Although there is a reference to “the Tribunal” being satisfied of certain matters, I do not regard that as conclusively showing that she in fact approached matters as being within the PHR and thus to be determined by the full tribunal since it is not unusual for Employment Judges sitting alone to refer to themselves as “the Tribunal”.  In short, even if it were appropriate to interpret the order under reference to the note and I doubt whether, for these purposes, it is, I am not persuaded that the note indicates that matters proceeded in accordance with rule 18(2) and (4).

20.	In any event, even if I was so persuaded, I could not competently hear the substantive appeal since it would not fall within that category of appeals which, in terms of section 28(4) of the Employment Tribunals Act 1996, empower this Tribunal to conduct the appeal proceedings before a Judge sitting alone.  An appeal against a decision on an application to revoke an information order taken by an Employment Tribunal of three would require to be heard and determined by an Employment Appeal Tribunal consisting of a Judge and two lay members.  In short, were I to accede to the course of action which parties proposed, the result would be another incompetent decision.

In these circumstances, it would not be appropriate for me to state any views regarding the merits of the appeal and I note that parties were at one in agreeing that I should refrain from doing so.

21.	The appeal will, in these circumstances be upheld, the order of 4 November being an incompetent one.

22.	I should say a word about paragraphs 6 and 8 of the order of 13 August 2009.  Another oddity of the circumstances of this case is that although, in the note attached to the order of 4 November, it is stated at paragraph 7 that they were both “revoked”, no reference to those paragraphs or to any such revocation is made in the order.  Thus, once the appeal is upheld, the position is that there will be an outstanding order dated 13 August 2009 but insofar as paragraphs 6 and 8 of that order are concerned, the Tribunal has stated, though not ordered, in a note which will subsist, that they are revoked.  In these circumstances, it would hardly be appropriate to insist on compliance with paragraphs 6 and 8 of the 13 August order and Mr Mitchell indicated that the Claimants recognised that, whilst still insisting that they ought to be entitled to the information detailed in the order of 4 November.  I take it that, in the meantime, there will be no attempt to enforce compliance with paragraphs 6 and 8 of the order of 13 August.

23.	Finally, I should add that whilst what has happened here is very unfortunate, it has occurred within the context of a highly complex Tribunal litigation.  It is patently obvious that the Employment Tribunal has, in good faith, been doing its best to achieve clarity and efficiency in accordance with the overriding objective but appears to have fallen over a procedural tripwire in challenging circumstances.

Disposal
24.	I will pronounce an order upholding the appeal, setting aside the order of 4 November 2009, and remitting the case to the tribunal to proceed as accords.