I logged into Twitter and someone had posted this image into my timeline. My eyes nearly rolled out of their sockets. The Brexit debate could scarcely be said to have been characterised by the accuracy and honesty of the arguments advanced, but this seems to me to be very seriously misleading.

I am going to deal with each of the points made. But two general points can be made immediately. First, the EU does not have the power to regulate Employment Rights generally. It is perverse to criticise the EU for not creating a right to a minimum wage where Member States have been scrupulous to ensure it does not have the power to do so. Second, the EU law sets a floor not a ceiling. There is nothing to stop the UK having more generous rights whilst remaining a member of the EU. The only thing continued membership prevents is having less generous rights.

Right to Holidays

The Holidays with Pay Act 1938 did not create a general right to paid holiday. It applied only to those workers who had their minimum wages set by a wage regulating authority (section 1(1)). Any worker whose pay was fixed under the Trade Boards Act 1909 and 1918 or the Agricultural Wages (Regulation) Act 1924 were not to be entitled to more than a week’s paid leave in each year and the former were not to be allowed to take more than three consecutive days of leave (Section 1(2)).

The relevant part of the Act was repealed in 1975. By 1997 there was no statutory right to paid annual leave (unless you were an agricultural worker). That position changed as a result of the Working Time Regulations 1998. The Regulations were intended to implement the Working Time Directive 93/104/EC.

The Directive created a right to four weeks’ annual leave.

The UK fought tooth and nail against the introduction of the Directive. It went to the European Court of Justice in an attempt to get it annulled. The attempt failed (see United Kingdom v Council of the European Union C-84/94).

It is true that the UK subsequently increased the entitlement by 1.6 weeks. The reason for the increase was that UK employers had insisted that bank holidays should count towards the four week entitlement. The significant point here is, as stressed above, that the Directive does not prevent the UK being more generous. It does, however, prevent the UK being less generous. It sets a floor not a ceiling.

So in Bear Scotland Ltd v Fulton UKEATS/0047/13, the Employment Appeal Tribunal made the latest in a series of findings that the UK had failed properly to implement the entitlement to paid annual leave. The Working Time Directive was used to bring the rights of UK workers up to the standard that applies across Europe. Without the Directive, UK workers would have had less protection.

Equal Pay

Should we pat ourselves on the back for having legislated for equal pay before even joining the EEC? In short, no.

The right to equal pay was enshrined in Article 119 of the Treaty of Rome itself, which was signed in … 1957. That meant that we were going to have to legislate if we wanted to join.

Although the Equal Pay Act was enacted in 1970, it was not in force in 1973 when the UK joined the EEC. In fact, it did not come into force until December 1975. By then the Equal Pay Directive 75/117/EEC was in place. It required a substantial broadening of the right so that it covered cases where men and women were performing work of equal value. Again, Europe enhanced the rights of UK workers.

A number of subsequent decisions identified respects in which the Domestic legislation had failed properly to implement the European right. One example was the fact that the 1970 Act limited back pay claim to two years. That was held to be inconsistent with European Law and extended to 6 years.

Maternity

Couldn’t the EU be more generous in respect of Maternity Leave? Couldn’t it set a minimum rate of pay?

In 2010, the European Parliament (that bunch of ELECTED Eurocrats) voted in favour of a series of amendments to the Pregnant Workers Directive 92/85/EU. These provided for, amongst other things, 20 weeks’ maternity leave on full pay.

The proposals were blocked in Council. The UK (you’ll probably have guessed) opposed the amendments. Who went along to block them? Vote Leave’s very own Chris Grayling MP: https://www.gov.uk/government/news/uk-ministers-lobby-europe-against-socially-regressive-maternity-proposals

The ECJ has on a number of occasions forced changes to the UK Law protecting pregnant women and those who take maternity leave against discrimination that would have been permissible as a matter of Domestic Law.

Wages

It is entirely correct that there is no EU minimum wage law. The EU does not have competence to legislate in this area (see Para 4.4 here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/332524/review-of-the-balance-of-competences-between-the-united-kingdom-and-the-european-union-social-and-employment-policy.pdf).

It is true that not all Member States have national minimum wages. Some have sectoral minimum wages and others achieve the same result by way of widespread use of collective agreements.

We were late to the party. The French have had a statutory national minimum wage since 1950.

Discrimination

Since we joined the EEC in 1973 and the Sex Discrimination Act was not passed until 1975, a TARDIS seems to be required.

[Edit: The article responds to the specific points made in the graphic circulating on the Internet. The scope of European influence on UK Employment Rights is much greater than the subset addressed here. If you are interested in a complete picture of what rights are under-pinned by European Law, I strongly recommend this opinion produced for the TUC by Michael Ford QC: https://www.tuc.org.uk/sites/default/files/Brexit%20Legal%20Opinion.pdf ]

With my Legal Officer at the Free Representation Unit hat on I go to the meetings of the Employment Tribunal National User Group.

From time to time I’ve written up some of my notes, on the basis that there was interesting information that could be usefully distributed further. This may become unnecessary, since HMCTS is making the minutes available. But, if only to draw attention to that, I thought at least one more post might be useful.

Note, however, that these are my best notes of the meeting and shouldn’t be read as any formal statement by any of the tribunal judiciary or HMCTS (any errors are mine alone). I didn’t get a full note of some of the detail, so that will have to await minutes.

Next year’s fee paid judges / members budget

This has been reduced, to reflect the fact that HMCTS expect fewer cases. It shouldn’t be regarded as a budget cut, because it’s based on the modelling of the case-load rather than trying to reduce costs. If there are more cases than expected there will be a case for more budget and that case will be made.

HMCTS Reform Programme

MoJ is doing ongoing reform work, including within the Employment Tribunals, focused in particular on IT and premises. This will start to affect the ETs in the next 12 to 18 months. Likely to be some changes users will like and some we’ll dislike.

Premises

Bristol and Nottingham have both recently moved into combined court premises. Initial feedback seems to be positive and HMCTS feels they’ve been able to maintain the informality of the tribunal while making efficient use of the premises estate.

Huntingdon moved into the law courts a few years ago and has been the only user. Due to changes elsewhere the Crown Court will be moving back in, partially displacing the Employment Tribunal. There will therefore be sittings in Cambridge as well as Huntingdon.

Pension Loss Guidance

The guidance booklet Compensation for loss of pension rights: employment tribunals, third edition is currently marked on the Gov.uk website as withdrawn. People who follow me on twitter may have seen that I was curious about this and so I raised a question.

The present position is as follows. Following the Court of Appeal judgment in Griffin v Plymouth Hospital NHS Trust the President of Employment Tribunals has formed a working group to consider whether there should be updated guidance. Any new guidance will be the subject of consultation. It may well take the form of Presidential Guidance, rather than a new booklet.

There has been no formal withdrawal of the 3rd edition guidance. Parties must take their own view on the extent to which, in any individual case, it is appropriate to rely on that guidance in the light of Griffin v Plymouth and what, if any, other material should be presented.

Remission

MoJ continues to work on the process for applying for remission. We can expect further changes in the Autumn.

Postponement Consultation

Slightly over 30 responses have been received. Given the timescales, the response is likely to be published after the election.

The Employment Tribunal Rules implemented in 2013 went wider than simply introducing fees.  As a package, I would argue that they have shifted too much of the risk of bringing a claim onto the claimant.  In particular, the increase in the maximum cost order from £10,000 to £20,000 has made it more attractive for employers to make unwarranted costs threats in an effort to force employees to drop their cases or settle on unfavourable terms.  My proposal seeks to remedy that by allowing tribunals to order an uplift in compensation where an employer makes an unreasonable costs threat and goes on to lose at tribunal.

Prior to July 2013, the main financial risk a claimant faced at tribunal was a costs order, which could be made if the tribunal found that the party or their representative had in conducting proceedings ‘acted vexatiously, abusively, disruptively or otherwise unreasonably’ or if their bringing or conducting of the proceedings had been misconceived.

The maximum costs order the tribunal could make was £10,000. The tribunal also had the power to order a party to pay a deposit of up to £500 if at a pre-hearing review it was held that their arguments had little prospect of success.

The Rules introduced in July 2013 widened the scope and potential scale of costs orders: the maximum costs order was increased to £20,000 and the tribunal gained the power to make a costs order where the party’s claim or response has no reasonable prospect of success. The maximum deposit order was increased to £1,000.

Whilst costs orders can be made either way, they tend to be made against a losing claimant and on the request of the winning respondent. Even when the maximum costs order was £10,000 there was evidence that costs warnings were being used to try to pressurise employees to withdraw their claims. This was acknowledged by the Government’s Resolving workplace disputes consultation in January 2011:

Anecdotal evidence suggests that in many cases, where the claimant is unrepresented, respondents or their representatives use the threat of cost sanctions as a means of putting undue pressure on their opponents to withdraw from the tribunal process. We would welcome views on this and any evidence of aggressive litigation.

In fact Citizens Advice published a paper in 2004 illustrating the extent of unjustified costs threats.  They reiterated these concerns in their response to the 2011 consultation.  They were not alone: Cloisters (whose members include three past chairs of the Employment Law Bar Association) noted that:

Regrettably, members of chambers have seen the oppressive use of costs threats by some respondents or their representatives.

Unite, the union, wrote:

The Union has no doubt that where the claimant is unrepresented the threat of costs sanctions is used by some respondents as a means of putting undue pressure on the claimant.

ACAS reported that:

…a few representatives make almost universal use of this tactic when faced with unrepresented claimants.

Organisations representing employers acknowledged the practice too.  EEF, the manufacturers’ organisation, stated that they were:

…aware that some respondent representatives use cost warnings as a standard tactic in defending claims.

They added that they did not support the practice.  Indeed they thought it counter-productive.

Given the widespread reporting of costs threats, and the concerns raised by organisations representing both employers and employees, it is unfortunate that the Government responded by doubling the maximum costs award – without including any protection for claimants.

£20,000 is a terrifying sum of money to most people and whilst a tribunal has to consider a party’s means when making a costs order, they are construed fairly widely.

Given the prevalence of respondents’ threats, one might think that tribunals regularly make costs orders.  But they are made less than 1% of the time. In 2013/14 the median costs order was £1000.  As the Citizens’ Advice Adviceguide website notes:

Your employer’s representative may say they will apply for you to pay costs but, usually, they are just trying to scare you into dropping the case or accepting a low offer of settlement.

So there is little to stop a respondent or their representative from making a cost threat, even where the claim has obvious merit.  The risk is that employees with legitimate claims are being put off getting justice because of cost threats that are not made in good faith.

Whilst tribunal awards are meant to be compensatory, there is a precedent for increasing awards where there is unreasonable behaviour: where a party unreasonably fails to comply with a relevant ACAS code of practice, the tribunal can order an uplift or downlift of up to 25% in compensation awarded.

So it would not be a huge departure from existing practice to allow the tribunal to order an uplift to compensation where a respondent has made an unreasonable costs threat.  The test should be a mirror of the test for making a costs order – that is to say the respondent’s costs threat must be found to be vexatious, abusive, disruptive or otherwise unreasonable or misconceived, or had no reasonable prospect of success.  This is a relatively high bar.  Just as a claimant who loses does not automatically have to pay the respondent’s costs, a respondent who loses should not have to pay an uplift simply because they have made a costs threat.  The respondent should have acted unreasonably before the uplift kicks in.

This modest reform is likely to have several effects, almost all of them beneficial.  There would likely be a reduction in the number of costs threats being made by respondents and their representatives.  All other things being equal, this might result in more cases going to a hearing as claimants would be less likely to drop otherwise meritorious cases in response to a costs threat.

However, adding an element of risk to costs threats may in fact encourage more early settlements.  Losing the opportunity of a ‘free hit’ on costs threats would likely focus the respondent’s mind on the hearing at an earlier stage and lead them to conclude that it is better to try to settle early.  Claimants may also be more receptive to settlement offers – as a number of responses to the Resolving workplace disputes consultation noted, costs threats can be counter-productive, antagonising claimants and making them more determined to see the case through to a hearing.

A reduction in the prevalence of costs threats might also mean that claimants would be better able to recognise and respond appropriately to genuine costs threats.  There would likely remain an element of bluff in the system, but it would no longer be a risk-free bluff.

The question of whether a costs threat is unreasonable should be a question of fact for the tribunal, as should whether a communication constitutes a costs threat.  A respondent who provides general information about costs should not be considered as making a costs threat, but the need for respondents to do this would be reduced if at the same time the ET1 form was amended to give claimants more information about the risks of costs.

If a communication is made and the claimant or their representative thinks it may be an unreasonable costs threat, they should be able to put the respondent on notice that should they win, they will ask the tribunal for an uplift. The respondent would then have an opportunity to withdraw the communication. If the respondent withdraws the communication they would be not be able to use it at a later stage as evidence that the claimant had acted unreasonably.

One potential pitfall of this approach is that claimants may start to disregard the risk of being ordered to pay costs because respondents and their representatives will become overly cautious about making warnings.

There are two answers to this.  First, the amended tribunal rules should be drafted in a way that makes clear that a costs threat is not automatically unreasonable just because the party who made it goes on to lose.  Second, an amended ET1 form would provide factual information about the circumstances in which a claimant might have to pay costs.

Whilst any law reform has potential risks, the benefits of this approach are potentially substantial – more cases settling early, more ethical behaviour, less mistrust between employers and employees, and increased confidence in the justice system for claimants.

It simply cannot be right that a claimant who is unfairly dismissed can be effectively compelled to drop their case because of an intimidatory costs threat.  These claimants are being doubly let down, by their employers and by the justice system.  That is why we need this reform.

Public debate about whether professional footballer Ched Evans should return to his job as a professional footballer following his release from prison for rape, provides a topical example of a wider problem. Over 9.2 million people were known to the police with a record on the police national computer in 2009/10: around 15% of the UK population. Research by Working Links suggests that three quarters of all employers would not employ anyone with a criminal conviction and that 74% of all newly released prisoners remain jobless. In relation to the purpose of employment in the wider criminal justice system, the CIPD found that

…employment is the single most important factor in reducing reoffending. Of the 144 HR professionals who have knowingly employed ex­offenders, only 8 have reported cases of reoffending. In addition, two­ thirds of HR managers state that employing ex­offenders has been a ‘positive’ experience.

Whilst many espouse the view that once locked up, the key should be thrown away, in 99% of cases this will simply not happen. This blog is not specifically about whether Ched Evans should be allowed to return to the game, or indeed on the necessity or desirability of those who have been convicted of very serious offences being back in the public eye,  there is enough comment elsewhere on this. What this is intended to address is how we deal with ex-offenders as a society. There is no substitute for Working Links’s research, but some of the most interesting parts of the paper deal with the reasons for employers either being reluctant, or refusing outright to employ ex-offenders.

In most cases, if not the lowest down on the list, a direct bad experience with ex-offenders was usually well towards the bottom. Of those who had knowingly employed an ex-offender, only 7% indicated a consistently “worse than expected” performance. Generally however, most employers expressed the view that they would be more likely to employ ex-offenders if there was more support and information for employers during the recruitment process and safeguarding thereafter.

What is worth taking from the majority of employers’ experience of employing former convicts however, is that the majority of the time, negative perceptions are not backed up by actual experience. The low employment rate amongst former offenders is undoubtedly a direct costs to the public purse in respect of jobseeker’s allowance, but also in respect of increased indirect costs by a higher level of reoffending. Ex-offenders who had a job to go to on their release from prison had  45%reoffending rate compared to a 58% overall: the lowest rate of reoffending of all of the groups for which employment status on release was recorded.

It is undoubtable that increased employment for ex-offenders is desirable, both from a societal self-interest point of view, as well as a more altruistic one. An interesting proposal has been the implementation of an “Offender Discrimination Act”, presumably along the same lines as the Equality Act, although the political will for this is never likely to be sufficiently strong to see any progress through Parliament.

There is limited protection in the form of section 4 (3) (b) Rehabilitation of Offenders Act 1974 which provides:

a conviction which has become spent or any circumstances ancillary thereto, or any failure to disclose a spent conviction or any such circumstances, shall not be a proper ground for dismissing or excluding a person from any office, profession, occupation or employment, or for prejudicing him in any way in any occupation or employment…

This provides very little comfort to those whose convictions are not spent, or those without qualifying service (caselaw on section 4(3) found it was an automatically unfair reason for dismissal but those employees had qualifying service and there have been no cases yet on the extent of any exception to section 108 (1) Employment Rights Act 1996). Bearing in mind the very real problems that unemployed offenders cause, perhaps this is something that needs addressing as part of a more in depth consideration of the purpose of the criminal justice system. I suspect there are doubts that vast numbers of unemployed ex-offenders are a good thing.

UPDATE: Jamie Oliver has also hit the headlines since I wrote this post. His restaurant Fifteen, which donates all profit to charity, has taken on an apprentice who was previously sentenced to 4 years in a young offenders institution for rape of a child under 13. A representative of the restaurant has been quoted as saying.

…we decided that as he had served his sentence he should be allowed a place on the programme.  He has so far been an excellent student.

May of next year brings an election. Elections bring manifestos. Manifestos bring pledges. Some of them relate to what (over)-excites us here at Hard Labour: UK Employment Law. In the run up to the election we will be maintaining a page dedicated to Employment Law-related pledges. You can find it here or by clicking the link at the top of the page.

As always we welcome your input in keeping it as comprehensive and up to date as possible. To be included information must meet three criteria:

• It must be an explicit pledge (e.g. we know Labour does not want to repeal the Human Rights Act 1998, but the table stays blank until there is a specific commitment on the issue);
• The pledge must be officially made by or on behalf of the party; and
• It must be available on the internet so that our readers can check it for themselves.

There was much (well some) fanfare following Redfearn v UK [2012] ECHR 1878 when the qualifying period for unfair dismissal was removed where the sole or principal reason for dismissal was due to a person’s political affiliation. It didn’t become “automatically unfair” so could still be an “ordinary” unfair dismissal on normal principles, although presumably it would have to be argued as some other substantial reason; the sole or principal reason not being one of the usual list of conduct, capability etc.

Whilst not entirely overlooked, a similar provision is likely to be quietly introduced in respect of members of the Reserve Forces – something that was envisaged by craighrb on my last blog on the subject.

Section 48 of the Defence Reform Act 2014 introduces an identical right in respect of dismissals where the sole or principal reason for the dismissal of an employee:

is, or is connected with, the employee’s membership of a reserve force…

 The provision is not yet in force. The only commencement order currently made does not apply to the new right. There has been discussion about how much further the employment rights of reservists could be extended. In the second reading debate, the then Shadow Secretary of State for Defence raised the prospect of what would appear a right not to be subjected to detriments on the same grounds. There was a proposal in committee to amend section 39 of the Equality Act 2010 so that discrimination in employment on the basis of membership of the reserve forces would become unlawful. That proposal. as well as a proposal to give the right to time off for training, were both defeated; the latter both in the Commons and in the Lords.

What could have been a wide ranging change has remained quite narrow. It’s also of questionable value bearing in mind the right to reinstatement contained in the Reserve Forces (Safeguard of Employment) Act 1985. In practice, any member of the reserves is going to be much better off getting what is (in most cases) going to be a guaranteed return to a job. Bearing in mind that on average fewer than 10 employees are reinstated each year, and bearing in mind that there are no fees to start a Reinstatement Committee case, the new change to the qualifying period seems to be very much the poorer relation.

Jessemy v Rowstock Ltd: post-termination victimisation and the limits of judicial reasoning by Harini Iyengar

How did the Court of Appeal in Jessemy v Rowstock Ltd [2014] EWCA Civ 185 conclude that victimisation of former employees remains unlawful even though “on any natural reading of the relevant provisions of the [Equality Act 2010], taken on their own and without reference to any contextual material, post-termination victimisation is not proscribed”.

Summary

The Court of Appeal (“CA”) has held that post-termination victimisation is unlawful, by adopting an ingenious interpretation of section 108(7) of the Equality Act 2010. Whilst the outcome is clearly correct according to the coterie of right-minded employment lawyers (amongst whom I would aspire to class myself), the case provides an intriguing example of a court concluding that what the law says is in fact exactly what it does not say. Does the type of judicial reasoning which the CA has deployed in Jessemy v Rowstock Ltd give discrimination law a bad name?

The Judgment

The judgment of the CA was given by Underhill LJ, former President of the Employment Appeal Tribunal (“EAT”), (with whom Ryder and Maurice Kay LJJ agreed) and upheld the judgment which his successor, Langstaff J, had given on the same issue in the EAT in Onu v Akwiwu, whilst overruling Mr Recorder Luba QC in Jessamy v Rowstock Ltd in the EAT.

As Underhill LJ stated, “the issue is one of pure law”, so, in regard to the facts, it is sufficient to relate simply that the claim of post-termination victimisation which the Employment Tribunal (“ET”) and then the EAT dismissed concerned a Claimant who was subjected to a detriment in the form of a poor reference from a former employer because he had brought proceedings for unfair dismissal and age discrimination.

The First-Generation Discrimination Statutes

The CA first considered the law on victimisation under the “first-generation” discrimination statutes (the Sex Discrimination Act 1975, the Race Relations Act 1976, and the Disability Discrimination Act 1995) which prohibited discrimination by an employer against a worker “employed by him” or “whom he employs”. In Post Office v Adekeye the CA held in 1997 that the natural meaning of these phrases confined the protection against discrimination to workers employed at the time of the act complained of, however, in Coote v Granada Hospitality Ltd in 1999 the European Court of Justice (“ECJ”) held that since sex discrimination was proscribed under the Equal Treatment Directive, the “principle of effectiveness” meant that employees complaining of sex discrimination had to be protected against victimisation on that account, whether the victimisation occurred during employment or after termination. On remission, the EAT held in Coote that “employed by him” should be construed as including a former employee who had complained of sex discrimination, and that Adekeye should not be followed.

Then, in Rhys-Harper v Relaxion Group plc in 2003, the House of Lords authoritatively determined that in regard to all three first-generation discrimination statutes, “employed by him” and “whom he employs” (despite the use of the present tense) could and should be read as applying to former employees. According to Underhill LJ, “The essential point is that it was regarded as extremely unlikely that Parliament had intended to exclude all claims for post-employment discrimination.” The majority reached those conclusions by applying ordinary domestic principles of construction, rather than the ECJ decision in Coote.

The Second-Generation Discrimination Provisions

In 2003, in regard to sexual orientation and religion or belief, and in 2006 in regard to age, the second-generation discrimination rights were brought in through statutory instruments which expressly rendered unlawful any discrimination or harassment which arose out of and was closely connected to “relationships which have come to an end”. Equivalent provisions were inserted by regulation at the same time into the first-generation discrimination statutes.
This analysis brought Underhill LJ to the bedrock of his argument: “The upshot of all that is that at the time that the 2010 Act was drafted it was well-established that post-employment discrimination – which included victimisation – was unlawful.”

The Equality Act 2010

He went on to analyse the structure of the Equality Act 2010. Part 2 sets out key concepts on equality, Chapter 1 giving the protected characteristics and Chapter 2 explaining “Prohibited Conduct” in the form of direct and indirect discrimination, ancillary matters, and then “Other Prohibited Conduct” in sections 26 and 27 defining harassment and victimisation respectively. Unlike the first- and second-generation anti-discrimination rules, under the Equality Act 2010 rules, discrimination, harassment and victimisation are separated out as distinct forms of prohibited conduct.

It is only in Parts 5 and 8 that the relevant prohibited conduct is made unlawful. In Part 5, sub-sections 39(3) and (4) make it unlawful to victimise an employee by subjecting him or her to any other detriment (such as providing a bad reference). Section 83 contains the definition of “employee” as someone who is employed under a contract of employment, a contract of apprenticeship or a contract personally to do work. Part 8 covers “Prohibited Conduct: Ancillary” and includes section 108:

(1) A person (A) must not discriminate against another (B) if –
(a) the discrimination arises out of and is closely connected to a relationship which used to exist between them, and
(b) conduct of a description constituting the discrimination would, if it occurred during the relationship, contravene this Act.
(2) A person (A) must not harass another (B) if –
(a) the harassment arises out of and is closely connected to a relationship which used to exist between them, and
(b) conduct of a description constituting the harassment would, if it occurred during the relationship, contravene this Act.
(3) It does not matter whether the relationship ends before or after the commencement of this Act.
(4) …
(5) …
(6) For the purposes of Part 9 (enforcement), a contravention of this section relates to the Part of this Act that would have been contravened if the relationship had not ended.
(7) But conduct is not a contravention of this section in so far as it also amounts to victimisation of B by A.

The CA plainly identified “the problem” about section 108 as being that it explicitly proscribes post-termination discrimination and harassment, but contains no equivalent provisions as to victimisation. Underhill LJ politely said of section 108(7) that its “intended effect is far from clear”.

The New Generation Directives

Underhill LJ next moved on to European Union (“EU”) law, in the form of the Race Directive of 2000, the Framework Directive of 2000 on religion or belief, disability, age and sexual orientation, and the Recast Directive on sex discrimination of 2006, which he categorised as the new generation directives, structured differently from the Equal Treatment Directive which was in force at the time of the claims in Coote and Rhys-Harper. The new generation directives all contain a prohibition on victimisation which is worded in a broadly similar way, requiring Member States to introduce into their national legal systems such measures as are necessary to protect employees against dismissal or other adverse treatment by the employer as a reaction to a complaint within the undertaking or to any legal proceedings aimed at enforcing compliance with the principle of equal treatment.
Reaching the same conclusion in regard to EU law as he had in regard to domestic law, he said, “It is clear from the decision of the ECJ in Coote that that provision must apply equally to acts done after as well as during the currency of the employment relationship.”

The Straightforward Reasoning of the ET and the Luba EAT in Jessamy

The CA described the reasoning of the ET and the EAT in Jessamy as “straightforward”. Mr Recorder Luba QC’s EAT regarded it as “highly unlikely” that Parliament had intended with the Equality Act 2010 to legislate away any redress for post-employment victimisation, given both the domestic law in Rhys-Harper and the UK’s obligations under EU law. The EAT fully acknowledged the “flexible interpretative approach” required by EU law, and cited Attridge LLP v Coleman and Ghaidan v Godin-Mendoza, but concluded that to read section 108(7) as prohibiting post-termination victimisation would “fly directly in the face of what Parliament has actually enacted.”

The Wholly Domestic Interpretation of the Langstaff EAT in Onu

In contrast, Langstaff J’s EAT in Onu took an approach based on interpretative principles of domestic law, as in Rhys-Harper, to conclude that the reference to “an employee of A’s” in section 39(4), could be stretched to include former employees.

The Reasoning of the Court of Appeal

Underhill LJ considered that it was “clear that on a natural reading of the relevant provisions of the 2010 Act, taken on their own and without reference to any contextual material, post-termination victimisation is not proscribed”. How then did he manage to reach the opposite conclusion through deft judicial reasoning?
To start with, he acknowledged the shortcomings in Langstaff J’s approach in the EAT. Although, in isolation, “an employee of A’s” can be read as referring to a former employee, that is not consistent with the scheme of the Equality Act 2010, in which prohibited conduct arising out of a past relationship will be proscribed, if at all, by the ancillary provisions in Part 8, and in particular by section 108. There, discrimination and harassment post-termination are prohibited but not victimisation.

He then stated that when the contextual materials were considered, it was clear that the provision in the statute was “not the result which the draftsman intended”, pointing out that Langstaff J, Mr Recorder Luba QC, and the barristers in the case all shared that view.

The contextual materials on which Underhill LJ relied were (i) Rhys-Harper and the second-generation discrimination provisions which expressly made post-termination victimisation unlawful; (ii) the absence of any indication from the Government that the Equality Act 2010 was intended to change the law by removing protection against post-termination victimisation; (iii) the Explanatory Notes on section 108 which referred to claims being “dealt with under the victimisation provisions and not under this section”; (iv) the fact that if post-termination victimisation were not proscribed then the UK would be in breach of its obligations under EU law; and (v) the absence of any rational basis for treating post-termination victimisation differently from post-termination discrimination and harassment.

Taken together, these five matters led him to conclude, “It follows that the apparent failure of the statute to proscribe post-termination victimisation is a drafting error. … In the end, it is unnecessary to be able to show how the error arose as long as it is clear that it was indeed an error.”

The key issue for Underhill LJ was therefore, “… how far is it right to go to correct what is an undoubted drafting error: would that, as the EAT put it, involve crossing the Rubicon?” Underhill LJ reasoned that since the Equality Act 2010 gives effect to the UK’s equality obligations in EU law, the Court must adopt “the Ghaidan approach” which empowered it more widely to “depart from the natural reading of the language of the statute, including by the implication of words which alter its effect as drafted” than would be possible on a conventional domestic approach to statutory construction. He considered that the “flexible interpretative” Ghaidan approach “unquestionably” applied here. After a detailed analysis, he concluded that “the only question is whether it is “possible” … to imply words into the 2010 Act which achieve that result” of proscribing post-termination victimisation, that it plainly was possible, and that the implication of such words “in fact represents what the draftsman intended.” According to Underhill LJ, the Luba EAT erred in failing to appreciate just how flexible the Ghaidan approach was. Yet, while making this criticism, he acknowledged that “the effect of section 108(7) is decidedly opaque”. After bravely attempting to find meaning in the sub-section, Underhill LJ concluded that the first possible meaning (that post-termination was not intended to be proscribed and therefore was also not proscribed where it happened also to constitute post-termination discrimination) was one which would have “no rational reason … for having that effect, and it would have perverse results”, and the second possible meaning (that post-termination victimisation was proscribed elsewhere in the statute but for some reason cases of overlapping post-termination victimisation and discrimination claims should only be complained of under those other provisions) was “unconvincing” because cases of overlapping claims are common and do not in practice give rise to double recovery. Ultimately, Underhill LJ did accept that “it is indeed impossible to see the point of sub-section (7)”. He considered that “the draftsman may rather have lost his way in his treatment of section 108”, noting that in Schedule 28 “discrimination” was said to be defined in, amongst others, section 108, whereas in fact that section proscribed it.

From this position, that the draftsman must have lost his way, made an error, and drafted a meaningless sub-section, Underhill LJ reached the view that the section 108(7) contained “no clear indication of an intention that post-termination victimisation should be lawful”. Therefore, he reasoned, there was “no obstacle” to implying that section 108 gave effect to the EU obligation to proscribe post-employment victimisation. Perhaps intending to guide the lost draftsman, the Court of Appeal suggested either an amendment to section 108(1) to add:

In this sub-section discrimination includes victimisation,

or a new sub-section 2A to add:

A person (A) must not victimise another (B) if –
(a) the victimisation arises out of and is closely connected to a relationship which used to exist between them, and
(b) conduct of a description constituting the harassment would, if it occurred during the relationship, contravene this Act.

Having determined that it was meaningless, Underhill LJ was “not sure that anything needs to be done about sub-section (7)”. He was, however, careful to state that the meaningless sub-section “can have no meaning which is inconsistent with post-termination victimisation being unlawful.”

Then, at the request of the Equality and Human Rights Commission, which was concerned about discrimination in the provision of goods and services, not all of which is proscribed by EU law, Underhill LJ also considered whether the domestic approach to statutory construction would lead to a different result. He accepted a “more straightforward domestic route to the same result, by way of a “rectifying construction” of the kind adopted by the House of Lords in Inco,” involving a “plain case of drafting error”. For Underhill LJ, where there is a drafting error through omission, there is “no real difference” between the Ghaidan and the Inco approaches.

In Inco the court concluded that “the draftsman slipped up” and “the court must be able to correct obvious drafting errors”: the court held that the words “from any decision of the High Court under that Part” were to be read as meaning “from any decision of the High Court under a section in that Part which provides for an appeal from such decision.” According to Lord Nicholls in Inco, a court could adopt such a course only if “abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed.” Lord Nicholls went on to say, however, that the third condition was of crucial importance, because otherwise the court would be crossing the boundary between construction and legislation.

No doubt recognising the dramatic nature of his interpretation, Underhill LJ said, “It would be different in a case where no such intention is established and the argument is simply that the implication sought is necessary in order to comply with EU law or the requirements of the Convention.”

Conclusion

Through sophisticated reasoning, the CA has achieved a result which is fair in the minds of the coterie of employment lawyers, and which will be of practical service to many litigants (be they workers, employers, or those giving or receiving goods and services) by ending legal uncertainty. Is it right, however, for a court to respond to a statutory provision which has no satisfactory meaning by implying into the statute words which make conduct unlawful? The CA did not hold that sub-section 108(7) must be deleted as meaningless, but left it to “some other court” to “cudgel its brains about what real effect, if any, it has”. In spite of its hesitation to delete the sub-section, the CA felt confident in asserting that, whatever it might mean, the sub-section was definitely inconsistent with post-termination victimisation being permitted.

It seems to me that the CA has turned a statutory provision, which is, at best, meaningless, and is, at worst, ambiguous and inconsistent with the UK’s equality obligations under EU law, into a provision which renders conduct unlawful. Can the position really be said to be analogous to Inco? The Equality Act 2010 separated out harassment and victimisation into different claims, after decades of being aspects of discrimination. In my view, the difficulty is that, whilst the draftsman clearly drafted poorly, exactly what he was up to in terms of tinkering with the law on discrimination, harassment and victimisation and how they should interrelate, remains very unclear, yet, I feel sure that he was up to something.

Our clever judges know how to achieve the result which right-minded employment lawyers desire, through the deployment of deft judicial reasoning, but is it right to develop principles of judicial interpretation which permit a statutory provision to mean that conduct which is stated to be lawful is held to be unlawful?

Access to justice in general is a matter of acute concern to barristers right now. Within the field of employment law, the introduction of ET fees is having a profound effect on discrimination litigation, a part of the legal system which is intended to protect the most marginalised and disadvantaged groups of workers. Is it idealistic and unrealistic for me to long for judicial reasoning which makes sense to those outside the inner circle of employment lawyers, in regard to what the major discrimination statute means? Does the type of judicial reasoning which the CA has deployed in Jessemy v Rowstock Ltd give discrimination law a bad name?