Morgan v Middlesbrough Borough Council

J U D G M E N T

1. LORD JUSTICE BROOKE: I invite Lord Justice Hooper to give the first judgment.

2. LORD JUSTICE HOOPER: In September 2001 the respondent, Angela Morgan, made an application to an Employment Tribunal under section 1 of the Equal Pay Act 1970. She alleged that she was employed on like-work as eight identified male comparators. She claimed that the terms of her contract were less favourable, in that she was paid for working during term times whereas the male comparators were paid on a whole year basis. This had a further impact for her in terms of her pension treatment, holidays and sickness.

3. By the time that the Employment Tribunal ("ET") began to hear the case in February 2003 there were two other applicants but only two comparators, a Mr Mell and a Mr Bevington. Following a ten-day hearing spread over February, July and September of 2003, the ET, on 11th March 2004, found against the applicants.

4. The ET decided that the applicants were not engaged in like-work with the named comparators. The other applicants did not appeal that decision. Mrs Morgan appealed it but only in relation to the conclusion of the ET that she had not engaged in like-work with the named comparator, Mr Mell. She accepted that the decision in so far as it related to Mr Bevington was unappealable.

5. The Employment Appeal Tribunal ("EAT"), by a majority, allowed her appeal and set aside the decision of the ET on the issue of like-work in relation to Mr Mell. The EAT remitted the case to the same ET for a re-hearing of that issue "together so far as necessary with any other issues arising on the 'genuine material factor' defence relating to the terms on which Mr Mell was employed". The appellant council seeks an order overturning the decision of the EAT and reinstating the decision of the Employment Tribunal. The respondent has a cross-appeal.

6. Mrs Morgan is employed by the appellant council as a primary school administrator. She is paid on the SO1 scale for 48.4 weeks a year made up in the following way: the school terms, three additional weeks and 7.4 weeks of paid holidays. Although she is only paid for 48.4 weeks she receives the income pro rata over the whole year.

7. Mr Mell had from 1996 to 2000 been an administrator in a secondary school paid at Grade 5 scale, two scales below Mrs Morgan. He worked in a department which consisted also of two senior clerks and a clerk. Mr Mell worked for 22.5 hours a week only, but did so for the whole of the year. Mrs Morgan's claim was that her terms of employment were less favourable than those of Mr Mell, although her pay was more than that of Mr Mell, given that she was on a higher scale and that he only worked for 22.5 hours a week. As the EAT noted there were obviously difficult potential issues in what would be needed for "equality" if the second stage of the Equal Pay Act claim were reached.

8. The primary school in which the respondent worked had a roll of 188 pupils with a budget of some £426,000; whereas the school at which Mr Mell worked had a roll of 712 pupils and a budget of some £2,259,000.

9. In its conclusion the ET held that the work carried out by Mrs Morgan was, in relation to Mr Mell, not like-work or broadly similar to that carried out by Mr Mell because of the degree to which Mrs Morgan carried out routine, lower grade tasks as against the more strategic and managerial role carried out by Mr Mell. In the light of that finding the ET did not go on to consider the genuine material factor defence.

10. The fact that there was more than one applicant and more than one comparator did cause the ET difficulties and the EAT criticised the ET for not sufficiently concentrating on Mrs Morgan's application. As the EAT wrote (paragraph 6) her application had to be determined by reference to her job compared with each of her chosen comparators:

"This was of particular importance given the undisputed evidence of wide differences in size and other factors between individual schools, both primary and secondary, so that care was needed in identifying and teasing out and individually the facts relevant to the claimant and each of her two comparators on the like-work issue."

11. The general principles which the ET was required to apply are well known and not in dispute. The thrust of Mrs Morgan's appeal to the EAT was to the effect that the ET had erred in law by reaching a perverse conclusion, by failing to have regard to relevant evidence and by failing to make and record sufficient findings of fact to justify the conclusions reached. It was said that the ET had misdirected itself and that a misdirection had to be inferred given the deficient way it had recorded its reasons.

12. The relevant statutory provision is section 1 of the Equal Pay Act 1970. By virtue of subsection (2) where a woman is employed on like-work with a man in the same employment, then any term of the woman's contract which is less favourable to a term under which the man is employed should be treated as so modified as not to be less favourable. Likewise if the woman's contract does not include a term corresponding to a term benefiting the man, then the woman's contract should be treated as including such a term. Subsection (4) lays down the test for deciding whether a woman is to be regarded as being employed in like-work as men. The subsection provides:

"A woman is to be regarded as employed on like work with men if, but only if, her work and theirs is of the same or a broadly similar nature, and the differences (if any) between the things she does and the things they do are not of practical importance in relation to terms and conditions of employment; and accordingly in comparing her work with theirs regard shall be had to the frequency or otherwise with which any such differences occur in practice as well as to the nature and extent of the differences."

13. It is well established that the test in section 1(4) involves the ET in a two-stage enquiry. The EAT wrote (paragraph 7):

"First, is the work of the same, or, if not, of a broadly similar nature? Secondly, if on a general consideration of the type of work involved and the skill and knowledge required to do it, the answer is that the work is of a broadly similar nature, it is then necessary to go on and consider the detail and inquire whether the differences between the work being compared are of practical importance in relation to terms and conditions of employment. ... In these two stages of the inquiry under section 1(4) the legal burden of proving that she is employed on like work with a man rests on the woman claimant, but if the first question is answered in her favour a practical and evidential burden of showing differences of practical importance rests upon the employers."

14. If both questions are answered in the woman's favour then the third question arises under section 1(3), namely whether the employer can then prove that any variation between her contract and that of the male comparator is genuinely due to a material difference, other than the difference of sex, between her case and his. That stage was not reached by the ET in the light of its finding that Mrs Morgan had not established that she was employed on like-work with a man.

15. Mrs Morgan's primary functions were:

"(a) Assisting the Head Teacher in the financial management of the school including the preparation of budgets and accurate monitoring of budget and appropriation of all school income and expenditure.

(b) Planning, direction and supervision of the duties of the school's Caretaker.

(c) Planning, direction and supervision of the duties of the school's Midday Assistants.

(d) To provide an effective administrative service to the whole school."

16. Among Mrs Morgan's principal responsibilities listed in her job description (page 97), as identified by her, were:

"1. Modelling of the school budget together with calculations for estimated staff and related costs, etc.

3. Advising the Governors of the school, the Head Teacher, Curriculum Co-ordinators, etc on detailed aspects of the school budget.

10. Attendance at Governing Body meetings to report on [the] school financial position and procedures.

14. Acting as an initial point of contact for the Caretaker to ensure the cleaning of all school buildings is undertaken to the required standards.

15. Acting as an initial point of contact for all Midday Assistant matters including the deployment of staff, cover, INSET and regular meetings as appropriate.

20. To deal with incoming and outgoing mail.

24. Liaison with appropriate external authorities and agencies.

25. Assisting as appropriate with the instruction and operation of suitable development and performance targets ..."

17. We note in passing that on 31st January 2003, Mrs Morgan's head teacher sought, unilaterally, to change her job description to remove the majority of these responsibilities.

18. Mrs Morgan wrote in her statement that she worked alone "as the only administrative support" and that her job description was almost if not identical to both Messrs Mell and Bevington. Minutes show her attendance at a Governor's meeting.

19. The ET wrote this about Mr Mell (paragraph 11(j)):

"We are given little information [by the respondent] about Mr Mell's former employment from the respondent. Mr Hiser [a witness] described him as having been a part-time school administrator at Coleby Newham Secondary School until he retired in March 2000 ... The respondent ... has produced samples of financial reports, budget plans and statistical analysis he and his successor Ms Lawton carried out and then presented to the School's Governing Body ..."

20. As the ET pointed out, the respondent claimed:

"That Mr Mell's functions were very similar of those of Paul Bevington."

21. Mr Mell's job description stated:

"Key Accountabilities

Preparation and monitoring of the school budget and related matters;

Regular reconciliation of payments;

Research and development of IT packages for.

School management;

Systems manager for CEMIS;

Administration of lettings and minibus.

Key Tasks

Preparation of draft budgets for consideration by SMT/Governors;

Monitoring of the budget and preparation of reports for each meeting of the Governors' Resources Committee and for other occasions when required;

Reconciling payments and taking appropriate action;

Researching and developing IT packages to support school management;

Being systems manager for CEMIS;

Negotiating contracts and liaising with contractors as appropriate;

Administration of directed and private lettings;

Administration of the school minibus;

Any other duties reasonably required by the Headteacher."

22. Mr Hiser also said in evidence that Mr Mell presented figures to the governing body and negotiated a cleaning contract and produced some prediction on GCSE result figures. He did not do orders or invoices. He might have done budget reconciliation. He did not do the kind of day-to-day organisation of the administrative support to the head teacher which Mrs Morgan did.

23. In paragraph 15(l) the ET identified the differences which it had found (as part of its fact-finding exercise) between the work of Mrs Morgan and the work of Mr Mell:

"Summarising the differences that we found Mr Mell did not provide the function of receptionist, or typist or collect dinner money. An additional function on his part was in terms of predicting GCSE figures. The school was larger in terms of pupil numbers. In terms of the primary job description functions, however, the applicant Mrs Morgan and Mr Mell carried out a similar job albeit Mrs Morgan at a primary school of considerably less numbers and Mr Mell at a secondary school with larger numbers. While Mrs Morgan had additional functions they tended towards the more routine and lower grade jobs. Most fundamentally the hours were different. Mr Mell brought to the job skills that Angela Morgan did not have namely his experience as a deputy head teacher [which post he had retired]."

24. In its conclusions the ET identified in paragraphs 26 and 27 the relevant section 1 differences. We shall refer only to those differences which the ET identified between the work of Mrs Morgan and the work of Mr Mell.

Mr Mell provides the service to a secondary school whilst Mrs Morgan provides the service to a primary school. The primary school at which Mrs Morgan worked has 188 pupils whereas Mr Mell's had 712. There were significant differences between Mrs Morgan and Mr Mell relating to the numbers of pupils and therefore the number of staff and the size of the budget. This represented a practical difference of importance.

Mrs Morgan carried out routine clerical work not carried out by Mr Mell. Mrs Morgan spent a significant amount of time on lower grade clerical tasks. Whereas Mrs Morgan also dealt with financial matters that was on a smaller scale and the time involved many more lower grade routine tasks of the type that did not exist out of term time such as collecting dinner money, reception, dealing with post.

Mrs Morgan had "direct involvement" "with parents and children" which was not the case with Mr Mell.

Mr Mell had a far greater responsibility in terms of contractual matters and involvement in the negotiation of contracts.

Mr Mell had responsibility for managing premises (although not to the same extent as Mr Bevington).

Mr Mell had a more strategic role within the structure of the school and his whole time was spent on financial matters. In his school the responsibilities for collecting dinner money, reception, dealing with post were dealt with by staff other than Mr Mell.

25.

The very nature of the different functions suggests to the Tribunal that there was a significant amount of time spent by Mrs Morgan on more routine matters as against a very more significant time spent by Mr Mell on managerial and financial matters.

All the differences identified between Mrs Morgan and Mr Mell also exist in Mr Bevington's case but on a larger scale.

26. In paragraph 29, the ET wrote:

"We have considered the frequency or otherwise with which the differences occur in practice, their nature and their extent. We have looked at the differences in work actually done, how large those differences are and how often they operate. In particular, it is the Tribunal’s view that the work of a more routine nature which the primary school administrators carry out is very much more term time related whereas the more strategic and managerial role carried out by those secondary school comparators is more appropriate for whole time work."

27. Before the EAT it was alleged on behalf of Mrs Morgan that the ET was wrong to proceed to determine the issue of like-work in relation to Mr Mell without having before it material the provision of which the appellant claimed had been directed. The EAT rejected this complaint (paragraph 13).

28. The majority of the EAT were persuaded (paragraph 14) that the ET had:

"... failed to address and identify with sufficient clarity by way of a separate comparison what were the actual facts relating to Mr Mell's employment over the period from October 1996 until he retired in March 2000 that took it out of the 'area of broad similarity' apparently accepted in the findings at paragraph 15(l); given the lack of evidence noted at paragraph 15(j), there was simply insufficient material to support the conclusion reached."

29. Ground 1 of the appellant's grounds attacks the first sentence and ground 2 the second sentence.

30. The majority were also persuaded (paragraph 15):

"... that the reference in paragraph 15(l) to the different hours worked and Mr Mell's special skills and previous experience as a former deputy head teacher as 'most fundamental' shows the tribunal must have misdirected itself into taking these into account, or at the very least have fallen into error by failing to address and sufficiently explain what genuine relevance they could have, on the like-work issue which should be a simple factual comparison of work done. In particular, it is well established that the mere fact that different hours are worked or the duties are performed at different times of the day cannot determine whether the work itself is similar or different ... and while an individual's personal qualities and previous experience may be of obvious and direct relevance to any genuine material factor defence under section 1(3) at any third stage, they do not demonstrate that the actual job he is currently required to do is different from that of anyone else."

31. Ground 3 attacks this conclusion.

32. For these reasons the majority concluded that the appeal must succeed and that:

"... the decision of the tribunal in relation to the comparison with Mr Mell must be held erroneous in law for want of sufficient findings and reasons, and [therefore] set aside."

33. In paragraph 16 the conclusions of the minority member are set out:

"... while agreeing that the tribunal's findings and reasoning in relation to the comparison with Mr Mell could certainly have been better and more clearly expressed if set out separately, he would not consider it right to infer any material misdirection or that the tribunal lost sight of the principles of law on which it is agreed to have directed itself correctly when it came to applying them and expressing its conclusions on the facts. The reference in the summary of facts at paragraph 15(l) to the different hours worked and the different skills and experience of the two individuals ought in his view to be read in the context of the latter passages in paragraphs 27-30 where the tribunal explained what it found the material differences actually to be, and also of the whole basis of the complaint made in the proceedings, that Mr Mell was being employed on a year-round basis whilst Mrs Morgan's services were only required during the school term times albeit for a full day while pupils and their parents might need to be attended to, plus the extra three weeks for preparation and catching up. The crucial difference, as found by the tribunal, was that Mrs Morgan as the sole administrator in a relatively small primary school had to carry out routine tasks of the kind that involved being on duty at the school throughout the day during term time; while Mr Mell had a more strategic and managerial role in a much larger school and without these tasks, with his whole time spent on financial matters, less term time related and more apt to year-round work. That was a conclusion open to the tribunal in relation to Mr Mell ... and there was evidence, in particular that of Mr Hiser, to support it in relation to what Mr Mell did until his retirement in March 2000; though admittedly less detailed and up to date than that about Mr Bevington who was still in the Council's employment. It was also open to the tribunal applying its own judgment and experience to find this a difference of practical importance for the purposes of section 1(4), which the wording used in paragraphs 28-29 showed it had closely in mind. On those findings which appear clearly enough from the statement of extended reasons, the tribunal was right to hold the applicant had not established she was employed in like work to that of Mr Mell and its explanation was, in the minority member's view, sufficient to meet the [required] standards ..."

34. I turn to the grounds of appeal, the thrust of which I have identified when looking at the reasons of the majority.

35. Mr Legard submits that the ET failed to carry out properly the exercise of comparing Mrs Morgan with Mr Mell. Like the minority member of the EAT I agree that this task could have been carried out. However, the analysis of paragraphs 26 and 27 which I have carried out (at paragraph 23 above) shows, in my view, that the error of the ET was one of style and not substance. Likewise, that analysis shows, in my view, that the ET gave sufficient reasons. Mr Legard submits that the conclusion of the majority that there was insufficient material was a correct conclusion to reach. Miss Woodwark has taken us through a quantity of the material that was available to the ET when examining the situation of Mr Mell, and in my view there was certainly sufficient material for the ET to reach the conclusions that it did.

36. Mr Legard during the course of argument submitted that given that the job descriptions of Mrs Morgan and Mr Mell were broadly similar (as the ET recognised in paragraph 15(l)), then the Tribunal ought to have found like-work, and left it to the employer to prove material differences. I, for my part, cannot accept that argument. It is clearly a question of degree. But in my view the Tribunal was entitled to make the finding, given the various differences which the Tribunal identified, that the work was not like-work.

37. Mr Legard's fundamental objection to the conclusion of the ET is that in paragraph 15(l) the Tribunal referred to two matters which in his submission were not only factors which ought not to have been referred to, but were ones which fundamentally undermined the conclusion of the ET.

38. My first difficulty with that argument is that paragraph 15(l) was not an attempt to draw conclusions about like-work, but merely set out a series of findings of fact. He complains about the passage "most fundamentally the hours were different". He says that that reveals an error of law because, so he submits, it must be a reference by the Tribunal to the fact that Mr Mell worked for 22½ hours and Mrs Morgan worked for some 37 hours a week. If that is what the Tribunal were referring to, it would certainly be very strange. No one had suggested to the Tribunal that that was relevant.

39. Miss Woodwark attempts to give another interpretation to these enigmatic words. She suggests that perhaps the Tribunal was referring to the difference between term work and whole-year work.

40. During the course of the hearing it seemed to me that it became much clearer what the Tribunal meant. A similar phrase is used twice in paragraph 26. In looking at the work of Mr Bevington and comparing it with that of Mrs Morgan, the Tribunal said "The hours worked were different." Likewise, when comparing the work of Mrs Watson and Mr Bevington, the Tribunal said "The hours were different." In both those examples it appears that the number of hours which were being worked per week was the same or almost the same. That suggests to me very strongly that that inelegant phrase in paragraph 15(l) was a reference to the nature of the work that was being done.

41. Even if I were wrong about that, there is an even more fundamental objection to the argument put forward by Mr Legard: the reference to hours finds no place in the conclusions which start at paragraph 26 and go through to paragraph 29, with the summary at page 30. Whatever the ET may have meant by those words, if they meant either what Mr Legard has suggested of what Miss Woodwark has suggested, they find no place in the conclusions.

42. I, for my part, deprecate choosing a phrase in the factual findings and then giving that phrase great importance when it finds no reflection in the conclusions of the Tribunal. I reject that argument.

43. The second complaint made by Mr Legard relates to the last sentence of paragraph 15(l), the reference to Mr Mell bringing to the job skills that Mrs Morgan did not have, namely his experience as a deputy head teacher. Again, that finds no reflection in the conclusions. Whilst accepting that one must be careful about using experience, it seems to me that it can be relevant to take into account the skills and knowledge of a person when trying to understand the nature of the job that he or she is given. I find no merit in that argument.

44. I turn briefly to the cross-appeal. It was submitted to the EAT that the ET had erred by not expressly referring to the evidence given by a Mrs Christine Watson, who was not a test applicant but who was in fact a claimant. This is what the EAT said about this:

"12. We were none of us persuaded that the tribunal’s omission to refer expressly to evidence relating to the employment of Mrs Christine Watson (who was not a test applicant) or the answers given in cross-examination by Mr Hogg the school support officer particularly in relation to the work done by her, was an error such as to render the decision itself perverse or erroneous in law. As is apparent from the evidence about Mrs Christine Watson to which we were referred, including the evidence in chief given in Mr Hogg's own witness statement at page 147, the school at which she worked with financial responsibility and the title of 'bursar' was very much larger than the other primary schools; and Mr Hogg's explicit evidence was that she did not do the same job as Mrs Morgan, her financial responsibility being far more akin to that of an administrator in a secondary school. The detailed answers recorded in the course of a cross-examination where Mr Legard was quite understandably seeking to shake this express evidence did not in our view come near agreeing or establishing it as 'common ground' that Mrs Watson performed 'an almost identical role to that performed by the appellant' as asserted in the notice of appeal. On any fair reading of that evidence it was reasonable for the tribunal to conclude that the material differences between this Mrs Watson’s work and that of the appellant made it unnecessary to refer to it or her in the specific comparison they were required to make between the individual cases of Mrs Morgan and Mr Mell."

45. Mr Legard has taken us to his cross-examination, but in my view that in no way undermines the reasoning of the EAT. It is clear from that paragraph and from her job description and other details about her that the work that she was doing was not of the same kind as that done by Mrs Morgan, and therefore any evidence that she gave would not assist the Tribunal in so far as Mrs Morgan was concerned.

46. For all these reasons, I would allow the appeal.

47. LORD JUSTICE DYSON: I agree.

48. LORD JUSTICE BROOKE: I also agree.

ORDER: Appeal allowed and the order of the Employment Appeal Tribunal set aside; the respondent to pay the appellant's costs, to be assessed by detailed assessment on the standard basis, if not agreed.

(Order not part of approved judgment)

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