ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
THE HON. MR JUSTICE BURTON (PRESIDENT)
Royal Courts of Justice
Strand, London, WC2A 2LL
Before :
THE RT HON. LORD JUSTICE WARD
THE RT. HON. LORD JUSTICE MAURICE KAY
and
THE RT HON. LORD JUSTICE WILSON
Between :
DIANA WOODWARD | Appellant |
- and - | |
ABBEY NATIONAL PLC | Respondent |
Jeffrey Bacon and Simon Forshaw (instructed by Russell-Cooke) for the Appellant
John Cavanagh QC and Richard Powell (instructed by DLA Piper Rudnick Gray Cary) for the Respondent
Hearing date: 20th March 2006
Judgment
Lord Justice Ward:
The issue
In this appeal we are invited by the appellant, Mrs Diana Woodward, to rule that we are not bound by a previous decision of this Court given in Fadipe v Reed Nursing Personnel [2001] EWCA 1885, [2005] ICR 1760 because, although it was not expressly overruled, it cannot stand with the decision of the House of Lords in Rhys-Harper v Relaxion Group Plc [2003] UKHL 33, [2003] ICR 867.
The material facts
Mrs Woodward was employed by Abbey National’s Treasury Services (ANTS) as head of financial institutions from February 1991 until she was made redundant in November 1994. She complained of sex discrimination and that complaint was settled without admission of liability in December 1996.
Some years later on 10th January 2003, Mrs Woodward made a further application to the Employment Tribunal complaining of victimisation. The details of her complaint related largely to allegations of sex discrimination but she contended that it included a claim under s. 47(B) of the Employment Rights Act 1996, as amended, (the ERA) that she had been subjected by the respondent, Abbey National Plc, to a detriment done on the ground that she had made a protected disclosure.
When doubt arose as to whether or not that claim was revealed in the particulars of her complaint, she submitted re-amended details of the complaint and sought leave to amend. It is unnecessary to spell out the details. In essence Mrs Woodward was alleging that the disclosure qualifying for protection consisted in her disclosure of the information that the respondent was failing to comply with legal obligations to which it was subject. She asserted that:
“throughout her time with the respondent the applicant was obliged to voice her concerns on regular occasions as to what she reasonably believed to be the reckless and/or negligent manner in which the respondent was handling the funds of its institutional investors, and/or the breaches of fiduciary duty of its directors … and/or breaches by the respondent … of s. 47 of the Financial Services Act 1997.”
The detriment to which she said she was subjected arose long after her employment had terminated and it consisted in one or more of the following:
(1) the respondent’s failure to provide a reference to BUPA in July 2000 in relation to the appellant’s application for a position with BUPA;
(2) the appellant’s failure to progress further with various job applications including those made to Barclays Bank and the Royal Bank of Scotland in February and March 2000;
(3) the appellant’s failure to be appointed as a consultant to ANTS whilst working for KPMG in 2001;
(4) the failure of Lord Burns, the new Chairman of the respondent, to respond to the appellant’s letter of 10th October 2002 in which she sought employment with the respondent; and
(5) the respondent’s failure to make any adequate efforts to seek alternative employment for the appellant following her exchange of letters with the respondent in the latter part of 2002.
It is only fair to add that none of these matters have been investigated: the case before us had to proceed as if they are true but the respondent has at all times maintained its strong denial of any wrong-doing.
There was some interlocutory skirmishing which needed a ruling from the Employment Appeal Tribunal, the details of which are again immaterial. The upshot of it was that the sex discrimination matters were set on one side and have since been disposed of. By its decision promulgated on 23rd February 2005 the Employment Tribunal decided as a preliminary issue that it had no jurisdiction to hear the protected disclosure claim because the acts of which complaint was made all took place after the appellant’s employment had come to an end. Her appeal to the Employment Appeal Tribunal was dismissed by the Employment Appeal Tribunal on 20th July 2005.
I gave permission to appeal stating that:
“Although success may be hard to achieve the chances of Parliament intervening to correct any injustice is so unlikely that the need for the Court of Appeal to look again at the problem may itself constitute a compelling enough reason to grant permission. The decision of the House of Lords in Rhys-Harper affords the opportunity for this Court to consider whether Fadipe can be overruled or distinguished.”
The legislative background
This claim is brought under the ERA and so its provisions are those which are directly relevant. The 1996 Act was amended by the Public Interest Disclosure Act 1998 (the 1998 Act) which is an Act “to protect individuals who make certain disclosures of information in the public interest; to allow such individuals to bring action in respect of victimisation; and for connected purposes”. In other and colloquial words, it is for the protection of “whistle-blowers”. The 1998 Act amended the 1996 Act by inserting Part IVA to deal with “Protected Disclosures”. S. 43A provides that a protected disclosure means a qualifying disclosure made by a worker in accordance with any of sections 43C to 43H. 43B defines disclosures qualifying for protection, s.43B(1)(b) being relevant to the appellant’s claim in providing that:
“In this Part a qualifying disclosure means any disclosure of information which, in the reasonable belief of the worker making the disclosure, tends to show one or more of the following – …
(b) that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject.
S. 43K extends the meaning of “worker” for Part IV A as follows:
“(1) For the purposes of this Part ‘worker’ includes an individual who is not a worker as defined by s. 230(3) but who –
(a) works or worked for a person [in various special circumstances some of which apply here] …”
Part V deals with “Protection from suffering detriment in employment”, with the emphasis added by me. It confers “Rights not to suffer detriment”. That right is given to various persons and in various circumstances covering a wide range of activity, for example, under s. 46M those employees called to jury service; under s. 45 employees refusing to do Sunday working; under s. 47A employees exercising the right to time off work for study or training and under s. 47C those taking leave relating to pregnancy, childbirth or maternity. These are but some of the activities and the point being made on the respondent’s behalf is that they all relate to activities in which the conditions are encountered whilst the employment or work continues.
The material provisions for the purpose of this appeal are s.44 relied on by Mr Fadipe and s. 47B, introduced by the 1998 reform, relied on by Mrs Woodward. Both fall within Part V. They provide as follows:
“44. Health and Safety cases
(a) An employee has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that - …
(c) being an employee at a place where –
(i) there was no such representative or safety committee, or
(ii) there was such a representative or safety committee but it was not reasonably practicable for the employee to raise the matter by those means,
he brought to his employer's attention, by reasonable means, circumstances connected with his work which he reasonably believed were harmful or potentially harmful to health or safety.
…
47B Protected Disclosures
(1) A worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure.
(2) … this section does not apply where-
(a) the worker is an employee, and
(b) the detriment in question amounts to dismissal (within the meaning of Part X).
(3) For the purposes of this section, and of sections 48 and 49 so far as relating to this section, "worker", "worker's contract", "employment" and "employer" have the extended meaning given by section 43K.”
S.48 deals with enforcement. Under s. 48(1) an employee may present a complaint to an Employment Tribunal that he has been subjected to a detriment in contravention of s. 44 among others. Under s. 48(1A), also introduced in 1998, a worker may present a complaint to an Employment Tribunal that he has been subjected to a detriment in contravention of s. 47B. Under s. 48(3) the Employment Tribunal shall not consider the complaint unless it is presented before the end of the period of three months beginning with the date of the act or failure to act to which the complaint relates.
As the title of the Act suggests, this is a wide-ranging Act on employment rights, various Parts dealing with time off work, suspension from work, leave from work, termination of employment, unfair dismissal, redundancy and so forth.
S. 230, which falls in Part XIV on Interpretation, defines “employees, workers etc” as follows:
“(1) In this Act "employee" means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.
…
(3) In this Act "worker" … means an individual who has entered into or works under (or, where the employment has ceased, worked under) -
(a) a contract of employment, or
(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract …
(4) In this Act "employer", in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.
…
(6) This section has effect subject to sections 43K and 47B(3); and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker” … and, in relation to a worker, “employer” … have the extended meaning given by section 43K.” (This subsection was introduced by the 1998 Act.)
The Employment Tribunal’s decision
The nub of its decision is contained in paragraph 10 where the Tribunal said:
“… we are driven to conclude that this Tribunal is bound by the judgment of the Court of Appeal in the Fadipe case. That is a case which is precisely in point in the sense that the relevant statutory language in s. 44 is the same as that in s. 47(B) and both sections are contained within the part of the Employment Rights Act headed ‘Protection from suffering detriment in employment’. The House of Lords judgment in Relaxion relates to the very different legislation in the form of the Discrimination Acts and in the light of the language of the European Directives which led to the passing of the discrimination legislation. In addition, we note that the rights enshrined within the Employment Rights Act do not in general terms, apply to incidents occurring after the termination of employment, whereas the Discrimination Acts do.”
The decision of the Employment Appeal Tribunal
Their decision is now reported at [2005] ICR 1750 and it is, therefore, unnecessary to cite it extensively. The essential strands of Burton J’s reasoning were that Fadipe could not be distinguished on the basis that that case concerned a health and safety complaint as opposed to the case before us involving a protected disclosure. Both were in Part V and governed by s. 48. Nor was there any distinction to be drawn on the basis that the definition of “worker” in s. 47(B) is drawn slightly wider than it is in s. 44. Rhys-Harper had not overruled Fadipe which was not cited in the House of Lords. The former was dealing with victimisation under the sex, race and disability discrimination Acts whereas the latter was dealing with detriment under Part V of the ERA. Rhys-Harper was simply “writing large” the conclusions of the European Court of Justice in Coote v Granada Hospitality Ltd [1991] ICR 100 which had been considered in Fadipe but found not to alter the result. In the view of the Employment Appeal Tribunal, it was bound by Fadipe and the appeal was dismissed accordingly.
What did Fadipe decide?
Mr Fadipe was a litigant in person. His complaint of unfair dismissal need not concern us. He said that his writing to the Chief Executive of his employer, Reed Nursing Personnel, raising health and safety concerns caused him to be dismissed by them. His second complaint, which is material for our purposes, was that by virtue of s. 44 of the ERA he had the right not to be subjected to any detriment by reason of his raising those health and safety concerns, (see s. 44(1)(c)) and that he suffered detriment in the form of a loss of a job opportunity with the City of Westminster who offered him employment subject to satisfactory references but refused to engage him because the reference provided by Reed Nursing Personnel was not regarded by Westminster as satisfactory enough. He relied on s. 230 to justify his bringing his claim where employment had ceased. The Employment Tribunal dismissed his claim on the basis that it had no jurisdiction because there was no absolute right for an employee or ex-employee to demand a reference and no obligation on the employer to provide one.
Mummery L.J. gave the first judgment in the Court of Appeal, Buxton and Longmore L.JJ. agreeing with it. He held that the Employment Tribunal had not erred in law in concluding that it did not have jurisdiction to entertain the claim, saying:
“25. … section 44 does not, on its proper construction, apply in the circumstances relied upon by Mr Fadipe. The section is in the Part of the Act that affords protection from suffering detriment in employment [Mummery L.J.’s emphasis]. Its purpose is to protect employees while they are still employed from suffering detriment, short of dismissal, by reason of having brought to their employer's attention health and safety matters of the kind referred to in section 44(1)(c). If it is a dismissal case the section does not apply: see section 44(4). The claim for unfair dismissal is made, if it is an alleged dismissal on health and safety grounds, under the unfair dismissal provisions in a different part of the 1996 Act. I am clear that this section does not apply where the facts are, as here, that the alleged detriment was inflicted and suffered after the employee (that is Mr Fadipe) had ceased to be employed.
26. As for Mr Fadipe's reliance on the reference in section 230(1) to (“where the employment has ceased, worked under)”, in my view that parenthesis in section 230(1) was inserted by Parliament for the purposes of dealing with the kind of situation which would arise under section 48(1), which entitles an employee to present a complaint at a Tribunal that he has been subjected to a detriment. The person who may present a complaint under that section may still be employed; or he may have ceased to be employed, either by reason of resignation or dismissal. He does not cease to be entitled to present a complaint by reason of the fact that he has ceased to be an employee.
27. The section was not, however, intended to confer a general right on an ex-employee to complain about acts done by his ex-employer after the employment relationship has ceased which could be described as detriment inflicted by reason of the ex-employee having raised health and safety grounds.
…
29. I should mention for the sake of completeness that reference has been made at this hearing, as reference was made at the hearing in the Employment Tribunal, to the decision of the European Court of Justice in Coote v Granada Hospitality Ltd (KC-185/97) [1999] ICR 100. That was a ruling of the Court of Justice on the effect of Article 6 of the Equal Treatment Directive, 76/207/EEC (OJ 1976 L 39, p 40), which has no equivalent provision in the Council Directive concerning health and safety at work. The Coote case was dealing with the quite different situation of the need to provide judicial protection for a worker whose employer, after the employment relationship has terminated, refused to provide a reference as a reaction to legal proceedings which the employee had brought to enforce compliance with the principle of equal treatment within the meaning of that Directive. That case is not authority for the wider proposition canvassed by Mr Fadipe that there was a general principle under which an employee who complained that he suffered retaliation from his employer or former employer, having raised health and safety matters, was entitled to bring a claim under section 44 of the 1996 Act.”
Can Fadipe be distinguished?
When granting permission to appeal I left that open as a possible argument to be addressed to us. On the hearing of the appeal, however, Mr Jeffrey Bacon for the appellant conceded that our case could not be distinguished from Fadipe. In both cases there was a protected disclosure under Part IVA of the ERA, the same right not to suffer detriment was conferred under Part V of the Act and the remedy was sought under s. 48. The case was squarely put before us on the basis that we were not bound to follow Fadipe.
When is the Court of Appeal not bound by one of its previous decisions?
The guiding principles were established in Young v Bristol Aeroplane Co. Ltd [1944] 1 K.B. 718, 725 where Lord Greene M.R., reading the judgment of the Court said:
“In considering the question whether or not this court is bound by its previous decisions and those of courts of co-ordinate jurisdiction, it is necessary to distinguish four classes of case. The first is that with which we are now concerned, namely, cases where this court finds itself confronted with one or more decisions of its own or of a court of co-ordinate jurisdiction which cover the question before it and there is no conflicting decision of this court or of a court of co-ordinate jurisdiction. The second is where there is such a conflicting decision. The third is where this court comes to the conclusion that a previous decision, although not expressly overruled, cannot stand with a subsequent decision of the House of Lords. The fourth (a special case) is where this court comes to the conclusion that a previous decision was given per incuriam. In the second and third classes of case it is beyond question that the previous decision is open to examination. In the second class, the court is unquestionably entitled to choose between the two conflicting decisions. In the third class of case the court is merely giving effect to what it considers to have been a decision of the House of Lords by which it is bound. The fourth class requires more detailed examination and we will refer to it again later in this judgment.”
It is Mr Bacon’s submission that this case falls within the third class in that although Rhys-Harper did not expressly overrule Fadipe, nonetheless Fadipe cannot stand with that subsequent decision of the House of Lords.
There was some debate as to whether or not Scott L.J. had introduced a different test in Wilson v Chatterton [1946] 1 K.B. 360, 364 where he spoke of the earlier decision “being inconsistent with general principles laid down by the House of Lords and with other decisions of this Court.” In my view this formulation of the test adds nothing of significance. If there are inconsistent decisions of this Court, then this Court on a later occasions is free to choose between them. Since Scott L.J. was expressly acting on Young v Bristol Aeroplane Co. Ltd, I can see no difference whatever in the sense being conveyed by both phrases. Whether a previous decision can “stand with” a subsequent decision of the House of Lords and whether the earlier decision is “inconsistent with general principles” laid down by their Lordships are different ways of saying the same thing. The House of Lords have reaffirmed that the rule laid down in Young v Bristol Aeroplane Co. Ltd remains binding on the Court of Appeal: see Davis v Johnson [1970] A.C. 264. So the question for us is whether Fadipe can stand with Rhys-Harper.
What did Rhys-Harper decide?
The facts: there were actually six appeals before their Lordships, these falling into three groups, the first being a claim under the Sex Discrimination Act 1975, the second under the Race Relations Act 1976 and third relating to claims brought under the Disability Discrimination Act 1975. The discriminatory act alleged by Ms Rhys-Harper related to an employer’s failure properly to investigate a sexual harassment complaint first made after the termination of the contract of employment. Mr D’Souza complained that he had been discriminated against on racial grounds and victimised by his former employers refusing to reinstate him. The disability discrimination cases involved victimisation and it is interesting to note that in three of the four cases the alleged victimisation concerned the provision of or failure to provide a reference after the termination of the contract of employment.
So far as the legislation is concerned, the basic structure of the Sex Discrimination Act 1975 and the Race Relations Act 1976 is the same and much of the language is identical. To take the Sex Discrimination Act 1975, discrimination is defined in sections 1 and 2, and is, broadly speaking, less favourable treatment. Section 4 provides that discrimination also includes victimisation. Part II deals with “discrimination in the employment field” and section 6(2) is the material provision namely:
“It is unlawful for a person, in the case of a woman employed by him at an establishment in Great Britain to discriminate against her –
(a) in the way he affords her access to opportunities for promotion, transfer or training, or to other benefits, facilities or services, or by refusing or deliberately omitting to afford her access to them, or
(b) by dismissing her, or subjecting her to other detriment.”
The italicised words are the key words to be construed the vital words in s. 4(2) of the Disability Discrimination Act 1995 are that it is “unlawful for an employer to discriminate against a disabled person whom he employs”.
The Court of Appeal had earlier found in Post Office v Adekeye [1997] 1CR 110, a case of racial discrimination, that s. 4(2) of that Act protected only those whose employment continued at the time of the act of discrimination, Peter Gibson and Pill L.JJ. considering that it was “unsatisfactory” that the Act did not extend to give a remedy to an ex-employee pursuing an appeal against dismissal.
The decision in Rhys-Harper: their Lordships all came to the conclusion that Post Office v Adekeye was wrongly decided and that each of the Acts should be interpreted as extending to acts of discrimination and victimisation against a former employee carried out by an employer after termination of the contract of employment. Each of their Lordships took a slightly different approach to the interpretation of the legislation and to the relevant test to be applied. For the purpose of this appeal, where the central issue is whether or not Fadipe can stand with Rhys-Harper, it is necessary, as I see it, to concentrate on how each of their Lordships came the conclusions he did for giving the words a wider than literal meaning. It is less important for us to identify tests they suggested for determining whether the claim should succeed on the facts in the individual cases.
Lord Nicholls of Birkenhead’s approach: he took the context in which the expressions “employed by him” and “whom he employs” were used, to include the benefits arising from a contract of employment. He said:
“36. … A contract of employment creates an employment relationship between two persons, an employer and an employee. It is a matter of ordinary experience that incidents of the employment relationship first created often continue beyond the termination of employment which gave rise to the relationship. When a contract of employment ends the employee ceases to be obliged to work for the employer, and the employer ceases to be obliged to employ the employee. But the ending of these obligations does not normally signify a complete end to all aspects of the relationship between employer and employee. Frequently contractual obligations, express or implied, accrue or continue after the period of employment has come to an end.” [For example obligations of confidentiality.]
“Frequently also an employee continues to enjoy, although not as a matter of contractual entitlement, other benefits arising in respect of his employment. One important example, of everyday occurrence, is the opportunity to obtain a reference to assist the employee in obtaining a new job.”
He dealt with the construction of the statute in these paragraphs:
“37. To my mind the natural and proper interpretation of section 6(2) of the Sex Discrimination Act 1975 and the corresponding provisions in the other two Acts in this context is that once two persons enter into the relationship of employer and employee, the employee is intended to be protected against discrimination by the employer in respect of all the benefits arising from that relationship. The statutory provisions are concerned with the manner in which the employer conducts himself, vis-à-vis the employee, with regard to all the benefits arising from his employment, whether as a matter of strict legal entitlement or not. This being the purpose, it would make no sense to draw an arbitrary line at the precise moment when the contract of employment ends, protecting the employee against discrimination in respect of all benefits up to that point but in respect of none thereafter.
38. If such a hard and fast line were drawn at this point it would mean that the employee who asks for a reference before he retires from his employment is protected but the employee who asks for a reference the day after he left is not. … It would mean that retaliatory action taken by an employer before the contract of employment ends is within the scope of the legislation, but retaliatory action taken later, for instance, regarding bonus payments, is not.
39. This cannot have been the intention of Parliament. Dismissal is one of the matters in respect of which discrimination is expressly prohibited by the statutes. Parliament cannot have intended that this prohibition should include an appeal decision regarding dismissal if the appeal is heard before the dismissal takes effect but not if it is heard later. That would be palpably absurd. Dismissal cannot have been intended to have such an artificially limited meaning. Nor can it have been intended that reprisals may be exacted, so long as they are postponed until after the employee has been dismissed. No sensible distinction can be drawn between giving a reference the day before employment ends and giving a reference the day after.”
He was concerned to draw a line somewhere between what is prohibited and what is not. He recognised that Parliament may well have chosen to advance cautiously keeping the law under review. But he added:
“… these considerations do not point to the conclusion that, when enacting this new form of legislation, Parliament intended to ban discrimination in respect of some of the benefits in respect of an employee's employment but not others, with the distinction between the two categories being self-evidently capricious.”
So he disagreed with the decision in Adekeye’s case, saying:
“43. … I understand the reasoning which attracted the Court of Appeal. But I consider this reasoning attaches insufficient importance to the capricious results which follow from a too literal interpretation of the statutory language. The Adekeye interpretation is insufficiently purposive. It pays insufficient heed to the context.
44. The preferable approach is to recognise that in each of the relevant statutory provisions the employment relationship is the feature which triggers the employer's obligation not to discriminate in the stated respects. This is the connection between two persons which Parliament has identified as requisite for these purposes. Once triggered, the obligation not to discriminate applies to all the incidents of the employment relationship, whenever precisely they arise. For the reasons already given, this obligation cannot sensibly be regarded as confined to the precise duration of the period of employment if there are incidents of the employment which fall to be dealt with after the employment has ended. Some benefits accrue during the period of employment, some afterwards. For the purposes of discrimination, there is no rational ground for distinguishing the one from the other. They all arise equally from the employee's employment.”
His test seems to be contained in paragraph 45:
“45. To be an 'incident' of the employment relationship for this purpose the benefit in question must arise between employer or former employer as such and employee or former employee as such. A reference is a prime example. Further, save perhaps in exceptional circumstances which it is difficult to envisage, failure to provide a non-contractual benefit will not constitute a 'detriment', or discrimination in an opportunity to receive a 'benefit', within the meaning of the anti-discrimination legislation unless the non-contractual benefit in question is one which normally is provided, or would be provided, to others in comparable circumstances. This is so with regard to current employees. It is equally so with former employees. But I stress this is not to say that an employer's practice regarding current employees is to be treated as equally applicable to former employees. This is emphatically not so. The two situations are not comparable. What is comparable is the way the employer treats the claimant former employee and the normal way he treats or would treat other former employees in similar circumstances.”
It is important to observe that Lord Nicholls expressly acknowledged that:
“48. … I have reached the conclusion expressed above on the proper interpretation of all three Acts without regard to the impact of the Equal Treatment Directive or the decision of the European Court in Coote v Granada Hospitality Ltd (No 2) (Case C-185/97) [1999] ICR 100. Having regard to the conclusion I have reached, it is not necessary to consider the issues arising out of the Equal Treatment Directive.”
Lord Hope of Craighead’s approach: he was more cautious. He explained in paragraph 78:
“… Experience has taught us that this is a matter which can only be dealt with by legislation, and that it requires careful regulation by Parliament. … In the result the legislation which is under scrutiny in these appeals is designed to be specific and particular rather than universal in its application, and it is still being developed incrementally. It must, of course, be construed purposively ... But the scope to be given to the legislation is essentially a matter for Parliament. The question which lies at the heart of these appeals is what its intention was when it enacted the provisions in each of these three Acts to deal with discrimination by employers against applicants and employees.”
He dealt with the purposive approach to interpretation in this way:
“88. In an area which is as sensitive and as wide-ranging in its effects as this one, the absence of information [from the advisory bodies established under these Acts] is a significant omission. It inhibits the use of the purposive approach in this case, as we have no clear guide to the scope which was intended to be given to the enactments other than the words which they themselves have used to declare it. The extent to which, if at all, the legislation was intended to apply after the ending of the employment relationship was, of course, a matter for the legislature. In this situation I believe that, subject to the guidance of the European Court of Justice as the scope to be given to the Sex Discrimination Act 1975 in the light of Council Directive 76/207/EEC, your Lordships must approach these questions by examining the language which Parliament used in order to discover what its intention was when the statutes were enacted.”
His examination of the language led him to conclude that the word “employed” in the phrase “employed by him” was without more ambiguous but that as soon as one began to examine the context, the ambiguity began to recede. His conclusion was:
“99. I would hold that, taken overall and when given their ordinary meaning in their context, these provisions indicate that the phrase "employed by him" in section 6(2) of the 1975 Act includes a woman who is employed by the alleged discriminator but that it does not include a woman who is no longer employed by him.”
There was no ground for giving a different meaning to the same phrase in the Race Relations Act. So far as the Disability Discrimination Act was concerned he started from the position that the ordinary and natural meaning of the phrase “whom he employs” was that it included a person who was employed by the alleged discriminator but that it did not include a person who was no longer employed by him.
He had to resort to the Community law to overcome the ordinary meaning to be given to the words. He pointed out that the Directive governed the Sex Discrimination Act only but it had implications for the other cases. His reasoning in this regard is contained in these paragraphs:
“106. The phrase "employed by him" in section 6(2) of the Sex Discrimination Act 1975 is, as I have said, ambiguous. I think that it is possible to construe it as referring to a woman who is no longer employed by the alleged discriminator as well as to a person who is employed by him, although I do not think that that is what the phrase means when the domestic rules of construction are applied to it and it is taken in its context.
…
113. The conclusion which I would draw from this case [Coote’s case] is that the interpretation placed on Directive 76/2007 by the Court of Justice does not require your Lordships to read the words "employed by him" in section 6(2) of the Sex Discrimination Act 1975 as including each and every case where the employment relationship has come to an end. …
114. … But, as my noble and learned friend Lord Scott of Foscote has pointed out, the relationship between the employer and the employee does not necessarily come to an end at the precise moment when their contract terminates. There may well be things that need to be done to bring their relationship to an end after the contract has terminated. … But the fact that [the employer will be dealing with someone who strictly speaking is a former employee] will not of itself remove that person from the scope of the Directive, so long as the transactions that remain to be completed are attributable to a continuation of their relationship as employer and employee.
115. … Whether or not there is still an employment relationship will be for determination according to the facts of each case.”
He gave the same extended meaning to the Race Relations Act since the language was identical and he could see no rational ground for a different approach to be taken to the use of similar language in the context of discrimination against disability.
Lord Hobhouse of Woodborough’s approach: he asked whether Adekeye was right. His answer was:
“137. As a matter of the simple language of s. 4(2) and its equivalent in the 1975 and 1995 Acts, there is much to be said for it and it provides a rule of simple application. But a different view is possible. The words are not used to refer to a status but to a connection. Under the Acts the discriminatory treatment does not have to be an infringement of the complainant's contractual rights. It can simply be less favourable treatment than that afforded to others in a like position. To introduce at this point into the structure of the Acts a criterion of strict contractual status would be anomalous having regard to their scheme as a whole. … To construe the Act so that the dismissal can be the subject of a discrimination complaint but the handling of the appeal cannot is irrational and unnecessary. The scheme of the Acts and the context in which the relevant words occur suggest that, rather than importing a crude temporal test, they describe the substantive scope within which the various duties not to discriminate under the Acts apply in the employment field.”
It remained necessary to define that scope and he said:
“139. … Guidance upon the scope can again be derived from the content of the provision [subjecting her to any other detriment]. What are the detriments which an employer may subject an employee to which can fairly be referred to as "any other detriment" in the context of this subsection? The answer must lie in a test of proximity. Does the conduct complained about have a sufficiently close connection with her employment? Is it sufficiently similar to the other conduct mentioned in the subsection? Any criterion of proximity has as its antithesis the concept of remoteness. Remoteness can have, as an element, remoteness in time. …
140. I appreciate that such an approach will ultimately lead to fact specific decisions in a number of cases but that is what is involved in the rejection of an arbitrary time-based criterion. … The nub is that the introductory words "a woman employed by him" are to be read with the rest of subsection (2) and relate to a substantive and proximate connection between the conduct complained of and her employment by the alleged discriminator.”
It is important to see how he approached the European dimension. He said:
“143. What I have said in the preceding paragraphs also reflects the view of the European Court of Justice in Coote. …”
He was of the view that similar reasoning governed the victimisation cases and in this regard he said:
“148. … Again the decision of the European Court of Justice is compelling. …”
Lord Scott of Foscote’s approach: he said the issue was essentially one of statutory construction. He said:
“184. The language used in each of the three Acts suggests, if read literally, that ex-employees are not protected. … [The statutory] language is indicative of a present relationship rather than a past one.”
However,
“187. It has been urged upon your Lordships to adopt a purposive approach to construction of the relevant language in the three Acts. It must surely, it is said, have been the intention of the legislature to protect an ex-employee from discrimination, and a fortiori from victimization for having previously complained of discrimination, where the discriminatory acts complained of consist of the unfair handling of appeals against dismissal. … How can Parliament have intended that an employer, in reaching a decision as to whether an employee's dismissal should stand or should be set aside, should be free from the restraints on discrimination imposed by the Act? It seems to me that once the question is asked there can be only one answer. Of course Parliament must have intended the Acts to apply to such cases.”
The question there arose as to where the line should be drawn and he said:
“196. How is the principle to be formulated that would enable ex-employers and ex-employees to judge whether the imposition of a particular detriment, alleged to be discriminatory, was or was not covered by the Act? One answer would be to construe the Acts simply as covering all ex-employees. The participle "employed" in the 1975 and 1976 Acts would be read as meaning "has been or is employed", and the word "employs" in the 1995 Act would be read as meaning "employs or has employed". An alternative answer would be to confine the relevant words to their strict literal meaning and exclude ex-employees from protection under the Acts in all circumstances. My Lords, I would, for my part, reject both these extremes. I would reject the first because it requires a purposive construction that can only be justified by attributing to Parliament an evident intention that, to my mind, is not in the least evident. I would reject the second because it introduces an arbitrary rigidity into the implementation of the Act that is unrealistic and cannot have been intended.
197. In my opinion, the answer to the conundrum can be found by concentrating on the relationship between the employer and employee that is brought into existence when the latter enters the service of the former. The relationship is, of course, based on contract, express or implied, but does not necessarily come to an end, ipso facto, when the employment comes to an end. …
200. Where references or other post-employment benefits are concerned the question whether the anti-discrimination Acts apply should, in my opinion, similarly depend on whether the relationship between employer and employee brought into existence when the employee entered the employer's service is still in existence.
206. I am in respectful agreement with the views about these appeals and the issues they give rise to that have been expressed by … Lord Hope.”
Finally, Lord Rodger of Earlsferry’s approach: in his opinion:
“211. … although being employed is one of the keys which unlocks access to the rights and remedies conferred by the anti-discrimination Acts, to a considerable extent those Acts are actually concerned with discrimination in relation to the various kinds of opportunities that employees may enjoy in addition to any contractual rights. … Since the anti-discrimination Acts are not tied to contractual rights and obligations, there is in principle no reason why the Acts should cease to have effect in respect of these continuing opportunities. I therefore have difficulty in seeing why Parliament, however cautious its approach, would ever have intended that it should be lawful for an employer to discriminate against a former employee in these respects. The idea, for instance, that Parliament intended that, after the 1976 Act was in force, an employer should still be able to bar a black former employee from entering the employer's social club while allowing white former employees to continue to enjoy the facility strikes me as untenable.
212. The same applies to the provision of references. … Again, I have the greatest difficulty in believing that Parliament could have intended that it should be unlawful for an employer to discriminate in giving or withholding references for existing employees but perfectly lawful for him to do so in the case of ex-employees. Parliament often has to draw lines … It is not hard to see the reason for that. It is very much harder to see why Parliament would have chosen to draw an arbitrary line through the continuing effects of the employment relationship rather than leave the ban on discrimination to expire as and when those effects themselves were spent.”
He dealt with the argument that the lack of any positive sign that Parliament considered the position of former employees shows that it did not in fact intend to make discrimination unlawful in their case. He said:
“214. At first sight the argument may appear quite persuasive, on mature reflection less so. For the reasons I have given, I do not find the lack of discussion of the particular position of former employees significant. What would have been significant, not to say remarkable, would have been any hint that the government of the day, or Parliament itself, ever contemplated that it was to remain lawful for employers to discriminate against former employees on, say, racial grounds.”
He acknowledged that “employed” is a passive participle and, as such, is inherently ambiguous. The words have to be interpreted in the context of the provision as a whole. That led to the conclusion that:
“215. … the wider considerations discussed above persuade me that the provisions should be interpreted as making it unlawful to discriminate against former employees as well as current employees if there is a substantive connexion between the discriminatory conduct and the employment relationship. In other words the former employer must discriminate qua former employer. I find nothing in the other provisions on employment in the statutes to invalidate that interpretation.”
In his opinion “compelling support” for his interpretation was to be found in the Community law background.
He concluded saying:
“221. For these reasons, and for those given by Lord Nicholls of Birkenhead, I respectfully agree with his interpretation of the relevant provisions in the three Acts.”
An analysis of these speeches
The following conclusions can be drawn. First, as a matter of construction of the domestic provisions, only Lord Hope was driven to conclude that the ordinary meaning of the words in their context excluded acts of discrimination by the former employer against a former employee done after the contract of employment had terminated.
Secondly, the reason for the majority concluding that an ex-employee was protected was that the context and purpose of the Act compelled that conclusion and that Parliament could not have intended such a limited application. To hold otherwise was variously described, with the paragraph number in parentheses:
(1) by Lord Nicholls as making no sense to draw an arbitrary line (37), palpably absurd (39), artificially limited (39), not a sensible distinction (39), self-evidently capricious (40) and insufficiently purposive (43);
(2) by Lord Hobhouse as anomalous (137), irrational and unnecessary (137), and a crude temporal test (137);
(3) by Lord Scott as arbitrary rigidity (169) and
(4) by Lord Rodger as an untenable argument (211), an arbitrary line (212) and a startling result (216).
Only Lord Nicholls fully explored the purpose of the legislation. For him it was to protect the employee against discrimination by the employer in respect of all benefits arising from the employment relationship (37). Lord Hobhouse appeared to see the purpose to be not to discriminate in the employment field (137). For Lord Scott the purpose was to protect even the ex-employee from discrimination (187). What would have been significant, not to say remarkable, so far as Lord Rodger was concerned, would have been any hint that the government of the day or Parliament itself, ever contemplated that it was to remain lawful for employers to discriminate against former employees on, say, racial grounds (214). Lord Hope could not sufficiently discern the purpose to be able to rely on it (88).
Only Lord Hope had to resort to the Equal Treatment Directive and Coote to found his decision. Having come to his construction of the domestic legislation, Lord Hobhouse found that his views were “reflected” in the views of the European Court of Justice (143), that decision being “compelling” (148). For Lord Rodger the Community law background gave “compelling support” for his interpretation (217) and “confirms the conclusion” (220). I do not understand either to be relying on the European jurisprudence to alter their view of the meaning of the Acts applying ordinary domestic principles of construction to the words in their context and with regard to their purpose. It simply bolstered their view. Lord Scott did not seem to find the decision of Coote and the Directive to be of any importance (203). Lord Nicholls reached his conclusion without regard to the impact of the Directive or Coote (48).
The test to apply to decide whether or not relief should be afforded was variously described as follows:
(1) for Lord Nicholls, the employment relationship triggered the employer’s obligation not to discriminate in all the incidents of the employment relationship whenever they arise, provided the benefit in question arises between the employer or former employer as such and the employee or former employee as such (44, 45);
(2) for Lord Hope the test was whether there is still a continuation of the employment relationship (114, 115).
(3) for Lord Hobhouse the test was one of proximity: does the conduct complained about have a sufficient connection with the employment (139) or a substantive and proximate connection between the conduct complained of and the employment by the alleged discriminator (140);
(4) for Lord Rodger, one must look for a substantive connection between the discriminatory conduct and the employment relationship, with the former employer discriminating qua former employer (205);
(5) for Lord Scott, it depends on whether the relationship between employer and employee brought into existence when the employee entered into the employer’s service is still in existence (200) or is still continuing notwithstanding the termination of the employment (204).
In other words Lord Hope and Lord Scott seem to tie the application of the Act to the continuance of the employment relationship whereas the majority look for a connection (variously described) between the former employee as such and the former employer as such.
An analysis of Fadipe
Having just summarised Rhys-Harper, let me summarise the reasoning in Fadipe. The ratio of the case is contained in paragraphs 25 and 27. The purpose was identified to be protecting employees while they are still employed from suffering detriment (25). The literal meaning of “in employment” governed the construction of the section (25). The section was not intended to confer a general right on an ex-employee to complain about any acts done by his ex-employer after the employment relationship has ceased (27). The reference to Cootes’ case in paragraph 29 was dealing with a quite different situation and so was obiter.
Can Fadipe stand with Rhys-Harper?
Mr Cavanagh Q.C. for the respondent submits that since this claim was brought under the provisions of the ERA, not the discrimination legislation, there can be no basis upon which it can be said that the two decisions are incompatible. The courts had merely decided that different outcomes should apply in different cases brought under different legislative schemes. Since the Court of Appeal has already decided that claims under the ERA should be treated differently from victimisation claims, it is not open to us to decide to decide differently.
For my part I agree with Mummery L.J. that “the Coote case was dealing with a ‘quite different situation’ where the employee was seeking to enforce compliance with the principle of equal treatment within the meaning of the Directive”. I agree with him that the case “is not authority for the wider proposition … that there was a general principle under which an employee who complained that he suffered from retaliation from his employer or a former employee, having raised health and safety matters, was entitled to bring a claim under s. 44 of the 1996 Act.” Accordingly, in my judgment, the decision in Coote, is not itself a justification for imposing on the ERA any strained interpretation of that legislation since the Directive and Coote are applicable to a quite different situation and have nothing directly to do with whistle-blowing. But none of this matters. The first reason is because reference to Coote was obiter: it does not contain the ratio of Fadipe. Secondly, Coote was not necessary for the decision in Rhys-Harper, save in the opinion of Lord Hope. Its reasoning may have supported the views of Lord Hobhouse and Lord Rodger but their construction of the legislation stood without resort to it.
It follows that the issue for us is whether the ratio of Fadipe contained in paragraphs 25 and 27 can survive Rhys-Harper.
Mr Cavanagh’s primary submission in this regard is that Rhys-Harper can have no application at all to claims under the ERA because different statutes are in play, different language falls for construction, and a different context in a different framework are involved. I am bound to say that I found this to be a powerful and compelling submission. But now I have retreated from that view for the reasons which follow.
First the context is not different. Victimisation is established by showing inter alia the discrimination of the employee by “subjecting him to any other detriment” – see s. 6(2) of the 1975 Act and s. 4(2) of the 1976 and 1995 Acts. Under s. 47B of the ERA a worker likewise has the right “not to be subjected to any detriment”. Although the language and the framework might be slightly different, it seems to me that the four Acts are dealing with the same concept, namely, protecting the employee from detriment being done to him in retaliation for his or her sex, race, disability or whistle-blowing. This is made explicit by the long title to the Public Interest Disclosure Act 1998, which is, as I have already set out:
“An Act to protect individuals who make certain disclosures of information in the public interest; to allow such individuals to bring action in respect of victimisation.” (Emphasis added)
All four Acts are, therefore, dealing with victimisation in one form or another. If the common theme is victimisation, it would be odd indeed if the same sort of act could be victimisation for one purpose, but not for the other.
Secondly, the reasoning of the majority compels one to face the absurdity, irrationality, arbitrariness, call it what you will, of limiting the victimisation to acts during the existence of the employment contract and not extending it to events after termination. As Lord Nicholls said, no sensible distinction can be drawn between giving a reference the day before employment ends and giving a reference the day after (39), or as Lord Rodger would say, one must have the greatest difficulty in believing that Parliament could have intended that it should be unlawful for an employer to discriminate in giving or withholding references for existing employees but perfectly lawful for him to do so in the case of ex-employees (212).
Mummery L.J. simply did not confront these difficulties and if they were the reason for giving the words in the discrimination Acts a wider than literal meaning, they ought consistently to have been applied widely in Fadipe in paragraph 9.
Moreover in holding as he did in paragraph 27 that the section he was dealing with was not intended to confer a general right on an ex-employee to complain about acts done “after the employment relationship had ceased”, Mummery L.J. was clearly confining the “employment relationship” to the duration of the contract and that simply cannot stand with the wider scope to an employment relationship which was given to the concept by their Lordships.
Conclusion
Not without hesitation and very mindful of Mummery L.J.’s vast experience in this field compared with mine, I am now driven to conclude that Fadipe cannot stand with Rhys-Harper and despite the different statutes involved I am now of the view that the reasoning which drove the Court of Appeal to its conclusion in Fadipe is inconsistent with the approach of the House of Lords in Rhys-Harper. It follows that we are free to depart from Fadipe if we conclude it right to do so.
Does section 47(B) of the ERA give a right not to be subjected to detriment after the contract of employment has terminated?
Since section 47(B) falls within Part V of the ERA, which Part is entitled “Protection from suffering detriment in employment” (with the emphasis added), there is obvious force in the argument which won the day in Fadipe that the detriment must be suffered whilst in employment, i.e. whilst employed and thus before the contract of employment is terminated. It belies the literal meaning of the words “suffering detriment in employment” to give it the meaning “suffering detriment when in employment as well as when not in employment”. But in the light of the elucidation of these concepts given by Rhys-Harper, “in employment” can also be understood to mean “in the employment relationship” and that can survive the termination of the contract itself. Given those two possible meanings the phrase is ambiguous.
Section 47B (3) gives “worker” the extended meaning provided by section 43K but none of the circumstances there defined apply in this case. We must, therefore, fall back upon the general definition in section 230 which covers the whole spectrum of the ERA. Thus “worker” means not only an individual who currently works under a contract of employment but one who formerly worked under such a contract. True it is that such a provision serves the purpose of giving a former employee the right to bring his claim under section 48 or a claim for unfair dismissal and so forth, but it does not follow that that is its only purpose. Were it so limited, one would have expected the point to have been more clearly made in a provision explaining that a right accruing during the currency of a contract of employment can be enforced by the victim after the contract is at an end. Drafted as it is, it is an omnibus definition of “employee, worker etc” and it is accordingly more likely that the legislature intended the purpose to be served and the meaning to be ascribed to take colour from the context of the section in which “worker” appears. So far as section 47B is concerned, the worker in its ordinary meaning is just as naturally to be construed as including a former employee. At least there is nothing clearly pointing away from that meaning and so once again the section can be seen to be ambiguous.
That leads one to ask the Rhys-Harper question: can Parliament seriously have intended to afford the whistle-blower protection only in respect of acts done in retaliation while the contract subsists and not to protect him from detriment suffered after his employment has terminated? Is such a distinction not palpably absurd and self-evidently capricious?
In striving to avert the affirmative answer, the respondent points out that the rights not to suffer detriment conferred by Part V manifestly relate to the retaliatory action by the employer being taken because of something done in the course of the employment, for example attending for jury service, taking maternity leave etc. That may be a good argument for saying that the action of the employee which provokes the retaliation must be some activity during the currency of the employment but it does not follow that the retaliation must likewise be so confined. There is no sensible reason for so confining it. (I emphasise “may be a good argument” because I would not want it to be thought that I am excluding a remedy for blowing the whistle after the contract of employment has terminated: this is an issue which does not arise on the facts of this case.)
If one seeks for the underlying purpose of section 47B one has to start with the Act which introduced the measure. The public interest, which led to the demand for this Act to protect individuals who make certain disclosures of information in the public interest and to give them an action in respect of that victimisation, would surely be sold short by allowing the former employer to victimise his former employee with impunity. It simply makes no sense at all to protect the current employee but not the former employee, especially since the frequent response of the embittered exposed employer may well be dismissal and a determination to make life impossible for the nasty little sneak for as long thereafter as he can. If it is in the public interest to blow the whistle, and the Act shows that it is, then he who blows the whistle should be protected when he becomes victimised for doing so, whenever the retribution is exacted.
The result of this appeal
In my judgment although both the Employment Tribunal and the Employment Appeal Tribunal were bound faithfully to follow Fadipe, this Court is not obliged to do so. In the light of Rhys-Harper I would allow the appeal and send the matter back to the Employment Tribunal for its determination. We have not heard argument on the facts or whether those facts would lead to a remedy being afforded to the appellant. Although I have sought to identify the various ways in which the tests have been expressed by the House of Lords, I do not consider it right or proper for us at this stage, and in the absence of argument about it, to spell out exactly what test their Lordships have laid down. That must await another day. Sorry though I am to be so unhelpful, the Employment Tribunal must take its course and do its best to find the right test. That said I earnestly hope that a sense of realism is brought to bear in the analysis of the issues so that unnecessary costs are not wasted in pursing this litigation with unrelenting vigour until it comes back to us some years hence.
Lord Justice Maurice Kay:
I agree.
Lord Justice Wilson:
I also agree.