Appeal No. UKEAT/0035/10/CEA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 10 June 2010

Before
THE HONOURABLE MRS JUSTICE SLADE
MR A HARRIS
MR B WARMAN

THE MANCHESTER COLLEGE	APPELLANT

MR M COCLIFF	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MS MARY O’ROURKE
(One of Her Majesty’s Counsel)
Instructed by:
Messrs DWF LLP
Bridgewater Place
Water Lane
Leeds
LS11 5DY
	
For the Respondent	MR PETER EDWARDS
(of Counsel)
Instructed by:
Messrs Thompsons Solicitors
46 Priory
Queensway
Birmingham
B4 7LF	

SUMMARY
FIXED TERM REGULATIONS

The Employment Tribunal erred in determining whether less favourable terms in a fixed-term worker’s contract had been justified before deciding the reason for the difference between the contractual terms of a fixed-term worker and those of his comparator.  They erred in deciding that because the less favourable terms had not been justified, the reason for such terms was that the Claimant was a fixed-term worker.  Further the Tribunal erred in failing to consider whether the differences in the jobs between the Claimant and his comparator justified his less favourable terms. 

Appeal allowed.  Case remitted for rehearing to a different Employment Tribunal.

THE HONOURABLE MRS JUSTICE SLADE

1.	This is an appeal by Manchester College from the judgment of an Employment Tribunal that the Claimant, Mr Cocliff, had been treated less favourably contrary to Fixed‑Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (‘the Regulations’) by reason that he is a fixed‑term employee.

2.	For the purpose of determining this appeal it has not been necessary to decide the many interesting issues which are raised by the application of the Regulations.  As far as we are aware there is no appellate authority on those provisions.  Consideration of the reasoning by the House of Lords in Matthews v Kent & Medway Town’s Fire Authority & Ors [2006] IRLR 367 of broadly similar provisions in the Part‑Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 has not been necessary in disposing of this appeal. The two grounds of appeal which would have engaged consideration of Matthews were withdrawn during the course of the hearing before us.

The Relevant Facts
3.	The relevant facts may be briefly stated as follows.  Mr Cocliff is an employee of Manchester College.  He works as a part‑time sessional lecturer at Stoke Heath Young Offenders Institution on four days a week.  He has been employed on a succession of fixed‑term contracts since 21 March 2005.  Mr Cocliff claimed that his terms of his employment were less favourable than those of a comparator.  He designated a Grade B lecturer as such a comparator.  He initially alleged that seven terms in his contract were less favourable but six were pursued before the Employment Tribunal.

4.	The Employment Tribunal opened their judgment by recording that it had the utmost difficulty in fully understanding the Claimant’s claims.  They record that: “Regrettably, the Claimant’s written witness statement was couched in terms of comparisons between part‑time and full‑time workers and not fixed‑term and permanent workers”

5.	The Employment Tribunal record that Mr Cocliff’s counsel at the hearing was himself unsure of the exact nature of the Claimant’s case.  This is perhaps not surprising bearing in mind the short hand‑written skeleton argument produced at the Tribunal recorded a comparison between a ‘full‑time’ crossed out and then inserted ‘permanent’ worker.

The Grounds of Appeal
6.	The grounds of appeal challenging the finding of the Employment Tribunal that Mr Cocliff was engaged on broadly similar work to that of the comparator within the meaning of the Regulations were abandoned before us.  The remaining grounds of appeal are summarised as follows: (1) the Employment Tribunal erred in law in failing properly or at all to address the question of whether the less favourable treatment resulted from the Claimant’s fixed‑term employee status, as opposed to his part‑time or sessional worker status, or some other reason, and, (2) the Employment Tribunal erred in their interpretation and application of the test of objective justification for less favourable treatment under the Regulations.

The Regulations
7.	A fixed‑term contract is defined in regulation 1(2) as:

“…a contract of employment that, under its provisions determining how it will terminate in the normal course, will terminate -
(a) on the expiry of a specific term,
[…]
“fixed‑term employee” means an employee who is employed under a fixed‑term contract.
“permanent employee” means an employee who is not employed under a fixed‑term contract, and any reference to “permanent employment” shall be construed accordingly.”

8.	Regulation 2(1) provides:

“For the purposes of these Regulations, an employee is a comparable permanent employee in relation to a fixed‑term employee if, at the time when the treatment that is alleged to be less favourable to the fixed‑term employee takes place, 
(a) both employees are
[…]
(ii) engaged in the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification and skills; and
(b) the permanent employee works or is based at the same establishment …”

9.	Regulation 3 provides:

“(1) A fixed‑term employee has the right not to be treated by his employer less favourably than the employer treats a comparable permanent employee -

(a) as regards the terms of his contract […]
		…
	(3)The right conferred by paragraph (1) applies only if -

(a) the treatment is on the ground that the employee is a fixed‑term employee, and
(b) the treatment is not justified on objective grounds.
   
(4) Paragraph (3)(b) is subject to regulation 4”

10.	Regulation 4 provides:

“(1) Where a fixed‑term employee is treated by his employer less favourably than the employer treats a comparable permanent employee as regards any term of his contract, the treatment in question shall be regarded for the purposes of regulation 3(3)(b) as justified on objective grounds if the terms of the fixed‑term employee’s contract of employment, taken as a whole, are at least as favourable as the terms of the comparable permanent employee’s contract of employment.
(2) Paragraph (1) is without prejudice to the generality of regulation 3(3)(b).”

The judgment of the Employment Tribunal
11.	The issues for the Employment Tribunal were set out by them in paragraph 1.5. These included:

“(ii) If the comparable employee is a Band B lecturer, is that Band B lecturer engaged in the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification and skills?
(iii) If there is less favourable treatment, is that objectively justified by the differences in roles between the Claimant as a sessional lecturer and Band B lecturers?  Are the terms of the Claimant’s fixed‑term contract of employment, taken as a whole, at least as favourable in terms of the comparable Band B lecturers?
(v) Is the reason for the less favourable treatment that the Claimant was a fixed‑term employee within the meaning of 2002 Regulations?”

12.	The issue of whether the Claimant and the comparator were engaged on the same or broadly similar work was initially the subject of grounds of appeal and seemed to have occupied some time before the Employment Tribunal.  That issue is no longer an issue in this appeal, however we set out some findings of the Employment Tribunal in this regard because they have a bearing on the current grounds of appeal.  At paragraph 3.9 the Employment Tribunal held:

“The Claimant gave evidence which the Tribunal accepts, that there was not a vast amount of difference between what he did as a sessional lecturer and what the Band B lecturer did.  By way of example, the Claimant gave evidence that he did most of what was set out at page 182 as a Band B job related responsibilities except for undertaking student induction, placements and monitoring, participating in marketing and promotional events, identification of customer requirements, only some liaison with external moderators, and no final responsibility for quality.”

13.	The findings of the Employment Tribunal on the issues which are the subject of this appeal are set out in paragraphs 4.3 and 4.4 of their judgment.  At paragraph 4.3 the Employment Tribunal set out the totality of their reasoning on objective justification and at paragraph 4.4 the reason for the less favourable treatment:

“4.3 Have the Respondents shown any objective justification for the less favourable treatment?  In this regard we have considered the Guide to the Regulations in particular at pages 6-9.  In effect the Respondent has provided no evidence whatsoever of objective justification other than to rely on its submissions that the Band B lecturer’s job was entirely different from that of the sessional worker and, therefore, provided the objective justification required.  Indeed, this is summed up in paragraph 10 of the Respondent’s skeleton argument where it is stated:-
“Alternatively the Respondent will say that any less favourable treatment is objectively justified by the differences in role between the Claimant as a sessional lecturer and Band B lecturers.”
We have already dealt with that earlier in these Reasons.  Accordingly, we do not consider that the Respondent has provided any objective justification for the less favourable treatment.
4.4  On that basis we frankly have no alternative but to conclude that the only reason why the Claimant was treated less favourably was because he was a fixed‑term employee.”

The Grounds of Appeal
The reason for the less favourable treatment
14.	Both Ms O’Rourke QC for Manchester College, and Mr Edwards, for Mr Cocliff, agree that the Employment Tribunal considered the issue of the grounds for the less favourable treatment and the justification for any difference in the wrong order.  The correct order is that a Tribunal should first consider the grounds for the less favourable treatment of the fixed-term worker and to decide whether the employee has established that his or her treatment is on the grounds that the employee is a fixed‑term employee.  It is only if the answer to that question is yes that the Tribunal should go on to consider whether the treatment is not justified on objective grounds.

15.	Ms O’Rourke contends that the Employment Tribunal failed properly or at all to consider the grounds for the less favourable treatment of Mr Cocliff.  The Employment Tribunal wrongly regarded itself as bound to conclude that the reason for the treatment was his fixed‑term status because it had held that the college had provided no alternative objective justification for the difference.

16.	Ms O’Rourke contends that their findings on objective justification for the difference in terms was based on the Tribunal’s earlier conclusion that the work of Mr Cocliff and the comparator was the same or broadly similar.  She submits that the Employment Tribunal failed as they had been obliged to do to consider each of the statutory questions in turn.  First to consider whether the work of the Claimant and the comparator was the same or broadly similar, if so, to move on to consider independently whether the less favourable treatment was on the grounds that the employee was a fixed‑term employee and, if so, whether it has been shown that the treatment is not justified on objective grounds.

17.	Mr Edwards for Mr Cocliff points out that no Meek ground of appeal has been raised in this case.  The Employment Tribunal deal with the reason why the terms and conditions of Mr Cocliff’s contract were less favourable than those of his comparator at paragraph 4.4 of the judgment.  Mr Edwards recognises that the reasons given are not very full but he contends that the meaning of that paragraph is clear.  

18.	Mr Edwards points out that one should not infer that the possibility of the reason for the less favourable treatment being part-time status had been ignored. He contends that the Employment Tribunal did not ignore the possibility that the reason for the difference in the treatment of Mr Cocliff and his comparator could have been his part‑time status.  The Tribunal had mentioned the part‑time status question in paragraph 1 of its judgment.  In any event, Mr Edwards contends that a conclusion that the reason for the difference in terms between the Claimant and a comparator was his part‑time status would not assist Manchester College.  Such a reason would be impermissible and unlawful in any event. 

19.	Mr Edwards contends that the basis of the Tribunal’s decision is clear and that it reached permissible findings as to the extent to which the jobs of Mr Cocliff and his comparator were the same.  Having rejected the explanation justifying the difference in terms, the Tribunal’s conclusion that the reason why Mr Cocliff was treated less favourably was because he was a fixed‑term employee is unassailable.  Mr Edwards says that it may be that the Tribunal’s reasoning was the wrong way round but it is a small step, he contends, from justification to the reason for the difference in treatment.

Discussion
20.	The Regulations require a stepped approach to the decision as to whether a fixed-term employee has been treated less favourably than his comparator with progression to the next step only when the logically prior step has been satisfied.  In the circumstances of this case, as Ms O’Rourke QC has contended, there were three steps to be considered by this Employment Tribunal.  The first was whether the Claimant and the comparator were engaged on the same or broadly similar work.  That issue has been conceded.  Second, whether the less favourable treatment, which was an alleged difference in six contractual terms, was on the ground that the Claimant, Mr Cocliff, was a fixed‑term employee.  It is only if the answer to that question is yes that the third question must be addressed; whether the treatment was not justified on objective grounds.

21.	In our judgment the Tribunal erred in considering the third question, whether the less favourable treatment was not justified, before the second, the reason for the treatment.  The Employment Tribunal dealt with the reasons for the less favourable treatment after deciding it was not justified. After the paragraph dealing with whether the College had shown any objective justification for the different and less favourable terms The Employment Tribunal held:  

“On that basis we frankly have no alternative but to conclude that the only reason why the Claimant was treated less favourably was because he was a fixed‑term employee.”

From the two and a half lines in which this Employment Tribunal dealt with the issue, it is apparent that they reached their conclusion on the reason for the less favourable treatment because they had decided that the difference in treatment was not justified.  In our judgment that is the only proper reading of those brief lines in which the Tribunal dispose of this important issue.  The Employment Tribunal concluded that the reason for the less favourable treatment of Mr Cocliff was his fixed‑term status because it had held that the employers had not shown any objective justification for less favourable treatment.

22.	The scheme of the Regulations shows that the first step in considering a claim is the determination of the reason for the less favourable treatment of a claimant.  If the reason for the treatment is not that the employee is a fixed‑term employee, no question of justification arises.  In this case, Mr Cocliff had, for some time, referred to his less favourable treatment in the context of being a part‑time employee.  The Employment Tribunal so record and similar references appear in the handwritten skeleton argument for the Claimant before the Tribunal, albeit that the material word was crossed out and replaced.

23.	In such circumstances, apart from the general requirement to properly address itself to the issue of the reason for the less favourable treatment, it was particularly important for the Employment Tribunal to consider carefully the reason for the less favourable treatment of the Claimant.  In our judgment the Employment Tribunal erred in failing properly to consider the reason for such less favourable treatment.  They erred in regarding themselves bound to conclude that the less favourable treatment was because the Claimant was a fixed‑term employee simply because they had found that there was no objective justification for the difference in treatment between him and his comparator.

24.	In our judgment on this ground alone this appeal succeeds.  However, we go on to consider the ground of appeal concerning the finding that there was no objective justification for the less favourable terms of Mr Cocliff’s contract.  

Objective Justification
25.	Ms O’Rourke contends that the Employment Tribunal erred in concluding that because they held that the work of the Complainant and the comparator were broadly similar, and because Manchester College’s justification defence was that the jobs of the Complainant and the comparator were entirely different, the employers had not shown objective justification for his less favourable treatment.

26.	Ms O’Rourke contends that it was a non sequitur for the Tribunal to conclude that because the work of Mr Cocliff and his comparator was broadly similar and the justification advanced was that the jobs were different:

“Accordingly we do not consider that the Respondent has provided any objective justification for the less favourable treatment.”

Further, Ms O’Rourke contends that the Employment Tribunal erred because differences in the work of a claimant and a comparator in this context can form the basis for objective justification of less favourable terms.  Mr Edwards also, quite rightly in our view, agrees that this is the case.

27.	Mr Edwards pointed out that the question identified by Baroness Hale in paragraph 49 of Matthews v Kent & Medway Town’s Fire Authority & Ors in relation to part-time workers as to whether a less favourable term in their contracts than those of their comparators can be justified by the presence of a more favourable term is clarified in relation to fixed-term workers by regulation 4 of the Regulations.  Regulation 4 expressly provides that less favourable terms in a fixed-term worker’s contract may be justified if the terms of contract taken as a whole are at least as favourable as those of the comparator. However Mr Edwards contends that Manchester College did not put forward any specific justification of the six particular differences in contractual terms upon which the Claimant based his complaint.  He says that the College relied on a global justification that the work performed by Mr Cocliff was different from that of his comparator.

28.	The Employment Tribunal had rejected the contention that the Claimant and the comparator were engaged on different work.  Mr Edwards accepts that even where it is found that work of a Claimant and their comparator is broadly similar, differences can form the basis for the justification of a claimant’s less favourable terms.  However, he contends that the employers in this case did not attempt to do so.  He contends that the Employment Tribunal identified the correct issues to be determined on justification and they properly addressed those issues as they were presented to them by the College.  Mr Edwards says that no Meek point on inadequacy of reasons, either on justification or on the reason for the less favourable treatment of the Complainant has been raised.  Further, no perversity point is made on the two findings of the Tribunal challenged in this appeal.  He contends that no error of law has been demonstrated.

Discussion
29.	The Employment Tribunal reasoned that because the only justification advanced by the College for Mr Cocliff’s less favourable terms was the difference in job roles between the Claimant and his comparator and because the Tribunal found that their work was broadly similar, the College had not established justification for the less favourable terms.  In our judgment, having regard to the use of the word ‘accordingly’, no other interpretation can be given to paragraph 4.3 of the judgment.  The Employment Tribunal erred in failing to consider whether the difference in roles which it found to exist between Mr Cocliff and his comparator justified his less favourable terms.  In this it erred.  This ground of appeal also succeeds.

Conclusion
30.	The judgment of the Employment Tribunal is set aside and the case is remitted to a different Employment Tribunal for rehearing.