UK: Attempt to Settle or Victimisation?

Last Updated: 16 May 2007
Article by Nicholas Dobson

St Helens Council victimised 39 of its school catering employees when (amongst other things) it wrote to all catering staff indicating that the continuance of the current equal pay claims '. . .and a ruling against the Council will have a severe impact on all staff.' So found the House of Lords on 25 April 2007 in Derbyshire and others v St. Helens Borough Council [2005] EWCA Civ 977.

Section 4 of the Sex Discrimination Act 1975 provides (amongst other things) that a person discriminates against another person if he or she treats that person (the person victimised) favourably than in those circumstances he treats or would treat other persons, and does so by reason that the person victimised has brought proceedings against the discriminator or any other person under (amongst others) the Equal Pay Act 1970. Section 6(2) of the 1975 Act provides (amongst other things) that it is unlawful for an employer to discriminate against a woman by dismissing her 'or subjecting her to any other detriment' (emphasis added).

The appellant employees had not joined in a settlement concluded by some 470 other female school catering staff of claims under section 2 of the Equal Pay Act 1970. Some two months before the employees' claim was due to be heard by the Employment Tribunal (ET), the Council's acting Director of Environmental Protection sent out two letters, the first of which was sent to all members of the catering staff and the second was sent only to the 39 appellants. The first ran to over two full pages and said not only (as indicated) that 'the continuance of the current claims and a ruling against the Council will have a severe impact on all staff' but also that it was 'important to ensure that all affected staff are fully aware of the longer term employment consequences' of the appellants' equal pay claims succeeding, and that separate letters were being written to the appellants.

The appellants appealed against a majority decision of the Court of Appeal that there had been no victimisation because writing the letters (per Khan v Chief Constable of West Yorkshire Police [2001] IRLR 830) had represented 'an honest and reasonable attempt by the Council to compromise the proceedings'.

Lord Hope acknowledged the Council's difficulty:

'Litigation between employers and employees about a matter which affects large sections of the work force such as an equal pay claim arouses strong feelings on either side. Increases in pay, especially where there is back pay to be made up too,must be matched by increases in income or a reduction in costs if the business is not to suffer financially. For local government employers who have not yet been able to meet them, conceding these claims will mean hard choices - redundancies, cuts in wages, cuts in public services or increases in rates and in council tax.'

And for employers who have to meet a successful equal pay claim: 'to be subjected to a claim for victimisation as well is an additional penalty. . . is like being penalised a second time for being rude to the referee. But as in sport, '. . .overreaction - for what to the employer may seem the best of reasons - can have very unwelcome consequences'.

Baroness Hale, who thought that this was 'a classic case of "blaming the victims"', noted that European law requires that people who bring equal pay and sex discrimination claims are given effective protection against dismissal or other adverse treatment from their employers as a reaction to their complaints. The purpose of this 'is to secure that they are not deterred from pursuing their claims or punished if they have done so'. She indicated that ordinary steps in defending the claim and ordinary attempts to settle or compromise it do no-one any harm and may even do some good. However, she noted the ET's view that the Council's letter had been 'intimidating' since the reaction to such a letter, despite a well-justified belief in the justice of one's case, may be 'surrender induced by fear. . .or public odium or the reproaches of colleagues'.

Baroness Hale said that Article 7 of the Equal Treatment Directive (Council Directive 76/207/EEC) was in 2002 amended (amongst other things) to give protection against 'dismissal or other adverse treatment' as a reaction to complaints or legal proceedings. And whilst Article 5 of the Equal Pay Directive (Council Directive 75/117/EEC) has not been amended it was common ground that the decision in Coote v Granada Hospitality Ltd [1999] ICR 100 (Case C- 185/97) produces the same effect. In her view, equal pay claimants '. . .are peculiarly vulnerable to reproach, and worse, from colleagues who fear the effects of their claims upon their own positions'. But however '. . .anxious the employers may be to settle, they should not exploit that vulnerability in their attempts to do so'.

Lord Neuberger said that the reasoning in Khan seemed to place 'a somewhat uncomfortable and unclear meaning on the words "by reason that"' in section 4 of the 1975 Act. He consequently felt it would yield a more satisfactory conclusion to focus on the word 'detriment' (in section 6(2)) rather than upon 'by reason that'. The words 'by reason that' require consideration as to why the employer has taken the particular act and to that extent the alleged act of discrimination must be assessed from the employer's point of view. Nevertheless, when considering whether the act has caused 'detriment' (per section 6) the issue must be viewed from the point of view of the alleged victim. So an employer must tread a fine line between any attempts to settle and avoiding victimisation.

Lord Hope gave some general guidance on how to walk the line and live, unlitigated, to tell the tale. As he indicated the employer should reflect on how the manner in which he or she wishes to behave will be seen by the employee - how would she be likely to react if she were to be treated in that way? And whilst in the light of caselaw the employer is entitled to bear in mind that an unjustified sense of grievance cannot amount to detriment, equally the employer must bear in mind that the employee's right to enforce compliance is protected by the Directive. So the employer must avoid doing anything that might make a reasonable employee feel that she is being unduly pressurised to concede her claim. Indirect pressure (as established by the ET in this case) is just as likely to deter an employee from enforcing her claim as a direct threat. Sensitivity to the wider effects of what the employer plans to do will be crucial to the exercise of an informed judgment as to what is reasonable.

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