R v Secretary of State for Employment ex parte Equal Opportunities Commission and another

The House of Lords held that the qualifying thresholds in the Employment Protection (Consolidation) Act 1978 which treat employees who work for fewer than sixteen hours per week differently in respect of entitlement to statutory redundancy pay and compensation for unfair dismissal are incompatible with Article 119 of the Treaty of Rome and Council Directive 75/117/EEC (equal pay) and with Council Directive 76/207/EEC (equal treatment), insofar as they produce an indirect discrimination against women. The court applied the Bilka-Kaufhaus test requiring objective justification and suitability and necessity of the measure; the Secretary of State failed to discharge the burden of showing objective justification because the factual evidence did not demonstrate that the thresholds were suitable and requisite to increase availability of part-time work. The Equal Opportunities Commission had sufficient interest (locus standi) to bring judicial review seeking declaratory relief under section 2 of the European Communities Act 1972 and Order 53, and the Divisional Court was an appropriate forum to grant declaratory relief about the compatibility of primary legislation with Community law. The appeal was allowed in part for the Commission, but the challenge insofar as it related to the private law claim of Mrs Day was dismissed because her claim should properly be determined in the industrial tribunal or by proceedings against her employer.

The claimants were the Equal Opportunities Commission (E.O.C.) and Mrs Patricia Day. The E.O.C. challenged by judicial review the compatibility of provisions of the Employment Protection (Consolidation) Act 1978 with Community principles of equal pay and equal treatment. The statutory provisions imposed hourly thresholds (notably a sixteen-hour-per-week threshold and an intermediate band of eight to sixteen hours) governing entitlement to statutory redundancy pay and compensation for unfair dismissal. It was common ground that those thresholds produced indirect discrimination disadvantaging women.

The procedural posture was an application for declarations in the Divisional Court (dismissed 10 October 1991), a majority affirmation by the Court of Appeal (6 November 1992), and an appeal to the House of Lords. The E.O.C. sought declarations that the United Kingdom was in breach of Article 119 of the Treaty of Rome and Directives 75/117/EEC and 76/207/EEC because of the part-time thresholds, and originally sought additional relief including mandamus to compel legislative change. Mrs Day, employed as a part-time cleaner working 11 hours per week and made redundant after five years, was joined seeking relief for her private claim.

The House examined four procedural points: locus standi of the E.O.C., whether the Secretary of State's letter was a reviewable decision, whether the Divisional Court could make a declaration about incompatibility of primary legislation with Community law, and whether the Divisional Court was the appropriate forum. It held that the E.O.C. had sufficient interest under its statutory duties in the Sex Discrimination Act 1975 to pursue judicial review seeking declaratory relief. The Secretary of State's letter of 23 April 1990 was not itself a decision susceptible to quashing, but Order 53 and the Factortame line of authority permitted declaratory relief about incompatibility of primary legislation; the Divisional Court was an appropriate forum.

The substantive issue was whether the thresholds were "objectively justified" under the Bilka-Kaufhaus test. The House required objective factors showing that the thresholds pursued a necessary social policy aim and that the measures were suitable and necessary to achieve that aim. The Secretary of State relied on the policy aim of increasing availability of part-time work by reducing employers' costs. The evidence was found deficient: the supporting affidavit merely set out departmental views, and comparative and statistical material did not demonstrate that the thresholds in fact produced greater availability of part-time work than alternative measures or that less intrusive measures would not suffice. The House concluded objective justification had not been established and therefore declared the challenged statutory provisions incompatible with Article 119 and the cited Directives. The Lords also considered whether compensation for unfair dismissal fell within the concept of "pay"; while the European Court had not yet ruled definitively, the incompatibility in relation to compensation for unfair dismissal was addressed under the Equal Treatment Directive in any event. The House refused to grant a broader declaration under Francovich enabling direct state liability claims in the abstract, leaving such questions to appropriate proceedings.

The appeal was allowed in part. The House held that the E.O.C.'s challenge succeeded: the hours-based thresholds in the Employment Protection (Consolidation) Act 1978 (distinguishing employees working fewer than sixteen hours per week) were incompatible with Article 119 of the Treaty of Rome and with Directives 75/117/EEC and 76/207/EEC because objective justification was not established. The appeal so far as it related to Mrs Day was dismissed; her private law claim should be pursued in the appropriate tribunal against her employer.

Divisional Court (Nolan LJ and Judge J.) dismissed the application on 10 October 1991 (reported at 1992 I.C.R. 341); Court of Appeal affirmed by majority on 6 November 1992 (reported at 1993 I.C.R. 251); House of Lords: judgment delivered 3 March 1994 ([1994] UKHL 2), allowing the E.O.C.'s appeal and affirming/dismissing the procedural point as to Mrs Day.