Preston and Others v. Wolverhampton Healthcare NHS and Others

This appeal concerned whether domestic time limits and limitation rules in the Equal Pay Act 1970 (as amended) and associated regulations were compatible with the principle of equal treatment under Article 119 of the EC Treaty. The House of Lords decided the domestic question of statutory construction that, for the purposes of section 2(4) of the Equal Pay Act 1970, "the employment" normally refers to the particular contract of employment under which an equality clause is to be read, so that the six-month time limit runs from the end of each such contract unless an overarching "umbrella" contract is shown to exist. The Lords held that questions of compatibility with Article 119 and Community procedural standards (in particular whether section 2(4) and the two-year limitation in section 2(5)/Regulation 12(1) render enforcement of Article 119 impossible or excessively difficult or are less favourable than similar domestic remedies) were not so clear as to permit domestic determination and therefore must be referred to the European Court of Justice.

The appellants were groups of mainly female part-time workers who claimed that exclusion from, or lack of credit for, occupational pension schemes amounted to indirect sex discrimination contrary to Article 119 of the EC Treaty and sought remedies (including admission to schemes and pension entitlements). The matters were litigated as test cases after the European Court of Justice decisions in Vroege and Fisscher. At first instance the Industrial Tribunal held that the six-month rule in section 2(4) of the Equal Pay Act 1970 and the two-year arrears limit in section 2(5) (as affected by Regulation 12(1)) did not make enforcement of Article 119 impossible or excessively difficult. The Employment Appeal Tribunal and the Court of Appeal upheld that approach.

The House of Lords was asked (i) to decide the domestic meaning of section 2(4) in relation to successive contracts; and (ii) to determine whether section 2(4) and the two-year limitation in section 2(5)/Regulation 12(1) were compatible with Article 119 and the Community principle that national procedural rules must not make the exercise of Community rights impossible in practice or be less favourable than rules for similar domestic claims.

The House of Lords: (a) dismissed the appeal on the domestic law point, concluding that "the employment" in section 2(4) refers to the particular contract of employment except in special factual situations where an overriding umbrella contract may be shown; and (b) concluded that the compatibility questions under Community law were not free from doubt and should be referred to the European Court of Justice under Article 177 (now Article 267). The Lords considered relevant ECJ jurisprudence (including Rewe, Defrenne, Vroege, Fisscher and the then recent Magorrian decision) and concluded that definitive answers about incompatibility or excessive difficulty required a preliminary ruling by the ECJ.

The House therefore referred three framed questions on compatibility and aggregation of service to the European Court of Justice while dismissing the domestic construction appeal.

This was an appeal in which the House of Lords dismissed the appeal on the domestic construction point: section 2(4) of the Equal Pay Act 1970 is to be read as referring to the particular contract of employment so that the six-month time limit runs from the end of each contract unless an "umbrella" contract is shown. However, the House held that questions whether section 2(4) and the two-year rule in section 2(5)/Regulation 12(1) are compatible with Article 119 and Community procedural requirements were not sufficiently clear for domestic determination and therefore referred three specific questions to the European Court of Justice for a preliminary ruling under Article 177.

Industrial Tribunal (Birmingham) decision appealed to the Employment Appeal Tribunal which upheld the Tribunal's decision; further appeal to the Court of Appeal (judgment 13 February 1997) which upheld the EAT; final appeal to the House of Lords which dismissed the appeal on domestic construction and referred questions to the European Court of Justice. ([1998] UKHL 6 is the House of Lords decision.)