Lawrence & Ors v Regent Office Care Ltd & Ors

Where existing Court of Justice jurisprudence does not clearly determine whether Article 141 permits equal-pay comparisons between employees of different, unconnected employers, the issue may require reference to the Court of Justice. The directly effective Treaty right may require incompatible limits in domestic equal-pay legislation to be disapplied, but the scope of that principle was unresolved in these circumstances. The ability of the respondent employer to explain the comparator’s pay was also a material question requiring authoritative determination.

Female cleaning and catering workers employed by private contractors sought to compare their terms with those of male employees of North Yorkshire County Council. Most had previously performed the same work for the Council, and the contracting-out process followed an earlier successful equal-pay claim against the Council.

The Employment Tribunal and the Employment Appeal Tribunal rejected the proposed comparisons on the basis that the applicants and comparators were not in the same employment. The Court of Appeal considered whether Article 141 of the EC Treaty could permit the comparisons and whether the respondents had to be able to explain the Council’s pay rates.

1. Reference allowed. The court referred two questions concerning Article 141 to the Court of Justice under Article 234 of the EC Treaty. Costs were reserved.
2. The court could not determine with complete confidence, from the existing jurisprudence, whether Article 141 was directly applicable to permit comparisons between the applicants and male Council employees performing work of equal value.
3. The issue was novel, difficult and of general importance. It could have significant consequences for equal-pay claims arising from the contracting out of public services and transfers of undertakings.
4. It was common ground that Article 141 conferred directly enforceable rights and, read with the European Communities Act 1972, required incompatible provisions of the Equal Pay Act 1970 to be disapplied. The unresolved question was whether the statutory restriction to employees in the same employment was incompatible in the particular circumstances.
5. The court also referred whether an applicant relying on Article 141 could do so only where the respondent employer was able to explain why the comparator’s employer paid its employees at the relevant rate. The court did not decide that issue.

• Court of Appeal (Civil Division): The appeal from the Employment Appeal Tribunal was referred to the Court of Justice under Article 234 of the EC Treaty. Costs were reserved.
• Employment Appeal Tribunal: The applicants’ appeal was dismissed on 5 November 1998. Permission to appeal was refused on 7 December 1998, but granted by the Court of Appeal on 15 February 1999.
• Employment Tribunal: The preliminary issue was determined against the applicants. The tribunal held that the applicants could not compare themselves with male employees of the Council because the respondent companies did not control both sets of wages.