St Helens Borough Council (Respondents) v. Derbyshire and others (Appellants)

Victimisation provisions protect an employee’s effective right to pursue a discrimination or equal-pay claim. An employer may properly defend or seek to settle proceedings, but an honest and reasonable employer formulation is not a free-standing statutory defence or a substitute for the statutory inquiry.

The tribunal must determine whether there was objectively reasonable detriment, less favourable treatment, and treatment because the employee performed a protected act. Conduct which exerts direct or indirect pressure likely to deter a reasonable employee from pursuing the claim may be detrimental. The employer’s reason is a factual question directed to why it acted, including whether it acted because the employee persisted in the claim.

Mrs Derbyshire and 38 other women, employed by St Helens Borough Council as catering staff, pursued equal-pay claims after other claimants accepted a settlement. Shortly before their hearing, the Council sent letters to the appellants and to their colleagues. The letters warned of serious financial and employment consequences if the claims succeeded.

The Employment Tribunal found that the letters intimidated the appellants, caused distress and odium among colleagues, and amounted to victimisation contrary to sections 4 and 6(2)(b) of the Sex Discrimination Act 1975. The Employment Appeal Tribunal upheld that decision. A majority of the Court of Appeal allowed the Council’s appeal and remitted the matter: [2005] EWCA Civ 977; [2006] ICR 90.

The central issue was whether the letters subjected the appellants to detriment by reason of their bringing and continuing equal-pay proceedings.

Appeal allowed unanimously. The House restored the Employment Tribunal’s decision that the Council had victimised the appellants and awarded them their costs in the Court of Appeal and the House.

1. Lord Bingham held that the statutory question was why the alleged discriminator acted. The Council sent the letters to put pressure on the appellants to settle their continuing claims. The Tribunal was therefore entitled to find that the letters were sent by reason of the protected proceedings, not merely in the course of defending them.

2. Lord Hope held that the Court of Appeal had read too much into Cornelius v University College of Swansea and Chief Constable of the West Yorkshire Police v Khan. In a case concerning conduct directed at the proceedings themselves, an employer may advance its position and seek a compromise. But the employer must not seriously jeopardise the employee’s effective right to pursue the claim. The question is fact-sensitive and is assessed through the eyes of a reasonable employee.

3. Baroness Hale stressed that the statutory language governs. The Tribunal had to decide whether there was detriment, less favourable treatment, and treatment because the women had asserted their claims. Ordinary litigation and settlement steps will not ordinarily amount to detriment. These letters, however, were intimidating and exposed the appellants to fear of public odium and colleagues’ reproaches.

4. Lord Neuberger, with whose reasoning Lord Carswell expressly agreed, held that objectively reasonable detriment is the preferable focus. Distress caused by measured and honest conduct in defending or settling litigation will usually not suffice. The Tribunal was nevertheless entitled to conclude that these particular letters went beyond reasonable protection of the Council’s interests and caused actionable detriment.

5. The reasoning was consistent with the requirement of effective judicial protection under the Equal Pay Directive and the Equal Treatment Directive. Indirect pressure capable of deterring a worker from enforcing equal treatment may be adverse treatment.

• House of Lords: Allowed the employees’ appeal in [2007] UKHL 16 and restored the Employment Tribunal’s decision.
• Court of Appeal: By a majority, allowed the Council’s appeal and remitted the matter to the Employment Tribunal; Mummery LJ dissented: [2005] EWCA Civ 977; [2006] ICR 90; [2005] IRLR 801.
• Employment Appeal Tribunal: Upheld the Employment Tribunal’s final decision dismissing the Council’s appeal.
• Employment Tribunal: After a rehearing, unanimously upheld the employees’ victimisation claims on 25 September 2003.
• Earlier Employment Appeal Tribunal stage: Set aside the initial dismissal of the victimisation applications and directed their rehearing.