Beware rule 9: New Court of Appeal decision
Daphne Romney QC
The recent decision of the Court of Appeal in Brierley v ASDA Stores Ltd; Ahmet v Sainsbury’s Stores; Fenton v ASDA Stores Ltd does not just affect equal pay claims, but all mass claims where there is more than one claimant on an ET1. Beware rule 9, says Daphne Romney QC.
For years group claims, including equal pay claims, were issued on one, or more than one, ET1 with an attached schedule setting out the names and addresses of the claimants. Rule 9 of the Employment Tribunal Rules of Procedure was first introduced in 2013. It provides that:
Two or more claimants may make their claims on the same claim form if their claims are based on the same set of facts. Where two or more claimants wrongly include claims on the same claim form, this shall be treated as an irregularity falling under rule 6.
Rule 6, which deals with procedural irregularities, provides:
A failure to comply with any provision of these Rules (except rule 8(1), 16(1), 23, or 25) or any order of the Tribunal (except for an order under rules 38 or 39) does not of itself render void the proceedings or any step taken in the proceedings. In the case of such non-compliance, the Tribunal may take such action as it considers just, which may include all or any of the following –
(a) waiving or varying the requirement;
(b) striking out the claim or response, in whole or in part, in accordance with rule 37;
(c) barring or restricting a party's participation in proceedings;
(d) awarding costs in accordance with rules 74 to 84.
Therefore, more than one claimant can use the same claim form, provided that their claims are based on the ‘the same set of facts’. On the face of it, equal pay claims against the same employer would appear to be based on ‘the same set of facts’. A female retail shop assistant, a female in-store pharmacy assistant, and a female checkout operator, all comparing themselves to a male fork-lift truck driver, share the same circumstances in that they are all alleging a breach of the sex equality clause which has resulted in terms which are more favourable in his contract of employment than in theirs. In addition, during the costs regime in force between 2013 and 2017, there was a particular financial benefit for no-win, no-fee claimant solicitors, rather than issue, and pay for, each claim separately. Then came the decision of the Employment Appeal Tribunal in Farmah v Birmingham City Council and others/Brierley v ASDA Stores Ltd. [1]
The conjoined appeals concerned equal pay claims against the supermarkets Sainsbury’s and ASDA and against Birmingham City Council, in which claimants carrying out different roles were put on the same claim forms. In total, there were 5,497 ASDA claimants included in 22 claim forms with one claim form containing 1,568 claimants, a saving of some £650,000. The claim forms also included ‘piggyback’ claims by male claimants whose comparator was a female claimant and not a male comparator as the essence of an equal pay claim is the comparison of a man and a woman. Different Employment Judges took different views of this practice. In Brierley v ASDA, the Regional Employment Judge held that there was an irregularity, but exercised his discretion under rule 6 to waive it and allow the claims to proceed. Fenton v ASDA had only three claimants, each doing different jobs, on the same form; the same REJ held that there was an irregularity but this time, he struck out the claim because the claimants did not advance any reason why their claims should proceed. In Ahmed v Sainsbury’s, the Employment Judge held that there was no irregularity and that rule 9 had been satisfied; conversely, in two separate Birmingham claims, Farmah v Birmingham CCand Callaghan v Birmingham CC, the Employment Judge held that there was an irregularity, that the onus was on the claimants to show why their claims should not be struck out, and that they had failed to do so. It was irrelevant that the breach was not deliberate.
In the EAT, Lewis J dismissed the ASDA claimants’ submission that these were ‘the same set of facts’ because of the sufficient similarity between the claimants on the claim forms; the employer was the same; the claimants were predominantly female and were underpaid in comparison to their comparators; there was a single source controlling the retail division and the predominantly male warehouse and distribution divisions; there was no good reason for the pay disparity; and they were all victims of historic pay inequality because of occupational gender segregation and separate pay bargaining. He held that the claims of a checkout operator and an assistant on the sales floor did not encompass ‘the same set of facts’, because there had to be a comparison between the work done by the woman and the work done by the man; it followed that the claim by a checkout operator comparing herself to a warehouse worker was different to a claim by a sales floor assistant, even against the same comparator. This followed the line of authority beginning with Redcar & Cleveland Borough Council v Bainbridge, [2] where the Court of Appeal held that each claim against a new comparator was a new head of claim. This was endorsed by Underhill J in Prest v Mouchel,[3] with the proviso that the substitution of one comparator for another where both did the same job did not constitute a new cause of action. It followed, said Lewis J, that only those doing the same work could be on the same claim form. Male piggyback claimants could not be on the same claim form as female claimants, even if they did the same work, because their comparators were different.
The Birmingham claimants settled before the appeals against Lewis J’s decision were heard in October 2018, but the ASDA and Sainsbury’s claimants continued. The Court of Appeal held that claimants did have to do the same, or substantially the same, work to comply with rule 9. Bean LJ, giving the lead judgment, approved the test set out by the REJ in the ASDA claims: ‘Multiple claims are allowed under Rule 9 where (whatever the titles attached) it is asserted by the claimants that their roles and the work they do are either the same, or so similar to one another that the claims can properly be said to be based “on the same set of facts”. It would be advisable in future for claimants' solicitors to err on the side of caution and issue multiple claims which comply with this interpretation of Rule 9, applying if appropriate at the stage of case management for more than one multiple claim to be heard together’ (paragraph 27).
Bean LJ also agreed that piggyback claimants did not share ‘the same set of facts’ with female claimants to whom they intended to compare themselves. At paragraph 28, he said: ‘I agree with REJ Robertson that such a claim is not "based on the same set of facts" as that of the women and its inclusion in their claim form, even if there are no other complications, is irregular, though I do not accept the argument that the whole claim form is vitiated as a result.’.
However, the Court of Appeal did not uphold all of Lewis J’s somewhat draconian conclusions. Bean J dismissed the respondent’s contention that not only did the claimants on a single ET1 have to do the same work but their comparators needed to be the same comparators as well; he said that condition of ‘the same set of facts’ applied to the claimants and not to the comparators (paragraph 29). He also disagreed with Lewis J that, where a claim form contained a group of claimants doing the same work and some other claimants who do not, the whole claim form, while irregular, is vitiated (paragraph 28).
The Court of Appeal reached its conclusions with reluctance, given the Overriding Objective and the desirability of avoiding technicality in ET proceedings and the widespread general practice; but it felt that the wording of rule 9 bore no other interpretation. Nevertheless, Bean and Rimer LJJ emphasised that these factors were ‘highly relevant to the exercise of the discretion to waive the irregularity under rule 6’ (paragraph 30).
Rule 6
During the ET proceedings, the Employment Judges in the ASDA and Sainsbury’s claims rejected the employer’s submissions that the claimants’ solicitors had ‘cynically’ made use of mass claim forms ‘in order to avoid payment of the very large fees involved’. The practice was widespread at that time and the claimants’ solicitors could not have known that it was irregular until after the REJ’s judgment in the ASDA case (paragraph 36). This was a finding of fact which the respondents could not overturn. That saved the Court of Appeal from having to decide whether a cynical avoidance of issue fees nevertheless trumped the decision of the Supreme Court in the UNISON v Lord Chancellor[4] case. Equally, the Court of Appeal dismissed ASDA’s submission that it would suffer prejudice were the claimants allowed to pursue claims, rather than have them struck out and re-issued. Bean LJ described this as a ‘windfall gain rather than prejudice’ (paragraph 41). Given that the claimants were at liberty to issue fresh claims if they were still employed or had been employed within the past six years, there could be no real prejudice.
In his judgment, Rimer LJ remarked that the Employment Judges were entitled to take the following factors into account: the likelihood of the same claims being represented, extra delay and cost, the prejudice suffered by the claimants and evidence of cynical intent to circumvent rule 9 (paragraph 50).
As a result, the Brierley v ASDA and Ahmet v Sainsbury’s claims were remitted to the ET for further deliberation. The Fenton v ASDA claim was not, because the Employment Judge there had clearly exercised his discretion properly under rule 6, given that the claimants there had no put forward no factors and had relied upon their interpretation of rule 9 being correct.
Conclusions
The EAT in Farmah focused its attention on the loss of fees to the DOJ purse, but that is – for the moment at least – no longer a factor for consideration. Nevertheless, the Court of Appeal has now clarified that the wording of rule 9 has a narrow meaning. Claimants in equal pay claims, or any form of mass claim, must do the same work as each other in order to share ‘the same set of circumstances’ and that would seem to apply to all claims. Although equal pay claimants do not have to rely on the same comparators, piggyback claimants, even ones doing the same work, do not share ‘the same set of circumstances.’ And when exercising their discretion on waiving any irregularity, Employment Judges must consider the prejudice to the claimants of having to restart proceedings, especially if they are outside the requisite limitation period. It should be recalled that the arrears period in equal pay claims (six years in England and Wales, five years in Scotland) starts from the date of the claim, and so the claimant will lose money if she has to re-issue. Nevertheless, practitioners would be wise to heed the words of Bean LJ and ‘to err on the side of caution and issue multiple claims which comply with this interpretation of Rule 9, applying if appropriate at the stage of case management for more than one multiple claim to be heard together’.
Daphne is the author of Equal Pay – Law and Practice, published by Oxford University Press
[1] Farmah and others v Birmingham City Council; Callaghan and others v Birmingham City Council; Fenton, Fairley and Harper v ASDA Stores Ltd; ASDA Stores Ltd v Brierley; Sainsbury’s Stores Ltd v Ahmed and others [2017] IRLR 785
[2] Redcar & Cleveland Borough Council v Bainbridge [2009] ICR 133; [2008] IRLR 776
[3] Prest v Mouchel [2017] IRLR 785
[4] [2017] 3 WLR 409; [2017[ ICR 1037