Justify yourselves

R v Secretary of State for Trade and Industry ex parte BECTU, Case C-173/99, European Court of Justice 26 June 2001

The Court of Appeal's seminal judgment in this case sends a clear message to employers of the full extent of their obligation to justify indirect discrimination.

Ms Allonby was originally employed by the College as a part-time lecturer. To cut costs, the College decided to terminate part-time lecturers' contracts and then re-engage them as sub-contractors through an agency, ELS. This meant that Ms Allonby and her colleagues lost a series of benefits, such as sick pay, career structure and the right to join the Teachers' Superannuation Scheme because she was treated as self-employed.
She claimed that her dismissal was indirectly discriminatory because the condition for remaining in employment with the College was that lecturers had to be full-time and disadvantaged a significantly greater proportion of women than men, a higher proportion of part-timers than full-timers being women. She also claimed that she was discriminated against as a contract worker, and that her pay and exclusion from the Superannuation Scheme breached the equal access requirements of the Pensions Act and her right to equal pay .

Ms Allonby is backed by NATFHE. She lost her case at the Employment Tribunal and the Employment Appeal Tribunal. There had been indirect discrimination, but it was justified and therefore not unlawful, the Employment Tribunal had held. 38% of men, but only 21% of women could comply with the condition and therefore have access to the higher pay and benefits.

The College's argument that any discrimination in the dismissal was justified because it needed to save money and impose firmer budgetary control was sufficient. The Tribunal accepted these grounds relatively uncritically and effectively found that it was no more than a coincidence that the means chosen disadvantaged significantly more women than men. The Employment Appeal Tribunal was not prepared to interfere with this conclusion.

The Court of Appeal emphasised the well-known "Bilka-Kaufhaus"test for objective justification: "the means chosen must (1) correspond to a real need on the part of the undertaking; (2) be appropriate with a view to achieving the objective; and (3) be necessary to that end". Crucially, the Court of Appeal said that there had to be a "critical evaluation" of the College's reasons for dismissal and then a balancing exercise between the needs of the employer and the disadvantage to Ms Allonby. The Tribunal had not met these criteria, and the case would therefore have to be re-considered.
On the equal pay and pensions issues, the Court of Appeal had to decide whether or not Ms Allonby, whose contract was with ELS, could compare her rights with those of a named male comparator employed direct by the College, or indeed whether she needed a comparator at all for the pensions claim. Here, the Court referred questions to the European Court of Justice. But in doing so, there is a clear suggestion that it does not matter that the College and ELS are not under common control.

Ms Allonby's case is a long way from over - some bits of it are on their way back to the Tribunal, while others are on the way to Luxembourg. But the Court of Appeal's judgment is a significant re-statement of the law, which will benefit many who suffer pay and indirect discrimination.