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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> North Cumbria Acute Hospitals NHS Trust v. Potter & Ors [2008] UKEAT 0121_07_1812 (18 December 2008) URL: http://www.bailii.org/uk/cases/UKEAT/2008/0121_07_1812.html Cite as: [2008] UKEAT 121_7_1812

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APPEARANCES

 

For the Appellant	MR ANDREW CLARKE (One of Her Majesty's Counsel) and MS NAOMI ELLENBOGAN Instructed by: Messrs Dickinson Dees Solicitors St Ann's Wharf 112 Quayside Newcastle upon Tyne NE99 1SB
For the Respondents The Cross Claimants	MR ROBIN ALLEN (One of Her Majesty's Counsel) and MS YVETTE GENN MS DEE MASTERS (of Counsel) Instructed by: Messrs Stefan Cross Solicitors Buddle House Buddle Road Newcastle upon Tyne NE4 8AW
The Casson Claimants	MS TESS GILL MS ANYA PALMER (of Counsel) Instructed by: Messrs Thompsons Solicitors The St. Nicholas Building St Nicholas Street Newcastle upon Tyne NE1 1TH


 


SUMMARY

EQUAL PAY ACT: Article 141/European law

EPA and Article 141 claims. The appeal and cross appeals give rise to various EPA issues; whether, like Article 141, section  1(6) requires a single source, that is a single body responsible for the inequality of pay which could restore equal treatment, or whether it is a complete code in itself; whether the Respondent Trust, the Whitley Councils or the Secretary of State are single sources on the facts; whether there were common terms and conditions between establishments under section 1(6) EPA; whether the change of terms and conditions in June 2002 was so radical that the contract was rescinded thereby causing the limitation period to start running. The cross appeals related to the same issues, save for the first ground which raised the question of whether the Employment Tribunal should have considered its analysis of terms and conditions only at the date of presentation of the claim or whether it should have done so throughout the six year period.


 


THE HONOURABLE MR JUSTICE NELSON

1. This appeal and the cross appeals concern the choice of comparators in equal pay claims. They arise from the decision of the Newcastle Employment Tribunal, promulgated on 18 December 2006, in which the tribunal found, as a preliminary issue, that the comparators chosen by the claimants were valid for the purposes of equal pay claims brought in some instances under the Equal Pay Act 1970 (EPA) as amended and in other instances under Article 141 of the European Community Treaty. The interpretation of section 1(6) of the EPA, of Article 141, and the interaction between these domestic and community provisions are some of the issues which fall to be considered.

The background facts

2. A substantial number of claims for equal pay have been brought against the North Cumbria Acute Hospitals NHS Trust (the Trust), some under the EPA and some under Article 141. There are currently some 1,500 claims proceeding against the Trust. These claims are divided into various different multiples depending upon the jobs held by the claimants. There was one lead case Wilson, some of the issues in which have been the subject of a settlement between the parties, and various submultiples, each with a lead case. The present claim consists of thirteen test case claimants with Mrs Potter as the lead claimant. Eleven of these claimants are nurses and two are medical secretaries. The issues raised in this appeal will affect all the claims in the Potter multiple and other equal pay claims as well.
3. The representation of the claimants is divided between those claimants who are represented by Thompsons instructed by UNISON and the GMB who have been described as the Casson Claimants with Mrs Casson being their sole test case claimant for these claims in this appeal, and those represented by Stefan Cross, referred to as the Cross Claimants. We shall use these descriptions in the judgment when referring to the claimants and the representations made on their behalf.
4. All the claimants, whether as nurses or medical secretaries were employed as at the date of the claim by the Trust and before that by a number of NHS bodies which predated the formation of the Trust. There were thirteen comparators chosen by the claimants. These men have a range of different jobs, namely Medical Laboratory Scientific Officer, Estates Officer (engineering), Senior Electronics Technician, Electronic Service Manager, Joiner, Flexible Cross-trade Supervisor, Senior Manager, Estates Officer (electrical), Maintenance Craftsperson, and Estates Information Manager. All but three of these comparators, Gordon Blake, Roland Johnston and Alan Sewell, were employed by the Trust at the date of the claims and had earlier been employed by other NHS bodies. The services provided by Mr Blake, Mr Johnston and Mr Sewell were contracted out by the NHS Trust for which they worked to Interserve fm Ltd (formerly Building and Property Limited) in April 1998. They have never therefore been employed by the Trust.
5. The detailed employment and contractual history of the claimants and their comparators was agreed between the parties and is set out in agreed documents, including appendices which form part of the judgment of the Employment Tribunal. The Trust was formed on 1 April 2001, the product of a merger of two former trusts namely West Cumbria Health Care NHS Trust (the West Cumbria Trust) and Carlisle Hospitals NHS Trust (the Carlisle Trust). Before the Trust was formed those claimants who were employed by the NHS at that time worked either for the West Cumbria or Carlisle Trusts, and in some cases their predecessor Health Authorities before transferring to the employment of the Trust by operation of law on its formation. Those employed by West Cumbria Trust were based at Whitehaven, and continued to work there following their transfer to the employment of the Trust. Those employed by the Carlisle Trust were based at Carlisle and continued to work there following their transfer to the Trust. All the comparators, save for Mr Blake, Mr Johnston and Mr Sewell, were employed by either West Cumbria Trust or Carlisle Trust, and, like the claimants, remained based at either Whitehaven or Carlisle following their transfer to the employment of the Trust. Mr Blake, Mr Johnston and Mr Sewell were each employed by Carlisle Trust until their transfer on 1 April 1998 to Interserve fm Ltd. As with the claimants, some of the longest serving comparators were employed by predecessor health authorities.
6. The employment histories of the claimants and their comparators are set out in detail in paragraphs 11-46 of the Employment Tribunal's judgment, as are the different mechanisms by which the terms and conditions of employment of the claimants and their comparators were determined and revised over time. A brief summary of the extended analysis of the Employment Tribunal based upon the agreed facts will suffice in this judgment, save where it is necessary to expand upon the matter in relation to any particular ground of appeal.
7. The concept of a Health Trust was introduced by the National Health Service and Community Care Act 1990 (the 1990 Act). Prior to the introduction of the Health Trusts the employers of all the claimants and comparators had been required to adopt for their employees the Whitley Council terms and conditions of employment appropriate to that employee. Health Trusts are legal entities in their own right. They employ staff and were given a statutory right and responsibility to set out their own terms and conditions of employment under the 1990 Act. That right, as from 2001 has been subject to the right of the Secretary of State to make regulations and or give directions as to how the power is exercised. (Schedule 2 paragraph 16(iv) as inserted by section 6(iii) Health and Social Care Act 2001). Once they had been created, the Health Trusts, West Cumbria and Carlisle, had the choice of continuing to adopt the terms and conditions of employment set out by the Whitley Council or of devising their own local terms and conditions of employment.
8. West Cumbria chose to devise local terms and conditions, giving those staff formerly employed on Whitley Council terms and conditions the opportunity to transfer to such local terms. Some chose to remain on Whitley Council terms. The Carlisle Trust chose to continue in the main, to apply Whitley Council terms and conditions.
9. When the West Cumbria Trust and the Carlisle Trust were merged to form the respondent Trust on 1 April 2001, the respondent Trust continued to utilise Whitley terms and conditions for those already employed on such terms and employed all new staff on Whitley Council terms. Those employed on locally determined terms and conditions remained on those terms until 2002 when their terms and conditions were harmonised to Whitley. A collective agreement signed on 7 June 2002 enshrined the harmonisation of terms and conditions. Pay protection was provided for employees whose position on whichever Whitley Council pay spine would otherwise have led to a reduction in pay. That pay protection continued either until the pay equalled the protected pay or, if sooner, Agenda for Change was introduced. The exception to the harmonisation of locally determined terms and conditions to Whitley by the collective agreement was the senior managers in both Carlisle and West Cumbria. These senior managers had their pay and conditions determined locally and separately by each Trust board on an individual basis. There were no senior manager pay scales and all senior managers were on spot points. Continued employment depended on annual assessment performance of objectives. The senior managers remained on locally devised terms and conditions and did not move to Whitley terms and conditions prior to the implementation of Agenda for Change, which was implemented with retrospective effect from 1 October 2004. It was then introduced nationwide by the Department of Health as a single scheme for governing terms and conditions across the NHS. After the implementation of Agenda for Change the single scheme for governing terms and conditions in relation to all NHS employees applied.
10. The operation of the Whitley Council system and its relationship with the pay review bodies set up by the Government in 1984 for nursing staff, midwives and the professions allied to medicine, is set out in the agreed facts and in the judgment. The Whitley Council system was established and developed to govern and support pay and grading arrangements in the NHS. There was a General Whitley Council and nine functional councils. The General Council set terms and conditions which were common across the NHS such as redundancy and maternity rights and the functional councils each set pay and other terms in relation to the specific NHS staff groups which they covered. The functional councils which related to the complainants and comparators are set out in paragraph 19 of the Employment Tribunal judgment and the mechanisms by which pay and grading were established for each group of employees covered by the Whitley system are set out in paragraphs 27-56 of the Employment Tribunal judgment.
11. At the heart of the appellant's case lies the submission that the employment histories of the claimants and their selected comparators and the different mechanisms by which their terms and conditions of employment were established, are such as to render the named comparators invalid under either domestic or European law.
12. The parties have analysed the various different permutations which can be said to arise from these contractual histories. Although it is possible to produce a substantial number of permutations as the appellant has done, we have found it helpful for the purposes of this judgment to use the categorisation of the Cross Claimants, whereby the claimants and their
    

comparator combinations have been assembled under three groups. These are as follows:

Group A: The claimant and her comparator are or have been employed by the same employer and at the same establishment. The vast majority of the comparisons fall within this category. Section 1(6) of the EPA is satisfied in such circumstances unless the EPA has to be interpreted to require a single source and no such single source can be established;

Group B: The claimant and her comparator are or have been employed by the same employer but at different establishments. Section 1(6) of the EPA is satisfied provided that the claimant can demonstrate that common terms and conditions were observed;

Group C: The claimant and her comparator are not or have not been employed by the same employer or they are employed by the same employer but not on "common terms and conditions". In such circumstances the claimant has to show that she can bring a valid claim under Article 141 EC which requires the existence of a "single source" as between her terms and conditions and that of her comparator. There is an overlap between groups B and C in that if a claimant in group B cannot show common terms and conditions, she falls within group C and must rely on Article 141 EC alone.

The Equal Pay Act 1970

13. The EPA, as amended, gives effect to the principle of equal pay embodied in Article 141 of the EC Treaty which states:-

"1. Each member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied."

14. The EPA section 1(1) provides that if the terms of a contract under which a woman is employed at an establishment in Great Britain do not include an equality clause, the contract should be deemed to include one. The equality clause is implied into every contract by the application of section 1(2) where the woman is employed on like work (section 1(2)(a)), work rated as equivalent, (section 1 (2)(b)) and work of equal value (section 1(2)(c)) with that of her comparator man in the same employment.
15. Section 1 (6) of the EPA sets out the meaning of "same employment" as follows:-

"…and men shall be treated as in the same employment with a woman if they are men employed by her employer or any associated employer at the same establishment or at establishments in Great Britain which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes."

16. The definition of "employed" includes a contract of service or a contract personally to execute any work or labour, and two employers are to be treated as associated if one is a company of which the other directly or indirectly has control or if both are companies of which a third person directly or indirectly has control. (Section 1(6)(a)(c)).
17. Once an equality clause has been deemed to be included in the contract of employment and appropriate workers have been identified as comparable comparators for equal pay, the burden passes to the employer under section 1(3) of the EPA to justify the disparity due to sex discrimination. (Glasgow City Council v Marshall [2000] IRLR 272 and Armstrong v Newcastle Upon Tyne NHS Hospital Trust [2006] IRLR 132 and Robertson v Department for Environment, Food and Rural Affairs [2005] IRLR 363 paragraph 29).

Article 141

18. Article 141 EC has been described as part of a scheme to ensure social progress and the elimination of discrimination. The principle of equal pay is one "of the foundations of the community". See - 50/96 Schroeder v Deutsche Telecom KOMAG [2000] ECR1-743 ECJ and see – 207/04 Paolo Vergani v Agenzia delle Entrate, Ufficio di Arona [2006] All ER (EC) 813.
19. Accordingly, both the European Courts and the United Kingdom Courts have emphasised the need to avoid limiting or restricting the right to pursue valid claims for equal pay. Thus in Pickstone and ors v Freemans plc [1988] ICR 697 it was said by the House of Lords that Parliament could not have intended that the United Kingdom should fail fully to implement its obligations under article 119 (the predecessor to Article 141). In Enderby v Frenchay Health Authority [1994] ICR 112 Advocate General Lenz said that additional obstacles to claims being made before the courts for sex related pay discrimination should not be created.
20. Defrenne v Sabena (No.2) [1976] ICR 547 establishes that Article 141 is directly effective, so that employees can rely upon it without also invoking the EPA. (see also Armstrong paragraph 8).
21. We have set out here the broad statutory framework for equal pay claims. The detailed arguments of construction and case law will be set out in relation to the separate grounds of appeal.

The issues

22. The issues to be determined by the Employment Tribunal were agreed between the parties and the list of those issues provided for the tribunal. It is necessary to set out the list of issues verbatim as not only does it explain both the issues and the relevant comparisons but also demonstrates where, unfortunately, the employment tribunal omitted to deal with one issue and one sub issue.

	Issue	Relevant comparisons
A	Comparability under s.1(6) Equal Pay Act
	In all cases bar those involving cross employer comparisons and those referred to at A1 below, it is agreed that the claimant and comparator were employed by the same employer (whether at the same time or not) and in the same establishment. In these cases it is agreed that s.1(6) Equal Pay Act applies, subject to the issue set out at A2 below.	All cases except: comparisons with Bertram when he was employed by the PHLS cross Trust comparisons with Brown by claimants in West Cumbria historical comparisons with Blake and with Alan Sewell by Claimants who never worked for the Carlisle Trust
A1	Where claimant is or was employed by same employer as her comparator, but not in the same establishment, were common terms and conditions observed: (a) generally? (b) for employees of the relevant class?	Three comparisons only, after the merger, within the North Cumbria Trust: Newlands-Brown Reid-Brown Casson-Brown
A2	Assuming the Respondent is right that under EU law Claimants need to show a "single source" even in situations of common employment [issue B1], is the Respondent right to assert that s.1 Equal Pay Act has to be read to include such a requirement?	All comparisons where claimant and comparator are / were employed by the same employer and in the same establishment; all comparisons under issue A1 above where the ET finds that common terms and conditions were observed either generally or for employees of the relevant class

B	Art 141 / "single source"
	Need for single source where there is a common employer	Need for single source where there is a common employer
B1	Where claimant and comparator are or were employed by the same employer, do claimants still need to show a "single source"? [If ET concludes it is bound by Robertson to find that something more than a common employer is necessary, Claimants reserve their position on this point]	All comparisons where claimant and comparator are or were employed by same employer, and single source is not conceded
	Common employer as a single source on facts of this case	Common employer as a single source on facts of this case
B2	If the answer to B1 is yes, is the common employer a single source on the facts of this case?	All comparisons where claimant and comparator are or were employed by same employer, and single source is not conceded
	Whitley / Secretary of State as single source	Whitley / Secretary of State as single source
B3	If the claimant and the comparator are both employed on Whitley Council terms and conditions [whether or not employed by the same employer] do the Whitley Council terms and/or the Secretary of State for Health constitute a "single source"?	All Whitley to Whitley comparisons
B4	If the claimant is employed on Whitley Council terms and conditions and the comparator is employed on local terms and conditions, or vice versa, [whether or not employed by the same employer] do Whitley Council terms and/or the Secretary of State for Health constitute a "single source"?	Whitley to local comparisons Newlands-Pinches and Newlands-Fleming prior to 1999 (she was still on Whitley); West Cumbria claimants after harmonisation to Whitley comparing themselves with men who remained on local terms Local to Whitley comparisons Newlands-Brown and Reid-Brown prior to the merger.
	Reference to ECJ	Reference to ECJ
B5	Is a reference to the ECJ required?	All cases where single source is in issue
C	Change in terms and conditions
C1	Where both claimant and comparator were on local terms, the Respondent concedes single source but contends that any equality clause would not survive what it contends was a "radical change" in terms and conditions in 2002. For the West Cumbria claimants, did the move from local terms to Whitley terms in 2002 amount to such a radical change in T&Cs that any equality clause would not survive?	All comparisons within the West Cumbria Trust where both claimant and comparator were on local terms

The decision of the Employment Tribunal

23. Under issue A1 the Employment Tribunal found that common terms and conditions were observed generally where the claimant and her comparator were employed by the same employer but not in the same establishment. The Employment Tribunal did not decide the alternative basis namely whether common terms and conditions were observed for employees of the relevant class.
24. Under A2 the Employment Tribunal found that there was no requirement for a "single source" under the EPA.

Under B1 the Employment Tribunal found that it was bound by the case of Robertson to conclude that under Article 141 a single source had to be shown even where the claimant and comparator were employed by the same employers.

Under B2 the Employment Tribunal found that the Trust was a single source, under B3 that the Whitley Council was an alternative single source but that the Secretary of State did not constitute a single source.

25. The Employment Tribunal made no finding in relation to B4 and indeed failed to set it out in the list of issued recited in the judgment.

Under B5 the Employment Tribunal found that a reference to the ECJ was not required.

Under C1 the Employment Tribunal found that the contracts of employment did not terminate as there was no radical change in terms and conditions in 2002 either where both claimant and comparator were on local terms or where the West Cumbria claimants moved from local terms to Whitley terms in 2002. Thus the claims were not commenced outside the six month time-limit from the termination of any claimants' employment.

The grounds of appeal and cross-appeal

The appeal

Ground 1-A1 common terms and conditions between establishments.

26. The Employment Tribunal's finding that the harmonisation of terms and conditions to Whitley Council terms and conditions by way of collective agreement in June 2002 established common terms and conditions between West Cumbria and Carlisle observed generally, was an error of law or a perverse conclusion. A finding was only made in relation to whether common terms and conditions were observed generally and not as to whether such terms and conditions were observed for employees of the relevant class. No sufficient regard was paid to the fact that the Whitley Council system had nine functional councils each of which made decisions in relation to the different type of staff and could not therefore be treated as a body setting terms and conditions. The Tribunal's reliance upon the case of Enderby was unjustified. In any event the Tribunal failed to take into account that not all the Trust's employees were employed on Whitley terms and conditions at the relevant time as senior managers retain terms and conditions which had been locally devised at West Cumbria. Had the Tribunal considered, as they should have done, the question of whether terms were observed for employees of the relevant class they would have been bound to have concluded, on the basis of the comparator Mr Brown, who was employed under Whitley terms and conditions at Carlisle but would have been on locally devised terms and conditions had he been at the relevant claimant's establishment, that common terms and conditions were not observed for employees of the relevant class either.

Ground 2-A2 Does section 1(6) EPA require a single source?

27. The proper interpretation of the cases of Lawrence v Regent Office Care Limited [2002] IRLR 822 ECJ Robertson, and Armstrong demonstrate that a single source is required for a claim to be brought under the EPA just as it is under Article 141. The decision of the Employment Appeal Tribunal in the case of Lawson and ors v Britfish Limited [1988] IRLR 53, which construes section 1(6) contrary to the incorporation of a single or common source, is wrongly decided. The Employment Tribunal in the present case were wrong in law in concluding that single source is not incorporated under the 1(6) of the EPA.

Ground 3 – B2 Is the Trust a single source on the facts?

28. The appellant contends that the Employment Tribunal's reasoning was confused, and that its conclusion that the Trust was a single source was inappropriate upon their own findings. The Employment Tribunal failed to act in accordance with the cases of Lawrence, Robertson and Armstrong which were binding upon them. The findings are internally inconsistent in that it is not possible to have both Whitley Council and the Trust amounting to a single source. The Trust was not the body responsible for setting the terms and conditions of both claimants and comparators. Once it had adopted Whitley terms and conditions it had removed from itself the power to set those terms and conditions. The conclusion that the Trust was the single source was wrong in law and perverse. The fact that the Trust was theoretically in a position to change the terms and conditions of employees which had been locally devised by a different employer (such as those of senior managers) and which it had inherited on merger is irrelevant as Armstrong determines. The Employment Tribunal should not have taken into account policy concerns; if the feared consequence is the result of a proper application of the law, so be it. The Employment Tribunal improperly relied upon the Wilson settlement when concluding that the Trust was a single source. This was untenable in law as entering into a compromise agreement cannot establish the relevant criteria for a single source.

Ground 4 – B3 Whitley Councils or Secretary of State as a single source on the facts where both claimant and comparator are on Whitley terms and conditions

29. The existence of separate bargaining mechanisms for each group of staff within the functional Whitley Councils means that there is no single source which satisfies the Robertson test for claimants and comparators both on Whitley terms, irrespective of whether the claimant and comparator were in common or separate employment. Each individual functional council represented a separate single source and the Employment Tribunal's finding that the Whitley Councils en masse constituted a single source was wrong in law.
30. Ground 5 – B4 Whitley Councils or Secretary of State as single source on the facts, where the claimant is employed on Whitley Council terms and the comparator is employed on local terms and conditions or vice versa.

The Employment Tribunal failed to identify issue B4 at the outset of its judgment or make findings upon it. Had appropriate separate consideration been given to the issues under B3 and B4 the error in the Employment Tribunal's reasoning as to Whitley Councils and/or the Trust being the single source would have been thrown into sharp relief. The Tribunal could not have found that both the Trust and the Whitley Councils were the single source and should have found that there was no single source for the terms or conditions on the facts of this case, whether it be the Trust or otherwise.

Ground 6 – C1 Was there a radical change in terms and conditions in 2002?

31. The Employment Tribunal failed properly to consider or take into account the dicta in Marriott v Oxford and District Co-operative Society [1969] 1 WLR 254 and Council of the City of Newcastle-Upon-Tyne v Alan & ors [2005] IRLR 504. The Employment Tribunal failed to address the Trust's argument that overtime and sick pay entitlements were significantly different post-harmonisation, and that such entitlements could not be considered minor or slight variations. The finding to the contrary was perverse. The Employment Tribunal failed to take into account that the employees' grading and pay scales were radically different. The dicta in Sorbie v Trust Houses Forte Hotels Limited [1976] ICR 55 were also not taken into account. The Employment Tribunal should have found as a matter of law that the contracts were terminated at harmonisation and that the time limits started to run from the date of harmonisation.

The Cross Appeals

32. There are three contingent grounds of cross appeal (2, 3 and 4) and two freestanding grounds of cross-appeal (1 and 5) by the Cross Claimants and one freestanding cross-appeal by the Casson Claimants which is the same as the Cross Claimants' cross-appeal 5.
33. Cross appeal Ground 1: The Employment Tribunal erred in law when it restricted its analysis of common terms and conditions to the date of the presentation of the claims.

The Employment Tribunal should have examined whether there were common terms and conditions of employment as between claimants and comparators for the entire six year period. On the facts available it would have so concluded.

34. Cross Appeal Ground 2 (contingent): The Employment Tribunal erred when it failed to analyse adequately the similarities between the conditions of the claimants and the comparators under the Whitley Council structure.

The Employment Tribunal correctly concluded that common terms and conditions were observed but failed to analyse adequately the similarities between the terms and conditions of the claimants and comparators under the Whitley Council structure. Had they done so they would have found further reasons for concluding that they were "broadly similar" and hence further grounds for concluding that they were observed.

35. Cross Appeal Ground 3 (contingent): The Employment Tribunal failed to consider the nature of the terms and conditions of the senior managers. Alternatively, the Employment Tribunal erred in law and or reached a perverse decision when it concluded that the senior managers were only employed on local terms and conditions.

A proper analysis of the issue would have revealed that the senior managers were on hybrid Whitley Council/local terms and conditions as opposed to pure Whitley Council terms and conditions. The Employment Tribunal failed to set out its analysis and conclusions on this issue.

Alternatively if the Employment Tribunal concluded that the senior managers were employed on purely local terms and conditions this was an error of law and a perverse conclusion. The Employment Tribunal should have concluded that the senior managers were engaged on mixed Whitley Council/local terms and conditions.

36. Cross Appeal Ground 4 (contingent): The Employment Tribunal failed to consider all the grounds upon which the Cross Claimants contended that the Trust was a single source.

The Employment Tribunal was correct in concluding that the Trust was a single source but failed to analyse the issue fully. Had it done so it would have reached the same conclusion but on the basis of a more reasoned analysis.

37. Cross Appeal Ground 5 and the Casson Cross Appeal: The Employment Tribunal's conclusion that the Secretary of State for Health could not be a single source was an error of law and or perverse.

The Employment Tribunal should have concluded on the findings of fact it should have made, that the Secretary of State for Health was a single source. It failed to take into account the extensive submissions made upon this issue by the claimants. Had it done so it would have concluded that the Secretary of State was a "single source".

38. It should be noted that the Cross Claimants submit that the Trust, alternatively the Whitley Council, alternatively the Secretary of State were a single source and that there may be more than one layer of single source whilst the Casson Claimants submit that the Trust was the single source not the Whitley Council, but that alternatively the Secretary of State was the single source.
39. As each Ground of Appeal stands on its own and there is no submission made on the cumulative effect of the Grounds we shall deal with the submissions and conclusions on each one in turn.

Ground 1 - A1. Common Terms and Conditions

Submissions

40. Mr Andrew Clarke QC on behalf of the Appellant Trust submits that the practices of the two Trusts as to the setting of terms and conditions of employment were radically different; Carlisle had always retained Whitley Council terms, whereas at Whitehaven local terms had been adopted. Even after the new Trust had been formed, and the harmonisation agreement entered into, common terms and conditions were not generally observed at Whitehaven and Carlisle. Although the nurses had common terms and conditions at both hospitals that was not so for the class of employee relevant for the comparator Mr Brown. Furthermore, senior managers had their pay and conditions determined locally on an individual basis and there were no pay scales for them, and, as the Employment Tribunal found, some staff did not agree to move to Whitley terms.
41. It follows, Mr Clarke submitted that there was no commonality of terms and conditions sufficient to satisfy section 1(6) either generally or in relation to employees of the relevant class. The failure of the Tribunal to consider the fact that Mr Brown was on Whitley terms at Carlisle and Mr Lunt, his equivalent at Whitehaven was on local terms, was not merely a failure to consider the second limb of section 1(6) namely whether common terms and conditions were observed for employees of the relevant class, but also a failure to consider the first limb, namely whether such terms and conditions were observed generally. These facts were relevant as to whether there was any general commonality but were not taken into account by the Tribunal.
42. The case of Leverton v Clwyd County Council [1989] IRLR 28 HL established that for general commonality to be satisfied all employees had to have common terms and conditions. That was not the case here on the Tribunal's own finding and accordingly no general commonality could exist. There has to be commonality across all classes and if there is no commonality between one or more of the relevant classes general commonality cannot be shown. One man's difference in terms and conditions can therefore prevent commonality, though Mr Clarke appeared to accept that there might in some circumstances be an anomalous section of staff and yet general commonality might still exist.
43. The decision in British Coal Corporation v Smith [1996] ICR 515 upon which the Respondent/Claimants rely did not assist them, Mr Clarke submitted. It demonstrates that there can be no general commonality where there is no commonality in terms and conditions between comparative establishment A and establishment B. The Casson Claimants in their submissions to the tribunal in effect accepted that general commonality could not be established here as it required all employees to have common terms and conditions.
44. For the purposes of ground 1 Mr Clarke assumed that his argument on ground 2 would fail and that no single source was required. It followed that a series of separate collective bargains applied to both establishments as the source of terms for all staff would be sufficient to satisfy the first limb of section 1(6) in accordance with Leverton. He accepted that general commonality did not require identical terms and conditions but the application of the same regime. Those general principles, he submitted, did not however apply to a case where a claimant at establishment A chooses a comparator at establishment B whose terms and conditions are not the same as those which would be enjoyed by him had he worked at the same establishment as the claimant does. In paragraph 14.2 of the grounds of appeal the Appellant Trust had contended that the existence of different Whitley Councils determining the pay of different categories of employees precluded a finding of common terms and conditions under section 1(6). That argument was not however pursued during the course of oral submissions under this ground of appeal, though it was maintained when arguing under ground 4 – B3 that the existence of separate Whitley Councils meant that the Whitley Council could not be a single source.
45. The Trust further submitted that the Tribunal's decision was perverse on the facts before it and its own findings but ground 1 is not just a perversity point as the Tribunal failed to give consideration to most of the Trust's arguments, dealing essentially only with the harmonisation and collective agreement point.
46. Mr Robin Allen QC on behalf of the Cross Claimants submitted that the Tribunal had rightly concluded that there were common terms and conditions observed generally in accordance with the first limb of Leverton, namely that there was a collective agreement scheme in existence in the form of the various Whitley Councils. That was a correct finding upon the facts and there was no proper basis for challenging it. It was unnecessary for the Tribunal to consider the second limb of section 1(6) having correctly concluded as they did that the first limb was satisfied. The Tribunal did not have to rehearse each and every argument put forward on behalf of a party and their judgment dealt adequately with the issues.
47. The arguments based upon the position of senior managers and that of Mr Brown and Mr Lunt were essentially wrecking arguments, aimed at providing barriers which employees would find it impossible to surmount. The House of Lords in Pickstone v Freemans plc [1988] IRLR 357 had criticised any interpretation which would enable an employer to evade the equal pay provisions by employing one token man on the same work as a group of potential women claimants who were deliberately paid less than a group of men employed on work of equal value with that of the women.
48. Mr Allen submitted that what was required was a broad sense of comparability using a commonsense approach as Lord Bridge had said in Leverton. What was necessary was to establish whether as Lord Slynn said in British Coal the terms and conditions were sufficiently similar for a fair comparison to be made. That test was equally applicable to section 1(6)(b), namely whether broadly similar common terms and conditions were observed for employees of the relevant class, as it was for section 1(6)(a), namely the observing of common terms and conditions generally.
49. Ms Tess Gill supported the Tribunal's decision on a similar basis and further submitted that the Tribunal set out its findings as to the separate manner in which senior managers' pay and conditions were determined in paragraph 17(4) of its decision and demonstrated that it was aware that not all employees were in the same situation in paragraph 149 where it said that "most employees from West Cumbria moved to Whitley Council terms and conditions". If the fact that senior employees, such as senior managers, were employed on terms set on a personal basis was to prevent a collective agreement applicable to the rest of the workforce amounting to common terms and conditions observed generally, section 1(6) would very rarely operate.
50. In any event the senior managers in both Carlisle and West Cumbria did not move on to Whitley terms and conditions; they both had their pay determined at local level separately by each Trust's board on an individual basis. That being so, there were common terms and conditions between establishments as far as senior managers were concerned. As Lord Slynn had said in British Coal "generally" does not necessarily mean "all".

Conclusions on Ground 1.

51. In Leverton the Court of Appeal found that the relevant comparison under section 1(6) was between the terms and conditions of employment of the female claimant on the one hand and of her comparators on the other and it was only if this comparison showed their terms and conditions to be broadly similar that they could be regarded as common terms and conditions under section 1(6). The minority considered that a much broader comparison was called for embracing both the establishment where the woman worked and the establishment at which the men worked. In his speech in the House of Lords Lord Bridge said:-

"The concept of common terms and conditions of employment observed generally at different establishments necessarily contemplates terms and conditions applicable to a wide range of employees whose individual terms will vary greatly inter se. On the construction of the subsection adopted by the majority below the phrase 'observed either generally or for employees of the relevant classes' is given no content. Terms and conditions of employment governed by the same collective agreement seem to me to represent the paradigm, though not necessarily the only example, of the common terms and conditions of employment contemplated by the subsection. ..

.. It cannot in my opinion possibly have been the intention of Parliament to require a woman claiming equality with a man in another establishment to prove an undefined substratum of similarity between the particular terms of her contract and his as the basis of her entitlement to eliminate any discriminatory differences between those terms." (Paragraphs 7 and 8)

52. Lord Bridge said that what was required was a broad comparison in order to ascertain on the facts of any given case whether as between two different establishments common terms and conditions were observed either generally or for employees of the relevant classes.
53. In British Coal Lord Slynn said:-

"Common terms and conditions of employment must be observed either generally (i.e. for all or perhaps for most workers) or for employees of the relevant classes." (Page 526B)

54. He concluded that the purpose of the legislation was to establish that the terms and conditions of the relevant class were 'sufficiently similar for a fair comparison to made, subject always to the employer's right to establish a 'material difference' defence under section 1(3) of the Act.' (Page 527)
55. The finding by the Tribunal that a collective agreement signed on 7 June 2002 enshrined the harmonisation of terms and conditions to Whitley is not challenged, save that the Cross Claimants say that it should really be described as a series of collective agreements rather than a collective agreement. On the face of it, the harmonisation of terms and conditions on 7 June 2002 by this means created the paradigm example of the common terms and conditions contemplated by section 1(6) as explained by Lord Bridge in Leverton.
56. The Tribunal was aware of the separate and distinct treatment of the pay conditions of senior managers in both Carlisle and Whitehaven. It set this out at paragraph 17(4) of its decision and clearly must have had that in mind when reaching its conclusions. It is also clear from paragraphs 55 and 149 that the Employment Tribunal was conscious of the fact that 'most' and hence not 'all' of the employees were harmonised to Whitley terms. Its awareness of this did not prevent it from concluding that common terms and conditions were observed generally.
57. The Tribunal was, in our judgment, correct in its conclusions. The collective agreement or series of agreements amounted to a paradigm example of common terms and conditions observed generally. The fact that senior managers were treated differently cannot prevent that from being the case. Were it to do so, it would mean that section 1(6) could rarely be satisfied as there is often a section of senior employees who have their own separate pay and conditions unrelated to any pay spine. It cannot have been the intention of the legislature to defeat valid claims for equal pay by so restricting the interpretation of section 1(6). Although 'all' is mentioned in Lord Bridge's judgment when reciting the decision of the minority in the Court of Appeal in paragraph 6, this is not in our judgment an essential part of the test as laid down in the case of Leverton. The situation is aptly described by Lord Slynn in British Coal where he said generally means 'for all or for perhaps most workers'. If this were not to be the case then the appointment of a token man on different terms and conditions could defeat the whole purpose of the Equal Pay Act. As was said in Pickstone this cannot have been the intention of Parliament.
58. The same proposition applies to the position of Mr Brown and Mr Lunt. Their individual situations do not prevent the collective agreement or series of agreements from being and remaining the paradigm example of common terms and conditions observed generally. As Lord Slynn said in British Coal what is required is a sufficient similarity for a fair comparison to be made. This is to be assessed, as a matter of fact in a broad commonsense fashion. That in our judgment is precisely what the Employment Tribunal did here.
59. We do not consider it essential that the Employment Tribunal had to make findings on the position of Mr Brown or Mr Lunt before it was able to reach a conclusion on the first limb of Leverton and section 1(6). Its failure to make any express findings on Mr Brown or Mr Lunt's precise position is not fatal to its conclusion that common terms and conditions were observed generally.
60. We are furthermore of the view that the Tribunal gave proper consideration to the arguments put before them. The written submissions were vast and, in our judgment, given the complexity and size of the case, were dealt with properly by them in their decision. They had considered the appropriate appendices with all the agreed facts in them, and we see no reason to doubt that they gave full and proper consideration to the position of both the senior managers and Mr Brown's and Mr Lunt's position. Their conclusion was neither perverse on the facts before them nor did they make any error of law in so concluding or in the manner in which they reached that conclusion. As their conclusions in relation to the first limb of Leverton were correct there was no need for them to consider the second limb, the findings in relation to which were not inextricably bound with their findings on the first limb.
61. Ground 1 of the appeal is therefore rejected. It follows that the cross-appeal point 2 does not arise.

Ground 2 – A2 Does section 1(6) EPA require a single source.

Submissions

62. The Trust has submitted that the need to establish a single source, that is a body which is responsible for the inequality and could restore equal treatment, is applicable not only to Article 141, but also to section 1(6) EPA. Mr Clarke submitted that the requirement of a single source is a universal requirement, as it tells one what to look for for comparison purposes. The argument that the principle only applied to cases where the applicants and the comparators worked for different employers was rejected in the case of Robertson. Lord Justice Mummery there stated that the case of Lawrence laid down an approach of general application, requiring that something more than just the bare fact of common employment was required for comparability purposes (Paragraph 28). Common employment was specifically held not to be sufficient in itself for comparability purposes even though common employment would ordinarily exemplify a single source of terms. "If that is absent then comparability is not available". (Robertson paragraph 28).
63. When the Court of Justice stated in Lawrence that it was necessary to consider in each case whether the terms and conditions were traceable to one source, it was setting out a justification in the form of a principled basis upon which responsibility for difference in pay could be pinned, and that justification was in the 'single source' rather than in common employment. The body responsible for the inequality, and which could restore equal treatment would often be the same employer of the applicants and the comparators but that was not necessarily so. It would depend upon the circumstances of the particular case. Lord Justice Mummery said that on his reading of Lawrence the approach of EC law is to locate the single source with the body responsible for setting the relevant terms. That was not determined by only addressing the formal legal question of the identity of the employer (Paragraph 29).
64. Furthermore in Armstrong Lady Justice Arden, in taking the same approach as Lord Justice Mummery in Robertson, said that in all cases, even where there is a common employer, differences in pay must be attributable to a single source.
65. Mr Clarke submitted that there was no basis in principle for seeking to distinguish between the approach to be adopted towards instances where the claimant and comparator were in common employment whether at the same establishment, at different establishments with common terms or at different establishments without common terms. In each situation a single source had to be established and it made no difference whether the claim was brought by the female worker under Article 141 or section 1(6) of the EPA. The whole basis for using the concept of single source is because it defined the comparison exercise.
66. There was nothing in the cases of either Leverton or British Coal which precluded that interpretation of the sub section. Both those cases were decided before Lawrence and the issue of single source was not considered by the House of Lords in either case.
67. Section 1(6) of the EPA should be interpreted so as to conform with the principles established under 141 even if they limited its apparent scope because what one was dealing with, Mr Clarke submitted, was the essence of the comparison process, and the heart of that was the single source. The 1970 Act was intended to give effect to Article 141 (Armstrong paragraph 7) and it is clear from, for example Pickstone v Freemans plc [1988] IRLR 357 that words should be implied into the 1970 Act in order to ensure that its meaning conforms to the decisions of the ECJ which explain and interpret that part of the Treaty, or any directive made under it, which the 1970 Act is seeking to implement. As was said in Litster:

"If the legislation can reasonably be construed so as to conform with those obligations – obligations which are to be ascertained not only from the wording of the relevant Directive but from the interpretation placed upon it by the European Court of Justice at Luxembourg – such a purposive construction will be applied even though, perhaps, it may involve some departure from the strict and literal application of the words which the legislature has elected to use."

68. The decisions in McCarthy's Limited v Smith [1980] IRLR 210 and Scullard v Knowles [1996] IRLR 344 demonstrate that section 1(6) requires a very broad and purposive construction. The EPA does not seek to give individual employees greater rights than those required by Article 141. What is required is an approach to its interpretation which takes account of what the ECJ and Court of Appeal have held to be the fundamental principles governing the concept of comparability. This ensures that the rights and obligations which Article 141 intended for both employers and employees are achieved.
69. It had been submitted by the Trust before the Employment Tribunal that the wording of section 1(6) EPA itself bore the interpretation that common terms and conditions would always need to be established by a claimant even if she was employed at the same establishment as her comparator. In response, the Claimants referred to the decision of Lawson v Britfish Limited [1988] IRLR 53 in which the Employment Appeal Tribunal held that the phrase 'and at which common terms and conditions of employment are observed' in section 1(6) of the EPA did not relate to employment 'at the same establishment' but related to other establishments outside the establishment at which the applicant was employed. The requirement for common terms and conditions did not apply therefore once it was found that the applicants and their comparators were employed at the same establishment.
70. Before us, Mr Clarke submitted that the decision of Lawson was wrong. It was decided before Lawrence, when common employment at the same establishment was thought to be enough to justify comparability, but even if it were correct, the decisions in Lawrence, Robertson and Armstrong demanded that words should be added at the end of section 1(6) as follows 'Where there is a single source of those terms and conditions observed generally or observed for the relevant classes'.
71. The addition of such words would accord with the approach of Lord Oliver, in Litster as to the construction necessary to give effect to the UK's obligations under the E.E.C. Treaty.
72. As will be apparent from the further grounds, it is the Trust's submission that if there is a requirement of a single source under section 1(6) it cannot be satisfied here as there is no single source.
73. The Respondent/Claimants submitted that the Employment Tribunal's conclusion that a single source was not required under section 1(6) of the EPA was correct. There is no authority for the proposition that a single source is a requirement in all equal pay cases. Lawrence, Robertston, Allonby v Accrington and Rossendale College and others [2004] ICR 1328 and Armstrong were all cases where claimants had to rely on Article 141. None of these cases was authority on section 1(6) of the EPA.
74. Leverton and British Coal are however authorities on Section1(6) and whilst they were decided before the case of Lawrence it has not been suggested in any case subsequent to them that they were wrongly decided, or should now be read in accordance with Lawrence. It is to be noted, Mr Robin Allen QC submitted, that Enderby v Frenchay Health Authority & Secretary of State for Health [1993] IRLR 592, a decision of the European Court of Justice, was an EPA case, yet it was not argued or held that the EPA was subject to the single source argument. Again, although this case pre-dated that of Lawrence it has not been suggested that it was wrongly decided. Had the argument been raised in Enderby it would not have been successful.
75. The interpretation of section 1(6) of the EPA as decided in Lawson was correct. The use of the words 'which' and 'which include' both qualify the words 'establishments in Great Britain'; they do not refer back to 'the same establishment'. It follows therefore that as a matter of grammatical construction as well as the reasoning in Lawson, common terms and conditions are required where the female worker and comparator work at other establishments rather than for the same employer at the same establishment. Furthermore, this interpretation makes practical good sense. Comparison can be made where applicant and comparator are at the same establishment employed by the same employer, whereas if they are employed in different parts of the country, common terms and conditions must apply.
76. The device of a 'single source' was created in order to explain the limitations to Article 141, as this article on its face, does not contain any limitations as to which comparators could be relied upon by a claimant. It was therefore necessary to create limitations. There is no such need in section 1(6) as that is complete in itself and on its face. It does not require the concept of 'single source' to understand its breadth and remit whereas Article 141 does.
77. It was submitted by the claimants that the effective incorporation of the concept of single source into section 1(6) would restrict its operation and defeat whole rafts of equal pay claims. The imposition of the concept on the restrictions already imposed by section 1(6) of the EPA would mean that a comparison could only be made where the claimants and comparators were employed by the same employer or associated employer, where the terms and conditions in the contract of the claimant and her comparator emanated from a single source, and where either the claimant was employed at the same establishment as the comparator, or the claimant and comparator were employed on common terms and conditions of employment which were observed generally or for employees of the relevant classes. In the present case only a small handful of combinations of the current 13 claimants and 13 comparators would satisfy the above conditions.
78. There is no reason why the additional hurdle of single source should be incorporated into the statute. The European Community law provides a floor of rights above which a member state legislation may go but below which it cannot go. It is not appropriate or permissible to read the EPA so as to cut down the rights available to female workers under EC law. The purpose of Article 141 is to ensure social progress and the elimination of discrimination. The principle is one of the foundations of the Community. An interpretation of the EPA which restricts those rights as the Appellant's interpretation would, is impermissible and in conflict with Litster and Pickstone rather than consistent with them. Ms Gill submitted that article 8e of Council Directive 76/207/EEC provides that member states may introduce or maintain provisions which are more favourable to the protection of the principle of equal treatment than those laid down in the Directive.
79. Autologic plc v IRC [2006] 1 AC paragraphs 16 and 17 provide that UK legislation must be disapplied or moulded to the extent necessary to enable Community rights under directly applicable revisions of Community law to be enforced. None of the authorities permits the use of Community law to create a defence limiting those rights which is what the Trust seeks to do here. Scullard v Knowles [1996] IRLR 344 demonstrates that section 1(6) of the EPA must be displaced and yield to article 119, the predecessor to Article 141, if the article permits a wider class of comparators than is contained in section 1(6). The Employment Tribunal rightly found that the United Kingdom must ensure that domestic legislation conforms to European Directives so as to enable the minimum rights as defined by the Directive to be enforced. Where European law is less generous than domestic law, the United Kingdom is not obliged to restrict domestic law as the Directives impose minimum not maximum standards.

Conclusions on Ground 2 – A2- Does section 1(6) EPA require a single source?

80. We have concluded that the Employment Tribunal was right in its decision that section 1(6) of the EPA did not require the incorporation of the concept of 'single source'. Article 141 does not, as Lord Justice Mummery said in Robertson, contain any detail on the comparison required or permitted by it for the purposes of determining whether there was equal pay for equal work by male and female workers. It was therefore necessary for the article to be explained and its limits determined. By contrast section 1(6) of the EPA defines the circumstances in which male comparators are to be treated as in the same employment as a woman and hence the circumstances in which the equality clause employed by section 1(1) of the Act operates. As the Act defines the circumstances in which the comparison can be made it is not therefore necessary, as it was in the widely framed Article 141, to incorporate a limitation in order for it to make sense. The question remains as to whether the decisions in Lawrence, Robertson and Armstrong nevertheless require the concept of single source to be incorporated.
81. None of these decisions relate to section 1(6) of the EPA. They are all concerned with the interpretation of Article 141, and do not state that they apply to section 1(6). Nor do any of these cases suggest that either Leverton or British Coal, where section 1(6) was considered, need to be revisited or read in the light of the decision of Lawrence. The references in Robertson and Armstrong to the general application of the single source test is, in the absence of any specific reference to section 1(6) to be construed as a reference to is wide applicability in Article 141 cases.
82. There is therefore no authority either binding or by way of obiter dicta, in support of the Appellant's proposition that 'single source' must be incorporated in section 1(6). It certainly would have been decisive in Enderby had it been raised in that case which it was not.
83. Does it however need to be incorporated in order to give section 1(6) relevant meaning consistent with the aims of the Equal Pay Directive and legislation? We have concluded that it does not. The decision in Lawson is in our judgment correct so that the requirement of common terms and conditions of employment being observed applies not where the woman and her comparator work at the same establishment but where they work at different establishments. The words 'which include' and 'at which' both apply to establishments in the plural rather than to the 'same establishment'. This interpretation, again not decisive, is more consistent with the exclusion of single source than its inclusion. We do not consider that the decision in Lawrence albeit later than Lawson, renders the interpretation in that case of section 1(6) incorrect.
84. The addition of the further requirement of establishing a 'single source' on top of the requirements already set out in section 1(6) would impose an extra hurdle for the female worker to overcome. Mr Clarke submitted that even if the incorporation of the 'single source' concept limited the apparent scope of section 1(6) it nevertheless should be incorporated because it was the essence of the comparison process. We do not accept that submission. We accept Mr Allen's submission that the effect of the single source concept and requirements of section 1(6) combined would restrict the principle of equal pay under Article 141. It may, as Mr Allen submitted, have the effect of defeating many pre-existing NHS claims.
85. The cases of Litster and Pickstone do not support the proposition that the UK legislation should be narrowed to accord with Article 141, if the effect of that on the proper interpretation of section 1(6) of the EPA would be to limit otherwise valid claims for equal pay. Such would not be the appropriate purposive interpretation, but one which limited the purpose of the equal pay scheme, which is to ensure social progress and the elimination of discrimination. It is not as if section 1(6) has been the cause of considerable difficulties in making appropriate comparisons, thereby unnecessarily placing the burden upon the employer to show that the variation is genuinely due to a material factor which is not the difference of sex under section 1(3) of the EPA.
86. A member state is entitled to provide more favourable provisions than the Directive and such provision cannot be restricted to the same level of protection as the Directive simply because it is more favourable. Nor is it in our judgment necessary to incorporate the 'single source' concept. Section 1(6) defines the circumstances in which men 'shall be treated' as in the same employment as a woman and hence comparable with her. If a valid comparison is deemed to arise without the need of proof of a single source there is no reason why that deeming provision should not operate in favour of a claimant, as it stands.
87. We conclude therefore that the concept of 'single source' should not be incorporated into section 1(6) of the EPA. To do so would unnecessarily restrict the proper operation of section 1(6) and limit otherwise valid comparisons from being made under the Act. To so restrict equal pay claims would be contrary to the intent and spirit of Article 141. There is no justification on the authorities for taking such a step.

Ground 3 – B2 Is the Trust a 'single source' on the facts?

Submissions

88. The Employment Tribunal had rightly concluded on issue B1 that a single source was required under Article 141. It followed, Mr Clarke submitted, that they had to make findings on issues B2, B3 and B4.
89. It was submitted on behalf of the Trust that the Employment Tribunal's findings on issue B2 were inadequate in their reasoning, inconsistent, contrary to authority, and wrong in their conclusions.
90. The Employment Tribunal failed to distinguish, Mr Clarke submitted, between the existence of a power to make a change and its exercise. Lord Justice Mummery drew that distinction clearly in Robertson when at paragraph 41 he said:

"The retention of a legal power, which has not in fact been exercised by the Crown over pay and conditions in the particular case, does not make the Crown 'the body responsible' for the actual negotiations and decisions on pay by individual departments resulting in pay differences of which complaint is made."

91. Mr Clarke submits that all employers have the power to vary terms and conditions of employment so as remove inequalities, and all employers, the pay of whose employees is fixed by some independent body will, at some point in time, have had to exercise their power to determine that pay and conditions should be fixed by that body. He submits that there is no distinction in principle between the delegation of pay setting to Departments in the Civil Service, as in the case of Robertson, and the decision by the Trust here to have its pay and conditions set by the Whitley Council. The real test is who is responsible for conducting the negotiations on pay and other terms and conditions and for reaching an agreement on them.
92. Mr Clarke submits that the Claimants fall between all stools, and that there is no single source in this case. It cannot be the Trust because the Trust delegated its power to the Whitley Councils; it cannot be the Whitley Councils because each separate Whitley Council is a separate source, and it cannot be the Secretary of State as she had not exercised any such power.
93. The Employment Tribunal found that the Whitley Councils determined rates of pay for those Trusts that had adopted Whitley Council terms and conditions. They were the body which was responsible for the inequality and which could restore equal treatment. That finding, together with the finding that the Trust was a single source could not be reconciled as there cannot be two single sources for terms and conditions of employment.
94. The Employment Tribunal relied upon the harmonisation agreement in June 2002 but, Mr Clarke submits, the Trust was doing no more than what the Crown had done in Robertson namely determining that the pay and conditions would be fixed by some other body, in this case the Whitley Councils, and not by itself.
95. The distinction which the Employment Tribunal drew when it said that there was a comprehensive review in the present case but only some evidence of harmonisation in Armstrong was a false one and in any event, on the facts of Armstrong there had been detailed consideration as to harmonisation and in particular in relation to the crucial bonuses.
96. What is crucial here however is that the Trust made the decision to have the terms and conditions of its employees set by independent bodies, the Whitley Councils, rather than by itself.
97. Mr Clarke also submits that the finding by the Employment Tribunal that the Trust rectified pay inequalities in the Wilson settlement was of no weight. It merely demonstrated that the Trust could, if it chose to do so, exercise its power to vary the terms of employment of its employees. The Wilson settlement did not rectify any inequality of pay; it was made without admission of liability and provided for the making of payments to compromise claims and, in some cases for the enhancement of pay by an amount into the future until Agenda for Change overtook that amount.
98. The fact that the Trust was theoretically in a position to change the terms and conditions of employees which had been locally devised by a different employer, and which it had inherited on merger is irrelevant. Had the dicta from Armstrong (paragraph 17.3) been properly applied the Employment Tribunal would have been bound to have determined that the Trust had not assumed responsibility for the terms and conditions which had been locally devised by different Trusts.
99. The Trust should not have taken into account the policy consideration that a claimant might be debarred from any remedy. If they feared the consequences of the result of a proper application of the law so be it.
100. The Respondent/Claimants accept for present purposes that a theoretical legal power is insufficient to establish the existence of a single source but submit that on the facts the Employment Tribunal found that the Trust did actively interfere with the terms and conditions of employment of its employees. The Employment Tribunal's findings and analysis were clear.
101. Both the Cross Claimants and the Casson Claimants supported the Employment Tribunal's conclusion that the Trust was the single source but they diverged as to the Whitley Councils. Mr Allen on behalf of the Cross Claimants submitted that there was no inconsistency between the Employment Tribunal's findings that the Trust and Whitley Council were both single sources as it was permissible to have different layers of a single source. Ms Gill on behalf of the Casson Claimants submitted that the Whitley Councils were not a or the single source.
102. Mr Allen submitted that the Court should be wary of employers defeating equal pay claims by distributing responsibility for the terms and conditions of employees between a number of different bodies. That mischief was identified in Enderby in relation to the creation of separate bargaining structures.
103. The Employment Tribunal was correct to find that the Trust was a single source where the terms and conditions of its employees were determined locally. The Trust was responsible for that inequality, assumed responsibility for it, and utilised its power to alter their terms and conditions. There was nothing theoretical about this power and consequently the dicta in Armstrong are irrelevant.
104. As to the Wilson settlement this, together with the harmonisation in June 2002 were cogent examples of the exercise of power by the Trust demonstrating that it could restore inequality and was responsible for the terms and conditions of its employees. This was a factual conclusion as indeed was the conclusion of the Employment Tribunal in the Armstrong case and the EAT cannot therefore go behind that unless the finding is perverse, which it is plainly not Mr Allen submits.
105. The Employment Tribunal was entitled to rely upon the policy argument as Lord Keith did in Pickstone when he referred to the risk of leaving a large gap in the equal pay provision enabling an employer to evade it.
106. Ms Gill submitted that the Employment Tribunal correctly observed that the Court of Appeal in Armstrong declined to determine whether an entity could constitute a single source where it had merely adopted a pay disparity created by former employers not by itself. The Tribunal correctly directed itself in concluding that the test for single source was whether the body concerned was responsible for the inequality and which could restore equal treatment. The Employment Tribunal was right to find that on merger the Trust, as a new employer, became responsible for any inequality of pay between men and women in its employment regardless of whether it had created the inequality. She emphasised that the Tribunal was entitled to reach the finding it did on the Trust's actions on the evidence and that finding could not be described as perverse.

Conclusions as Ground 3 – B2 – Is the Trust a single source on the facts?

107. The Employment Tribunal set itself the correct task in law by asking who was the body 'responsible for the inequality and which could restore equal treatment' as set out in Lawrence paragraph 18. They rightly noted that it was not enough for the Claimants to show that they had the same employer as the comparators as was stated in both Armstrong and Robertson. They were also in our judgment correct in finding that when Lord Justice Mummery in Robertson and Lady Justice Arden in Armstrong referred to the body 'responsible for setting the terms of both groups of employees' they did not mean responsible for creating the inequality. Were that to be so no equal pay claim could be brought where a Trust had merged with another. Both Lord Justice Mummery and Lady Justice Arden were expressing the same concept as set out in Lawrence in slightly different terms.
108. Whether a particular body is responsible for the inequality and could restore equal treatment depends on an evaluation of all the evidence. (Armstrong headnote paragraphs 25, 27, 28 and 30 and Robertson paragraph 29). It is therefore an issue of fact for the Employment Tribunal to determine. Such a factual enquiry may include, as it did in Armstrong, and it does here, an assessment of the body's role in harmonisation of terms and conditions and whether on the facts such harmonisation as had occurred was sufficient to demonstrate responsibility for the inequality and restoration of equal treatment. (See for example Armstrong paragraph 30).
109. The Employment Tribunal in the present case considered the agreed facts and analysed them in their decision. At paragraphs 43, 44, 45 and 46 they considered the harmonisation of terms and conditions in June 2002, Agenda for Change and the settlement of the Wilson claims. In paragraphs 47 – 56 the Tribunal found further facts relating to the Whitley Councils and in particular the harmonisation process. They noted in paragraphs 54 and 55 that it was not possible to wait for Agenda for Change hence the need for harmonisation of terms and conditions and the negotiation of the collective agreement. They found that it was considered that the existence of different terms and conditions in the different hospitals could be a recipe for unrest. They also noted in paragraph 56 that harmonisation was driving towards Agenda for Change.
110. On the basis of those detailed findings and considerations of the evidence the Employment Tribunal concluded in paragraphs 159 – 169 that the Trust had the power to change the employment terms of its employees including any inequality of pay, and demonstrated that ability by the harmonisation collective agreement. Further, the Trust rectified inequality of pay for some employees at the Carlisle Hospital in the Wilson settlement and thereby demonstrated that they could restore equal treatment. They also found on the facts that the Trust was responsible for the inequality because it had inherited the disparity on merger and further demonstrated that responsibility by dealing with it.
111. There was ample material before the Employment Tribunal upon which it could make those findings of fact and come to the conclusions that it did on the issue of single source. This was not as Mr Clarke submits a mere power but the exercise of a power available to the Trust as employers of both Claimants and comparators. The extent of the active involvement of the Trust in the harmonisation process and indeed in the Wilson settlement, are, as the Tribunal found, clear examples of the exercise of a power rather than the mere existence of such a power. The system under which the Trust operated permitted it to exercise those powers, and it did.
112. The Employment Tribunal found that both Trust and the Whitley Councils were single sources. We for our part see difficulty in finding that there can be two single sources operating at the same time. Mr Allen has submitted that there may be different layers of single source with the Whitley Council being one and the Trust being an over arching single source responsible for the terms and conditions of the Claimants and comparator group which would derive mostly from the Whitley Councils system. Whilst not accepting the concept of layers of single source we recognise that a Trust may exercise its responsibility through the Whitley Council, without thereby ceasing to be a single source. We do not accept Mr Clarke's submissions that the delegation of the fixing of the terms and conditions to the Whitley Councils is the same as the delegation to the Departments in Robertson. There, each separate Department used its discretion to introduce pay systems and negotiate pay settlements that best suited its particular needs. The Departments operated separately and distinctly one from another and such similarities as existed were a matter of choice. (Paragraph 35 Robertson). This is an entirely different situation to that of the Trust in the present case which was responsible for both Claimants and comparators. It was the Trust which could and had, by harmonisation and the Wilson settlement, dealt with inequalities, was doing so through the Whitley Councils and could renegotiate terms and conditions with the unions.
113. This is not a case such as Armstrong where there was only theoretical power to change terms and conditions. We accept Mr Allen's submissions that the Trust did assume responsibility for inequality and did utilise its power as the Employment Tribunal found to alter the terms and conditions of its employees.
114. We do not accept that the Employment Tribunal gave inaccurate or inadequate consideration to the case of Armstrong or applied it incorrectly. Nor do we consider that the reasoning as a whole can be described as inadequate. It may in some parts be brief but it sets out properly and adequately the basis upon which the decision is made. At its heart is the finding that there was a real exercise of power in relation to harmonisation and the Wilson settlement and those are findings of fact which cannot properly be challenged. Mr Clarke's submission that the Employment Tribunal did no more than investigate the Trust's power to set terms is not in our judgment correct. We conclude that there is no error of law in the Employment Tribunal's conclusion that the Trust was a single source responsible for the inequality and for restoring equality, that this was in essence a finding of fact which was open to them on the agreed facts in evidence before it and cannot be challenged. It was in no sense a perverse finding.
115. It is not necessary in view of our finding on Ground 3 – B2, to deal in detail with cross-appeal ground 4. We would note in passing however that the Employment Tribunal deals with Agenda for Change at paragraph 56 of its decision and of the argument upon it at paragraph 168 but does not deal with it further in its conclusions. On the face of the material before the Employment Tribunal there appears to us to be some merit in the Cross Claimants' argument that the Trust was actively involved in the terms and conditions of its employees through Agenda for Change and the consequent re-grading of its employees. It might further be said that although the Employment Tribunal did not consider its legal significance the Trust became liable for the pay disparity as a result of the transfer of the employment of the Claimants and their comparators under TUPE.

Ground 4 – B3 Whitley Councils/Secretary of State as single Source where both Claimant and comparator are on Whitley Council terms and conditions.

Ground 5 – B4 Whitley Councils/Secretary of State as a single source on the facts where the Claimant is employed on Whitley Council terms and the comparator on local terms and conditions or vice versa.

Submissions

B3

116. Mr Clarke submitted that on the basis of its findings and in particular those set out at paragraph 51 of its decision the Employment Tribunal should have been driven to the conclusion that each individual functional Whitley Council represented a separate single source of terms and conditions of employment for the employees covered by that individual council where the employer had adopted Whitley terms and conditions.
117. The Employment Tribunal made the appropriate finding as to the workings of the Whitley Councils, how they operated, and the extent to which they were independent of the department and ministers. Although they had to operate within cost envelopes set by ministers, the detail of how the available funding should be used was a matter for each council and ministers did not become involved in this.
118. These separate functional councils should, Mr Clarke submitted, have been regarded as separate single sources just as the separate Departments in Robertson were so regarded. The Employment Tribunal however failed to deal with this by stating 'It does not matter that there can be different Whitley Councils for claimants and comparators see Enderby'.
119. Mr Clarke submitted that this was not only an inadequate manner in which to deal with the Trust's submissions, it was also inappropriate. The case of Enderby v Frenchay Health Authority and Secretary of State for Health [1993] IRLR 591 was a case which dealt with an entirely different factual and legal situation. The case concerned the application of section 1(3) of the EPA and whether, amongst other things, an employer could rely as sufficient justification for the difference in pay, upon the fact that the rates of pay for the jobs in question were decided by collective bargaining processes which, although carried out by the same parties, were distinct and, considered separately had no discriminatory effect. The ECJ held that the answer to this point was that if the employer could rely on the absence of discrimination within each of the collective bargaining processes taken separately as sufficient justification for the differences in pay, he could, as the German Government pointed out, easily circumvent the principle of equal pay by using separate bargaining processes.
120. Enderby did not provide the answer to the Trust's submissions, Mr Clarke submitted and it was insufficient for the Tribunal to rely solely upon that case in order to deal with the Trust's argument. The case of Enderby was relied upon by the claimants in Robertson but the Court of Appeal nevertheless concluded that each individual department was a separate single source.
121. These are matters which need to be determined upon the facts but the Employment Tribunal did not carry out this exercise. Here the employer was not a party to the bargaining which was carried out by the Whitley Councils. This was done at national level with the employer's side representative being nominated by the Secretary of State and the staff side representatives nominated by various trade unions. These facts alone distinguish the case from Enderby. The Employment Tribunal in the present case did not, Mr Clarke submitted, deal at all with the situation where there were local terms and conditions and Whitley terms and conditions but no common employer.
122. Whilst the Cross Claimants invite the EAT to accept the Tribunal's findings on this issue their own preferred case was that the Secretary of State for Health was the single source and the Whitley Council a manifestation of her control. In any event the Cross Claimants contend that the Whitley Council 'en masse' could constitute a 'single source' and that the Trust's arguments to the contrary were misconceived. To find that each individual Whitley Council was a separate single source would be contrary to Article 141 as it would deprive a significant number of women of the right to bring equal pay claims against both the NHS and more generally. For example of claim in Enderby would have failed as the claimant and comparator were governed by different Whitley Councils and the claim in British Coal would have failed as there were a series of parallel pay structures. It was not suggested in Smith or Enderby that comparisons with separate collective bargaining structures were legally invalid.
123. The Casson Claimants' primary contention is that in cases of common employment the Trust was the single source but if that were not to be so then alternatively the Secretary of State must be the single source as the ultimate authority responsible for the Whitley terms and conditions. The Casson Claimants do not maintain that the Whitley Councils are a single source.

Conclusions on Ground 4 – B3 - Whitley Councils/Secretary of State as single Source on the facts where Claimant and comparator are on Whitley terms.

124. We do not accept the Trust's argument that the functional Whitley Councils are analogous to the different Departments in Robertson. As we understand Robertson the individual Departments were free to negotiate and agree upon most terms and conditions of employment and were found on the facts to be the body responsible for the inequality in pay and the body which could restore equal treatment. Such a power does not exist in the Whitley Councils as it is the Trust which has that responsibility, just at it was the Departments which had that responsibility in Robertson. The Whitley Councils, as Ms Gill on behalf of the Casson Claimants submits, is the process by which the terms and conditions were determined. They are not in our judgment the body or bodies responsible for the inequality or the restoration of equal treatment. The Whitley Council, either en masse, or through its functional councils is different from both an employer such as the Crown in Robertson or the Trust here, or the Departments in Robertson.
125. Whilst the case of Enderby cannot be said to be decisive upon the issue, the point made in it about the circumvention of the principle of equal pay by using separate bargaining processes is relevant. As the Cross Claimants submit, were the Trust's arguments correct a significant number of women in the NHS would be deprived of bringing any claim for equal pay because their comparators would, of necessity, have had their pay determined by a different Whitley Council. That cannot have been the intention of the ECJ in Lawrence. We do not therefore consider that the Trust's contention that each functional council should be treated separately as a single source is valid. We are however satisfied that the decision of the Employment Tribunal that the Whitley Councils are a single source cannot stand. As set out earlier in these conclusions the Whitley Councils are merely the process by which pay and conditions are determined. They deal with pay but they do not deal with inequality of pay nor the restoration of equal treatment. There is nothing in the evidence which suggests that they have any such power, except as an indirect consequence of any awards they may make. It is the Trust which is responsible for instigating, negotiating and agreeing changes in terms and conditions not the Whitley Councils.
126. For reasons other than those put forward by the Trust therefore we conclude that the finding by the Employment Tribunal that the Whitley Councils are a single source cannot stand.

Submissions.

Ground 5 – B4

127. It is agreed between the parties that the Employment Tribunal failed to deal with this issue. Indeed it omitted issue B4 entirely when it set out the agreed issues in its decision and placed part of the information which should have appeared under that heading against issue B3.
128. Mr Clarke submits that the Employment Tribunal was bound, upon the findings of fact which it made, to have concluded that in the case of Whitley to local comparisons where there was no common employer there could be no single source. Some of the comparators were never employed by the Trust, never employed by the same employer and were on local terms and conditions whereas the Claimants who were seeking the comparison were on Whitley terms. The Secretary of State could not be the single source when the comparators terms were set locally and the Trust could not be as it did not employ the comparator in all the cases.
129. The Respondent/Claimants accept that the Employment Tribunal erred in not dealing with issue B4 but submit that it is immaterial that they failed to do so because all of the Whitley Council to local comparisons include a Whitley Council to Whitley Council analysis on a historical basis. It follows, it is submitted that an equality clause will have modified the contract and it is irrelevant that there were Whitley Council to local periods of comparison. The Trust is the single source in all cases where it is a common employer.

Conclusions of Ground 5 – B4 Whitley Council/Secretary of State as single source on the facts where the Claimant is employed on Whitley Council terms and the comparator on local terms.

130. It is unfortunate that in a long and detailed judgment the Employment Tribunal omitted to deal with this matter. We accept however the Respondent/Claimants' submissions that it is in the circumstances immaterial for the reasons which they put forward. At the date of the claim all Claimants were on Whitley Council terms and the relevant comparators either were or had been at a point in the past. In accordance with MacCarthys v Smith [1980] IRLR 210 historical comparisons are permissible as there is no requirement for contemporaneous employment. In all cases of common employment the Trust was, as indicated earlier in this judgment the single source.
131. This Ground of Appeal must also fail.

Cross-appeal Ground 3.

132. This cross-appeal does not arise in view of the rejection of Ground 5 of the appeal and the rejection of the Trust's argument that there can be no single source where pay and conditions are determined by different functional Whitley Councils.

Cross-appeal Ground 5

Submissions

133. The Cross Claimants and the Casson Claimants challenge the Employment Tribunal's finding that the Secretary of State was not the single source.
134. The Cross Claimants' challenge is upon three bases:

Firstly that their submissions and analysis upon the Secretary of State's role were dealt with woefully inadequately by the Employment Tribunal, secondly that upon the findings which they did in fact make their conclusion was an error of law or perverse, and thirdly the Tribunal failed to set out its analysis and conclusions in accordance with the decision in Meek v City of Birmingham District Council [1987] IRLR 250 and Rule 30(6) of the Rules.

135. The Casson Claimants submitted that the Secretary of State was the ultimate authority, responsible for ratifying the Whitley Council final agreement and, as a consequence, if the Trust was not the single source then the Secretary of State was.
136. In support of their contention that the Employment Tribunal's analysis of their arguments was woefully inadequate the Cross Claimants referred to their detailed submissions of 7 September 2006 and submitted that the Employment Tribunal failed to take adequate account of their complex and detailed submissions upon the Whitley Council structure, the pay review bodies, the shift to optional local terms and conditions, the significant involvement of the Secretary of State when local terms and conditions were observed, the impact of harmonisation, and the introduction of Agenda for Change. Neither the detail nor the complexity nor the relevance of those matters was adequately dealt with by the Tribunal, Mr Allen submitted.
137. As to their submission that even upon their own findings the Tribunal's conclusion that the Secretary of State was not the single source was an error of law or a perverse conclusion, the Cross Claimants set out 28 relevant matters upon which findings were made, together with an additional 6 sub findings which it is submitted could only have led, or certainly should have led, to the conclusion that the Secretary of State was the single source.
138. These findings which are set out in the Cross Claimants' written submissions relate to the extent to which the Minister of Health or the Secretary of State is responsible for the Health Service, the Whitley Council, the membership of the Whitley Council, the supervision of the negotiations of the Whitley Council and influence upon their agenda and the outcome. The Secretary of State was actively involved in setting out the regimes, defining starting points on pay spines, and determining grades or pay scales for particular posts where necessary. The Minister was responsible for changes to agreements of the Whitley Council some of whose determinations were passed to the Department of Health for promulgation by way of Advance Letters. The members of pay review bodies were appointed by the Department of Health and the Minister set out the formal remit for such bodies. They had to operate within the financial constraints set by the Secretary of State who in one year in the early eighties would only sanction a 1.5 per cent increase. Accordingly the relevant Whitley Councils chose to recommend uniform increases of 1.5 per cent across the board. After the 1990 Act the Department of Health took political responsibility for the Service. Trusts were encouraged by the Department of Health to develop local terms and conditions but had the freedom to design and mix Whitley and non-Whitley terms and conditions for employees. The Department of Health encouraged Trusts on local terms and conditions to revert back to Whitley terms and conditions by 2001 when the process of harmonisation was commenced in preparation for Agenda for Change. The Department of Health considered and approved merger proposals. It introduced Agenda for Change in October 2004 as a single scheme for governing terms and conditions. In its strategic role of applying general policy and strategy the Department took a keen interest in the terms and conditions of each NHS Trust and in the level of pay awards, whether or not the Trust had local terms and conditions.
139. Those matters, set out in detail in the written submissions, demonstrated, it is submitted, that the degree of control and its exercise by the Secretary of State could lead to no conclusion other than that the Secretary of State was the single source.
140. Mr Clarke on behalf of the Trust submitted that the Employment Tribunal gave proper and careful consideration to all the relevant submissions by the Cross Claimants and the Casson Claimants. The Whitley Councils had to operate within a cost envelope, but how it used the sums was left to each Council, and Ministers would not intervene in such details. The Employment Tribunal was entitled to reach the conclusion that it did. As in the decision in Robertson, the question was not who had theoretical power but who in practice made the decisions and could restore equality where necessary.
141. Although the summary of the Cross Claimants' arguments was brief it was unexceptional. The key elements of the case were set out. It was to be noted that the findings of fact contained a very detailed account of the Whitley Council structure, of the workings of pay review bodies, their interrelationship with the Secretary of State and the role of the Councils in dealing with the available money. Mr Clarke sets out in paragraph 62 of his written submissions the extent to which the Employment Tribunal dealt with the various issues raised by the Cross Claimants in its decision. The detailed findings made by the Tribunal demonstrated that it had all appropriate matters in mind.
142. As to the contention that even on its own findings the Tribunal's decision was in error Mr Clarke questions the Cross Claimants' summary in relation to sub-paragraphs (viii), (xii) and (xx). He submits that the Employment Tribunal's finding showed that it clearly had in mind everything that was appropriate when reaching its decision. It was not perverse.

Conclusions on Cross Appeal 5 and the Casson Claimants' sole ground of appeal

143. For the reasons already expressed we are satisfied that the Trust was the single source in this case. There is no scope for the Secretary of State to be the single source at the same time. We do not in any event consider that the Employment Tribunal gave inadequate consideration to the key arguments or made any error in reaching its conclusion. The conclusion was not in any sense perverse on the material before it.
144. It is correct that the Tribunal's consideration of the Cross Claimants' submissions was brief but it included the key issues and there is no reason to suppose that the very substantial findings of fact made by the Tribunal were not kept in mind by them throughout. Those findings adequately dealt with the core and complexity of the Cross Claimants' submissions.
145. That the findings of fact were thorough and detailed can be seen from the Cross Claimants' own written skeleton argument. In paragraph 2 they set out the 28 matters upon which findings were made but which, it is submitted, were inadequately taken into account when reaching a conclusion. The detailed findings are set out in paragraphs 12, 15, 21, 23, 25, 26, 27, 28, 30, 31, 32, 33, 34, 35, 37, 38, 42, 43, 48, 50, 51 and 55.
146. The essence of the Cross Claimants' second argument in relation to this cross appeal is that the decision is perverse. We are satisfied that it is not. It was open to the Employment Tribunal upon the evidence before it, and recited in its detailed findings, to conclude that the Secretary of State was not the single source.
147. The ultimate control argument directed by the Casson Claimants and in effect by the Cross Claimants does not, in our judgment, assist the claimants in their cross appeal. It is without doubt that the Secretary of State exercised a substantial degree of control over the terms and conditions relating to pay, particularly over what has been called the costs envelope. Nevertheless the Secretary of State permitted discretion to the Trust as employer; it was the Trust which had the power to and did make decisions in relation to equal pay. The choice to harmonise and the decision to enter into the Wilson settlement were made by the Trust in its capacity as employer. It was the Trust who dealt with the negotiations and reached conclusions on harmonisation and it was the Trust which entered into the detailed terms of the Wilson settlement. It was not the Secretary of State which was responsible for the inequality between individual groups of employees and which could restore equal treatment; it was the Trust.
148. We are satisfied that the Employment Tribunal came to a proper conclusion on the facts before it and that this ground of cross appeal must fail. We emphasise however that this is not a case, as was submitted by the Trust, where there is no single source. If we are wrong in upholding the Employment Tribunal in its finding that the Trust was the single source under Article 141, we, for our part, would have held that the Secretary of State could be regarded as the single source, even though the Whitley Councils could not. One body was responsible; as the Casson Claimants submitted, if the Trust was not the single source, the Secretary of State was.

Appeal Ground 6-C1 - Was there a radical change in terms and conditions in 2002?

Submissions

149. The Trust submitted that those employees who were employed on local terms and conditions until the harmonisation agreement in June 2002 brought them onto Whitley Council terms were statute barred from bringing a claim for equal pay as the changes to their contracts by virtue of the harmonisation process were so radical that it brought their previous contract to an end. They were thus required to bring their claims within 6 months of the termination of their previous contract but failed to do so.
150. The decision in Marriott v Oxford and District Co-operative Society [1969] 1 WLR 254 stated the principle that in order to amount to a rescission, the variation in the contract must be "so fundamental that nobody could claim that the original contract was still in being". There is therefore a distinction between slight variations and significant or substantial variations which are so fundamental that the original contract ceases to exist.
151. The Employment Tribunal was, the Trust submits, wrong in its conclusion that the changes in the contracts on harmonisation were not significant changes but variations of entitlement that each of the employees already had, and in its conclusion that the changes were not so significantly different that common sense led to there being a different contract. (Paragraph 180).
152. Mr Clarke submits that the Tribunal's decision was one which no reasonable tribunal could have reached, addressing its mind properly to the changes which took place. Those included radically different pay grades and pay scales and an entirely new mechanism for determining pay and other benefits namely the Whitley Council rather than local determination. This latter point, which was a significant change, was not dealt with by the Employment Tribunal. Furthermore Appendix 5 which the Employment Tribunal appended to its judgment was not the correct version, though that had in fact been put before it and was in front of it when submissions were made so it may have been a purely administrative error by which the wrong appendix was put in the bundle.
153. A proper examination of the differences in the correct appendix demonstrate that there were different pay levels, different salary scales and pay spines, overtime on Sundays and bank holidays which was different, sick pay which was different in structure and holiday pay which was not the same for all. The main part which was contractually different however, Mr Clarke submitted, was that before employees were on local terms whereas after they were on national Whitley Council terms.
154. There was no proper analysis of the pay changes or the local to national change.
155. When these were taken into account the Tribunal was bound to find that rescission had taken place. In contrast, the Tribunal relied upon matters which neither individually nor cumulatively supported its conclusion that the changes were not significant. The fact that pay was protected tended to emphasise the fact that the changes were significant. It affected progression up the pay scale. The fact that there was harmonisation pointed towards significant change. The agreement took months to achieve. It was recognised in the case of Sorbie v Trust House Forte Hotels Limited [1976] ICR 55 that a radical change may be achieved by a collective agreement.
156. It was correct that the Trust told affected employees that the only difference they would see would be as to how their payslip was presented, but that could not change the fact that the pay grades were different as were the pay scales. The local terms and conditions had fewer grades of nurse than did Whitley and a number of points on the pay spine and their values differed.
157. It was also true that the status of the employees did not change, but that did not assist in determining whether there was a new contract or not. The same applied in relation to the hours of work. A correct analysis of the situation would lead to the conclusion that the parties intended a termination. (Cumbria County Council v Dow and others [2008] IRLR 109.)
158. The Respondent/Claimants submitted that the Employment Tribunal considered all appropriate matters as can be seen from the correct version of Appendix 5 set out in core bundle 2 pages 691 onwards which it had in its possession during submissions. The harmonisation agreement amounted only to an amendment and not a novation. Clearly the Tribunal had all relevant matters in mind as is clear from its findings of fact and its consideration of this issue at paragraphs 177-180. The case which the Trust advances is a series of ill-founded perversity challenges which do not even come close to satisfying the high standard required in such cases.

Conclusions on Ground 6 – C1 Radical Change in terms and conditions

159. It is clear from paragraphs 79 and 177-180 of the decision that the Employment Tribunal took into account all the relevant facts on this issue and the Trust's submissions. Paragraph 79 makes it clear that Mr Clarke's submission that the change from local to national entitlement was a fundamentally different contract was expressly taken into account, as were the changes in pay and spine positions on harmonisation. Paragraph 179 shows that Appendix 5 was considered expressly and the variations in it taken into account.
160. The factors relied upon in its decision by the Employment Tribunal were all matters upon which it was entitled to rely. The fact that the Trust wrote to its employees stating that "effectively the only difference you will see is how your payslip is presented" suggests that the Trust's view at the material time was that this was not a significant change. That together with the fact that the status of each employee remained the same was clearly a matter which the Tribunal was entitled to take into account in assessing whether the changes were slight or so significant that they brought the contract to an end.
161. We can see no error in the Tribunal's reasoning or indeed in its conclusion. This ground of appeal must also fail.

The Cross Appeals

162. During the course of this judgment we have dealt with cross appeals 2, 3 4 and 5 by the Cross Claimants and the sole ground of cross appeal by the Casson Claimants. There remains cross appeal ground 1 by the Cross Claimants.

Cross Appeal Ground 1 – The date of analysis of common terms and conditions

Submissions

163. The Employment Tribunal stated that the only point in time at which the analysis of common terms and conditions of employment needed to be assessed was at the date of the presentation of the claims, which was generally in 2004 (Paragraph 146). This conclusion was an error in law, Mr Allen submitted, as the Employment Tribunal should have examined whether there were common terms and conditions of employment between the claimants and their comparators for the entire 6 year period. In his oral submissions Mr Allen said that the only two claimants affected were Mrs Reid and Mrs Newlands and he accepted that it was understandable that the Employment Tribunal had taken 2004 as the date because of the existence of Appendix 4 which analysed the different Whitley Council terms and conditions as at April 2004 and had been prepared by the agreement of the parties.
164. Nevertheless, Mr Allen submitted, 2004 did not deal with the situation of Mrs Reid and Mrs Newlands. It was not the case, as the Trust had contended in its reply to this ground of cross appeal, that the claimants had only sought to compare themselves and their comparators in their roles that they occupied as at the date of the claim, or if the claimant left at an earlier date, at that date. The fact that in the Master ET1 the claimants had limited their claim to the role they were performing at the date of the claim did not mean that they had precluded themselves from arguing that an equality clause arose prior to that date.
165. The Trust submitted in response to this ground of cross appeal that the parties had agreed Appendix 4 and put it before the Tribunal. The Tribunal was not invited to consider the observance of common terms and conditions at any time other than at the presentation of the claims in 2004. It was understood by the Trust to be considered by the parties that Appendix 4 would be sufficient to deal with the point. As a consequence any new argument would be faced with the decision of Kumchyk v Derby County Council [1978] ICR 1116 in which it was determined that a point of law not taken before the industrial tribunal could be considered on appeal but only in limited circumstances, none of which applies here.
166. Mr Clarke submitted that the Master ET1 served in February 2007 only asked the role of complainant and comparator to be considered as at the date when the original ET1 was lodged. The Tribunal was not asked to look at any particular point in time over a six year period. When all parties produced Appendix 4 by way of agreement the burden could not fall upon the Trust to produce and deal with material relating on this issue to the whole of the six year period. There was no evidence or argument as to the terms and conditions enjoyed by particular employees at particular times save as agreed by the parties in Appendix 4 and otherwise.

Conclusions on Cross Appeal Ground 1 – The Date of analysis of common terms and conditions

167. It is clear from the material before the Employment Tribunal, and in particular the Master ET1 and Appendix 4, that the Employment Tribunal was requested to consider whether common terms and conditions were observed as at the date of the presentation of the claim. It appears that they were not asked to consider any particular employee at any particular time. Nor was there any evidence or argument adduced in relation to that matter. It does not seem appropriate in our judgment in these circumstances for this issue to be raised now when neither evidence nor argument was adduced on it before the Employment Tribunal. We do not feel able to deal with the matter in such circumstances on the material before us, nor would it be appropriate to send it back to the Employment Tribunal on this issue at this stage. It may be that there is some merit in the Cross Claimants' appeal upon this issue but unless it is determined by way of agreement it does not seem to us that it can now be properly dealt with. This ground of cross appeal must therefore be dismissed.

Summary of Conclusions

168. The appeal is dismissed save for ground 4-B3, where the Employment Tribunal's decision that the Whitley Councils were a single source on the facts is set aside but for reasons which are different from those put forward by the Appellant. The cross appeals are all dismissed.
169. The Employment Tribunal was entitled to find that common terms and conditions were observed generally where the claimant was employed by the same employer as her comparator but not in the same establishment (Ground 1-A1); the contingent cross appeal Ground 2 does not arise as in view of its finding as to the observance of common terms and conditions generally there was no need for the Employment Tribunal to determine whether the terms and conditions of claimants and comparators were 'broadly similar'. Section 1(6) EPA does not require a single source (Ground 2-A2). The Tribunal was entitled to find that the Trust was a single source on the facts (Ground 3-B2); cross appeal Ground 4 did not therefore arise though we note that there is some merit in the Cross Claimants' further arguments as to why the Trust was the single source. The Tribunal was wrong in concluding that the Whitley Councils were a single source but for reasons different from those put forward by the Appellant; the Tribunal was correct in concluding that the Secretary of State was not a single source (Ground 4-B3). The Tribunal should have dealt with Whitley Council to local comparisons, but had they considered it, they would properly have concluded that the Trust was the single source where it was the common employer and all Whitley Council to local comparisons included a Whitley Council to Whitley Council analysis on a historical basis. (Ground 5-B4). Cross appeal Ground 3 does not arise. The Employment Tribunal was entitled to find that there was no radical change in terms and conditions by reason of the harmonisation agreement in June 2002; the contract therefore continued as amended and was not rescinded. (Ground 6-C1).
170. The Employment Tribunal did not err in law when it restricted its analysis of common terms and conditions to the date of the presentation of the claims (Cross appeal Ground 1). The Employment Tribunal's conclusion that the Secretary of State for Health could not be a single source was neither an error of law nor perverse. (Cross appeal Ground 5 and the Casson cross appeal).