P Sharma & Others v. Manchester City Council

Factual and Procedural Background

The appellants, referred to as the claimants, were part-time lecturers employed by the respondent, Company A, within its Adult Education Service. They worked under different categories of part-time contracts, notably including established part timers governed by a Collective Agreement Appendix which guaranteed a minimum of one-third of the previous year's hours. The respondent faced financial difficulties and funding cuts, leading to proposed reductions in staff hours and voluntary redundancies. The claimants contended that the application of Appendix 10 and subsequent reduction of hours constituted less favourable treatment contrary to the Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 ("the Regulations"). The Employment Tribunal unanimously found no unlawful treatment, and the claimants appealed this decision.

Legal Issues Presented

1. Whether the claimants were subjected to less favourable treatment on the grounds that they were part-time workers under the Regulations.
2. If such less favourable treatment existed, whether it was justified on objective grounds.
3. Whether the Employment Tribunal erred in law by requiring that the less favourable treatment be caused solely by part-time status.
4. Whether the "but for" causation test or the "reason why" test applies in determining discrimination under the Regulations.
5. Whether the existence and implementation of Appendix 10 constituted unlawful less favourable treatment.

Arguments of the Parties

Appellants' Arguments

• The introduction and existence of Appendix 10 was itself an unlawful contractual term discriminating against part-time workers.
• Implementation of Appendix 10, by reducing hours according to its terms, necessarily breached the Regulations.
• The Tribunal should have applied the "but for" test for causation, showing that but for their part-time status, claimants would not have been treated less favourably.
• There is no valid distinction between discrimination based on part-time status and discrimination based on contractual terms exclusively applied to part-time workers.
• The subjective intentions of the respondent's management were irrelevant to the question of discrimination.

Respondent's Arguments

• The less favourable treatment was not solely due to part-time status but because the claimants had particular contractual terms allowing flexibility in hours.
• The Tribunal was correct to apply the "reason why" test and the "sole reason" requirement from relevant case law.
• The claimants could not challenge the contractual terms themselves unless they had been implemented to their detriment.
• The fractional part-time claimant’s situation differed materially and should be considered separately.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the application of the Regulations, focusing on whether the less favourable treatment was "on the grounds that" the claimants were part-time workers. It reviewed the relevant statutory provisions and the interpretation of causation tests in discrimination law, particularly the "reason why" and "but for" tests. The Employment Tribunal had applied the "reason why" test coupled with a restrictive "sole reason" interpretation derived from Gibson, concluding that the treatment was not solely because the claimants were part-time but because they held particular contractual terms.

The appellate court rejected the Tribunal’s "sole reason" interpretation as inconsistent with the Directive's purpose, emphasizing that discrimination need not be the only reason but must be a reason for the treatment. The court found that the existence and application of Appendix 10 constituted less favourable treatment linked to part-time status. It held that a part-time worker can challenge less favourable contractual terms even if not yet implemented to their detriment, supported by the Regulations’ provisions relating to terms and detriments.

The court further held that the argument that the term only applied to some part timers and thus was not discrimination on the grounds of part-time status was untenable, as selective adverse treatment of part timers still engages the Regulations. It also rejected the respondent's attempt to separate the contractual term from the part-time status, considering such a distinction artificial and undermining the protections afforded by the Regulations.

Regarding the fractional part-time claimant, the court acknowledged potentially material differences and remitted that aspect of the case to the Tribunal for further consideration.

Holding and Implications

The appeal was ALLOWED in respect of the established part-time workers. The court held that the Regulations were breached by the existence and application of Appendix 10, constituting unlawful less favourable treatment on the grounds of part-time status. The matter was remitted to the Employment Tribunal to determine appropriate remedies.

The fractional part-time claimant’s case was remitted for further consideration due to potential differences in circumstances. No new precedent was established beyond clarifying the interpretation of causation and the scope of discrimination under the Regulations. The decision affirms that less favourable contractual terms exclusive to part-time workers engage the Regulations and that the "sole reason" test is not a proper construction of the Directive or domestic law implementing it.