Allonby v Accrington & Rossendale College & Ors

Factual and Procedural Background

This case concerns a contractual arrangement for the provision of lecturers' services by colleges of further education aimed at reducing the financial impact of new statutory employment rights. The Appellant was employed as a part-time lecturer on a series of one-year contracts paid hourly, which were recognized as continuous contracts of service with statutory obligations.

Due to legislative changes requiring equal benefits for part-time lecturers, the College terminated or did not renew these contracts and instead engaged lecturers as self-employed subcontractors through an agency, Company A. This resulted in reduced pay and loss of employment benefits for the affected lecturers, including the Appellant.

The Appellant, supported by her union and the Equal Opportunities Commission, brought proceedings against the College for redundancy payment, unfair dismissal, and indirect sex discrimination. Further claims were brought against Company A and the Department for Education and Employment regarding discrimination in pay and pension rights.

The redundancy claim was settled. The Employment Tribunal and Employment Appeal Tribunal issued decisions largely against the Appellant, but permission to appeal to this court was granted on all issues.

Legal Issues Presented

1. To what extent do domestic or European legislation forbid or qualify contractual arrangements that disproportionately impact or disadvantage women compared to men?
2. Whether the Appellant's dismissal constituted indirect sex discrimination under the Sex Discrimination Act 1975.
3. Whether the College and Company A discriminated against the Appellant as a contract worker under section 9 of the Sex Discrimination Act 1975.
4. Whether the Appellant is entitled to equal pay under the Equal Pay Act 1970 by comparison with a male full-time lecturer employed by the College.
5. Whether the Appellant has rights to occupational pension benefits under the Teachers' Superannuation Scheme and relevant pension legislation.
6. Whether questions of interpretation under European law, particularly Article 141 of the Treaty of Rome, require referral to the European Court of Justice.

Arguments of the Parties

Appellant's Arguments

• The contractual arrangement imposed a requirement or condition for continuous employment that disproportionately disadvantaged women, constituting indirect sex discrimination.
• The College and Company A discriminated against her as a contract worker by denying access to benefits and equal pay.
• Under European law, especially Article 141 of the Treaty of Rome, she is entitled to equal pay and pension rights despite differences in contractual status.
• The College's justification for dismissal and re-engagement through subcontracting was insufficiently scrutinized and failed the test of objective justification.
• Section 9 of the Sex Discrimination Act 1975 applies broadly to discrimination against contract workers, including differences between contract workers and employees of the same principal.

Respondents' Arguments

• The College argued that the decision to subcontract was a commercial business decision, not the imposition of a discriminatory requirement or condition.
• They contended that any disproportionate impact was justifiable due to financial necessity and the need for budgetary control.
• Company A maintained that it set the terms of the contract with the Appellant, not the College, limiting the latter's liability under section 9 claims.
• Regarding equal pay, the respondents argued that the comparator must be employed by the same employer, which was not the case here.
• On pension rights, the respondents submitted that the Appellant's contract did not confer membership rights in the pension scheme and that trustees, not employers, are responsible for pension discrimination claims.
• They contended that the existing domestic law and tribunal decisions were consistent with European law and that no breach of Article 141 had been established.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analyzed the case primarily through the lens of indirect sex discrimination under the Sex Discrimination Act 1975 and related European law provisions.

It affirmed that the relevant "requirement or condition" imposed by the College was that continuous employment required prior salaried employment, which disproportionately disadvantaged women due to the composition of the workforce.

The court rejected the respondents' narrower characterization of the condition and the reasoning in the precedent Brook v London Borough of Haringey, deeming it flawed for conflating indirect with direct discrimination and for being inconsistent with later European Court of Justice decisions.

The Employment Tribunal's choice of the comparison pool and recognition of disproportionate impact were upheld, though the court noted the Tribunal's failure to explicitly find the difference "considerably" smaller as statutorily required and remitted this for reconsideration.

On justifiability, the court found the Employment Tribunal's reasoning deficient. It had not balanced the discriminatory effect against the College's business needs and had accepted the College's reasons uncritically without considering alternative measures or the proportionality of dismissal.

The court emphasized the need for a clear, objective balancing exercise and noted that a discriminatory aim cannot justify discriminatory means.

Regarding discrimination against contract workers under section 9 of the Sex Discrimination Act, the court held that the section applies broadly to discrimination by the principal, including differences between contract workers and employees of the same principal, and remitted the matter for further factual determination.

On equal pay claims, the court identified a conflict between domestic law requiring the same employer for comparison and European law provisions emphasizing equal pay within the same establishment or service. It found the domestic interpretation restrictive and referred questions to the European Court of Justice for clarification.

The pension rights claim was similarly referred to the European Court of Justice, acknowledging the complex interaction between national pension legislation and EU equal treatment requirements.

The court underscored the importance of clear reasons in tribunal decisions, particularly when serious disparate impacts arise, and stressed the duty to provide adequate reasoning to enable appellate review and fairness.

Holding and Implications

The court allowed the appeal in part and ordered the following:

• The issues of justifiability of the indirectly discriminatory condition and the extent of disproportionate impact are remitted to the Employment Tribunal for reconsideration in light of the court's guidance.
• The claims under section 9 of the Sex Discrimination Act 1975 regarding discrimination against contract workers are remitted for further factual and legal determination.
• Questions concerning the interpretation and application of European law on equal pay and pension rights are referred to the European Court of Justice.
• Permission to appeal to the House of Lords was refused for the respondents.
• Costs are awarded to the Appellant against the first and third respondents.

The decision directly affects the parties by requiring further tribunal consideration and European Court guidance but does not establish new binding precedent beyond clarifying the application of existing principles. It highlights the necessity for tribunals to conduct proper balancing exercises in indirect discrimination cases and recognizes the evolving interplay between domestic and European law in employment discrimination.