Inner House overturns EAT decision on part-time clerk’s pension entitlement

The Advocate General for Scotland has successfully challenged an Employment Appeal Tribunal decision that a solicitor who worked part-time as a clerk to the General Commissioners of Income Tax was entitled to a pension.

Judges in the Inner House of the Court of Session ruled that an Employment Tribunal decision, which dismissed the lawyer’s claim that he received “less favourable treatment” than a full-time clerk, was correct.

Lady Smith, Lord Drummond Young and Lady Clark of Calton heard that the claimant, John Barton, worked part-time as a clerk to the General Commissioners of Income Tax, when their functions were transferred to the tribunal structure established by the Tribunals Courts and Enforcement Act 2007, until his retirement on 31 March 2009.

He had worked as a clerk in Scotland for about 38 years, during less than 50% of normal working hours – for four hours each week.

The court was told that another clerk to the General Commissioners of Income Tax, Mr R M Howey, worked for three-and-a-half days each week, amounting to 70% of a normal five-day working week.

The test for entitlement to a pension prescribed by section 3(3) of the Taxes Management Act 1970 is that a clerk “is required to devote substantially the whole of his time to the duties of his office” and 70% of a normal working week is accepted as falling within the meaning of the term “substantially”.

When he retired on 30 November 2001 Mr Howey was granted a pension, but Mr Barton was not, prompting the claimant to contend that he received less favourable treatment than Mr Howey, contrary to his part-time worker’s rights.

When he applied for a pension Mr Barton relied on the provisions of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000(PTWR), article 141 of the Treaty of Rome and the Equal Pay Directive 75/117, contending that part-time clerks should not be treated less favourably than “our full-time brethren”, but his application was rejected for the reason that he could not be “classed as a “full-time clerk” within the meaning of section 3(3) of the 1970 Act.

Judge Macleod in the Employment Tribunal, sitting in Edinburgh, dismissed that claim on the ground that although Mr Howey was assessed as “full-time” for the purposes of section 3(3) of the 1970 Act, he was, nonetheless, in fact a “part-time worker” for the purposes of the PTWR.

However, Mr Barton’s appeal to the Employment Appeal Tribunal (EAT) was upheld after the judge, Lady Stacey, applied the Marleasing principle – even though Mr Barton did not present any argument based on the doctrine, nor was it raised in the course of the hearing of the appeal.

Applying Marleasing she held that it was clear from the Directive and the PTWR that “granting the possibility of a pension to a full – time worker but denying a part-time worker access to that possibility is discriminatory” and that therefore “the Act requires to be read down by omitting the words “full-time” and the definition.

Lady Stacey held that Mr Howey was a valid comparator since he was identifiable as a full-time worker and therefore Mr Barton had been treated “less favourably” when the 70% Ministry of Justice policy was decided on.

The Advocate General (representing the Secretary of State for Scotland, the Ministry of Justice and Her Majesty’s Courts and Tribunals Service, all of whom have a relevant interest), appealed to the Court of Session, contending that the Mr Barton’s claim was “rightly rejected” by the Employment Tribunal.

Allowing the appeal, the judges observed that while Mr Howey was clearly a “worker” in terms of the PTWR, it was not established that he was a “full-time worker”.

Delivering the opinion of the court, Lady Smith said: “Mr Howey did not work full-time. He worked for 70% of the maximum hours potentially available. The starting point is, therefore, that Mr Howey was a part-time worker.

“For the proposition that Mr Howey was in fact a full-time worker, Mr Barton – and the EAT – relied solely on the fact that Mr Howey had passed the stage one threshold in the MoJ policy and, having done so, was treated for the purposes of section 3(3) of the 1970 Act as a full-time clerk.

“We cannot accept that that sole fact demonstrates that ‘having regard to the custom and practice of the employer in relation to workers employed by the worker’s employer under the same type of contract’ he was ‘identifiable as a full- time worker’ (reg 2(1)).

“The custom and practice of an employer is a question of fact. Relevant evidence that is accepted as being credible and reliable or agreement as to relevant fact is required before it can be established. There was, however, neither evidence before nor any finding in fact made by the ET of Mr Howey’s employment bearing any indicia of full-time worker status…”

The judges agreed with the appellants that passage through that threshold was not of itself indicative of the individual concerned having lost his part-time worker status.

Lady Smith explained: “Mr Howey did not become a full-time worker. His part-time worker status was, we agree, unaffected by the policy and unaffected by the implementation of the policy in his favour. He remained a part-time worker. As observed by Judge Macleod, the PTWR do not provide protection for workers against less favourable treatment when compared to part-time workers who are not full-time but work longer hours than they do.”

It was by application of the Marleasing principle that Lady Stacey concluded that Mr Barton had been entitled to pass the stage one threshold, but in doing so she had gone against the intention of parliament.

She added: “The EAT applied it not to the regulations under which Mr Barton’s claim was brought but to the statutory provision by reason of which his pension application was refused, the need to do so being seen as arising because to grant the possibility of a pension to a full-time worker but deny that possibility to a part-time worker was discriminatory; section 3(3) of the 1970 Act accordingly required to be read down. The rewriting involved in the EAT’s approach would, we consider, be so fundamental and would distort a piece of primary domestic legislation that it would not be an appropriate application of the Marleasing principle.

“As indicated in the discussions of that principle in the authorities to which we refer above, there are limits to what can be done by the court to amend the expressed will of Parliament as set out in its legislation and care has to be taken to ensure that the court does not legislate under the guise of reading down. The court would, however, be doing just that if the references to ‘full-time’ in sec 3(3) of the 1970 were to be deleted.”