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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Copple & Ors v Littlewoods Plc & Ors [2011] EWCA Civ 1281 (08 November 2011) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2011/1281.html Cite as: [2011] Eq LR 1271, [2011] EWCA Civ 1281, [2012] 1 CMLR 36, [2012] ICR 354, [2012] IRLR 121, [2012] 2 All ER 97, [2011] Pens LR 443

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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HHJ McMullen QC, Mr K Edmondson JP & Mr D Smith
UKEAT/0116/10/ZT, BAILII: [2010] UKEAT 0116_10_2312

		Royal Courts of Justice Strand, London, WC2A 2LL
		08/11/2011

Lord Justice Elias :

1. This appeal raises a short point of some importance relating to the rights which certain female part-time workers can assert once they are able to establish that their employer's pension scheme indirectly discriminated against part-timers on grounds of sex by denying them access to the employer's occupational pension scheme. The critical feature of these part-time workers is that they would not in fact have chosen to join the pension scheme even if they had been eligible to do so. I will refer to them as the "opt-out women".
2. The established approach which courts have adopted with respect to such women is to conclude that they are not entitled to any remedy arising from their exclusion from the pension scheme since they have suffered no loss. I shall call this denial of remedy to the opt-out workers the "opt-out principle". Two different reasons have been given for adopting this principle. One is that there is no breach of the equality principle with respect to such women since no detriment has been suffered. The other is that although the mere denial of the right of access does constitute a breach of the equality principle, given that such women have suffered no loss as a consequence of the breach, they ought not to be entitled to any remedy. The appellants submit that the opt-out principle is wrong as a matter of law: there is a breach of the equality clause for which a proper and effective remedy must be provided in accordance with EU law.

The facts.

3. The essential facts fall within a very short compass. The respondent employer runs the famous Littlewoods Pools organisation and has a large mail order business and some retail shops. Many hundreds of claimants, all part-time women, alleged discrimination resulting from being denied access to the employer's pension scheme during certain periods in the past (the "closed periods"). Certain women were chosen as test cases. The EAT described their circumstances as follows:

"The Claimants were employed in various positions, principally in occupations where they were described as "graded employees", as opposed to the supervisory and management positions of "zoned employees". Their dates of employment begin as long ago as 1968. For the purposes of legal proceedings, 8 April 1976 is the relevant start date, for this is when the judgment of the ECJ in Defrenne v Sabena [1976] ECR I-455 took effect. The availability of a pension scheme to employees of the Respondents changed at different stages and the relevant periods are as follow:

(1) 8 April 1976 to 1 January 1977: membership of the scheme was compulsory for supervisors and voluntary for others, but part-time staff were excluded.

(2) 1 January 1977 to 6 April 1988: membership of the scheme was made compulsory for new entrants in the zoned categories; part-timers were excluded. It was closed to graded employees but those already in the scheme were entitled to remain and to continue contributing. In effect, it became a "top hat" scheme available only to managers.

(3) 6 April 1988 when section 15 of the Social Security Act 1986 came into effect to 1 June 1988: This rendered void any term within an occupational pension scheme which made membership of the scheme compulsory. The Respondents' scheme, therefore, was voluntary by law.

(4) 1 June 1988: membership of the scheme was made available on a voluntary basis to all zoned and graded staff, but not to part-timers.

(5) 1 April 1990 to 1 July 1995: eligibility for the scheme was opened up in stages to part-timers, first to those working 22.5 hours, then 15 hours, then 12 hours a week and finally to all on 1 July 1995."

4. The closed period therefore varies depending upon the part-timer's hours of work. The part timers most adversely affected would be those working under 12 hours a week; they would have been excluded from 8 April 1976 to 1 January 1977 and then again from 1 June 1988 to 30 June 1995.
5. The employer conceded that during the closed period part-timers were the subject of indirect discrimination which was not justified. However, it applied the opt-out principle and refused to allow those whom it believed fell into the category of opt-out women to join the scheme with retrospective effect. The employer took the pragmatic view that if a woman had failed to join the scheme within three months of being eligible to do so, it would assume that she would not have joined it earlier even if eligible and was therefore covered by the opt-out principle.

The law.

6. The detailed statutory provisions relating to the area of pension equality are extremely complex. They are summarised admirably by HH Judge McMullen QC in the EAT in Preston v Wolverhampton Healthcare NHS Trust No. 3 [2004] ICR 993 and are reproduced in paragraph 13 of the EAT decision below. For the purposes of this appeal, it is necessary to focus only on a limited number of provisions. First, the Equal Pay Act 1970 section 1 establishes the principle of equal pay, which includes pension benefits under an occupational pension scheme: see Worringham and Humphreys v Lloyd's Bank [1981] ICR 558 (ECJ). The principle operates by implying an equality clause into the woman's contract so that if, apart from the equality clause, her contract includes a term which is less favourable than a similar term in the man's contract, her contract is modified so as to ensure that the term is no less favourable than his. The principle has been modified with respect to access to pension schemes so as to ensure that the terms on which access is granted are no less favourable: see regulation 10 of the Occupational Pension Schemes (Equal Access to Membership) Regulations 1976.
7. Given the period under consideration, it is common ground that the remedy for breach of the equal access principle is found in regulation 12 of the 1976 Regulations which provides, so far as is now material:

"The Equal Pay Act shall be so modified as to provide that where a court or an industrial tribunal finds that there has been a breach of a term in a contract of employment which has been included in the contract, or modified, by virtue of an equality clause and which relates to membership of a scheme, or where it makes an order declaring the right of an employee to admission to membership of a scheme in pursuance of the equal access requirements, it may declare that the employee has a right to be admitted to the scheme in question with effect from such date ("the deemed entry date") as it may specify, not being earlier than …8 April 1976."

8. There are two points to note about this provision. First, it does not oblige a court or tribunal to grant a declaration once a breach of the equality clause is found; the remedy is discretionary. Second, it defines the earliest period from which the court can declare a right of admission but it does not in terms limit the period of the declaration to the period during which the equality clause was infringed.
9. If a woman is seeking a declaration recognising her right to retrospective membership, she is required to pay back contributions which she would have had to pay had she been in the scheme at the relevant time. That is compatible with EU law: see National Pensions Office v Jonkman [2007] 3 CMLR 25 para 27.

The hearing before the Employment Tribunal.

10. The claimants before the Employment Tribunal made a root and branch attack on the opt-out principle. The arguments run at that stage were essentially those advanced before the EAT and again before us. First, it was submitted that to apply the opt-out principle denies an effective remedy to part-timers who have been the subject of discrimination and is accordingly contrary to EU law. The claimants should have been granted a declaration that they were entitled to membership of the pension scheme as of right (provided they paid the necessary contributions) for the period during which they were subject to discrimination whether they would have chosen to join the scheme or not. If successful, this submission would have ensured that the claimants would be treated as members during the closed period.
11. That still raised the question whether they were entitled to a declaration that they should retrospectively be treated as members during the open period when they were eligible to join the scheme but had chosen not to do so. The appellants submit that they were so entitled because of the application of the principle developed by the EAT in Sorbie v Trust House Forte Hotels Ltd [1977] ICR 55 since affirmed by the Court of Appeal in Sodexo Ltd v Gutridge [2009] ICR 1486. I consider the merit of these arguments below.
12. The Employment Tribunal rejected both these arguments. As to the first, it concluded that since those who opted out had not suffered a detriment, there was no breach of the equality principle. In any event, it was satisfied that it would not be appropriate to grant the discretionary remedy of a declaration of entitlement to retrospective membership since no prejudice had been suffered.
13. The Employment Tribunal also held that the Sorbie principle was inapplicable and could not be relied upon to justify a declaration of entitlement to take effect retrospectively. This would put the claimants in a better position than male full timers who had chosen not to join once they were eligible to do so.
14. The Employment Tribunal also had to consider whether on the facts the claimants fell into the category of opt-out workers. If they did not, they were entitled to the declaration of membership. In some cases it found that the women would have joined the pension scheme had they been able to do so, notwithstanding that there had been some delay in joining once they became eligible. In the other cases it concluded that they would not have joined and therefore were not entitled to a declaration conferring the rights of membership during the closed period.

The decision of the Employment Appeal Tribunal.

15. None of the Employment Tribunal's factual findings were challenged before the EAT. The only question was whether the opt-out principle was in accordance with EU law, and whether the Sorbie principle preserved the right of women to retrospective membership of the scheme even during the open period when they were eligible to join but chose not to do so.
16. The EAT (HH Judge McMullen QC presiding) held that the opt-out principle was wholly compatible with EU law. The EAT disagreed with the conclusion of the Employment Tribunal to the extent that it considered that it was a breach of the equality clause, as modified in relation to pension schemes, to fail to afford part-timers the right of access to the pension scheme. However, it agreed with the alternative ground relied on by the Employment Tribunal, namely that in the circumstances it was not appropriate to grant the remedy of a declaration of entitlement. This was a discretionary remedy and it would not be appropriate to grant that remedy to provide significant benefits to an employee who had suffered no loss.
17. The EAT observed that whilst EU law requires a real and effective remedy, as Marshall v Southampton and South West Health Authority (No. 2) [1993] ICR 893 (ECJ) makes clear, that does not mean that an employee is entitled to valuable reparation where no loss has been incurred.

The grounds of appeal.

18. The part-time women now renew the submissions that were rejected by the EAT. They also seek to advance two further arguments which were not pursued before the EAT. The first is that even if the opt-out principle is a legitimate approach to the question of remedy, the Employment Tribunal imposed too high a burden of proof on employees who sought to establish that they would have joined the scheme had they been eligible to do so.
19. The second concerns the particular finding of the Employment Tribunal that one of the claimants, Ms Smith, would not have joined the scheme if eligible and therefore fell into the opt-out category. It is submitted that this was a perverse finding not sustained by the evidence. Mr Linden QC, counsel for the employer, did not object to the first ground being canvassed before us, but he did object to the second being advanced. I will return to these issues after addressing the two principal grounds of the appeal.

Is the opt-out principle compatible with EU law?

20. As I have said, there are two different formulations of the opt-out principle. The Employment Tribunal held that there is not even a breach of the equality clause if there is no loss or detriment suffered by the part-time woman. Mr Linden QC, counsel for the employer, sought to support that analysis. He drew an analogy with someone who has a right to exercise a contractual option clause; until he chooses to exercise the option, no breach of contract can arise. Furthermore, he submitted that the conclusion was consistent with the law of indirect discrimination which is the form the discrimination takes in this case and which requires a detriment. No detriment is suffered if the woman had not wished to join the scheme.
21. The EAT rejected that analysis, and so would I. In my judgment, the mere fact that an employer provides different rules for part-timers and full-timers without justification is necessarily a breach of the equality clause. The woman is entitled to the same contractual right of access, and it is a breach of the equality clause and of her contractual right of access to deny her that right whether or not she would have chosen to exercise it. She is being denied her right to choose whether or not she wishes to take advantage of her right of access. That is itself a detriment, albeit not necessarily one causing financial loss.
22. The option clause example is not analogous. The true analogy is with a person who claims that the other party to the contract is denying that she has a right to have an option clause in the contract. That denial may not be an actionable breach of contract as such but that is not the question in issue. If the reason for denying the existence of the contractual right is the sex of the contracting party, I see no reason why the denial should not of itself be treated as a breach of the equality clause, albeit that it does not sound in damages.
23. The second formulation of the opt-out principle, adopted by the EAT, focuses on remedy rather than breach. Although there has been a breach of the equality clause for the opt-out women, they are not entitled to be granted a declaration of entitlement to retrospective membership of the scheme because they have lost nothing from the denial of access. The question before the court is whether the denial of a remedy in those circumstances is compatible with EU law.
24. Ms Monaghan QC, counsel for the claimants, submits that it is not. She drew our attention to many of the seminal decisions of the ECJ (now the Court of Justice of the European Union) dealing with pensions cases such as Bilka-Kaufhaus GmbH v Weber Von Hartz [1987] ICR 110; the Vroege and Fisscher cases, dealt with in a single judgment [1995] ICR 635; and Preston v Wolverhampton Healthcare NHS Trust [2001] 2 AC 455. However, as she was constrained to accept, none of them has even engaged with, let alone resolved, the argument she has advanced in this case. The assumption in those cases is that the women who were denied the right to join the pension scheme would have done so if they could. None of the cases deals with someone who would have chosen at the relevant time not to join the scheme but seeks later to be permitted to do so with retrospective effect.
25. I accept, as did the EAT, that there is no difference between compulsory and voluntary pension schemes so far as the operation of the equality principle is concerned. It is simply not arguable that a woman could lawfully be denied access to a scheme because it was voluntary and Mr Linden was not seeking to contend otherwise. The significance of the difference between voluntary and compulsory schemes is simply that in the latter the employer could not say that women part-timers would not have joined even if they had been eligible since they would have had no option but to join. It is only with respect to voluntary schemes that the opt-out principle has any potential application.
26. Ms Monaghan relied heavily upon the well known decision of the ECJ in Von Colson v Land Nordrhein-Westfalen [1986] 2 CMLR 430. That case was concerned with a provision of German law which provided that where a woman was refused a job because of her sex, her only remedy was reimbursement of her travelling expenses incurred in pursuing the application. Not surprisingly, the Court held that this was not an effective remedy. The ECJ held that it was incumbent on a member state to adopt measures which were (para 18):

"sufficiently effective to achieve the objective of the directive. …Such measures may include, for example, provisions requiring the employer to offer a post to the candidate discriminated against or giving the candidate adequate financial compensation."

At paragraph 23 the Court said this:

"Although… full implementation of the directive does not require any specific form of sanction for unlawful discrimination, it does entail that that sanction be such as to guarantee real and effective judicial protection. Moreover, it must also have a real deterrent effect on the employer."

Finally, at paragraph 28 it said:

"It should, however, be pointed out to the national court that although Directive 75/207/EEC, for the purpose of imposing a sanction for the breach of the prohibition of discrimination, leaves the member-States free to choose between the different solutions suitable for achieving its objective, it nevertheless requires that if a member-State chooses to penalise breaches of that prohibition by the award of compensation, then in order to ensure that it is effective and that it has a deterrent effect, that compensation must in any event be adequate in relation to the damage sustained and must therefore amount to more than purely nominal compensation such as, for example, the reimbursement only of the expenses incurred in connection with the application. …"

27. Ms Monaghan submitted that if, for example, none of the claimants would have joined the scheme, no remedy at all would be granted and that could not on any view be said to have a deterrent effect on the employer.
28. Mr Linden submitted that even focusing on this case, it does not assist the claimants. The ECJ accepts that compensation that is adequate to reflect the damage actually suffered complies with EU law. It is the fact that this is available to anyone who does suffer loss which creates the deterrent effect. He also referred us to certain passages in the case of Marshall (No. 2) where the ECJ observed, in the context of a discriminatory dismissal (para 26):

"Where financial compensation is the measure adopted in order to achieve the objective indicated above, it must be adequate, in that it must enable the loss and damage actually sustained as a result of the discriminatory dismissal to be made good in full in accordance with the applicable national rules."

Here the remedy is not compensation as such, but it is just as effective since the declaration enables the woman claimant to be treated as if she was always a member of the scheme.

29. In my judgment, there is no doubt that the domestic remedy satisfies the principle of effectiveness. The passages from Von Colson on which Ms Monaghan relies do not support the proposition that a penal remedy is appropriate. The equality clause has the effect of removing the barrier which prevents part time women from having access to the scheme and is an effective remedy for that purpose. However, conferring the right to access did not oblige them to join the scheme. It did not confer an automatic entitlement to the benefits which membership would bring. Those benefits will only be granted to those women exercising their right to join and being willing to undertake the financial burdens of membership. If the women would not have joined anyway, they would not have received the benefits of membership and accordingly no declaration of entitlement is appropriate. Conversely, if they would have joined, the declaration provides a full remedy. Its effect is that they will be treated as always having been members of the scheme, provided they make the relevant employee contributions.
30. If full time workers choose not to exercise their right to join the scheme when they are able to do so, they cannot later claim the right to be allowed to join it with retrospective effect. Yet that is the right which it is said should be conferred on these part-timers in order to secure the necessary effective equality. In my judgment, the argument is misconceived and if accepted would create an unacceptable inequality. The ECJ has on a number of occasions confirmed that equal treatment does not mean more favourable treatment. For example, in Jonkman, itself a case concerning pension benefits, the ECJ said this (para 23):

"Where such discrimination has been suffered, equal treatment is to be achieved by placing the worker discriminated against in the same situation as that of workers of the other sex. Consequently, the worker cannot claim more favourable treatment, particularly in financial terms, than he or she would have had if he or she had been duly accepted as a member…"

31. I therefore reject this submission. The remedy sought by the opt-out women would be disproportionate to their loss and would create an inequality with the full time men which would be wholly contrary to the principle of non-discrimination. Domestic law prevents this breach of EU law by making the declaration discretionary thereby ensuring that it need only be given where it is appropriate and in accordance with EU law to do so.
32. In my judgment, therefore, the opt-out principle is sound and entirely in accordance with EU law.

The 'Sorbie' principle.

33. This principle was relied upon to justify extending the declaration of entitlement beyond the closed period so as to cover the open period when the women were eligible to join the scheme but had chosen not to do so. Given my conclusion that the opt-out principle is appropriate, so that the opt-out women will not be entitled to a declaration in their favour for the closed period, this principle cannot apply to assist those women. It seems to me that if applicable at all it could only be to benefit those women in whose favour a declaration has been granted because they would have joined the scheme if eligible. But typically they will in fact have joined the scheme and remained in it for the open period, so it is difficult to see why they would need to rely on this principle. However, I will briefly deal with the argument.
34. The submission is that once the equality clause is implied to give the right of access to equivalent benefits during the closed period, that right continues throughout the open period, even though there was during that period an express term conferring equality so that the equality clause was no longer necessary to achieve that objective. I have no doubt that the argument is wholly misconceived. It relies upon the decision of the EAT in Sorbie. That was a case where a woman was held to be entitled to equal pay with her male comparator. He left the employment and the question arose whether, since she could no longer point to her comparator, her pay fell back to its previous level. The EAT held that it did not. Once she became entitled to the non-discriminatory rate for the job, she remained entitled to that pay whether her comparator remained in the same employment or not.
35. In my view Sorbie has no relevance here whatsoever. The principle operated to prevent the woman's pay being reduced to the discriminatory job rate, which would have been a detrimental change in her contract. Here there was no adverse change in the women's terms when they were given the right to join the pension scheme. On the contrary, there was simply an express recognition of rights which had hitherto only been implied by the equality clause. Again the effect of this argument, if successful, would be to place part time women in a more favourable position than her male comparator, as HH Judge McMullen QC observed in his judgment in the EAT (para 69):

"In our view, to allow the declaration to continue during the open period up until the time she actually joined the scheme would be to give her an advantage over her colleagues who did not so join. She would be in a better position than a full-timer whose contract at all times included a term that he could join the scheme, but who never did. In the closed period, the implied term operated to equiperate her terms with his so that both had the right to join the scheme. In his case it is express and in hers implied. When the scheme was open to all, there was an express term in her contract, and in his, giving a right of access to the scheme. There is no discrimination of any sort going on thereafter and no reason in law why she should be compensated for not joining the scheme, by extending a declaration to her, when he is not entitled to it. The reason why neither of them joined the scheme is not found in discrimination but in choice. For that matter, she would also be in a better position than a female full-time colleague."

36. I entirely endorse that analysis. This argument distorts equality law and in my judgment is inconsistent with both EU and domestic law. The position is acte clair and no reference to the CJEU would be appropriate.

The scope of the declaration.

37. Ms Monaghan drew attention, however, to one difficulty with the principle adopted by the Employment Tribunal in this case. It had referred to the following observation of Employment Judge MacMillan in the Preston (No. 3) case where he said this:

"I hasten to emphasise that those reasons would not entitle her to succeed in respect of that part of the claim which falls after the date on which she became eligible for membership. It can only ever be of relevance to that part of the claim during which she was excluded from membership by the scheme's rules."

38. This is, of course, consistent with the rejection of the Sorbie principle. However, as Ms Monaghan pointed out, if the remedy is granted solely in respect of the closed period, this would leave a lacuna in the protection afforded to a woman who would have joined the scheme had she been eligible to do so, but who may have taken some time after she became eligible to decide to join. Perhaps, as in some of the cases before the Employment Tribunal, she was taking advice, or perhaps the information as to her eligibility had not been sufficiently communicated to her in advance. If, however, the declaration of entitlement runs only until she became eligible to join, it would mean that she would not be entitled to be treated as a scheme member for that relatively short period when she is making up her mind whether to join or not.
39. I accept that it would be an injustice for women to be without any entitlement to be treated as members of the scheme for this short interim period. In my view failure to accord membership for that period means, in most cases at least, that they are not being granted an effective remedy as EU law requires. The actual detriment flowing from their exclusion from the scheme would not be compensated in full. In such a case the declaration should run from the date of the exclusion from the scheme until the date when the employee actually joined, although of course the successful claimant would need to pay the appropriate pension contribution for the whole of that period. In my view nothing in regulation 12 precludes a declaration being granted in this way.
40. That has a practical effect in the some of the cases here where the Tribunal has granted the appropriate declaration. For example, in the case of Anne Ferguson, she joined the scheme on 15 July 1991 after taking some time to consider her position, having become eligible to join on 1 January 1991. The declaration that was granted ran from 1 January 1980 to 1 January 1991 whereas in my view, in order fully to correct the consequences of the unlawful discrimination, it should have run to 15 July 1991. No doubt the parties can work out the position with respect to the other claimants where a similar problem arises. In each case the declaration should be amended to include this short interim period.
41. Mr Linden did not seek to contradict this analysis as a matter of principle. He did, however, suggest that there may be exceptional cases where a tribunal could be satisfied that although the employee would have joined the scheme had she been eligible, there is still some period following the change in rules when her absence from the scheme is purely a matter of choice and is not referable to the unlawful discrimination. I would agree that the declaration of the kind I have identified above would not in such cases be appropriate; it ought not to cover the period of voluntary absence from the scheme. However, I suspect that such cases will be extremely rare in practice.

The burden of proof.

42. Ms Monaghan has run a further argument not advanced before the EAT. She submits that even if the opt-out principle is compatible with EU law, the Employment Tribunal erred in imposing too heavy a burden on an employee when she had to demonstrate whether she would have been likely on the balance of probabilities to have joined the scheme during the closed period.
43. In order properly to understand this submission, it is necessary to refer to a number of cases. The starting point in this submission is the ruling of Employment Judge Macmillan (as he now is designated) in Preston v Wolverhampton NHS Trust (No. 3) [2002] OPLR 323. (The Employment Judge had the unenviable task of having to deal with the seminal equal pay pensions' cases and notwithstanding that in some respects some of his conclusions have been overturned by higher courts, his judgments have been of conspicuous quality). In Preston (No.3) he identified the opt-out principle which, as I have indicated, I consider to be correct. He also made observations about the evidence which might support an inference that a part-timer would not have joined the scheme even had she been allowed to do so:

"181. The burden of proof is of course, as in all civil proceedings, on the applicant and it will therefore be for an applicant who did not opt in on becoming eligible to do so, or who positively opted out when invited to join, to satisfy the tribunal that she would, nonetheless, have joined during the period of exclusion had she been able to. If she can satisfy the tribunal that she would have joined, she will have established a breach of the equality clause. It is not difficult to think of circumstances which might well persuade a tribunal that there had been a breach of the equality clause. For example, because of her exclusion from the scheme the applicant had made alternative private arrangements and membership of the employer's scheme was no longer either relevant or available to her; or, by the time she became eligible to join the scheme, the applicant was so close to retirement that it was not worthwhile contributing…."

44. In 2004 he set out guidance for tribunal chairs in a document headed "Part time worker pension cases: Information Bulletin No. 9" which included the following paragraph:

"Your claim will not succeed in respect of this period if you do not join the scheme when the rules later changed to allow you to do so or you only did so after significant delay. This is because your failure to join the scheme when you were allowed to, suggests that had you been a full–timer you would not have joined the scheme during this earlier period of time anyway and therefore you have lost nothing. However, there is an exception for applicants who can satisfy a tribunal that they would have joined during the earlier period had they been eligible. This is to allow for special cases such as those where by the time the rules were changed to enable part–timers to join, an applicant was so near to retirement that joining was pointless, or she had already taken out a private pension plan."

45. In a later decision, Betts v The Boots Company Plc (2006) Case No 2600121/96, Judge Macmillan set out in detail the way these principles should operate. In particular, he said this with respect to the significance of delay: (paras 13-15).

"13. The respondent has taken the view that any claimant who did not join the scheme within three months of becoming eligible is guilty of significant delay and has therefore suffered no detriment. There are two flaws in this position: that delay of itself is a disqualification and that any particular length of delay can be regarded as a cut off or watershed. Even if this latter proposition were true, [there is no warrant for it in Preston (No.3)] in our judgment 3 months is too short and, if it is their only argument, the respondent is unlikely to succeed against any claimant who appears to have had a reason for not joining the scheme at an earlier date and who has delayed for say 4 or even 5 months. Note that we do not qualify the word 'reason' by any adjective such as 'good' or 'valid'. It is not for a tribunal to determine whether the decision not to join within a certain period was logical, sensible, rational or even comprehensible. The tribunal's function is to determine whether the claimant's explanation for the delay in joining negatives the evidential presumption of an absence of detriment during the period of exclusion to which a lengthy period of delay gives rise. An inability to comprehend the claimant's reasons for the post-eligibility delay however, is very likely to undermine her ability to discharge the burden of proving that it does.

14. As the presumption is evidential rather than legal, delay by itself cannot be decisive, although it clearly will have some, and particularly with long delays, probably a major, part to play in influencing the tribunal in deciding whether a claimant would have joined the scheme at an earlier date had she had the opportunity…..

15. Delay and its absence may both in fact be illusions, equally capable of deceiving the casual observer. The claimant who delays several months before joining the scheme may just be ultra cautious or even down right dilatory, and would have taken as long to decide to join whenever the opportunity to do so had arisen. Or she may be subject to a domestic regime which requires her to obtain her husband's approval before making such a decision and when the opportunity to join first arises he just happens to be abroad or seriously ill. Or in recent times she may have been labouring under financial or other constraints that prevent her from joining the scheme that were not operative factors even 6 months before. In none of these cases does the delay in joining signify an absence of earlier detriment."

46. In Dennison v The University College of St. Mark and St. John (2006) UKEAT/0196/06 when, giving the judgment of the EAT, I made these observations with respect to the guidance (para 10):

"Paragraph 7.2 is in similar but not identical terms to the passage of the Chairman's judgment, which we have quoted, found in paragraph 36 of the Preston decision. In effect, it raises a rebuttable presumption. If on becoming eligible a person did not join the scheme, then the presumption is that they would not have joined it even had they been eligible to join at an earlier stage, but there may be circumstances where they can rebut that presumption by demonstrating in one way or another that they would then have joined. Neither party has suggested that the guidance is inappropriate or legally incorrect, and in my judgment it provides a legally sound and practical approach which tribunals can safely adopt in relation to cases which it is addressing."

47. Then at paragraph 15 I said this:

"The fact that when she becomes eligible she does not join will be powerful and often very powerful evidence from which a Tribunal will readily draw the inference that she would not have joined even had she been notified of her eligibility at an earlier stage. But it is not necessarily conclusive and the tribunal must always focus on the crucial question whether she would have joined the scheme at the earlier stage or not. There may be explanations as to why she did not join later but would nonetheless have joined earlier. Paragraph 7.2 recognises that this is a clear possibility. A potential special case which identified in paragraphs 7.2 is where she has taken out a private pension and it may have been more sensible for one reason or another to maintain that arrangement in place rather than to go into the employer's scheme. But there may be other explanations, good or bad, as to why she did not join when she became eligible to her knowledge and yet will still be able to establish that she would have joined at an earlier date."

48. Finally, in Lavety v (1) Lanarkshire Health Board (2) Scottish Ministers (2008) UKEAT/0033/08 in the EAT in Scotland, The Honourable Lady Smith expressed some concerns about the first sentence of the guidance in Bulletin No. 9 and expressed reservations about using the concept of a "presumption". She said this (paras 16 and 17):

"I have a concern that if the first sentence of that paragraph is taken out of context then a claimant who is in fact in a position to succeed in her claim will assume that she is not. It is plainly not the law that a claimant cannot succeed in the circumstances envisaged. She may well be able to do so. In Dennison, Elias J commented, at paragraph 10, that:

"In effect, it raises a rebuttable presumption. If on becoming eligible the person did not join the scheme, then the presumption is that they would not have joined it even had they been eligible to join at an earlier stage, but there may be circumstances where they can rebut that presumption by demonstrating in one way or another that they would then have joined."

I do not read those comments as indicating that there is a presumption in law that requires to be rebutted in any case where a claimant has not joined a pension scheme when first allowed to do so or has delayed. Indeed, the governing statute, the Equal Pay Act, does not provide for any such presumption. Another way of putting it would be to recognise that as a matter of evidential assessment, a Tribunal will be entitled to infer from the fact that the claimant did not join the scheme when she became entitled to do so or, if she did join later, that she delayed in doing so, that she would probably not have joined it at an earlier date. However, as ever, the Tribunal will require to consider the whole facts and circumstances and will, equally, be entitled to conclude that the claimant would have joined earlier notwithstanding her not having done so at the first opportunity if, on those facts and circumstances, it is satisfied that she probably would have done. As the present case shows, approaching matters in terms of presumptions which require to be rebutted may not always be helpful."

49. The Employment Judge in this case stated that the Tribunal had found the considerations in paragraphs 13-29 in Betts "extremely helpful" in its conclusions as to whether the part-timers would have joined or not. He did not directly refer to the information bulletin. In addition the Tribunal concurred with the suggestion of counsel that in Preston No. 3 Judge Macmillan was simply drawing inferences from facts, and that the presumption referred to in Betts was merely evidential.
50. Ms Monaghan has no quarrel with the way Lady Smith approached the matter, but she submitted that by focusing on the approach of Judge Macmillan, and accepting my adoption of the "presumption" concept in Dennison, the judge placed too much weight on the delay in joining.
51. I do not accept that submission. The Employment Tribunal relied heavily on Betts in which Judge Macmillan emphasised that there may be numerous good reasons why no adverse inference can properly be drawn because of delay in joining. Furthermore, the Employment Judge recognised that the exercise was merely to draw inferences from the facts. I do not accept that the language of presumption demonstrates a material error of law. Nor do I resile from the observation I made in Dennison that the failure to join when eligible will often be powerful evidence in support of the inference that the woman would not have joined even had she been eligible to do so. Human experience tells us that if a woman had really wanted to join the scheme, one might have expected her to join once she became eligible to do so.
52. Having said that, I respectfully accept that Lady Smith was right to caution against using the term "presumption". It may suggest that if the evidence is equivocal then the tribunal should find against the claimant. It would have been better had I not adopted the use of that concept in Dennison. Lady Smith's formulation of the proper approach to the evidence in paragraph 17 of Lavety is to be preferred. As all the authorities confirm, ultimately the fundamental question is whether on the balance of probabilities the woman would have joined during the closed period, and all the evidence bearing on that question must be considered.
53. However, for reasons I have given, I do not accept that anything of substance turns on the adoption by the Employment Tribunal of a "presumption" in this case.

Mrs Smith.

54. I turn to the particular ground of appeal advanced in relation to Ms Smith. The Tribunal found that she fell into the opt-out category. She had joined the employer's scheme in February 1991, some 13 months after becoming eligible to join. The Tribunal expressly rejected her evidence that she was unaware of the change of rules. She had joined a private scheme in 1989 but the Tribunal was not satisfied that this showed that she would have joined the employer's scheme in 1988 if she had been given the chance.
55. The allegation is one of perversity, not advanced below. That is an exceptionally high hurdle requiring an "overwhelming case" that the decision was one not open on the evidence to a reasonable tribunal: see Yeboah v Crofton [2002] IRLR 634 at para 93, per Mummery LJ. I do not think that test begins to be satisfied here. I accept that on the face of it the fact that Mrs Smith joined a pension scheme when barred from her employer's scheme was potentially powerful evidence to counter her delay in joining that scheme. But it certainly cannot be said to be sufficient to compel the inference that she would have joined so as to render the decision perverse on its face. It is not as if she was saying that she did not join when eligible because she was already a member of a private scheme but would have preferred to join the employer's scheme if she had been eligible at the time.
56. Moreover, as Mr Linden points out, we do not have the Employment Judge's notes and their absence compounds the difficulty of pursuing a perversity appeal. He submits, not least for this reason, that we ought to refuse permission to allow this ground to be run. I agree that the notes could be important. For example, they may have provided evidence that the private scheme involved much smaller employee contributions that the employer's scheme, in which case her decision to join a private scheme would not necessarily carry much weight. I have to say, however, that I find it difficult to envisage how an appeal on this point could succeed even with the notes, given the lengthy period of delay before she joined the scheme.
57. In the circumstances I would not grant permission to argue this point, but in deference to Ms Smith, I have explained why I think that in any event it could not succeed.

Disposal.

58. For all these reasons the appeal fails, save that, in my judgment, some of the declarations should be amended to reflect the argument considered at paragraphs 37-41 of this judgment.

Lord Justice Davis:

59. I agree.

Lord Justice Mummery:

60. I also agree.