THE INDUSTRIAL TRIBUNALS

CASE REFS:	3933/01
3934/01
3935/01

CLAIMANTS:		Andrew Alexander Faulkner
				Peter Rogan
				Robert David Johnston

RESPONDENTS:		1.	BT Northern Ireland
2.	BT Cellnet
3.	BT Wholesale
4.	BT PLC
5.	O2 PLC

Faulkner & Ors v BT Northern Ireland & Ors [2005] NIIT 3933_01 (24 October 2005)

DECISION ON A PRE-HEARING REVIEW 
The decision of the tribunal is that for the purposes of an indirect discrimination claim under Article 3(1)(b) of the Race Relations (Northern Ireland) Order 1997 the claimants, as engineers employed within Northern Ireland by the respondents, can compare their treatment in relation to grading and bonus payments with that afforded by the respondents to engineers employed by them within England, Scotland and Wales. 

Constitution of Tribunal:
Chairman (sitting alone):		Mr N Kelly
  Appearances:
The claimants were represented by Mr M Potter, Barrister-at-Law, instructed by The Equality Commission.

The respondents were represented by Mr J O’Hara, Queen’s Counsel, instructed by Napier & Sons, Solicitors.

1.	This is a decision of a Chairman sitting alone in a pre-hearing review under Rule 18 of Schedule 1 to the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 to determine the following agreed preliminary issue:-

“For the purposes of an indirect discrimination claim under Article 3(1)(b) of the Race Relations (Northern Ireland) Order 1997, can the claimants, as engineers employed within Northern Ireland by the respondents, compare their treatment in relation to grading and bonus payments with that afforded by the respondents to engineers employed by them within England, Scotland and Wales?”

2.	For the purposes of the determination of this preliminary issue, the relevant facts are as follows:-

(a)	The claimants were, at all material times, engineers employed by the fourth-named respondent and carried out work on behalf of the other respondents.

(b)	The national origin of the claimants, for the purposes of Article 5(1) of the Race Relations (Northern Ireland) Order 1997, is Northern Irish.

(c)	The fourth-named respondent also employs engineers who work in England, Scotland and Wales.  The respondents all accept that those engineers are predominately not Northern Irish.  

(d)	The engineers employed by the fourth-named respondent in England, Scotland and Wales were upgraded and given bonus payments and these benefits were not offered to the claimants as engineers working in Northern Ireland.

3.	The determination of this preliminary issue has potentially two stages:-

(i)	Is a comparison of persons employed within Northern Ireland with persons employed in England, Scotland and Wales clearly permissible under domestic legislation, ie the Race Relations (Northern Ireland) Order 1997 (the ‘Order’)?  If the answer to that first question is yes, that is an end to the matter and their claims can proceed to a substantive hearing on the merits.

(ii)	If the answer to (i) is not clear, can Council Directive 2000/43 (the Race Directive) help to resolve any ambiguity?

Race Relations Order

4.	The claims were lodged on 13 December 2001.  The claims are therefore made under Article 3(1)(b) and 6(2) of the Order as worded in 2001, ie before the amendments made by the Race Relations Order (Amendment) Regulations (Northern Ireland) 2003.  

5.	Article 6(2) provides that:-

“It is unlawful for a person in relation to employment by him at an establishment in Northern Ireland, to discriminate against that employee –

(a)	in the terms of employment which he affords him; or

(b)	in the way he affords him access to opportunities for promotion, transfer or training, or to any other benefits, facilities or services, or by refusing or deliberately omitting to afford him access to them; or

(c)	by dismissing him, or subjecting him to any other detriment.”

6.	Article 3(1)(b) provides that:-

“A person discriminates against another in any circumstances relevant for the purposes of any provision of this Order if –

(b)	he applies to that other a requirement or condition which he applies or would apply equally to persons not of the racial group of that other but –

(i)	which is such that the proportion of persons of the same racial group as that other who can comply with it is considerably smaller than the proportion of persons not of that racial group who can comply with it; and

(ii)	which he cannot show to be justifiable irrespective of the colour or race, nationality or ethnic or national origins of the person who can comply; and

(iii)	which is to the detriment of that other because he cannot comply with it.”

7.	Article 10(1) of the Order provides:-

“For the purpose of this Part, employment is to be regarded as being at an establishment in Northern Ireland unless the employee does his work wholly or mainly outside Northern Ireland –

(2)	The reference to ‘employment’ in paragraph (1) includes:-

(a)	employment aboard a ship registered at a port of registry in Northern Ireland; and

(b)	employment on aircraft or hovercraft registered in the United Kingdom and operated by a person who has his principal place of business, or is ordinarily resident, in Northern Ireland.”

8.	It is clear from the terms of Article 10 that with the minor exception in Paragraph (2) the Order was intended to apply only to work undertaken wholly or partly within Northern Ireland.  That in itself does not assist in determining whether for the purposes of Article 3(1)(b) the pool for comparison can include workers who do not fall within Article 10.  Neither Mr Potter nor Mr O’Hara could locate any decision in which this issue had been determined.  My research has not been any more successful.  In the case of Rutherford  v  Town Circle Limited (T/A Harvest) and Secretary of State for Trade and Industry [2002] IRLR 768 the Employment Tribunal was faced with two sets of statistics; one related to Great Britain and one related to the United Kingdom as a whole.  The Employment Tribunal determined that the statistics relating to Great Britain were the appropriate statistics to be considered (Paragraph 15).  The Court of Appeal when determining an appeal in the same case referred at [2003] IRLR 858 Paragraph 56 to a discussion before the tribunal of a difference between the experts due to the fact that one had used figures for the United Kingdom and the other for Great Britain.  The Court did not however comment on this issue.  The issue in Rutherford was the compatibility of part of the Employment Rights Act 1996 with EC law.  That Act applied only to Great Britain and therefore it is perhaps unsurprising that the Great Britain statistics were preferred to the statistics applicable to the United Kingdom as a whole.  I therefore do not derive any assistance from these reports in relation to the present case.

Case relied on in argument

9.	In Greater Manchester Police Authority  v  Lea [1990] IRLR 372  the applicant complained that the respondent’s recruitment practices amounted to unlawful and direct sex discrimination, contrary to the Sex Discrimination Act 1975.  The tribunal relied on UK-wide statistics to establish that 99.4% of women and 95.3% of men could comply with the requirement or condition contained in the recruitment practices of the Police Authority.  The fact that UK-wide statistics were relied on in relation to a claim under Great Britain legislation did not attract any comment in the Employment Appeal Tribunal.  While this might appear to support the claimants’ argument in the present case, I am not sure that I regard this as a significant authority for a proposition which does not appear to have been argued and which appears to have gone by default.

10.	In contrast the Court of Appeal in London Underground  Limited  v  Edwards [1998] IRLR 364 when determining the ‘essential facts’ in relation to indirect discrimination relied on the Great Britain statistic that there are 10 lone mothers for each lone father.  However there is no indication that there had been any alternative UK-wide pool under consideration and no reference to any argument in the point.  

11.	Mr Potter sought assistance from Perera  v  Civil Service Commission [1983] CA 428 where Stephenson LJ appears to suggest at Paragraph 437C that a comparison could be made between the population of Sri Lanka and the population of England.  However the Court of Appeal was considering the recruitment process for lawyers into the Civil Service in England.  All  applicants had to be qualified to practice law in England.  The applicant was resident in England and was at all relevant times already employed as an administrator in the Civil Service in England.  Extra-territorial comparators were not really an issue in this case.  Any such suggestion would have been obiter and I do not see any substantial support in the Perera decision for Mr Potter’s submission.  

12.	In R (on the application of Elias)  v  the Secretary of State for Defence and Commissioner for Racial Equality [2005] IRLR 788, the High Court, in considering a challenge under the Race Relations Act to the Government’s non-statutory compensation scheme for those interned by the Japanese during World War 2, held that the criteria for payment were indirectly discriminatory on racial grounds.  The Court did not appear to restrict the pool to those potential applicants resident within Great Britain or even with the United Kingdom.  The pool consisted of all those who were British subjects at the time of the internment.  There was no challenge to that approach.  However there was an implied presumption of extraterritoriality within that legislation and therefore I do regard this decision as of assistance in determining the preliminary issue in the present case.  

13.	Mr O’Hara QC pointed out that Article 3(3) provides, in the context of defining racial discrimination, that a comparison ‘must be such that the relevant circumstances in the one case are the same, or not materially different, in the other’.  He submitted that it cannot possibly be said that the circumstances in one case are the same or not materially different from the other when the comparators do not work in the same legal jurisdiction as the claimants.  I do not agree.  I have heard no evidence that the circumstances of a BT engineer working in Northern Ireland are materially different from those of a BT engineer working in England, Scotland or Wales.  The fact that they are in separate legal jurisdictions within one State does not appear to me to be material to the issue.

Mr O’Hara QC also sought to rely on Article 6(5) of the Order which excludes, from Article 6(1) and (2), situations where a person from outside Northern Ireland is employed within Northern Ireland for training purposes.  It would enable an employee in those circumstances to be paid at different rates than Northern Ireland workers.  It is not restricted to workers from England, Scotland and Wales.  I do not accept Mr O’Hara’s submission that it is implicit in this provision that when an Englishman comes to Northern Ireland, trains local workers and then leaves, a worker in Northern Ireland would not be able to claim entitlement to equivalent terms and conditions.  The exemption appears to me to relate only to the period when the outside worker is actually engaged in Northern Ireland and refers only to a situation where the training is for the benefit of the worker from outside Northern Ireland.  The purpose of this provision may have been to assist Northern Ireland employers to train workers from developing countries without being exposed to the risk of claims from those workers.  In any event, I do not regard Article 6(5) as relevant to the determination of the preliminary issue in the present case.

I have been referred by both parties to various decisions in relation to Equal Pay legislation.  The differences in the legislation relating to Equal Pay and the legislation relating to race discrimination are such that I cannot derive any assistance from these decisions.

Statutory interpretation

14.	In the absence of any definitive case law, I have to turn to basic principles of statutory interpretation.  The Race Relations (Northern Ireland) Order 1997 is an Order in Council made under Paragraph 1(1)(b) of Schedule 1 to the Northern Ireland Act 1974 and extends only to Northern Ireland (see Article 21(1) of the Order and Section 6 of the Interpretation Act (Northern Ireland) 1954).  

In Bennion’s ‘Statutory Interpretation’ Fourth Edition, a distinction is drawn between the territorial extent of an enactment and the territorial application of an enactment.  The territorial extent of the Order is limited to Northern Ireland.  The question remains whether the Order can encompass matters outside Northern Ireland, ie whether the other component in an act of discrimination -  the comparator -  can be based outside Northern Ireland.  At Page 306 of Bennion, it states that  an Act does not usually apply to acts or omissions taking place outside its territory.  The basic principle is that words of written or unwritten law expressed in general terms are taken to be subject to an implied limitation which confines their effect to the territorial jurisdiction  At Page 308, Bennion states ‘similarly the territory of a sovereign state may be divided into areas each having a different system of law.  This is the position as between England and Wales on the one hand and Scotland on the other.  In relation to such divided areas the same implied limitation on the operation of enactments is applied as prevails between different sovereign states’.  The position must be the same in relation to Northern Ireland and Northern Ireland legislation.  There is therefore a presumption that the Order does not apply to matters elsewhere in the United Kingdom but that presumption can be displaced by a contrary intention.  This principle is also stated in Halsburys 4th Edition Volume 44(1) at Paragraph 1319 which states: “The person on whom a particular Act is intended to operate are described as the persons to whom it ‘applies’.  Who these are is to be gathered from the language and purview of the Act, but the presumption (the presumption of applicability) is that Parliament is concerned with all conduct taking place within the territories to which the Act extends and with no other conduct”.

15.	In determining how this presumption operates in relation to the Order and the preliminary issue set out at Paragraph (i) above, some limited assistance can be gleaned from case-law.

In Tomalin  v  S Pearson & Son Ltd [1909] 2KB61, the Court of Appeal considered the case of a fitter, employed by an English company, who died as a result of an industrial accident in Malta.  His widow claimed under the Workmen’s Compensation Act 1906 and the Court had to determine if the Act had any application outside the territorial Courts of the United Kingdom.  The Court held that it did not.  It referred to Maxwell on the Interpretation of Statutes: “In the absence of an intention clearly expressed or to be inferred from its language, or from the object or subject-matter or history of the enactment, the presumption is that Parliament does not design its statutes to operate beyond the territorial limits of the United Kingdom.”  In the present case, the claimants do not argue that the Order should apply anywhere in the world; they argue that given the purpose of the Order it should apply to persons, as comparators, elsewhere in the United Kingdom.  The same question of extra-territorial application arises but in my view, where the extra-territorial application is limited to the United Kingdom, the presumption may be as strong as in cases where the                extra-territorial application is outside the United Kingdom.

The territorial extent of enactments was also an issue in Serco Ltd  v  Lawson [2006] UKHL3 where the Lords were considering Section 94(1) of the Employment Rights Act 1996.  At Paragraph 6 Lord Hoffman stated: “The general principle of construction is, of course, that legislation is prima facie territorial.  The United Kingdom rarely purports to legislate for the whole world.  Some international cases like torture are an exception, but usually such an exorbitant exercise of legislative power would be both ineffectual and contrary to the comity of nations.  That is why all the parties are agreed that the scope of Section 94(1) must have implied territorial limits.  More difficult is to say exactly what they are”.

At least in the present case which is entirely within the United Kingdom I do not have to be concerned with the comity of nations.  He went on to state: “So the question of territorial scope is not straightforward.  In principle, however, the question is always one of the construction of Section 94(1).  As Lord Wilberforce said in Clarke  v  Oceanic Contractors Inc [1983] 2AC130, 152  it ‘represents an inquiry to be made as to the person with respect to whom Parliament is presumed, in the particular case, to be legislating.  Who, it is to be asked, is within the legislative grasp, or intendment of the statute under consideration?’.”

16.	The presumption in the ordinary course of events would be that the legislation was only meant to apply to individuals within its territorial extent, ie to individuals within Northern Ireland.  In determining whether comparators in England, Scotland and Wales were within the ‘intendment’ of the legislation, I have to look at the mischief which the legislation was intended to remedy.  At Paragraph 1474 of Volume 44(1) of Halsbury’s Law (Fourth Edition) the mischief rule is described in the following terms:-

“Parliament intends that an enactment shall remedy a particular mischief, and it is therefore presumed that Parliament intends that the court, when considering, in relation to the facts of the instant case, which of the opposing constructions of the enactment corresponds to its legal meaning, should find a construction which applies the remedy provided by it in such a way as to suppress that mischief.”

Halsbury refers back to the decision in Heydon’s Case [1584] 3Co Rep 7a which held, inter alia, that statutes should be construed to “suppress the mischief and advance the remedy” and to “add force and life to the cure and remedy according to the true intent of the makers of the Act pro bono publico”.

The House of Lords is Anyanwu and Another  v  South Bank Students Union and South Bank University [2001] UKHL 14, in construing the word ‘aids’ as it appears in Section 33(1) of the Race Relations Act, stated (Paragraph 2):-

“Section 33(1) is to be read in its context, as a provision in an Act passed to remedy ‘the very great evil’ of racial discrimination (as recognised by Templeman LJ in Savjani  v  Inland Revenue Commissioners [1991] QB 458 at 446 – 467) and it must be construed purposively (see Jones  v  Tower Boot Co Ltd [1997] IRLR 168 at 171, per Waite LJ).”

The House of Lords had earlier relied on the mischief rule as set out in Heydon’s case in Applin  v  Race Relations Board [1975] AC 259 where the issue was whether it was possible to discriminate, contrary to the Race Relations Act 1968, against local authorities, as a ‘section of the public’ on the ground of colour.  Lord Simon of Glaisdale in his judgment refers to Heydon’s case and defined the purpose of race discrimination legislation in the following terms:-

“The common law before the making of the first Race Relations Act (1965) was that people could discriminate against others on the ground of colour to their hearts content.  This unbridled capacity to discriminate was the mischief and defect for which the common law did not provide.  The remedy Parliament resolved and appointed was to make certain acts of discrimination unlawful.  The reason for the remedy must have been that discrimination was thought to be socially divisive (indeed, Section 6 of the 1965 Act suggests, potentially subversive of public order) and derogatory to human dignity.”

	He went on to state:-

“Where the paramount statutory purpose is palpable, the fact that it has not been carried through into every conceivable situation does not, in my view, mean that the ‘mischief rule’ (Heydon’s case) ceases to have any value.  At the very least, it should operate, where Parliament has stipulated express exemptions in derogation of its paramount statutory purpose, to cause the courts to hesitate in going on to imply further exemptions in added derogation.”

Turning at last to the facts of the present case, I have concluded that the Order does not specifically restrict the pool for the purposes of Article 3(1)(b) of the Order to persons working within Northern Ireland.  The extracts from Hansard to which I have been referred do not shed any light on this question.  The question has not been litigated before and I can find no particular assistance in the case law to which I have referred.  In my view the matter has to be determined in accordance with the ordinary rules of statutory interpretation and in particular, the mischief rule.

If the Order, is to be interpreted as restricting the pool of comparators under Article 3(1)(b) to individuals working in Northern Ireland, that would permit UK employers to offer less advantageous terms and conditions of service to workers in Northern Ireland than they offer to workers in England, Scotland and Wales – even where no objective justification can be shown for the purposes of Article 3(1)(b)(ii) and where a clear disproportionate impact on grounds of race can be identified.  Given the purpose of the Order, or to use the words of Tomalin (above), the object, subject matter and history of the Order, I do not believe that could have been the intention of Parliament and I conclude that the territorial presumption has been rebutted.  That conclusion does not necessarily lead, in my opinion, to the result that paying different rates of pay in different parts of the United Kingdom or offering different terms and conditions in different parts of the United Kingdom is necessarily unlawful discrimination.  However in circumstances where the statutory tests for indirect discrimination as set out in Article 3 are met, it is for the employer to prove justification.  That would have been the position in 2001 under the GB legislation if, for example, a UK-wide company paid workers in Scotland less than it paid workers in the South East of London.

Furthermore, the Order in clear terms requires that the claimant (with minor exceptions) has to be an individual who works wholly or partly within Northern Ireland.  If it had been intended that the comparator should be similarly restricted, that would have been a simple result to achieve but no attempt has been made in the drafting of the Order to specify such a restriction.

I am also conscious of the risk of incorporating an element of discrimination into the make-up of the pool.  If it were the case that the pool were to be restricted to those employees who worked in Northern Ireland that risk would, I think, be real.  See R  v  Secretary of State for Education ex parte Schaffter [1987] IRLR 53 at Page 56, Paragraph 25.

17.	I therefore conclude that the Order, given the manner in which it is framed and given its purpose, permits the claimants to compare their terms and conditions of service afforded by the respondents to the terms and conditions of service afforded by the respondents to analogous employees in England, Scotland and Wales.

18.	Mr Potter, for the claimants, urged me to interpret the Order in a manner consistent with the Race Directive (2000/43/EC) and if I was uncertain about the import of the Directive, he suggested that I refer an appropriate question to the ECJ under Article 234 of the European Union Treaty.  

19.	I have not sought to interpret the Order in a manner consistent with the Directive for the purposes of the question posed in this case because I do not believe I am entitled to do so.  These tribunal applications were lodged in  December 2001.  I have not been referred to any more recent applications and therefore I do not believe that I can consider either any factual situations or the legal position at any point beyond December 2001.  At that time the Order was in its original form.  The Race Directive had not taken effect and did not do so until 19 July 2003.  The amendments to the Order implementing the Directive did not take effect until the same date.  European (or any) legislation which is not in force at the time of the alleged acts of discrimination (the relevant time) is of no assistance to me in determining the preliminary issue.  In Paragraph 117 of Pieffer  v  Deutches Rotes Kreuz Kreisverband Waldshut EV [2005] IRLR 137, the European Court at Paragraph 177 stated, “In such circumstances the National Court, when hearing cases which, like the present proceedings, fall within the scope of Directive 93/104 and derive from facts postdating expiry of the period for implementing Directive, (my underlining) must when applying the provisions of national law specifically intended to implement the Directive, interpret those provisions so far as possible in such a way that they are applied on conformity with the objectives of the Directive”.  

20.	The provisions of the Race Directive could only be relevant to the preliminary issue in this case if the Directive had been implemented, or had been required to have been implemented, before or during the relevant period.  The claimants alleged acts of indirect discrimination in 2000 and 2001.  I am therefore obliged to look at the law as it stood during that period.  I can derive no assistance from a Directive which was not yet in force or from implementing domestic legislation which had not yet been made.  I am therefore considering the preliminary issue as a point of domestic law only; ie interpreting the provisions of the Order in its unamended form as relevant to 2000 and 2001.  

Chairman:

Date and place of hearing:		24 October 2005, Belfast

Date decision recorded in register and issued to parties: