|
OUTER HOUSE, COURT OF SESSION
[2006] CSOH 193
|
|
P2909/06
|
OPINION OF LADY
DORRIAN
in the Petition of
UNISON, a Trade Union having a place of business at Union
House, 14 West Campbell Street, Glasgow and GMB, a Trade Union having a place
of business at Fountain House, 1/3 Woodside Crescent, Glasgow
Petitioners;
for
Judicial Review of
a Resolution of the Respondents dated 28
June 2006
ญญญญญญญญญญญญญญญญญ________________
|
Petitioners: Napier, Q.C., O'Carroll; Thompsons
Respondents: McNeill, Q.C., Macroberts
14 December
2006
[1] This
petition for Judicial review came before me on 12
December 2006 for first orders for intimation and service and for certain
interim orders. The respondents opposed all these motions on the basis of
competency, as well as making certain submissions in respect of balance of
convenience.
Background
[2] The background to the
petition was the adoption in 1999 by the Scottish Joint Council of a new
collective agreement known as the Single Status Agreement ("SSA"). The Petitioners aver that one aim of the SSA
was the elimination of certain discriminative inequalities between men and
women in the workforces of Scottish local authorities by unifying the pay
structures and re-evaluating all jobs in a manner which eliminated systematic
and discriminatory pay inequalities between men and women. It is averred that a
job evaluation scheme was to be established for use by local authorities and
that all authorities should have completed this evaluation by April 2002.
That date was subsequently postponed to April 2004. It is averred that this
date was not met and that the authorities sought a further postponement which
was refused by the trade union members of the Scottish Joint Council on the
basis that the continued delay was a breach by the authorities of their
statutory responsibilities.
[3] On 8 February 2006 the respondents resolved to
commence formal consultation with the unions, including the petitioners, and
their workforce on a proposed package of pay and conditions with a view to
implementing the SSA.
[4] Negotiations were entered into in respect of a proposal from
the respondents that a new package of pay, terms and conditions would apply to
all employees from 1 October 2006. Agreement could not be
reached as the petitioners considered that the package contained elements which
were discriminatory on the grounds of sex.
[5] The petitioners aver that the respondents did not carry out
any detailed examination of the package from an equality perspective and did no
more than an initial screening assessment of proposals which had been made in
November 2005.
[6] At a meeting of the full council on 28 June 2006 the respondents made some alterations to the proposed
package to reflect loss of certain enhancements and to resolve certain grading
issues. They also passed a resolution in these terms:
"Should a collective
agreement with the Trade Unions not be able to be reached or any other option
avoiding dismissal and re-engagement fail to be identified, then Council
authorises the Chief Executive to impose the new improved single status package
to the extent necessary to ensure that the Council's exposure at Tribunal to
equal pay claims is minimised through the introduction of a single status
package on or before 1 January 2007."
Negotiations continued
through July and August but agreement could not be reached.
[7] On 23 August 2006 the respondents wrote to
their employees proposing a variation in each employee's terms and conditions
so that the adjusted package would apply with effect from 18 December 2006. A form was enclosed on which the recipient could
indicate acceptance or rejection. It is averred that about 40% rejected the
proposal but in submission this figure was revised to about 25%. A number of
employees have indicated that they will continue working under protest and the
respondents have accepted such a stance pro
tem.
[8] On 14 September 2006 the respondents wrote
letters to all of their employees who had not accepted the variation, giving
notice that their contract of employment would terminate at the conclusion of
the working day on 17 December 2006, which letter was
accompanied by an offer of re-engagement on the terms offered on 23 August.
[9] The petitioners aver that they instructed a detailed report
on the grading and pay structures proposed in the package from an independent
consultant with around 20 years experience in this area, whose conclusion
supports their contention that the package was grossly flawed from an equality
perspective.
[10] In this petition they seek : (i) declarator that the resolution
of 28 June was unlawful; (ii) suspension and reduction of the resolution; (iii)
suspension and reduction of those dismissal notices due and intended to take
effect on 17 and 18 December 2006; and (iv) interim
suspension of the resolution and those notices. They do not seek to suspend any
contracts entered into with any employees who have accepted terms.
Petitioners' submissions
[11] Senior counsel for the petitioners submitted that the primary
challenge was to the resolution insofar as it gave the authority to proceed
with the issuing of an ultimatum to employees. He submitted that this was a
challenge to an administrative decision within the scope of judicial review
under reference to Watt v Strathclyde Regional Council 1992 SLT
324 and the Opinion of Lord Clyde at
page 331 that
"..where the decision is not
one which is made in the context of a particular contract of employment but,
while affecting a number of contracts of employment, is taken as a matter of
general decision in the exercise of their administrative function by a local
authority, then it seems to me that if challenge is made on the legality of the
decision and if the essential remedy sought is a reduction of that decision
then the action can be identified as one directed at the supervisory
jurisdiction of the court and should be admitted as competent."
That, counsel submitted, was
the situation in the present case.
[12] He submitted that the
petitioners as a trade union with a large number of members affected by the
decision had both title and interest to sue. He referred to Educational Institute of Scotland v Robert Gordon University 1997 ELR 1 in which Lord
Milligan, at page 10, observed that
"Where...a trade union is able
to allege that amongst its membership are persons who are likely to be
adversely affected by an ultra vires
decision of the respondents and that it is unrealistic for such members
individually, both on timetabling and prospect of acceptance grounds, to
challenge the decision individually, it seems to me that that trade union has
not only an interest to challenge the decision but also title to do so."
[13] By failing to take steps to inform itself whether the new
proposals fully addressed the existing inequalities and did not perpetuate
them, the council failed in its duties. Their own procedures (6/4 of process)
required them to carry out a full impact assessment and they did not do so:
they did no more than carry out a screening assessment in relation to original
proposals made in 2005. Had the later proposals been properly tested by a full
impact assessment the council would not have proceeded with them.
[14] Turning to the legal basis of his argument, counsel referred to
section 1 of the Local Government in Scotland Act 2003 which deals with a local
authority's duty to "make arrangements which secure best value" (s1(1)) which
is defined as "continuous improvement in the performance of the authority's
functions" (s1(2)). In securing best value, authorities are required to
maintain an appropriate balance amongst, inter
alia, "(3)...(a) the quality of its performance of its functions; (b) the
cost to the authority of that performance" (s1(3)). In maintaining that balance
they must have regard to a number of issues including "(4)....(d) the need to
meet the equal opportunity requirements". The latter means "the requirements of
the law for the time being relating to equal opportunities" and "equal opportunities"
in turn means "the prevention, elimination or regulation of discrimination
between persons on grounds of sex or marital status,........". The Act further
provides in section 2 that in the performance of its duties under section 1 a
local authority shall have regard "(1)...(a) to any guidance provided by the
Scottish Ministers...on the performance of those duties" and "(b) to what are,
whether by reference to any generally recognised, published code or otherwise,
regarded as proper arrangements for the purposes of section 1(1)". Guidance
from the Scottish Ministers on best value was issued in 2004 (6/3 of process)
and guidance from COSLA on the subject was issued in September 2003. The
first of these came within section 2(1)(a) and, whatever else might or might
not come within the elastic terms of section 2(1)(b), guidance from COSLA must
do so. Both of those documents indicate that arrangements which secure best
value will involve the observance and
encouragement of equal opportunities requirements. Counsel submitted that in
addressing best value a commitment to equal opportunities requirements is
essential. The respondents did not fulfil their duties under section 1 of the
Act because they could not have had regard to the "..need to meet equal
opportunities requirements" without having carried out a full equality impact
assessment of the proposals. Until there has been a proper assessment of the
equality issues in the proposals, the process envisaged by section 1(3) of the
Act cannot be undertaken. The situation was analogous to that in respect of a
failure to address racial discrimination in terms of a non statutory
compensation scheme, as occurred in R(Elias)
v Secretary of State for Defence [2006] EWCA Civ 1293. See paragraph 176 of that decision.
[15] Furthermore, for similar reasons, the respondents were in
breach of a duty imposed on them by section 59(1) of the Act which requires
that, in discharging their functions under the Act, they must do so in a manner
which encourages equal opportunities and, in particular, the observance of the
equal opportunities requirements. That
duty was, in relation to an authority's functions under section 1, additional
to that set out in subsection (1) of that section (S59(2)). By making
arrangements which introduce a scheme which is grossly flawed in equality terms
the respondents are not encouraging equal opportunities.
[16] In
respect of the balance of convenience, counsel recognised that this challenge
comes "late in the day" and will cause administrative difficulties for the
respondents but these were not insuperable. On the other hand, if the interim orders were refused there would
be prejudice to those employed on new terms which are grossly flawed from an
equality point of view. It is not satisfactory to say that employees could
bring actions to put these matters right. This issue has a collective dimension
and should be addressed in a collective manner. Granting the orders would not
put the respondents at risk of failing to obtemper contractual obligations.
There was a public interest in ensuring that a local authority does not behave
in such a way.
Defenders'
submissions
[17] Counsel
for the defenders opposed the motion for a first order and for interim orders on the basis of
competency. He said that this was not one of the limited sets of circumstances
in which a trade union had an interest to present a petition of this nature.
Moreover, there was no prima facie
case and in any event, the balance of convenience was against the granting of interim orders.
[18] In relation
to competency he referred to EIS v RGU (supra) submitting that there had
to be very particular circumstances before a union would have title and
interest to sue. He submitted that it was critical to the success of the
application in EIS v RGU that no members of the union had
yet been affected by the decision challenged in that case. The matter was one
which was therefore still capable of affecting all members of the union and had
not reached the stage where individual employees' contracts had been affected.
It related to a situation where it was unrealistic to expect individual challenges.
By contrast, in the present case individual members had been affected. Some had
accepted the terms offered. Others had not, but had taken the appropriate steps
in employment law, namely the bringing of an application to an employment
tribunal. Not only had such applications been made individually, another
concerned union, the TGWU had brought a protective award claim which had been
registered in September.
[19] The 28 June
resolution, which is at the heart of the petitioners' complaints, has been
overtaken by events. Had the petitioners sought to bring an application before
that had happened, things would have been different. The reality is that at
present their challenge is not a challenge to the totality of what has come
about as a result of the resolution but only insofar as such notices have not
been translated into contracts. The application therefore concerns only those
individuals who wish to maintain a complete challenge and they could properly
do so within accepted employment law structures.
[20] He
referred to Watt v Strathclyde Regional Council (supra)
and highlighted the observations of the Lord President, Lord Hope at page 329
as to cases which are appropriate for judicial review and those which are suitable
for ordinary employment law. In Watt the Lord President pointed out that
the challenge was
"..directed against the
decision itself, not against such consequences as may flow from it in due
course once it is put into effect - in breach, as they would maintain, of their
contracts of employment. ...........I recognise that the reason which underlies the
petitioners' objection to the decision is that it conflicts with the 1987
settlement which, both under statute and because of express provisions, forms
part of their contract of employment. No doubt the ordinary contractual
remedies are available to the petitioners, including that of interim interdict,
in regard to such breaches as may result. But that does not, in my view, have
the effect of excluding the decision itself from the remedy of judicial review
at this stage."
Counsel emphasised those last three words, submitting
that the stage at which the application was made in Watt had been critical. No contracts had yet been affected and the
decision was one which was one of considerable potential importance to
Strathclyde Region and all teachers employed there, so it was appropriate to
address the issue in judicial review. The matter had not yet become a matter of
ordinary employment law. The contrary was the position in the present case.
[21] In Watt the Lord President had pointed out
that to attempt to deal with the issue according to ordinary employment
remedies
".....would have wider consequences which would
be likely to affect all teachers within the respondents' area. Indeed it is the
fact that the decision by its nature is of such general application that
provides the clearest answer to the objection that the issue raised is not open
to judicial review. ...........It is the intended generality of its effect that gives
the decision in the present case the administrative character which makes it
especially suitable for the remedies of declarator and reduction which are
sought in this application".
Reference was also made to the observations of
Lord Clyde in that same case at page 331, quoted above. In that
particular case the issue was "..not one of breach of contract but of the
legality of a decision of general application." Counsel submitted that in Watt both the Lord President and
Lord Clyde were at pains to identify a dividing line between applications truly
going to an exercise of an administrative power and matters more properly
related to individual contracts for which there exist ordinary remedies. The
present case is not appropriate for the supervisory jurisdiction but for the
ordinary remedies which exist for such circumstances. The petitioners do not
seek complete reduction of the notices but only insofar as they have not been translated
into contracts. The issue is not properly characterised as an application
relating to an administrative decision but relates to issues of unfair
dismissal and failed negotiation in respect of which there are recognised
employment law remedies available. Only a limited number of persons had not
taken up the offer and the issue was not one of general application.
[22] Counsel
also took issue with the petitioners' contention that the issuing of the
dismissal notices was a necessary consequence of the resolution. It granted to
the CEO power to take steps to protect the authority but that need not have led
to the dismissal letters. One consequence might have been a negotiated
settlement or there was the possibility, however slight, that all employees
would accept the conditions. The June decision did not stop negotiations which
continued through July and August. The critical point comes with the September
letters. The union are seeking to protect only a proportion of their membership
in the employment of the respondents. The vast majority have accepted terms. In the EIS
case the action could be seen as being for the protection of all members of the
union, who were, at the time of the challenge, all capable of being affected.
Here the challenge is in the interests of some only.
[23] As to
the balance of convenience this was strongly in favour of the respondents. The petitioners accept that there has been
considerable delay in bringing the petition with the result that significant
changes had already taken effect in the respondents' payroll system. To grant interim orders as sought would cause
real administrative problems for the respondents. He produced two affidavits -
one from the head of Payroll and Pensions and the other from the head of Human
Resources -vouching the difficulties which would be encountered. The
respondents' system involves two computer loads. The first loading is for
individual posts and what they involve. The second is for the individual
employees who hold those posts. In a normal month electronic payments reach employees'
bank accounts about the 27th. In December, this happens by 21st/22nd.
Contingencies require to be built in for printing of payslips and time for
employees to challenge their payslips. To achieve that, the deadline for
loading was lunchtime on 12 December, i.e. the day on which this application
was being heard. Once loading commences, it cannot be reversed in part. It
would require to be stopped and restarted. It is not possible to separate out
those who have signed contracts and those who have not but are still working.
The prejudice would be not only to the respondents but also to those employees
who have signed contracts and on whose behalf no challenge is made. It would
also affect those on the payroll but whose pay is not dealt with under the same
agreement e.g. teachers and firefighters.
Petitioners'
response
[24] Mr. Napier, in reply, said that the
application was being brought on behalf of all employees who were members of
the union. The reasons it is limited in its effect are tactical and pragmatic:
had they sought to reduce all notices they would have faced enormous
difficulties on the balance of convenience. Employment law mechanisms are
wholly ineffective in achieving a change of policy and that is what the
petitioners seek.
Decision
[25] Although
the argument for the respondents was initially presented on the basis that the
petitioners had neither title nor interest, it was eventually based on the
argument that the circumstances of this case were not appropriate for the
supervisory jurisdiction of the court, under reference to Watt v Strathclyde Regional
Council. The nub of the argument was that the heart of this dispute was a
contractual employment dispute not an administrative matter. I agree.
Essentially the attack is on the individual consequences of the resolution on a
number of individual employees who have been offered regrading or otherwise
offered terms different to their previous contracts of employment. It is only
in respect of those employees who have refused these terms that reduction of
the notices it sought. All the other notices served would remain standing.
There are very clear, competent and obvious remedies in employment law relating
to unfair dismissal which could be taken by these employees and would address
what is in reality the only issue in this case. The petitioners' argument that
the application is limited because a wide application would have caused
problems relating to the balance of convenience is not persuasive. Had they
sought to reduce all dismissal notices they would have faced very serious
substantive problems based on the fact that they were seeking to reduce notices
which had been superseded by contractual agreement. The situation here is quite
the opposite of that which existed in Watt.
There, to deal with the dispute under employment law would have had wider
consequences likely to affect all teachers in the respondents' area. To address the present issue according to
employment law remedies would have no such consequence. The present complaint
is not one of general application to all employees affected by the resolution
or its consequences, it is brought on behalf of a limited number of those
affected and is essentially in the nature of a private employment dispute not
suitable for the supervisory jurisdiction of the court. I will accordingly
dismiss the petition.
[26] Had it been necessary to decide the issue of the balance of
convenience I would have accepted the submissions of Mr. McNeill that the
balance lay with the respondents.
