Appeal No.	 EAT/785/99

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 7 December 1999
Judgment delivered on 12 January 2000

Before
THE HONOURABLE MR JUSTICE CHARLES
MR I EZEKIEL
MR S M SPRINGER MBE

COLT GROUP LTD	APPELLANTS

MS C COUCHMAN	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MS D ROMNEY
(of Counsel)
Messrs Jeffrey Green Russell
Solicitors
Apollo House
56 New Bond Street
London
W1Y OSX	
For the Respondent	MR M KURREIN
(of Counsel)
Instructed By:
Ms J Murphy
Disability Law Service 
Part 2nd Floor North
High Holborn House
52-54 High Holborn 
London
WC1V 6RL	

	MR JUSTICE CHARLES:	The parties to this appeal are Colt Group Plc (the Appellant before us and the Respondent before the Employment Tribunal) and a Mrs Couchman.

1	The appeal is against a decision of an Employment Tribunal sitting at Southampton, the Extended Reasons for which were sent to the parties on 18 May 1999.  The decision was that:

“The Tribunal finds that the employer of the respondent does not have less than 20 employees and therefore the Tribunal has jurisdiction to deal with this claim under the Disability Discrimination Act 1995.”

2	On the face of that decision one would be forgiven for thinking that the issue for the Employment Tribunal was one of fact, namely an issue as to the number of employees of the Appellant company (ie Colt Group Ltd).  However, this is not the case because the Employment Tribunal find (and it is not disputed) that if the Appellant company is taken and treated as a separate legal entity it has less than 20 employees.

3	The basis of the decision of the Employment Tribunal is what they describe as “a purposive construction” of section 7 (1) of the Disability Discrimination Act 1995 (the “DDA”).  

4	This appeal therefore raises a point of statutory construction and application.  

Background

5	The factual background appears from paragraphs 4 to 22 of the Extended Reasons.  These are in the following terms:

“4.  We find the following facts.
5  The respondent is the parent company of a group of companies which originally provided ventilation equipment, but now is a world-wide organisation operating in several countries with a multi-million pound turnover, said to have profits in recent years of £2.3 million.
6.  There are approximately 40 companies in the group, of which the respondent is the parent company.  The respondent is obliged by company law to file group accounts each year, but it has taken advantage of a concession not to file its own accounts.  We were shown a copy of recent accounts in the bundle R1.
7.  The applicant was recruited following an advertisement (page 52) for Secretary to the Trustees of the Colt Foundation and Group Information Officer.  The beginning of the advertisement stated, ‘The Colt Group is a leading international company that designs and installs heating, ventilation, day lighting and fire protection services throughout the UK, Continental Europe and much of the rest of the world’.
8.  Mr Ward-Penny told us that the ‘Colt Group’, as such, has no legal entity.  The advertisement was not only for Secretary to the Trustees of the Colt Foundation, but also for Group Information Officer, and the two roles were combined.
9.  The applicant was successful and she was appointed by letter dated 5 December 1997 an acknowledgement for which she signed on 8 December 1997 (pages 53-58 of R1).  Her employment began on 5 January 1998.
10.  There is a slight problem in the terms and conditions shown on page 53, in that they may not completely comply with Section 1 (3) of the Employment Rights Act 1996, in that they do not specifically name the employer, but if one takes the letter heading and the reference to ‘this company’, it appears to be clear that the employer was the respondent.  The applicant certainly understood that her employer was the respondent and she has named the respondent as her employer in her Originating Application.
11.  The terms and conditions were in two parts:  the first consisted of the letter to which we have already referred (page 53-58) and the second is described as ‘an employment handbook instalment two’.  This appears on pages 59-79 of the bundle R1.  The second instalment, the company handbook, is common to all employees within the Colt group of companies.
12.  As Group Information Officer, the applicant was responsible for evolving a uniform house style throughout the group, including the international companies.  The group not only had a house style, it also had a common ethos, common terms and conditions, common arrangements for pensions, a common holiday scheme and a common IT policy.
13.  The building in which the applicant worked was used by a number of different companies within the group.  It had common facilities, such as a visitors’ centre and a canteen.
14.  Some employees worked in several different companies, for example the Personnel Officer who signed the applicant’s letter of appointment (page 58 of R1), Ms J W Millar, was in fact an employee of another company, not the respondent company.  Mr Ward-Penny, the Company Secretary, transferred from the respondent to Colt Group Services Ltd with his own consent in order to participate in a profit-related pay scheme in March 1997.  He referred us to a letter confirming this arrangement on page 268 of the bundle R1.
15.  However, Mr Ward-Penny also provided services to a number of the companies in the group and he described himself as Group Secretary to the respondent and as Group Company Secretary to the Colt Group, an organisation which he told us had no legal standing.
16.  The applicant acted as Group Information Officer and Secretary to the Trustees of the Colt Foundation, which is a charity and is also a shareholder in Colt companies.
17.  The applicant’s duties involved her working with other companies within the group from time to time, either to deal with the corporate image or to prepare the Coltpost (a newsletter) and the Annual Review (an annual newsletter).
18.  The payroll was run by two companies, Colt International Ltd and Colt Services Ltd, but the applicant conceded that she was paid on behalf of the respondent and that she had signed the letter accepting the respondent’s terms.
19.  It was conceded by Mr Turley, on behalf of the applicant, that in accordance with the respondent’s evidence, there were only 7 employees in the respondent company, and that even if one added the four non-executive directors of the respondent and also the six charity trustees of the Colt Foundation, the number still fell below 20.  [Of course, at the time of dismissal (7 November 1998), Parliament had indicated an intention to lower the threshold and it was, in fact, lowered to ‘fewer than 15 employees’ on 1 December 1998].
20.  In any event, notwithstanding Mr Turley’s concession, we do not find that the six charity trustees were employees of the respondent, nor were they employees of the Foundation.
21. Also, the non-executive directors of the respondent we find were officeholders, but not employees of the respondent.
22.  Those then are the facts which we find.”

6	We comment that as a matter of law the “Colt Group” referred to in paragraph 15 of the Extended Reasons does not have a separate legal identity or standing.  The legal persons or bodies are the individual companies that make up that Group.

Relevant sections of the DDA 
7	We cite these sections from Butterworths Employment Law Handbook.  As was common ground before us the headings to the sections in that copy appear as side notes in the Queen’s Printer’s Copy of the Act. 

“7  Exemption for small businesses:
(1)  Nothing in this Part applies in relation to an employer who has fewer than [20] [now 15] employees.
(2)  The Secretary of State may by order amend subsection (1) by substituting a different number (not greater than 20) for the number for the time being specified there.

68  Interpretation
(1)  In this Act –
‘employment’ means, subject to any prescribed provision, employment under a contract of service or of apprenticeship or a contract personally to do any work, and related expressions are to be construed accordingly.

4  Discrimination against applicants and employees

(1)  It is unlawful for an employer to discriminate against a disabled person –
(a)  in the arrangements which he makes for the purpose of determining to whom he should offer employment;
(b)  in the terms on which he offers that person employment; or
(c)  by refusing to offer, or deliberately not offering, him employment.

(2)  It is unlawful for an employer to discriminate against a disabled person whom he employs –
(a)  in the terms of employment which he affords him;
(b)  in the opportunities which he affords him for promotion, a transfer, training or receiving any other benefit;
(c)  by refusing to afford him, or deliberately not affording him, any such opportunity; or
(d)  by dismissing him, or subjecting him to any other detriment.

(3) …
(4) …
(5) …
(6) ..This section applies only in relation to employment at an establishment in Great Britain.

6  Duty of employer to make adjustments
(1)  Where –
(a)  any arrangements made by or on behalf of an employer, or
(b)  any physical feature of premises occupied by the employer,
place the disabled person concerned at a substantial disadvantage in comparison with persons who are not disabled, it is the duty of the employer to take such steps as it is reasonable, in all the circumstances of the case, for him to have to take in order to prevent the arrangements or feature having that effect.

(2)  Subsection (1)(a) applies only in relation to –
(a)  arrangements for determining to whom employment should be offered;
(b)  any term, condition or arrangements on which employment, promotion, a transfer, training or any other benefit is offered or afforded.

(3)  The following are examples of steps which an employer may have to take in relation to a disabled person in order to comply with subsection (1) –
(a)  making adjustments to premises;
(b)  allocating some of the disabled person’s duties to another person;
(c)  transferring him to fill an existing vacancy;
(d)  altering his working hours;
(e)  assigning him to a different place of work;
(f)  allowing him to be absent during working hours for rehabilitation, assessment or treatment;
(g)  giving him, or arranging for him to be given, training;
(h)  acquiring or modifying equipment;
(i)  modifying instructions or reference manuals;
(j)  modifying procedures for testing or assessment;
(k)  providing a reader or interpreter;
(l)  providing supervision.

(4)  In determining whether it is reasonable for an employer to have to take a particular step in order to comply with subsection (1), regard shall be had, in particular, to –
(a)  the extent to which taking the step would prevent the effect in question;
(b)  the extent to which it is practicable for the employer to take the step;
(c)  the financial and other costs which would be incurred by the employer in taking the step and the extent to which taking it would disrupt any of his activities;
(d)  the extent of the employer’s financial and other resources;
(e)  the availability to the employer of financial or other assistance with respect to taking the step.
This subsection is subject to any provision of regulations made under subsection (8).

(5)  …
(6) …
(7) …
(8) …
(9) …
(10) …
(11) …
(12)  This section imposes duties only for the purpose of determining whether an employer has discriminated against a disabled person; and accordingly a breach of any such duty is not actionable as such.”

8	Enforcement, remedies and procedure
(1)	A complaint by any person that another person
(a)	has discriminated against him in a way which is unlawful under this Part, or
(b)	is, by virtue of section 57 or 58, to be treated as having discriminated against him in such a way,
may be presented to an Employment Tribunal.

8	During the course of argument before us Sections 16 and 58 were also referred to.  We will not set them out.  Sections 4 to 18 of the DDA are in Part II thereof which has the heading “Employment” and the subheading “Discrimination by employers”.

9	We make the following comments on the above sections:

(a)	Sections 4, 6, 7, 16 and 58 all refer to an employer.  In our judgment it was correctly accepted before us that the word “employer” should have the same meaning or breadth of meaning, in each of the sections, and

(b)	The definition of employment provides that related expressions, and therefore expressions such as “employer” and “employee” are to be construed according to the definition.  In our judgment the definition indicates that there is to be a contract between the employer and the employee.  

Comments on the sections of the DDA by reference to other legislation

10	Section 230 of the Employment Rights Act 1996 is in the following terms:

“230 Employees, workers etc
(1)  In this Act ‘employee’ means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.
(2)  In this Act ‘contract of employment’ means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.”

We accept the submission made on behalf of Mrs Couchman that this definition of “employment” and “employee” is narrower than the definition of “employment” in the DDA.  However, the definitions in both Acts require there to be a contract.  

11	Section 96 (2) of the Employment Rights Act 1996, Section 1 (6) (c) of the Equal Pay Act 1970 and Section 82 of the Sex Discrimination Act 1975 all refer to an associated employer.  These sections therefore demonstrate (should any such demonstration be needed) that when Parliament wishes to do so it can and does define “employment”, “employer” and “employee” by reference to an associated employer.  It was common ground that the DDA makes no reference to an associated employer.  Further in Hardie v Northern Ltd (EAT/1142/98) this Tribunal chaired by the President has recently in paragraph 18 of the judgment recognised the force of the argument that when Parliament wants to include associates it does so. 

12	We pause to comment that, as we understand it, the definition contained in Section 82 Sex Discrimination Act 1975 related to Section 6 (3)(b) of that Act as originally enacted.  That subsection was in similar terms to Section 7 of the DDA but it expressly referred to and directed that the employees of an associated company should be included (which explains paragraph 7 of the judgment  in Hardie v Northern Ltd (EAT/1142/98).

The Arguments on this Appeal

13	We have had the benefit of written skeleton arguments and oral submission.  Unsurprisingly the Appellant company, both in writing and orally, concentrated their attack on the reasoning of the Employment Tribunal.  Equally unsurprisingly the Respondent to the appeal sought to uphold the reasoning of the Employment Tribunal.  In addition, and in particular orally, Counsel for Mrs Couchman made some further and alternative submissions in support of the conclusion reached by the Employment Tribunal.

Our Approach

14	We shall firstly deal with the reasoning of the Employment Tribunal and then go on to consider other points raised before us.  Some of the arguments advanced before us and included in the Extended Reasons of the Employment Tribunal were considered by this Tribunal in Hardie v Northern Ltd (EAT/1142/98).  Also some of the arguments advanced in that case were not advanced in this one.

The Reasoning of the Employment Tribunal

15	This is contained in paragraphs 26 to 42 of their Extended Reasons.  These are in the following terms:

“26.  It is certainly true that Section 7 appears to be clear when it states that the Act does not apply in relation to an employer who has fewer than 20 employees.  On the face of it, the respondent, Colt Group Ltd, is the applicant’s employer and has fewer than 20 employees, namely 7.
27.  The applicant undoubtedly worked with and for a number of the companies in the group.  For example, she was secretary to the Trustees of the charity.  She also had contact with a number of companies over their corporate image and the preparation of the Coltpost and the Annual Review.  However, we do not consider that on that account she became, in fact, an employee of those other companies.
28.  However, Mr Turley urges us to take a purposive view of the legislation.  We hesitate to do so when Section 7 is clear.  As Mr Ward-Penny said, if Parliament had intended to include associated companies, it could have done so, but it failed to do so.
29.  We have been referred by the applicant to reports from Hansard in connection with the passage of the Bill through Parliament.
30.  We have considered the speeches of their Lordships in Pepper v Hart [1993] ICR 291 at page 317 where Lord Browne-Wilkinson stated that ‘reference to Parliamentary material should be permitted as an aid to the construction of legislation which is ambiguous or obscure or the literal meaning of which leads to absurdity’.  For the reasons given below, we feel that to give a literal meaning to Section 7 would lead to an absurdity, since, as we remarked below, by no stretch of the imagination could the respondent’s organisation involving a group of companies with a multi-million pound turnover be said to be ‘a small business without specialist knowledge’.
31.  Lord Browne-Wilkinson went on to state, ‘Even in such cases, references in court to Parliamentary material should only be permitted where such material clearly discloses the mischief aimed at or the legislative intention lying behind the ambiguous or obscure words’.
32.  There is a slight clue in the heading to the Section (which we accept is not part of the Act).  It states ‘exemption for small businesses’.
33.  We have looked at Hansard in the report of Parliament when the Bill was being considered.  Mr Paice, the Parliamentary Under-Secretary, made the following statements:
‘Successive Governments have recognised that small businesses need special help to survive and prosper as well as protection from over-burdensome regulation … .  Small scale employers do not necessarily have specialist staff easily available to them, staff who have knowledge of the more detailed aspects of employment law … .  The 1975 Act (the Sex Discrimination Act) introduced a small firm threshold of five, in recognition of the unique difficulties of small firms. …  The small scale employer, who is usually the owner of the business, will have many issues on his mind.  It is unrealistic to expect him or her to know what might or might not be reasonable, to take advice or to follow case law as it develops, especially in the early years of the Act’s implementation. … It will be much more difficult for small businesses, without special knowledge, to keep up with what is happening in the early years of implementation … .  Small businesses face particular difficulties in interpreting guidance and advice from central and local Government.  They seldom have the personnel expertise available to the larger company. …  There is ample evidence that some organisations that represent small businesses clearly recognise the problems that small businesses face’.
34.  We take it as obvious from those comments by Mr Paice that it was clearly the intention of Parliament to assist small businesses and that is why the exemption was put in Section 7.
35.  By no stretch of the imagination could the respondent’s organisation involving a group of companies with a multi-million pound turnover be said to be a ‘small business without specialist knowledge’, to quote Mr Paice.
36.  We take into account that the whole organisation of the group has been on the basis of harmonisation across the group.  Indeed, the applicant herself was responsible for the Group’s corporate image.  The Personnel Manager dealt with a range of the companies in the group.  Mr Ward-Penny acted as Company Secretary to many of the companies in the group.  The publicity material promotes the Group’s size and turnover and the number of employees overall (said to be over 1,000).  The office at Havant had all the staff from various companies working together under the same roof and sharing resources.  The plaque on the front door was said both by the applicant and Mr Ward-Penny to display ‘Colt International’. 
37.  Even Mr Ward-Penny had difficulty in identifying the number of employees in one company.  He began by writing a letter dated 23 March 1999 (page 34) which identified 16 employees of the respondent.  He recognised in his evidence today that this was incorrect and that the true number was 7.
38.  If the Company Secretary has so much difficulty in identifying the exact number of employees, it is illustrative of how far integration has gone.
39.  Many of the titles of those identified in the letter on page 34 are ‘group’ titles, i.e. they confirm the integrated nature of the organisation.
40.  Even Mr Ward-Penny, who signed the letter, identified himself in that letter as an employee of the respondent, when today he says that he was not, in fact, an employee of the respondent, but had transferred for the purpose of a profit-related scheme in 1997.
41.  We have decided to accede to the suggestion of the Vice Chancellor, Sir Richard Scott in Harrods v Remick [1998] ICR 156 at page 163 to ‘give a construction to the statutory language that is not only consistent with the actual words used, but also would achieve the statutory purpose of providing a remedy to victims of discrimination who would otherwise be without one’, although we do appreciate that this may give some uncertainty to the interpretation of the law.
42.  We therefore interpret Section 7 as including all the employees in the group of companies of which the respondent was parent and that therefore the employer had more than 20 employees when the applicant was dismissed.
43.  We have fixed a date for the further preliminary point, as to whether the applicant was disabled within the meaning of Section 1 of the Disability Discrimination Act 1995 for Tuesday, 15 June 1999 and any Tribunal may deal with that preliminary point.
44.  We appreciate, however, that in the light of any possible appeal, the parties may wish to seek an adjournment of that hearing.”

Some Preliminary Points

16	Neither side submitted to us that we were obliged to construe the DDA in the light of, or to give effect to, a European Directive or other obligation on the State.  Counsel for Mrs Couchman referred us to the Council Recommendation of 24 July 1986 on the employment of disabled people in the Community (which is to be found at paragraph 3394 of Butterworths Employment Law Handbook, Eighth Edition).  He did so in support of his argument that a narrow meaning should not be given to the word “employer”, or the word “employee” in the DDA.  In our judgment reference to this Recommendation does not add to or subtract from the submissions made on behalf of the Respondent (Mrs Couchman) (i) that the exception to the DDA contained in Section 7 (1) thereof should not be construed narrowly, and (ii) that the correct approach to the construction and application of the DDA is one that gives it as wide an application as is possible.  

17	As appears from the Extended Reasons the Employment Tribunal thought that a slight clue to the construction application of Section 7 (1) of the DDA could be found in the heading or side note to the section.  It was correctly common ground before us that a side note is a poor guide to the meaning and extent of a section (see for example R v Schildkamp [1971] AC 1 and Bennion on Statutory Interpretation 3rd edition p. 576).  We agree.  The reason for this is that it can do no more than indicate the subject matter of the section.  In particular when the side note, as here, is in terms that can have a breadth of meaning it is of little assistance and it can be dangerous to place any weight on it.

18	Indeed, in our judgment if the Act had been differently drafted and the exception had been expressed to be in respect of “small businesses” who had then been defined in the terms of Section 7 (1), it would have been the definition that was important rather than the short description chosen to describe what the statute defines.

19	In our judgment as a matter of ordinary language a small business or employer can have a wide range of meaning and a small business or employer can be defined in a number of different ways.  For example in the case of a business conducted by a company it can be defined or identified done by reference to its paid-up share capital, and in the case of a business conducted owned by an individual or individuals or a company this can be done by reference to turnover or employees.  Here the language and thus the definition, identification or extent of the exception (which is not confined to companies) is by reference to an employer who has less than a specified number of employees. In our judgment, it is the wording of the body of Section 7 (1) construed in the context of the DDA as a whole and, in particular, the sections we have set out above, that is important and the side note provides no real assistance.

Our Reasoning and Conclusion

20	In our judgment as a matter of ordinary English the words of Section 7 (1) of the DDA are clear.  We note that:
(a)	this was also the view of the Employment Tribunal (see paragraph 26 of the Extended Reasons), and
(b)	 the force of this view is recognised in Hardie v Northern Ltd (EAT/1142/98) (see paragraph 18 of the judgment).

21	In our judgment an application of the clear meaning of the ordinary English words used in Section 7 (1) of the DDA has the result in this case that the DDA does not apply because the employer (the Appellant company, Colt Group Ltd) has fewer than the specified number of employees. This overall conclusion accords with the decision in Hardie v Northern Ltd (EAT/1142/98) with which we respectfully agree.

22	However, as the Extended Reasons show the Employment Tribunal reached a different conclusion by taking what they describe as a purposive approach in which they also apply Pepper v Hart [1993] ICR 291 on the basis that a literal approach gives rise to an absurd result.

23	We do not agree with the reasoning and conclusion of the Employment Tribunal.  In our judgment both are wrong.  

24	The first step in taking a purposive construction and a part of the process in determining whether “Parliamentary material” can be looked at pursuant to the decision in Pepper v Hart and thus whether a literal meaning produces an absurd result is to identify the underlying purpose of the legislation and in particular of the section under consideration.  

25	The overall purpose of the DDA appears from the opening recital to the DDA and it is to make it unlawful to discriminate against disabled persons in connection with certain activities.  The underlying purpose of Section 7 (1) is apparent on its face and it is to provide that Part II of the DDA does not apply to certain employers (and thus their employees).  

26	We accept that because Section 7 (1) provides an exemption from the DDA that on a literal, or a purposive, approach it should be construed narrowly rather than widely.  

27	We do not agree that having regard to the purposes and approach referred to in paragraphs 25 and 26 hereof that what we (and the Employment Tribunal) have concluded is the natural meaning of Section 7 (1) leads to an absurdity.  In our judgment it does not. As to this conclusion we make the following points:
(1) 	We repeat that an exception from the provisions of the Act by reference to the size or smallness of an employer could be defined in a number of ways.  We see nothing absurd in it being defined by reference to the number of employees of a single company.	Indeed, in our view that approach derives support from the definition of “employment” (and thus related expressions) contained in the DDA which as we have pointed out indicates that there should be a contract between the employer and the employee.
(2)	Further, and in more general terms, we see nothing absurd in an exception which does not deal with companies who are members of a group or associated with other companies.  The decision of this Tribunal in Hardy v C D Northern Ltd supports that conclusion because in that case this Tribunal chaired by the President saw nothing absurd in excluding associated companies from the word “employer” and indeed concluded that the word “employer” in the DDA did not include “associates”.  We respectfully agree with the conclusions in paragraph 23 of the judgment in that case that there is no reason to believe that by leaving out reference to “associates” Parliament made a slip and as to drawing the line. 
(3)	In our judgment Parliament has clearly chosen a formula that has the consequence which must, we think, have been apparent to them that an employer in a group when looked at as a separate legal body or person has less than the specified number of employees is excluded.  In our judgment this view is supported by the limited method of altering the ambit of the exclusion contained in Section 7 (2) of the DDA.  

28	It follows that, in our judgment, the Employment Tribunal erred in applying Pepper v Hart and it is to be noted that in Hardie v C D Northern Ltd an argument based on Pepper v Hart was not advanced.

29	However, if we are wrong in that conclusion in our judgment in applying Pepper v Hart  the Employment Tribunal fell into further error.  This is because:
(a)	they had regard to only one part of the relevant debate, and
(b)	the part which they refer to is not clearly in favour of their conclusion.

30	As to point (a) in our judgment the passage cited from Hansard in the Extended Reasons has to be read with the comments of Lord Mackay of Ardbrecknish at columns 1914 1916 and 1917.  At column 1917 he says this:

“I said to my noble friend that I should like to check the question he asked in regard to a company breaking itself up or being part of a group.  I answered him but indicated that I would write to him if I was wrong.  I can do better than that.  I can say that I probably got that wrong.  Each individual company within a group is a separate employer.  My point is that it would not be sensible for a company to split itself up into groups just to get away from having to apply this Bill.  Therefore, that is not a realistic scenario to contemplate.”

31	In our view the passage which Lord Mackay is there accepting that he probably got wrong is the passage appearing at column 1914 which is in the following terms:

“A conglomerate or a mini-conglomerate, however one likes to describe it, is considered as one company.  I do not think that one can break up one’s company into self-contained operating units.  One would have to go to the extent of creating absolutely separate and unrelated companies before one would get out of obeying the terms of the Bill.”

32	With respect, it seems to us that in that passage Lord Mackay makes some errors of company law.  Further, it seems to us that when taken together these two passages from the statement of Lord Mackay support a conclusion that the intention of Parliament was to provide an exception as to which the correct approach was to look at each company within a group and to ask how many employees that company had.  

33	As to point (b) it seems to us that the reference by Mr Paice to the Sex Discrimination Act 1975 (which included within its definitions and exceptions associated companies) has the result that the statement relied upon by the Employment Tribunal does not have a clear message.

34	We were not shown the Bill which was the subject of the debate and statements we have referred to.  The content of the statements indicates that the Bill accorded with Section 7 and the definition of “employment” in the DDA as enacted.  We did not cause the parties to obtain a copy of the Bill, or obtain it ourselves, having regard to our view that the Employment Tribunal were incorrect to apply Pepper v Hart.  

35	As appears above in our judgment if the statements in the relevant debate are taken as a whole, they do not provide a clear indication of the Parliamentary intention as to the meaning and extent of Section 7 (1) of the DDA but, if anything, they support the view that what we (and the Employment Tribunal) regard as the natural meaning of the words used should be applied.    

36	The balance of the reasoning of the Employment Tribunal in paragraphs 34 to 42 has similarities to the argument based on “single economic unit” and “lifting the corporate veil” raised and in our judgment correctly rejected in Hardie v CD Northern Ltd.  Of course when reaching their decision the Employment Tribunal did not have the benefit of that decision because it was only decided in October 1999.

37	As to paragraphs 41 and 42 of the Extended Reasons we do not follow and the Employment Tribunal do not explain  how their interpretation and conclusion in paragraph 42 is consistent with the words used and thus the approach in the case they refer to.

38	Counsel for Mrs Couchman also relied on paragraph 2.6 of the Code of Practice for the Elimination of Discrimination in the Field of Employment against Disabled Persons.  This refers to Section 7 DDA and points out that the DDA applies if the number of employees is exceeded regardless of the size of the individual workplaces or branches.  It also comments that if the number of employees falls below 20 the employer will be exempted for as long as there are less than 20 employees and that individual franchisees are exempt.  In our judgment if anything this statutorily approved guide supports the conclusion we have reached rather than that argued for on behalf of Mrs Couchman.  In our judgment when read as a whole paragraph 2.6 indicates that what is important is the number of employees an individual employer has for the time being.  We do not accept the submission made on behalf of Mrs Couchman that the reference to franchisees and to irrelevance of the number of workplaces or branches indicates that franchisees are treated as individual employers but the members of a group of companies or associated companies should not be so treated. 

39	Understandably having regard to the recent decision in this Tribunal in Hardie v Northern Ltd  counsel for Mrs Couchman in his oral submissions concentrated on an argument which is not included as such in that case.  This argument was that because (i) the definition of “employment” in Section 68 DDA is wide, (ii) the exception in Section 7 should be construed widely, (iii) in day to day use the word “employees” can be used loosely and widely and can cover the employees of all companies in a group (and that this was demonstrated by for example paragraphs 36 to 38 of the Extended Reasons) and (iv) the overall purpose of the DDA is to make it unlawful to discriminate against employees who are disabled the extent of meaning and the application of the exception should be left to the good sense of the Employment Tribunal in each case.  A factor could perhaps have been added to this argument but was not is that Section 6 Interpretation Act 1978 provides that unless the contrary intention appears words in the singular include the plural and words in the plural include the singular, so that “an employer” in Section 7 should be read as “employers” when they are part of a group or are otherwise associated to comprise what would not commonly be thought of as a small business.

40	We reject this argument.  In our judgment it cannot have been the intention of Parliament to leave the extent of the exemption to and thus the application of the DDA  so open ended and vague.  Further in our judgment:

(a)	for the reasons we have given such a conclusion is contrary the clear language of in particular Sections 7(1), 4 and 68 (the definition of “employment”) which indicate that Section 7(1) is concerned with the employer, or potential employer, of the disabled person (and potential claimant) and thus the person with whom the disabled person (and potential claimant) has, or potentially could have, a contract of the types defined and the number of employees that employer has, which expressions (or words) are to be construed in accordance with the definition of “employment”, and 
(b)	such a conclusion would give rise to uncertainty and unnecessary and inappropriate difficulty in the determination of when a person should be treated as an employee and thus a legal person who can be sued pursuant to and who owes duties under the application of the other provisions of the DDA (see Sections 6 and 8 and paragraph 26 of the judgment in Hardie v Northern Ltd).
  
41	As to point (b) we accept that on our view of the true construction and effect of Section 7(1) in the application of Section 6 alone, or together with for example Section 16, situations could arise which could rise to difficulty or where it might be said that a result is surprising but we think that these are less extensive than those that would arise if the flexible and therefore uncertain approach advanced on behalf of Mrs Couchman was to be adopted. 

Leave to appeal

42	At the end of the hearing we indicated that we would allow the appeal and counsel sought leave to appeal.  We refuse that leave:
(a)	in our judgment without reference to the recent decision of this Tribunal in Hardie v Northern Ltd  the true construction of Section 7(1) DDA is clear,
(b)	in Hardie v Northern Ltd this Tribunal reached the same conclusion, and
(c)	we agree with this Tribunal in Hardie v Northern Ltd that it is for Parliament and not the tribunals or the courts to extend the application of the DDA so that it would cover Mr Hardie in that case and Mrs Couchman in this one.