[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Prebon Marshall Yamane (UK) Ltd v Rose [2004] UKEAT 1002_02_0206 (2 June 2004) URL: http://www.bailii.org/uk/cases/UKEAT/2004/1002_02_0206.html Cite as: [2004] UKEAT 1002_2_206, [2004] UKEAT 1002_02_0206

[New search] [Printable RTF version] [Help]

APPEARANCES

 

For the Appellant	MR D READE (of Counsel) Instructed by: Messrs Herbert Smith Solicitors Exchange House Primrose Street London EC2A 2HS
For the Respondent	MS S MOOR (of Counsel) Instructed by: Messrs Collyer Birstow Solicitors 4 Bedford Row London WC1R 4DF


 


SUMMARY

Issues of:

(a) appropriate comparator for an equal pay claim

(b... length of period of comparison

HIS HONOUR JUDGE BIRTLES

Introduction

1. This is an appeal from decisions of an Employment Tribunal sitting at London Central on 7 -10, 13 - 14 May 2002 (the liability decision) and 20 September 2002 (the remedies decision). The liability decision was sent to the parties and entered in the Register on 24 July 2002 and the remedies decision was sent to the parties and entered in the Register on 23 December 2002. The Chairman at both hearings was Mr C P Baron and the members were Miss M O'Sullivan and Mr D Warner-Howard.
2. At the liability hearing the unanimous decision of the Tribunal was as follows:

"1 That the Applicant was not wrongfully dismissed and in breach of contract;

2 In accordance with section 2(2) Equa1 Pay Act 1970 the Tribunal declares that the rights of the parties are that the provision in the Applicant's contract of employment relating to salary shall be modified so as not to be less favourable than that of Ian Gable, subject to the principle of pro rata temporis;

3 That the Applicant was discriminated against on the grounds of her sex contrary to the provisions of the Sex Discrimination Act 1975 in respect of the amount of bonus paid to her by the Respondent in November 20;

4 That the Applicant was not discriminated against on the grounds of her sex contrary to the provisions of the Sex Discrimination Act 1975 in any other respect;

5 That the Applicant was not treated less favourably contrary to the provisions of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000;"

3. The decision of the Employment Tribunal at the remedies hearing was as follows:

"1. That the Decision of the Tribunal dated 24 July 2002 be reviewed and that the Decision be varied as follows:

a. In paragraph numbered 2 the words 'during the whole of the period of the employment of the Applicant by the Respondent' be added after the name of Ian Gable;

b. In paragraph numbered the words 'and that it is just and equitable in accordance with section 76(5) of the Sex Discrimination Act 1975 to extend the time for the presentation of the complaint to the Tribunal until 5 September 2001' be added at the end of that paragraph:

2 That the Applicant be awarded £58290 in respect of the breach of the equality clause implied by the Equal Pay Act 1970;

3. That the Applicant be awarded compensation of £1400 under the provisions of the Sex Discrimination Act 1975;

4. That the Respondent do pay the Applicant £6997 interest on those sums calculated as shown in the reasons set out below."

The Liability Decision

4. The Employment Tribunal gave a reserved decision and set out the appearances, the history of the proceedings and the evidence it heard: decision paragraphs 2 - 7. It then found what it called "The basic facts": decision paragraphs 8- 21; the claims and issues: decision paragraph 22 and the questions which it had to decide: decision paragraph 23. The Employment Tribunal then went on to consider each of the Applicant's claims in detail. It dealt first with the equal pay claims: decision paragraphs 24 - 49 and then turned to the issues of discrimination, wrongful and unfair dismissal: decision paragraphs 50 - 106. Finally, it turned to the other claims under the Sex Discrimination Act 1975 and the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000: decision paragraphs 107 - 111.
5. The basic facts found by the Employment Tribunal are set out at paragraphs 9 - 21 of the Employment Tribunal decision, which state this:

"9 The business of the First Respondent is that of money broking. It is apparent that the money-broking community in London is relatively small. The money broking business of the Respondent is sub-divided into 'Desks' to which we refer below, We are content to take advantage of the descriptions of the business supplied by Mr Bright and the Applicant. The business was described by Mr Bright at paragraphs 3 and 4 of his witness statement, part of which reads as follows:

The work of the Desk involves money broking in different products, including foreign exchange deposits and interest rate products. The Desk puts together agreements between customers for the acquisition and sale of emerging market currencies, for example the South African Rand, Czech Krona, Slovak Krona, Polish Zloty and Korean Won. The customers of the Desk are banks, who buy and sell such currencies for the purpose of their business. The brokers on the Desk working with such customers develop close working relationships with them, speaking to them frequently on a number of occasions during the course of the day, although the individual trades themselves are generally very quick and take a matter of seconds on average.

10 The Applicant described the business of the First Respondent as follows:

Money brokers essentially act as intermediaries between two banks who wish to buy and sell currency, futures, stock, debentures and bonds, goods and services and such other items. Money brokers compare different prices being offered by banks and try to find the best price for the customer. Money brokers make their money by charging banks a commission on the transaction. Each bank will deal with a variety of different brokers. Often when a bank wants to place a deal. they will ask brokers from several different firms to obtain prices for them.'

11 The phrase 'Desk' comprises both the physical elements of the desk and equipment, and also the people working on it. The physical arrangement is as follows. The furniture is in the shape of a 'T' with ten to twelve people sitting round it. The Desk is conceptually broken up into several 'areas', and the word 'area' denotes the currency or category of currencies in which each person deals. There may be several areas comprised in each Desk.

12 Each member of the Desk has certain equipment to enable him or her to carry out their function. As we understand it, not every employee has a PC, but in fact the Applicant did have a PC to enable her to input details of the deals which she had arranged. In addition, each employee had access to a monitor giving details of rates and other financial information necessary for them to be able to fulfil their function properly. The photographs at R4 and R5 are photographs of a typical Desk, but not the Desk upon which the Applicant was actually employed. We were informed that the differences between them are not materia1,

13 It is important to record and understand the telephone arrangements at the Desk. In between the monitors for each employee was a stack of 'boxes' and it is apparent from the photographs we have seen that there could be at least a dozen or so boxes on each Desk. Although the word 'boxes' has been used, these were in fact small loudspeakers, Each box had up to four direct telephone lines connected to it and those telephone lines were permanently connected to various bank customers of the First Respondent. Customers of the First Respondent initiated conversations with the individual brokers by calling down the telephone line and through the boxes. All brokers within hearing range could hear what the particular bank customer was requesting over the box.

14 In addition to the box system, each employee had their own mini telephone exchange, for want of a better description. The unit in front of each employee had 40 grey buttons, and by depressing one of the buttons the employee then accessed a direct line to the 'owner' of that button. This also gave a broker the facility to pick up the telephone call being made via the box and then speak directly to the bank involved on a one-to-one basis through a normal handset. The unit also of course allowed the broker to initiate calls direct to any other customer linked to one of the grey buttons. Finally, the unit had a relatively ordinary dial-up facility to enable the user to dial an outside line by dialling the number in the usual way. By the use of the grey buttons it was possible to move between conversations with different outside lines successively. More mention of this fact will be made below when discussing the events of 19 January 2001 .

15 The handset was modified from the ordinary domestic handset in two ways. Firstly some electronic gadgetry was added in the microphone to restrict the amount of ambient noise picked up by the microphone. We record that fact for completeness, although it did not feature significantly in the hearing. Of more importance, the handset had a small rocker switch near the earpiece on the outside of the unit. The purpose of the switch was to enable the user to turn off the microphone entirely so that the user could speak to people around him or her without the person on the other end of the line hearing what was being said.

16 We were told that the First Respondent is one of four major brokers in London in the same line of business. There is a similar firm in Geneva. The First Respondent had offices elsewhere in the world, and we learned of offices in Prague and Johannesburg. There may well have been offices elsewhere which are not relevant to these proceedings. We were not told the precise size of the First Respondent in its London office. Mr Verrier told us that he managed 350 employees in his role as Deputy Chief Executive Officer of Europe, Middle East and Africa. It is apparent that the undertaking is of some considerable size. It had its own Human Resources Department, and reference will be made to individuals in that department below. In reaching our decision we noted that in the bundle of pleadings it is stated that the First Respondent had about 550 employees, of which the vast majority were in the UK, and of those about 337 were brokers, including money brokers.

17 We now turn to the employment history of the App1icant and her position in the business of the First Respondent. The Applicant was dismissed on 7 March 2001 and at that time was aged 30. She started working in the banking industry with HSBC in London on 31 July 1989. She worked in the foreign exchange area and liaised with brokers, such as the First Respondent. She later worked for another bank as a foreign exchange trader then for another company as a money broker. During that time she was relocated to Singapore, but decided to return to London, and joined the First Respondent in July 1998. The Applicant was a valuable asset to the First Respondent, particularly because she had a good contact with Standard Chartered Bank.

18 The Applicant's working hours when she started with the First Respondent were 7 a.m, to 5 p.m, Monday to Friday. The Applicant was away on maternity leave from December 1999 until March 2000. When she returned to work it was agreed with her then line manager, David Harris, that she would work on a part-time basis from 7 a.m. until 2 p.m., and her salary would be reduced pro rata. She continued working on that basis until she was dismissed.

19 Shortly after the Applicant joined the First Respondent in September 1998 she moved to the 'forward Aussie Desk' and Mr Field was her direct line manager. She was then, and at all material times, specialising in broking the forward Rand. That was one 'area' on Mr Field's forward from 1 June 2000 the Applicant and Ray Fairchild moved to the Desk managed by Mr Bright. The full title of the Desk was 'Non-Deliverable Forwards and Emerging Markets Desk'. We will simply refer to it as 'the Desk'. The Applicant carried on dealing with the South African Rand. Mr Bright proposed in November 2000 that she should also broke the Czech Krona. and this is one of the issues to which further reference will be made below.

20 On 19 January 2001 an incident occurred as a consequence of which the Applicant was alleged to have disclosed confidential information to her husband. Further details are set out below. The result was that the Applicant was suspended. A disciplinary hearing was held on 5 March 2001 and the Applicant was dismissed with effect from 7 March 2001. She appealed against the dismissal, and the appeal was itself dismissed. Neither party relies upon the appeal in support of their respective cases and no further details of the appeal will be given.

21 The other piece of background information which is relevant is that the Applicant's husband was also a money broker working in the same markets as the Applicant herself. He worked for a competitor, but had previously been an employee of the First Respondent."

6. Those basic facts need to be amplified by further facts found by the Employment Tribunal, and we will refer to them when we deal with each of the grounds of appeal and cross-appeal.

The remedies hearing

7. The remedies hearing on 20 September 2002 took an unusual turn. As we have indicated, the Employment Tribunal at the liability hearing unanimously decided that the Applicant's claims under the Equal Pay Act 1970 and (in part) under the Sex Discrimination Act 1975 succeeded. There was an unresolved dispute as to whether that decision covered the whole period of the continuous employment of the Applicant by the First Respondent (the present Appellant), beginning in July 1998. The Appellant maintained that the decision only related to the period from 1 June 2000, when the Applicant joined the desk managed by Mr Bright. The Tribunal was invited to, and did, deal with the matter under Rule 13(1)(e) of the Employment Tribunals Rules of Procedure 2001. This decision is also under appeal before us and it is therefore necessary to set out the relevant parts of the Employment Tribunal' decision:

"14 Having decided to review the decision we proceeded so to do. Ms Moor submitted that we ought to consider the review based upon the evidence we had heard, because to do otherwise would be to allow the Respondent to resile from the concession already made which, she submitted, related to the whole period of employment. She pointed out at the Originating Application (as amended) specifically stated that the equal pay claim related to. 'her salary during the whole of her employment and that the schedule provided by the Respondent covered the whole of that period. It was therefore clear, she said, that the claim by the Applicant had always been in respect of the whole period. Ms Moor drew our attention to Glennie v. Independent Magazines (UK) Limited in connection with the effect of the concession by the Respondent.

15 She submitted that we had to determine the issue on the basis of the evidence presented. and it was up to the Respondent to present evidence as to the material factor defence. That evidence had not been produced. The burden of proving the defence was on the Respondent. It was not appropriate to rehear the case as opposed to varying our decision, because to do so would allow the Respondent to produce further evidence and so to have a second bite at the proverbial cherry.

16 Mr Reade agreed with the legal principle in Glennie. but submitted that the concession had in fact only related to the period from 1 June 2001, He further pointed out that the concession only related to the fact that the Applicant and her comparators were employed on like work. It did not at any time cover the question as to whether there was a material factor justifying any difference in remuneration. He pointed out that both the Respondent and the Tribunal were under the misapprehension that the claim related only to the period from 1 June 2001 and it was to that period that was focussed upon in the evidence given. He suggested that the problem arose as a consequence of or following the Hearing for Directions in August 2001 when the focus of attention was on the desk, He reminded us of the overriding objective and that both parties should be on an equal footing, To prevent the Respondent giving further evidence would mean that they were not on an equal footing and that to do justice we should hear further evidence as to whether there were material factors.

17 We had concluded that we had power to review the decision, and we then concluded that in the circumstances we should review it. We decided that the pleadings (as amended) referred to equal pay during the whole of the employment of the Applicant. and that nowhere was there any restriction of that claim to the period when she was working on the Emerging Market's Desk. We noted also that comparative figures had been provided from 1 January 1998. We decided that the Respondent had conceded that the Applicant and her comparators were employed on like work without there being any time (or other) restriction on that concession. We noted that there was no evidence as to any material factor justifying. any difference in pay in respect of earlier periods.

18 We therefore decided that we should vary our decision by the addition after the name of Ian Gable in paragraph numbered 2 of the words '...during the whole of the period of the employment of the Applicant by the Respondent ...'.

19. On that basis Counsel told us that the parties had agreed the sum due after tax as being £58290 in accordance with a table produced to us, to which some amendments were made. In order to calculate interest we had to break down that total into different periods. It appeared to the Tribunal that there had been an error in the original calculation in respect of the total for the tax year 1999/2000. The solicitors acting for the Applicant have confirmed that the slightly lower figure for that year is acceptable, The details of the calculation are shown in the table attached to this decision. We find that the sum due is £58.290 together with interest "

The re-amended Notice of Appeal

8. The original Notice of Appeal was amended on 3 February 2003 and re-amended on 7 August 2003. It appears before us as a "Further Amended Notice of Appeal": EAT bundle pages 35 - 42. There is a "Respondent's Amended Answer and Cross-Appeal": EAT bundle pages 43 - 47. We have been greatly assisted by the Skeleton Arguments and oral submissions of Mr Reade and Ms Moor. We are grateful to them for the clarity and cogency of their submissions.
9. Although the re-amended Notice of Appeal is of some length, it essentially raises two issues. The first is a challenge to the Employment Tribunal decision that Mrs Rose could claim equal pay with her comparator, Mr Gable, and the second is a challenge to the decision of the Employment Tribunal on the review that her equal pay claim could succeed for the whole period of her employment. We deal with those two issues before turning to the cross-appeal.

Ground 1

10. The first ground of appeal is in respect of the Employment Tribunal's decision that Mr Gable was an appropriate comparator for Mrs Rose, for the purposes of its finding that she was entitled to succeed on her equal pay claim. In other words, Mr Gable was an appropriate comparator: he was engaged in like work. The Employment Tribunal's additional findings of fact and conclusions are set out at paragraphs 32 and 36 - 46 of the liability decision:

"32 The Applicant's salary was £55,556 which is £65.000 on a full-time/equivalent basis. The salary of Mr Gable was £1051000. and that of Mr Warren was £70,000. Mr Reade agreed that each of the Applicant, Mr Gable and Mr Warren were 'employed on like work ...in the same emp1oyment' for the purposes of section 1 (2) of the Equal Pay Act 1970. He therefore relied upon the 'material factor' defence in section (3) of the Act.

…….

36 The Applicant had worked for the First Respondent from 1998. She is an experienced broker with one very strong client relationship. She joined Mr Bright's desk in June 2000 and her bonus was reduced by one third as it covered only four out of the six months' trading period. Her bonus was not reduced to reflect the fact that she was a part-time worker .

37 Mr Bright said that he perceived that the Applicant was not one of the strongest brokers on the Desk, and that she made little effort to develop client relationships. We were not supplied with any documentary evidence to support such assertions. Further, the South African Rand was not as profitable as Mr Bright had hoped and the amount of the bonus payable to each individual was also influenced by the trading performance of the 'area' in which they worked. Mr Bright did not take into account any income earned by the Aussie Desk on which the Applicant had previously been working. He did take into account in assessing the amount of the bonus the salary payable to each of the employees he referred to the total package of remuneration. By this he meant that, other things being equal, he would be likely to pay a higher bonus to someone who was on a lower salary than another person in the same position.

38 Mr Gable had been a broker for approximately twelve years and employed by the First Respondent for five to six years. Mr Bright told us Mr Gable 'was a consistently high earner in terms of brokerage, with an impressive customer base.' We were not supplied with further details. He worked on trading in the Korean, Chinese, Indian, Philippine and Taiwan currencies. His area of the Desk was profitable. He was seen to be proactive and seeking new customers and trying to strengthen relationships with existing customers. Mr Gable is aged 34.

39 Mr Warren is 31 and had been broking for about eleven years. all with the Respondent or its predecessors. He was earning £50,000 per annum, but that was increased by Mr Bright to £70,000 on an unspecified date in the latter half of 2000. Mr Bright told us that the reason for the increase was that at that time Mr Warren was approached by one of the Respondent's competitors and Mr Warren was also moving house and getting married. The increase was designed 'to incentivise him to remain with the First Respondent'. He traded in the Czech and Slovak Krona and the South African Rand, which currencies are not as profitable as other emerging market currencies. He was seen as having an excellent relationship with a number of key clients.

40 There was no formal system for either the determination of the salary payable to an employee, nor for the determination of the amount of any bonus. The Respondent did not draw our attention to any policy on equal pay, nor indeed in respect of any other aspect of equal opportunities. We have noted the Code of Practice on Equal Pay issued by the Equal Opportunities Commission under section 56A(1) of the Sex Discrimination Act 1975, and in particular the recommendation at the end of that code that there should be a policy on equal pay.

41 Although the claim in respect of basic salary and that in respect of bonus fall under different legislative provisions, they are so inextricab1y interlinked that in considering our decision we have dealt with them together. There is no other realistic way of dealing with the points.

42 Mr Reade drew our attention to the authority of Glasgow City Council - v- Marshall [2000] lRLR 272 HL. We have noted the contents of paragraph 18 in the speech of Lord Nicholls where four questions are set out. We have to be satisfied that the explanation offered by the Respondent for the difference in pay is a genuine one, that the less favourable treatment is due to that reason, that that reason must not be the difference of sex. and that the fact upon which reliance is placed is significant and relevant.

43 Mr Warren was paid a salary of £50,000 until it was increased to £70,000. The explanation given to us by Mr Bright is set out above. The other material difference between the Applicant and Mr Warren is that he had been with the Respondent for eleven years, by comparison with the Applicant's length of service of four years in approximate figures. The difference in pay (based on a full-time equivalent) between Mr Warren and the Applicant is only £5,000. Having applied the test propounded by Lord Nicholls we are satisfied that the factors referred to are sufficient to justify that difference in pay.

44 Mr Gable, on the other hand, was paid significantly more, his salary was £105,000 per annum. We were not given any reason for that figure having been a agreed with him. Mr Bright told us he had in effect inherited the salary when he took over the line management of Mr Gable. The justification put forward for the difference as far as Mr Gable is concerned was his length of service of five to six years, being a high earner of brokerage fees for the Respondent, and having a wide customer base. We were not supplied with any detailed evidence to support those assertions. If one looks at the information compiled for the redundancy exercise in the autumn of 2001 at pages A3/229 and 230A those differences are not so apparent. Mr Gable scored three points in respect of his client base. as opposed to two points for the Applicant. His brokerage fees for those purposes were shown at £103,000 as opposed to £72,000 for the Applicant. However, if the total brokerage for the South African Rand was divided by two rather than three (as to which see below), then the fees earned by the Applicant would have increased to £107,000. We were not supplied with any detailed evidence as to what fees were actually earned personally by the Applicant or by other members of the Desk. The only information we have is that contained in the papers prepared for the redundancy exercise. We are far from convinced as to the accuracy of those figures.

45 We also note that although the length of service was put forward as a reason to justify the salary payable to Mr Warren (which was eleven years), the length of service of Mr Gable (which was five to six years) was considerably less although he was paid considerably more. We were not provided with any evidence as to how Mr Gable came to be paid the salary of £105,000 in the first place.

46 The Respondent has not, therefore, demonstrated the reason that his salary was increased to that figure. We are not satisfied that the employer has shown that the difference in salary is due to a material factor which is not the difference in sex. We therefore find that the Applicant's claim in respect of equal pay by comparison with Mr Gable succeeds. "

11. Mr Reade makes essentially three submissions. First, he submits that the Employment Tribunal was in error at paragraph 45 of its decision when it asserted that the Appellant's case was that Mr Gable's length of service with the Appellant was being put forward to justify the difference in salary with Mrs Rose. That is a critical finding of fact which is not supported by the evidence. Mr Bright's evidence was that it was Mr Gable's experience as a broker, which exceeded that of Mr Warrren and Mrs Rose, not his service with the Appellant, that was a genuine material difference: see the second witness statement of Mr Bright, paragraph 3: EAT supplementary bundle page 112. That evidence was not challenged in cross-examination: EAT supplementary bundle pages 123 - 124. Mr Reade therefore submits that the Tribunal were in error in providing no or no adequate reasons for a finding that Mr Bright's evidence, as to experience of broking being a genuine material difference between Mrs Rose and her two comparators (Mr Gable and Mr Warren) should be accepted in the case of Mr Warren but rejected in the case of Mr Gable, when there was no issue on the evidence but that Mr Gable had more experience as a broker than both Mrs Rose (not precisely clear but substantially less than twelve years) and Mr Warren (eleven years). Second Mr Reade submits that the Tribunal rejected Mr Bright's evidence as to the high level of earnings for Mr Gable (£105,000) as being a genuine material difference between Mrs Rose and him. It gave no or no adequate reasons for so doing: decision paragraph 45. See Meek -v- City of Birmingham District Council [1987] IRLR 250. Finally, Mr Reade submits that the Tribunal were not provided with any evidence as to how Mr Gable came to be paid a salary of £105,000 in the first place: decision paragraph 45. He relies on Glasgow City Council -v- Marshall [2000] IRLR 272. The issue is why is the Applicant's salary less not why is a comparator's salary more.
12. In answer to this, Ms Moor correctly points out that the burden of proof is on the Appellant to show that the variation between the pay of Mr Gable and Mrs Rose was "genuinely due a material factor which is not the difference in sex": Equal Pay Act 1970 section 1(3). She submits that the Employment Tribunal properly directed itself to this question: decision paragraph 42. The Employment Tribunal then carefully considered the evidence and reached the right decision. Even if the Employment Tribunal confused the length of service with experience as a broker, that makes no difference because there was no hard evidence before the Employment Tribunal as to how Mr Gable's salary had been arrived it.

The EAT Decision

13. We accept the submission made by Mr Reade. While it is not incumbent on the Employment Tribunal to make specific findings of fact on every issue raised before it, it is its duty to make specific findings of fact on the critical issues. In this case the clear issue before the Tribunal was whether or not the Appellant could justify the material factor defence in section 1(3) of the Equal Pay Act 1970. It failed to do so in two respects. First, it made a false finding of fact in respect of the Appellant's case that it was Mr Gable's experience as a broker which was one material factor that the Tribunal should take into account. That is clear from the uncontested evidence of Mr Bright: second witness statement paragraph 3: EAT bundle page 112. The Employment Tribunal has simply got it wrong in paragraph 44 where it states that:

"The justification put forward for the difference as far as Mr Gable is concerned was his length of service of five to six years, being a high earner of brokerage fees for the Respondent, and having a wide customer base"

While that is part of Mr Bright's evidence, it is quite clear that it is broking experience which is critical and not length of service. Otherwise Mr Warren would be a better comparator than Mr Gable, but the Employment Tribunal specifically rejected Mr Warren as a comparator. Second, we have no doubt that a historical explanation of the pay difference between the sexes can be sufficient in law so as to be a material factor defence, or part of a material factor defence under section 1(3) of the Equal Pay Act 1970: Glasgow City Council & Others -v- Marshall & Others [2000] IRLR 272. The Employment Tribunal did not address this issue

Ground 2

14. The second ground of appeal is in respect of the period of the equal pay claim. Mr Reade submitted that the Employment Tribunal erred in law in refusing the Appellant's request that it should be allowed to call evidence upon the material factor defence as to the pay differential between Mrs Rose and her comparator or comparators for the period from July 1998, when Mrs Rose commenced employment with the Appellant and 1 June 2000 when she joined the desk managed by Mr Bright. No evidence had been called by the Appellant at the liability hearing because there had been a clear misunderstanding on the Appellant's part (and on the part of the Employment Tribunal) that the claim only related to the period post 1 June 2000. The Employment Tribunal gave no good reason, or indeed, any reason, for so deciding: Meek supra. In the alternative, there was a failure to apply Trimble -v- Supertravel Ltd [1982] IRLR 451. Finally, Mr Reade submitted that there was a breach of the rule of natural justice and Article 6.1 of the European Convention on Human Rights, incorporated into English law by the Human Rights Act 1998.
15. Ms Moor argued that if one looked at the history of the case, there can have been no misunderstanding and any failure at the original hearing to produce the relevant evidence was a failure by the Appellant's professional advisers, for which Mr Rose was not liable. In any event, any further evidence would not have made any difference because Mrs Rose had always broked the same currency, the South African Rand, and her change of desk from 1 June 2000 was a physical and organisational one, and did not result in any change in her work. It therefore made no difference to her claim for equal pay for like work.

The EAT Decision

16. We again agree with Mr Reade. In Trimble -v- Supertravel Ltd [1982] IRLR 451 Browne-Wilkinson J, as he then was, said this at 252 paragraph 7:

"As it seems to us the fundamental question is whether or not the Industrial Tribunal's decision that Miss Trimble had failed to mitigate her loss was reached after Miss Trimble had had a fair and proper opportunity to present her case on the point, being aware that it was a point which was in issue. We do not think that it is appropriate for an Industrial Tribunal to review its decision simply because it is said there was an error of law on its face. If the matter has been ventilated and properly argued, then errors of law of that kind fall to be corrected by the Appeal Tribunal. If, on the other hand, due to an oversight or to some procedural occurrence one or other party can with substance say that he has not had a fair opportunity to present his argument on a point of substance, then that is a procedural shortcoming in the proceedings before the Tribunal which, in our view, can be correctly dealt with by a review under Rule 10 however important the point of law of fact may be. In essence, the review procedure enables errors occurring in the course of the proceedings to be corrected but would not normally be appropriate when the proceedings had given both parties a fair opportunity to present their case and the decision had been reached in the light of all relevant argument."

17. In our judgment the Employment Tribunal made an error of law when, having decided to grant a review (and there is no appeal against that decision), it refused the Appellant the right to call such further evidence on this narrow issue as it wished. The Employment Tribunal accepted that at the first hearing the Appellant had been under a genuine misunderstanding that the period of time for making the comparison of like work ran from 1 June 2000 to the date of the hearing: remedies decision paragraph 11, and that there was a lacuna in the Tribunal's decision on liability: remedies decision paragraph 13. Indeed, it seems to us that a fair reading of the remedies decision is that the Employment Tribunal had been under the same misunderstanding as the Appellant. If the decision to permit further evidence had resulted in an adjournment, then there would no doubt be a cost issue for it to decide. In refusing the Appellant's application to call further evidence as to whether there were other material factors involved, prior to 1 June 2000, the Employment Tribunal made an error of law.

The cross-appeal

18. The Respondent cross-appeals against the majority decision of the Employment Tribunal in the liability decision that she was not unfairly dismissed. The materials facts relating to the dismissal are set out in the Employment Tribunal's Decision at paragraphs 74 - 91 which say this:

"74 We now turn to the events of 19 January 2001 which eventually resulted in the dismissal of the Applicant. At about 10.15 a.m. the Applicant was at her normal workstation, and was on the telephone to her husband, having a conversation about domestic matters. During that conversation, a request came through the speaker box from 'Phil' of UBS Zurich. Because it was on the speaker box, it was 'broadcast' to those brokers in the vicinity. The Applicant heard it. The request was as follows: 'How about one month Slovak today what do you reckon it is?' The Applicant decided to deal with the request but had not heard exactly what was said. She asked Phil for clarification, and he confirmed that it was the Slovak Currency to which he had referred. The Slovak currency was not one in which the Applicant had experience in broking and she was not able to find a price from the monitor in front of her. She accordingly said to Phil: 'We're just going to try and check up a proper level for you.' The Applicant had during this period put her husband on hold and connected with Phil on a one-to-one basis through the telephone system in front of her. She then reverted to speaking to her husband. She said: 'Zurich are asking for one month Slovak.' To that, her husband replied: Who is?' and the Applicant replied: 'Zurich'. There then followed a conversation between the Applicant and her husband during which the Applicant said that 'We haven't got a clue' and then her husband gave her a price of 70 - 74. An extract from the transcript is set out below.

75 The Applicant's explanation for what occurred is that she did not intend to say to her husband that Zurich had been asking for the price of one month Slovak, and at the time she used that phrase she thought she had pressed the 'confidence' switch on the telephone earpiece and she was making that statement to her colleague, Mr Warren who was sitting beside her. The Applicant said that Mr Warren was at that time himself also on the telephone and it is for that reason that she had dealt with the call from Zurich, The Applicant also told us that, having inadvertently disclosed the proposed transaction to her husband, she thought that she might as well take advantage of her error and obtain a recommended price from him. Mr Warren took over the call and quoted a price to Phil.

76 We were told that Phil at UBS in Zurich had a later conversation with Mr Warren concerning the transaction, and part of the way through that conversation Phil told Mr Warren as follows: 'Matt, I have a small problem with you.' Phil then told Mr Warren that he had been contacted by another broker in connection with the price of one month Slovak, saying that Zurich was looking for that price. The clear inference is that Phil believed that the Respondent had disclosed the fact to another broker that UBS was seeking to deal in the currency. At the end of the conversation, Phil was telling them that the transaction was not to go ahead. Later that day good working relationships between the Respondent and UBS Zurich were reinstated.

77 We were supplied with transcripts of the two conversations at A3/251- 253. The telephone conversations were recorded as a matter of course, and we were provided with a cassette tape containing extracts from the principal tape. It is apparent that the principal tape has been edited because it recorded all the conversations taking place at the same time. We have listened to the relevant extracts about which there was no dispute between the parties.

78 In this case, the Applicant is making a claim that she was wrongfully dismissed. The Respondent is alleging that she was guilty of gross misconduct, and that that gross misconduct was the disclosure of confidential information to her husband. We must therefore make a finding of fact as to what did occur during the telephone conversation. The evidence we have has been the written and oral evidence of the Applicant, the transcript of the tape and the tape itself.

We have listened many times to the relevant part of the tape and in particular the following which are the relevant exchanges. The recording starts with purely domestic conversation between the Applicant and her husband. Then Phil of UBS speaks over the box, and the recording continues:

Applicant: Sorry, what was you just asking?

Phil/UBS: How about one month Slovak today -what do you reckon it is?

Applicant: One month?

PhiI/UBS: Slovak.

Applicant: We're just going to try and check up a proper level for you.

~

Applicant: Hello.

Applicant's Husband: All right.

Applicant: Zurich are asking for one month Slovak, ,

Applicant's Husband: Who is?

Applicant: Zurich.

Applicant's Husband: Oh yeah

Applicant: We haven't got a clue.

Applicant's Husband: I'll tell you what it is.

Applicant: Go on then

Applicant's Husband: Eh?

Applicant: Go on then

Applicant's Husband: 60:90 -no, don't -I'm only joking

Applicant: No only joking

Applicant's Husband 70:74

Applicant: 70:74

Applicant's Husband: It's the level for you

Applicant: Led the level -Ah, good fun -What do you want for tea tonight?

80 It is apparent to us that those exchanges are easily divided into two separate sections, marked by the ' ~ ' The first section is the conversation between the Applicant and Phil at UBS. There was a break in the transcription immediately before the beginning of that section. The second section is the conversation between the Applicant and her husband. That second part of the conversation flows naturally as one entity, and the Applicant is speaking in the same tone to her husband as she had been speaking earlier in the conversation when domestic matters were being discussed. We reject her explanation that she was reporting to Mr Warren that UBS were asking for the price. The second part of the conversation flows too naturally for that to be credible .

81 We find that the Applicant intentionally told her husband that Zurich was making the enquiry, and then repeated it when her husband enquired who was the enquirer. When her husband made that enquiry, there was no suggestion by the Applicant to her husband that she had made an error and that he should not have overheard the fact of the proposed transaction. She did not say to him, for example: 'Oh - you should not have heard that.' We find she deliberately volunteered that information to him, and then confirmed it was Zurich who was asking for it.

82 We are supported in that conclusion by the statement made by Mr Warren in connection with the subsequent disciplinary investigation which is at A3/265. In that statement, he states that he heard over the box that UBS were asking for the price and that he had already started finding out the price by the time that the Applicant referred to it as being 70-74, He does not make any reference there to the Applicant informing him that UBS were looking for the price - he states he heard it over the box.

83 Mr Bright had overheard at least part of the conversation which Mr Warren had with UBS and was aware that there was a difficulty. He did not take any action at that time but left for a lunch meeting with a customer. When he returned, he asked Mr Warren what had happened and Mr Warren told him. The Applicant had by then left for the day. Mr Bright arranged for the tape recorded telephone conversations to be played to him, and decided to speak to his line manager, Mr Farrington. Mr Farrington was not in the office until the following Tuesday, 23 January because of illness. Mr Bright did not make any attempt to speak to any other director in the meantime. Mr Farrington also listened to the tape and thought that the matter needed further investigation and could be serious. The Applicant was suspended on that day, and the suspension was confirmed in a 1etter dated 24 January 2001 - A3/255.

84 Ms Whelan took statements from the various members of the Desk including Mr Bright. and those are at A3/26-274. Copies were supplied to the Applicant. A disciplinary hearing was held on 1 March 2001 by Mr Stewart. There was a delay in the disciplinary hearing caused by the Applicant's illness, but that delay is not relevant for present purposes. The letter notifying the Applicant of the disciplinary hearing is dated 26 February 2001 and is at A3/300. It is stated that the purpose of the hearing was 'to discuss the allegation of you disclosing confidential information to your husband over the telephone.'

85 The Applicant had been interviewed by Ms Whelan and as a consequence Ms Whelan had prepared a statement for her. A draft was sent to her on 19 February 2001 (A3/296) and the Applicant signed a statement on 21 February 2001 (A3/297-298). There was a conflict of evidence as to whether the copy statement provided to us was the first draft or the second version. We find that the copy statement was the final version. and not the original draft. The Applicant also prepared notes for the hearing and those are at A3/303-305.

86 The points made by the Applicant can be summarised briefly as follows :

• She did not intentionally ask her husband for the price.

• The offence was not serious.

• She had not previously been told that 'Zurich' must not be mentioned when
asking for prices.

• The Respondent did not lose any business.

The whole matter has been blown totally out of proportion by Steve Bright for reasons completely unconnected with the incident on 19 January. She refers to Mr Bright not liking her working part-time, that he had not made her feel part of the team and the other issues which we have mentioned above.

She believed the incident was 'basically an excuse to get [her] out of the Bank' and that 'it has been made quite clear to me that[Mr Bright] in particular is not happy for [her] to continue working part- time.'

87 The disciplinary hearing was held on 5 March 2001 by Mr Stewart. Ms Anne Hayns from Human Resources Department was present with Mr Stewart. The Applicant had been invited to have a friend or colleague with her, but she did not in fact take up that invitation.

88 There are brief notes of the meeting prepared by Anne Hayns at A3/312. They record that the Applicant said that she had been doing three things at once - speaking to her husband, inputting data onto her PC, and also listening to the box. She said she thought she had pressed the confidentiality button, and that information can be overheard down the telephone line when it is relayed through the box. She pointed out that there was no evidence that the other London broker referred to by Phil at UBS was her husband's firm. She wanted that investigated. but Mr Stewart said it was not appropriate.

89 Mr Stewart decided that the issues raised by the Applicant concerning her alleged treatment by Mr Bright were not relevant to the matter before him, and that if she wished to pursue them then the grievance procedure was the appropriate procedure to adopt. The Applicant asked for a copy of the grievance procedure, which was supplied by Ms Hayns.

90 Mr Stewart said in his witness statement that he was initially of the view that it was unlikely to be a case where dismissal was appropriate and that it may simply have been a case of an unfortunate comment having been passed over the telephone to her husband. Mr Stewart, however, changed his mind when he listened to the tape and he came to the conclusion that the Applicant had deliberately volunteered the information to her husband. He also concluded that during the disciplinary hearing the Applicant had tried to mislead him, and that had undermined his trust and confidence in her as an employee. He considered that those were acts of gross misconduct. The only appropriate sanction was the termination of her employment.

91 The Applicant was dismissed with effect from 7 March 2001 and that was confirmed in a letter of that date (A3/315-316). It records in the sixth paragraph that Mr Stewart's decision was that she be summarily dismissed for gross misconduct on the basis that she passed confidential information concerning a customer to a direct competitor, and that that, in his view constituted gross negligence, which could have had a detrimental effect on the company's business. The Applicant was paid up to that date, but not beyond it."

19. The Employment Tribunal reached its conclusions relevant to the cross-appeal in the liability decision at paragraphs 101 - 103

"101 In her submissions, Ms Moor raised two issues. The first was whether the decision to dismiss the Applicant was within the range of reasonable responses which an employer could have to the particular circumstances. The second was whether the Respondent adopted a reasonable procedure in coming to the conclusion which it did.

102 Ms Moor tried to persuade us that there was no adequate explanation for why Mr Stewart had changed his original view that this was not a case which justified dismissal. We reject that. We are satisfied that Mr Stewart listened to the tape as to what had occurred, and came to a decision which it was perfectly proper and reasonable for him to reach, That decision was that the Applicant had deliberately divulged confidential information to her husband, who was working for a competitor. Indeed, we have come to the same conclusion from listening to the evidence and the tape, although it is not our function in respect of this aspect of the Applicant's claim to determine actual guilt or innocence.

103 The other points put forward by Ms Moor were that the disclosure was insufficiently serious to justify her dismissal. and also that there was no damage in fact to the relationship with UBS. We do not consider that those are relevant factors. The relevant fact is that the Applicant had deliberately disclosed confidential information. We are all of the view that the sanction of dismissal was one to which the employer, acting reasonably, could impose."

104 The other aspect put to us by Ms Moor was whether the employer had adopted a reasonable procedure and made appropriate enquiries in coming to that conclusion. Ms Moor focused particularly upon the point that she said that the Applicant did not know that the word 'Zurich' should not have been used."

The difference between the members of the Tribunal was on a quite separate point not related to this cross-appeal.

20. The grounds of the cross appeal are that, in deciding that the Appellant's decision to dismiss was reasonable, the majority of the Employment Tribunal made a finding of fact which was not based on any evidence:

a) Mr Stewart made the decision to dismiss.

b) The Tribunal found that Mr Stewart was initially of the view that it was unlikely to be the case that dismissal was appropriate because it may simply have been a case of the Respondent making an unfortunate comment over the telephone to her husband.

c) At paragraph 90 of the decision the majority of the Tribunal found that Mr Stewart changed his mind when he listened to the tape of the conversation and he came to the conclusion that the Respondent had deliberately volunteered the information to her husband ('the finding of fact')

d) This finding of fact was contrary to the evidence of Mr Stewart At paragraphs 4 and 5 of his written evidence Mr Stewart makes it clear that his initial view, that dismissal may not be appropriate, was reached after he had listened to the tape.

e) The finding of fact was an important factor in relation to the decision of the majority of the Tribunal in determining that Mr Stewart's decision was reasonable, see paragraph 102 of the decision.

f) The Tribunal erred in law in reaching a decision that dismissal was a reasonable sanction based upon an important but erroneous finding of fact.

21. In our judgment it is not necessary to summarise the submissions of the parties here because Ms Moor effectively relied upon her cross-appeal in her Skeleton Argument and her oral submission. Mr Reade referred to the matter briefly in his Skeleton Argument and oral submissions.

The Employment Appeal Tribunal decision

22. In our judgment this is a simple matter of the proper reading of the Employment Tribunal decision. Ms Moor conceded in argument that if the second sentence of paragraph 90 of the Employment Tribunal read: "Mr Stewart, however, changed his mind when he re-listened to the tape and he came to the conclusion that the Applicant had deliberately volunteered the information to her husband" instead of "listened to the tape", then she would have no cross appeal. It is quite clear to us, reading paragraphs 74 - 91 of the Employment Tribunal decision, together with paragraphs 5, 12, 13, 15 - 16 of Mr Stewart's witness statement: EAT bundle pages 101 - 110(a) (which was unchallenged by Ms Moor) that it is crystal clear that Mr Stewart listened to the tape before the disciplinary interview and formed an initial view that the matter was not one of gross misconduct. However, following the disciplinary interview with Mrs Rose, he re-listened to the tape and formed a much more serious view of its contents, as the result of what he thought were evasive answers by Mrs Rose at the disciplinary hearing. He then formed the view that the matter was much more serious than he had first thought. He was entitled to do this and it is quite clear that that is what the Employment Tribunal accepted he had done. He was entitled to take that view; and there was no misunderstanding or incorrect finding of fact by the Employment Tribunal. There was no error of law.

Disposal

23. It follows that the appeal succeeds on the two grounds set out above and the cross appeal is dismissed.
24. We have listened to the submissions of Counsel as to the proper disposal of the appeal if the appeal is allowed. In our judgment, given the length of time and the careful analysis of the Employment Tribunal, there is no justification for sending the matter back to a fresh Employment Tribunal. There is no suggestion of bias or perversity here. In our judgment, there are two simple issues which this Tribunal can easily dispose of in some half a day. We therefore remit this case to the same Employment Tribunal to deal with the following matters:

(i) to consider further submissions on whether Mr Gable was a suitable comparator for the purposes of Mrs Rose's claim under the Equal Pay Act 1970, in the light of our findings on this ground of appeal;

(ii) if the Employment Tribunal finds that Mr Gable remains a comparator for the purposes of that equal pay claim, then to hear such further evidence as both parties wish to adduce on the issue of like work between Mrs Rose and any other employee of the Appellant, for the period July 1998 to 1 June 2000.

25. Both parties have liberty to apply to His Honour Judge Birtles in writing within fourteen days of the date of this judgment being handed down, to vary the Order: the terms of the Order of remission, but not on the issue of remission to a fresh Employment Tribunal.