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The Direct Effect of Article 157 in Regard to Work of Equal Value: A Discussion.

Legal Update by Bethan Davies (Pupil).

The direct effectiveness of Article 157 of the TFEU in cases of like work is uncontentious, the same however cannot be said for equal pay claims founded on work of equal value.  Both the Employment Appeals Tribunal [EAT] and the Court of Appeal [CA] have examined the interplay between the concept of direct effect, Article 157 and work of equal value in Asda Stores Ltd v Brierley and others[1]. In the EAT Kerr J provided a detailed analysis of the relevant national and European authorities, concluding that whilst the question is far from a simple one, were the ECJ to hear the case today, it would hold that there was direct effectiveness. The matter of whether there should be a referral to the ECJ was reserved to the Court of Appeal, which in turn declined to do so as it was unnecessary for the disposal of the case. Nevertheless, the Court of Appeal judgment provided further fodder for the discussion; with Underhill LJ inclined to agree with Kerr J[2], Sales LJ “more doubtful[3]. and Peter Jackson LJ declining to express a view.[4] On 13th July the case will come before the Supreme Court, presenting the Justices with an opportunity to conclusively determine the question. Plainly the matter is not clear cut, and the recent judicial discussion makes clear that a correct answer cannot presently be given with any authority or certainty. What follows below is an outline of the arguments that have been presented for and against direct effect. 

Article 157 provides: 

1. Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied. 

The dispute as to whether Article 157 has direct effect in cases of equal value is founded in the ECJ judgment in Defrenne v Sabena, in which a distinction was drawn between two classes of case: 

"18. For the purposes of the implementation of these provisions a distinction must be drawn within the whole area of application of article 119 between, first, direct and overt discrimination which may be identified solely with the aid of the criteria based on equal work and equal pay referred to by the article in question and, secondly, indirect and disguised discrimination which can only be identified by reference to more explicit implementing provisions of a community or national character.”[5] 

The argument presented on behalf of the Respondent in Brierley finds its routes in the dichotomy between those cases in which discrimination may be identified solely with the aid of the criteria based on equal work and equal pay, and those where a finding of discrimination relies upon more explicit national implementing provisions. The Respondent submitted that cases of equal value must fall within the latter, save as for where there has been an earlier concession that the work is indeed of equal value, by way of a job evaluation or express concession on behalf of the Respondent. 

In Favour of Direct Effect 

The evolution of European case law shows that the concept of direct effect in the context of workplace sex discrimination has broadened; while Defrenne was a case of direct and overt discrimination, it is not the case that direct effect is confined to such circumstances. The later cases show that the paradigm of overt direct discrimination embodied in Defrenne —unequal pay for equal work carried out in the same establishment or service—is only one example of a range of situations in which direct effect occurs. Thus, the jurisprudence reveals a widened understanding of “direct and overt discrimination” to include those cases where comparison is drawn to a predecessor, indirect discrimination on the basis of paying less to predominantly female part-time staff, and of difference in travel benefits enjoyed by male and female employees after retirement.[6] 

Consequently, the court held in Worringham v Lloyds Bank Ltd[7] that cases where discrimination may be “judicially identified” include cases of equal value where “the court is in a position to establish all the facts enabling it to decide whether a woman receives less pay than a man engaged in the same work or work of equal value [8]. It is not the case that a case falling into the first of the Defrenne categories must be one in which the questions are purely legal as the facts are without controversy, the same is simply a type of case that will fall within that category; a lack of such factual complexity may be sufficient for direct effect, but is not necessary. Importantly, the clarification provided by the ECJ in Worringham followed invitations from Advocate General Warner[9] to clarify the scope of the direct effect of (then) article 119 as expounded in Defrenne which he referred to as “puzzling”, suggesting that the proper analysis was simply: 

“Article 119 has direct effect … in those areas where a court can apply its provisions by reference to the simple criteria that those provisions themselves lay down; and that it can have no direct effect where implementing legislation is necessary to lay down the relevant criteria.”[10] 

This view gains further support from the analysis of Elias J in Walton Centre for Neurology and Neurosurgery NHS Trust v Bewley[11] where, in reviewing the law on direct effect, it was stated that “Article 141EC (formerly article 119 of the EC Treaty) requires member states to ensure that the principle of equal pay for equal work or work of equal value is applied.”[12] In distilling the Defrenne dichotomy, Elias J stated “the focus of this formulation is on the question whether discrimination can be identified solely with the aid of criteria of equal work and equal pay.”[13] It follows that those cases of “indirect and disguised discrimination” to which direct effect do not apply are those in which the comparison drawn is hypothetical; hypothetical comparators are excluded from the scope of Article 157 as the same was deemed by the ECJ to require “comparative studies of entire branches of industry[14].  

The argument is perhaps best summarised by Judge Pierre Pescatore, who sat on five of the major cases in the field. Writing in the European Law Review, Judge Pescatore referred to the line of cases in which article 119 had been held directly effective, as cases belonging to an “inner circle” at the “core” rather than the “fringe” of the provision, where “evaluation of the factual elements did not go beyond the normal powers of investigation and appreciation of any court[15]. The question then becomes whether equal value can be said to be at the fringe of Article 157 and of such a nature that the necessary analysis lies outside the normal powers of investigation and appreciation of any court. An argument that “the criterion of work of equal value is too abstract to be applied by the courts”  has been expressly rejected by the ECJ, drawing on the fact that national courts must embark on similar factual analysis in determining objective justification defences.[16] It seems difficult to define exactly what makes a court or tribunal determining equal value different from other factual analysis; the task is not conceptually unique. This view appears to have formed the foundation of the judgment of Kerr J, rejecting the validity of the distinction between: 

“on the one hand, making a finding of fact on an issue where expert evidence is deployed to assist the court and, on the other hand, making a finding on whether particular jobs done by particular claimants and their comparators are or are not of equal value.  The inquiry may permit of more than one methodology and may be quite complex, though not necessarily so in every case.”[17] 

Kerr J concluded that job evaluation for these purposes “may be an art as well as a science, and it is not an exact science, but it is not alchemy. It is opinion evidence on the basis of which a tribunal makes a finding of fact.”[18] On this basis, considering the ECJ’s expansive approach to direct effect[19], Kerr J concluded 

“…the CJEU now would be inclined to hold that direct effect can supply the omission where specific jobs are being compared with specific other jobs being done by actual not hypothetical workers, but not where the comparison is between a claimant and a hypothetical comparator.”[20] 

Against Direct Effect 

To the contrary, the Respondent in Brierley argued that in an equal value claim the discrimination cannot be “judicially identified” on the basis of “a purely legal analysis of the situation” and “solely with the aid of the criteria based on equal work and equal pay referred to by the article”. A complex evaluation of the jobs using “expert methodology” is required and as such direct effect cannot here apply.[21] The argument that equal value claims must fall within the second type of Defrenne case is consistent with the underlying rationale of direct effect; requiring the measure in question to be unconditional and sufficiently precise.[22] As to the meaning of these criteria, a common thread in the ECJ jurisprudence on direct effect is that “implementation must not be subject to any further measures implying a measure of discretion on the part of either the Community organs or the Member States, as the case may be.”[23] 

In Worringham the test was expounded as whether “the court is in a position to establish all the facts”.[24] For such to be the case, the court  must not be required to engage in a complex fact-finding exercise or in evaluation of expert opinion evidence; it must be established, without such an exercise being necessary, that the work is of equal value; for example, by internal job evaluation, or by a concession from the employer. This view finds support in the obiter comments of three domestic judges, Lord Oliver, Lord Justice Balcombe, and Lord Eassie: 

“[t]he cases in the European Court … clearly establish that there is an area within which the article is not directly applicable. The bounds of that area are far from clear to me, however, but the cases appear to indicate that the article may not be directly applicable in an "equal value" claim, at any rate where there is no machinery in the domestic law by which the criterion of what is work of equal value can be readily ascertained.”[25] 

And 

“In my judgment in the instant case the employee's rights under article 119 cannot be directly enforced without reference to "more explicit implementing provisions of a Community or national character," for the following reasons: … (v) in an "equal value" case under section 1(2)(c) of the Act of 1970 detailed procedures are usually requisite to enable the industrial tribunal to determine the question before it.”[26] 

And 

“In the case of a claim based, not on ‘like work’, or ‘work rated as being of equal value’, but instead ‘work of equal value’, it is, I think, difficult for a court or tribunal to say that discrimination on grounds of sex in the field of equal pay can be detected on the basis of a purely legal analysis. Procedures and mechanisms are required for establishing the ‘value’ of the work performed by the persons concerned.”[27] 

Evidently, the common theme of the above passages is the need for a detailed procedural regime to allow the tribunal to determine whether work is of equal value. The evaluation of jobs to determine whether they are of equal value is not an ordinary fact-finding exercise for the tribunal; it is a system of classifying components of the different jobs, necessarily involving a methodology.[28] It therefore follows that, if the evaluation of equal work requires such an approach, reliant on a regulatory framework external to Article 157, how can it be said that in this respect Article 157 has direct effect such that it can be “fully and uniformly applied” across all member states?[29] 

In the broader context of EU law, it is worth noting that there are other provisions that have been found to simultaneously have and not have direct effect, including in the context of Article 90 on State undertakings and Article 93 on State aids. Perhaps most pertinently, Article 52, the right of establishment, has been held to have direct effect in regard to the basic rules of non-discrimination, but not in regard to those provisions aimed at facilitating freedom of establishment.[30] 

Conclusion 

It is the view of the writer at least, that the conclusion reached by Kerr J is hard to argue with; it seems difficult to point to a defining characteristic that sets the task of determining equal value apart from other such assessments. Rather than the task necessarily being complex and conceptually unique, it is possible to imagine hypothetical scenarios in which the determination of equal value would be relatively simple and need not cause a tribunal much concern. The complexity of the task is a question of degrees, and surely it should not be the case that simply because the task may be hard at the penumbra, the entire class of case should be deemed an exception. 

Both the EAT and the CA have it seems indicated a provisional view, and then kicked the proverbial can down the road, each deferring to the higher courts on whether a referral to the ECJ should be made. When the matter comes before the Supreme Court, it may of course be the case that the question remains unanswered should the same be deemed to be not determinative of the appeal. It is of relevance that the future relationship between the UK and the ECJ is far from clear, and any such uncertainty may weigh heavily in an assessment of whether a referral is necessary.

 

[1] [2018] I.C.R. 384 and [2019] EWCA Civ 44.

[2] [2019] EWCA Civ 44, para 115.

[3] Ibid, para 118.

[4] Ibid, para 119.

[5] Defrenne v Sabena, para 18

[6] See Macarthys Ltd v Smith (Case 129/79) [1980] ICR 672; [1981] QB 180 and Jenkins v Kingsgate (Clothing Productions) Ltd (Case 96/80) [1981] ICR 592; [1981] ECR 911 and Garland [1982] E.C.R. 359 .

[7] [1981] ICR 558

[8] Ibid, para 23

[9] Worringham, p 566C–E and Jenkins, pp 601G–602E.

[10] Worringham, p 566C.

[11] [2008] ICR 1047.

[12] Ibid, para 15.

[13] Ibis, para 33.

[14]Macarthys Ltd v Smith [1980] ICR 672 , para 15, cited in Walton, para 24.

[15] “Doctrine of ‘Direct Effect’; an Infant Disease of Community Law” (1983) 8 EL Rev 155, 163.

[16] Commission of the European Communities v United Kingdom [1982] ICR 578, 42.

[17] [2018] I.C.R. 384, 27.

[18] Ibid, 28.

[19] See, for example, Judge Pierre Pescatore (n15) at 135: “In other words, "direct effect" must be presumed, it has not to be established a priori. To return to medical comparisons, I would say that "direct effect" is the normal state of health of the law…”

[20] 2018] I.C.R. 384, 31.

[21] Ibid, 11.

[22] Van Gend en Loos v Nederlandse Administratie der Belastingen (Case 26/62) [1963] ECR 1 .

[23] Judge Pierre Pescatore (n15), page 140.

[24] Worringham, para 23.

[25] Lord Oliver of Aylmerton in Pickstone v Freemans Ltd [1988] ICR 697, 723–724; [1989] AC 66 , 124B–F

[26] Lord Justice Balcombe in Leverton v Clwyd County Council [1989] ICR 33, 50; [1989] AC 706 , 723H–724D

[27] Lord Eassie in City of Edinburgh Council v Wilkinson [2012] IRLR 202 , paras 41–42.

[28] Judge McMullen QC in Middlesbrough Borough Council v Surtees (No 2) [2008] ICR 349 , para 8.

[29] Italian Tax and Revenue Administration v SA Simmenthal, Monza (Italy) (106/77) [1978] 3 C.M.L.R. 263, paragraph 14.

[30]Reyners v Belgium [1974] 2 C.M.L.R. 305, 324 – 327 cited by Judge Pierre Pescatore (n15). 

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