Significant Supreme Court decision about scope of protection for part-time workers

Background

Back in 2016, Mr Augustine was a part-time private hire driver and Data Cars imposed a weekly flat rate circuit fee of £148 which gave the drivers access to its booking system. This was a fixed rate for all drivers regardless of hours worked. Mr Augustine worked around 34 hours a week but on average, the drivers worked over 43 hours a week although some worked more than 60 hours a week.

Mr Augustine brought a claim for breach of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 in that the flat rate circuit fee meant he was treated less favourably as a part-time driver when compared to a full-time driver. Effectively, he paid a higher fee per hour to drive.

Employment Tribunal and Employment Appeal Tribunal

For the purposes of his claim, Mr Augustine’s full-time comparator driver worked over 90 hours a week but the Employment Tribunal did not find this choice inappropriate despite the comparator’s hours being considerably longer than those worked by Mr Augustine.

The issue was whether or not the causation test in the Regulations should be interpreted narrowly, consistent with the Directive and clause 4.1 of the Agreement. In other words, that part-time status was the sole cause of the less favourable treatment.

The Employment Tribunal rejected the claim. It held that Mr Augustine had been treated in the same way as a comparable full-time driver and had not been treated less favourably. It also considered whether or not the treatment was on the ground that Mr Augustine was a part-time worker. It held that it was not. Mr Augustine was charged a circuit fee so that Data Cars could earn revenue and not because he worked fewer hours than some of his colleagues. The circuit fee was not charged on the “sole ground” that Mr Augustine was a part-time worker.

It applied the 2007 Court of Session decision (Court of Appeal in Scotland) in McMenemy v Capita Business Services even though that decision was not binding in England and Wales. In McMenemy, it was held that Regulation 5 only applies if the employer intends to treat the worker less favourably for the sole reason they are part-time. As Mr Augustine’s less favourable treatment was not solely because he worked part-time (the “sole reason” test), his claim was unsuccessful.

Mr Augustine appealed to the Employment Appeal Tribunal (EAT) and argued that, on a pro rata basis, he was paying a higher circuit fee than his full-time comparator when taking it into account as a proportion of his hours worked. This meant his take home pay was less once he had paid the circuit fee.

The EAT applied the pro rata principle and held that failure to apply a circuit fee that took into account hours worked was less favourable treatment. It found that Mr Augustine was, at least in part, treated less favourably because he worked part-time. However, this also applied to many of the full-time drivers who worked full time, that is, more than 43 hours a week but fewer hours than the chosen comparator. As the EAT could not say that part-time status was the sole ground for the less favourable treatment it dismissed the appeal.

The EAT regarded itself bound by the precedent set in McMenemy and as Mr Augustine’s less favourable treatment was not solely because he worked part-time, his claim failed.

However, it gave Mr Augustine permission to appeal because it regarded the reasoning in McMenemy as wrong in law. In the EAT’s view, Regulation 5 applies if a worker’s part-time status is an effective cause of the less favourable treatment and it does not need to be sole cause.

Supreme Court

Interestingly, both parties had the benefit of pro bono representation by counsel at the Court of Appeal and Supreme Court and so the legal points in issue were fully argued.

The Supreme Court unanimously allowed the appeal. It held that the Regulations prohibit less favourable treatment of part-time workers where their part-time status is an effective cause of the less favourable treatment. It does not need to be the sole cause.

As it said, “To require that the claimant’s status as a part-time worker be an effective, even if not the sole cause of the less favourable treatment is consistent with the language of regulation 5(2) and its protective purpose. To hold otherwise is inconsistent with the standard approach to questions of causation in discrimination cases and risks uncertainty and unreasonable outcomes”.

There was nothing to prevent the United Kingdom from providing protection which goes beyond the minimum standards of the Directive because it was left to the member states to decide how the Directive’s protection should be implemented.

As the Supreme Court said, “It is striking that the Secretary of State did not adopt the “solely because” language in clause 4.1 by way of the causation test to be applied but instead adopted language in the 2000 Regulations that comes directly from pre-existing equality legislation and which had been the subject of authoritative treatment by the courts.” The meaning of the test imposed by the words “on the ground of” in an anti-discrimination context was “clear and authoritatively established”.

Comment

The Supreme Court decision now provides clarity on this significant issue and ensures the same consistent causation test as for other discrimination claims. The existence of other causes of the treatment may be relevant to whether the treatment is objectively justified or to the amount of compensation which is just and equitable in the circumstances but it does not mean that the right under Regulation 5(1) does not arise. For employers, the judgment is likely to mean that its decisions in respect of part-time workers will need to be even more carefully considered and thoroughly documented in order to minimise the risk of similar claims being successful.