Case Facts
The appellant, Mrs Eileen Mary Garland, was a female clerical worker employed by British Rail Engineering Ltd, a wholly-owned subsidiary of the British Railways Board. The respondent company operated a scheme under which employees were granted concessionary travel facilities for themselves and their families during the course of their employment. Upon retirement, former employees continued to enjoy these travel facilities for themselves; however, a material distinction existed between male and female employees. The families of retired male employees continued to receive the concessionary travel facilities after the male employee's retirement, whereas the families of retired female employees did not receive any such facilities after the female employee's retirement. Crucially, this continuation of benefits was not conferred by contractual right but was rather a voluntary practice of the employer.
Mrs Garland brought a complaint before an industrial tribunal under s 63 Sex Discrimination Act 1975, contending that the respondent's scheme constituted unlawful sex discrimination contrary to s 6(2) Sex Discrimination Act 1975. The industrial tribunal dismissed the complaint on the ground that the scheme amounted to a "provision in relation to … retirement" within the meaning of s 6(4) Sex Discrimination Act 1975, which excluded such provisions from the scope of the unlawful discrimination provisions.
The Employment Appeal Tribunal allowed Mrs Garland's appeal. It held that s 6(4) Sex Discrimination Act 1975 was not apt to include a privilege that existed during employment and was merely allowed by the employer to continue after retirement; since it was not part of a specific plan for retirement, the subsection did not apply. The Court of Appeal reversed this decision on the employer's appeal, holding that the expression "provision in relation to … retirement" was a wide one which included any provision "about" retirement and therefore the exemption in s 6(4) Sex Discrimination Act 1975 applied. Mrs Garland appealed to the House of Lords.
The House of Lords, before giving its final decision, referred questions to the European Court of Justice (Case 12/81), asking inter alia whether the discriminatory practice was contrary to Article 119 of the EEC Treaty (the Treaty of Rome) and whether that article was directly applicable so as to confer enforceable Community rights upon individuals. The ECJ gave its ruling on 9 February 1982, and the House of Lords gave its final decision on 22 April 1982.
Held
The House of Lords allowed the appeal and restored the decision of the Employment Appeal Tribunal.
The ECJ, in Case 12/81, held that the provision by an employer — even where not made by virtue of any contractual obligation — of special travel facilities for male employees after retirement, some of which female employees did not receive, constituted discrimination against former female employees within Article 119 of the EEC Treaty. The ECJ confirmed that "pay" within Article 119 extends beyond cash wages to encompass any other consideration, whether in cash or in kind, which the worker receives, directly or indirectly, in respect of employment from the employer. This broad definition, established in the leading precedent Defrenne v Sabena (Case 43/75) [1976], expressly included non-contractual post-retirement benefits such as concessionary travel facilities. The ECJ further held that Article 119 applied directly where a national court, using the criteria of equal work and equal pay and without the operation of Community or national measures, was able to establish that the grant of special travel facilities to retired male employees represented discrimination based on difference of sex.
On the reference back to the House of Lords, the court applied the principle of consistent interpretation. It held that s 6(4) Sex Discrimination Act 1975 ought, so far as possible, to be construed so as to carry out the United Kingdom's obligations under the EEC Treaty and not to be inconsistent with them. The words of the subsection were capable of bearing both the meaning attributed to them by the Employment Appeal Tribunal and the broader meaning adopted by the Court of Appeal. Since the EAT's construction alone was consistent with Article 119 of the Treaty, as interpreted by the ECJ, that construction was the correct one. The appeal was accordingly allowed.
Ratio Decidendi
The ratio of this decision operates on two interrelated levels.
First, at the European level, the ECJ confirmed that the discriminatory post-retirement travel benefit scheme fell within the scope of Article 119 of the EEC Treaty, which prohibits sex discrimination in relation to "pay". The concept of pay extends to any benefit, whether in cash or in kind, received by a worker from an employer in respect of employment, including non-contractual post-retirement benefits. Article 119 is directly applicable where a national court, applying the criteria of equal work and equal pay, can independently establish that a discriminatory practice exists.
Second, and of profound constitutional significance for English law, the House of Lords established a clear principle of consistent statutory interpretation. Where a United Kingdom statute is ambiguous or capable of bearing more than one meaning, domestic courts are obliged to adopt whichever construction is consistent with the United Kingdom's EEC Treaty obligations. This principle applies even where the domestic legislation was not enacted for the purpose of implementing a particular Treaty obligation. The formulation, associated principally with the speech delivered in the House of Lords, requires that courts, confronted with two available constructions of statutory language, must prefer that which conforms to Community law obligations. On the facts, since s 6(4) Sex Discrimination Act 1975 could be read either broadly (as the Court of Appeal held) or narrowly (as the EAT held), and since only the narrow reading was compatible with Article 119 as interpreted by the ECJ, the EAT's construction was mandated. The appeal was allowed, and the discriminatory scheme was held to constitute unlawful sex discrimination.
This principle of consistent interpretation subsequently became foundational to the relationship between domestic legislation and European Community law in English courts, and was further developed in cases such as Pickstone v Freemans [1989] and Litster v Forth Dry Dock [1989].
Obiter Dicta
Not applicable.