Case Facts
The claimant, Mrs Wendy Smith, was employed by Macarthys Ltd, wholesale dealers in pharmaceutical products, at a wage of £50 per week. Upon discovering that her male predecessor in the same role had been paid £60 per week, she brought a claim for equal pay under the Equal Pay Act 1970 (as amended by the Sex Discrimination Act 1975).
The central domestic law question was whether the Equal Pay Act 1970 permitted a female employee to compare her pay with that of a male predecessor who had previously held the same position — a case of successive rather than contemporaneous employment — or whether the Act confined comparisons to men employed at the same time as the claimant. An industrial tribunal and the Employment Appeal Tribunal both found in Mrs Smith's favour. Macarthys appealed to the Court of Appeal.
The case proceeded in two distinct stages. The first was the Court of Appeal hearing reported at [1979] 3 All ER 325, at which the court considered both the domestic statutory position under the Equal Pay Act 1970 and the requirements of Article 119 of the Treaty of Rome. Finding Article 119 uncertain on the point, the majority referred the question to the European Court of Justice under what was then Article 177 of the EEC Treaty. The second stage was the Court of Appeal's subsequent hearing — [1980] EWCA Civ 7, decided on 17 April 1980 — at which the court applied the Case 129/79 ruling of the European Court of Justice, [1980] ECR 1275, and finally disposed of the appeal.
Held
At the first hearing, the majority of the Court of Appeal (Lawton LJ and Cumming-Bruce LJ) held that the Equal Pay Act 1970 required a contemporaneously employed male comparator; it did not extend to a comparison with a male predecessor. Because the majority regarded the scope of Article 119 of the Treaty of Rome as uncertain on this point, the court referred the following question to the European Court of Justice: whether Article 119 entitled a woman to claim equal pay by reference to pay received by a man who had previously occupied the same post.
The European Court of Justice ruled on 27 March 1980 in Case 129/79, [1980] ECR 1275, that Article 119 does not require that the woman and the man be employed at the same time. A woman is accordingly entitled to claim equal pay for equal work even where she is employed after the man has left the role. The British government had argued before the ECJ that contemporaneous employment was required, but that argument was rejected.
At the second hearing, all three members of the Court of Appeal — Lord Denning MR, Lawton LJ, and Cumming-Bruce LJ — unanimously dismissed Macarthys' appeal and held that Mrs Smith was entitled to £60 per week, not £50.
On the question of costs, the court held that Macarthys had no right to confine their attention to the domestic statute alone; they should throughout have considered the Treaty of Rome as part of the applicable law. Community law was part of English law by virtue of the European Communities Act 1972, and Macarthys were ordered to pay all costs of the appeal.
Ratio Decidendi
The operative legal principles confirmed by the case, taken in its entirety across both hearings, are as follows.
First, as a matter of domestic law, the majority of the Court of Appeal at the first hearing held that the Equal Pay Act 1970 was confined to contemporaneous employment and did not permit comparison with a male predecessor. However, this domestic ratio was superseded by the superior force of Community law.
Second, and of constitutional significance, Article 119 of the Treaty of Rome does not require contemporaneous employment. The ECJ ruling in Case 129/79, [1980] ECR 1275 established that a woman may rely on Article 119 to claim equal pay by reference to the pay of a man who previously held the same role, irrespective of whether their periods of employment overlapped.
Third, where Community law — as authoritatively interpreted by the ECJ — is inconsistent with a provision of domestic legislation, Community law prevails. Lord Denning MR affirmed in the second decision that Article 119 of the Treaty of Rome takes priority over anything in the Equal Pay Act 1970 inconsistent with it, and that this priority derives from the European Communities Act 1972 itself. Community law is part of English law and overrides any inconsistent domestic provision.
Obiter Dicta
Cumming-Bruce LJ, in the second decision, offered an important clarification regarding the approach taken by the majority at the first hearing. He explained that the majority had found no ambiguity in the Equal Pay Act 1970 and had therefore declined to use Article 119 of the Treaty of Rome as an aid to its construction. He confirmed, however, that had there been ambiguity in the domestic statute, it would have been appropriate to look to Article 119 to resolve it. He further stated that "if the terms of the Treaty are adjudged in Luxembourg to be inconsistent with the provisions of the Equal Pay Act 1970, European law will prevail over that municipal legislation."
This observation is significant in the context of the relationship between Community law and Parliamentary sovereignty. Rather than asserting a broad general principle that Parliament must comply with EU law in all circumstances, the statement was more precisely directed at the mechanism by which EU law displaces conflicting domestic legislation — namely, through the conduit of the European Communities Act 1972. The case accordingly stands as an early and authoritative illustration of the principle confirmed in Factortame (No 2) [1991]: that English courts are required to give effect to directly effective Community law even where it conflicts with a domestic Act of Parliament.