 House of Lords |
Session 1997-98
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| Judgments - Kelly v. Northern Ireland Housing Executive Loughran v. Northern Ireland Housing Executive (Northern Ireland) (Conjoined Appeals) |
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(APPELLANT)
(RESPONDENTS)
(RESPONDENT)
(APPELLANTS)
LORD SLYNN OF HADLEY
My Lords, These two appeals raise important questions as to the application of sections 17 and 23 of the Fair Employment (Northern Ireland) Act 1976. Those sections fall in part III of the Act "Unlawful Discrimination" and provide:
By section 16 of the Act:
A person discriminates against another person on the ground of religious belief or political opinion if, on either of these grounds, "he treats that other person less favourably in any circumstances than he treats or would treat another person in those circumstances." By section 57 of the Act, unless the context otherwise requires: 'employer' means-
As to the meaning of "person" it is to be borne in mind that by section 5 and Schedule 1 to the Interpretation Act 1978, unless the contrary intention appears, "person" includes a body of persons corporate or unincorporate. At all relevant times Mr. Loughran, a solicitor, practised in Omagh Co. Tyrone as "Oliver M. Loughran & Co." This was not a partnership; he was the sole proprietor and principal though he employed one assistant solicitor. Mrs. Kelly, also a solicitor, practised in partnership with Mr. Hugh Finnegan as "John Hoy, Son & Murphy" in Dungannon Co. Tyrone. The Northern Ireland Housing Executive, appellant in the first ("Loughran") appeal and respondent in the second ("Kelly") appeal is a non-departmental body set up by statute as the housing authority for Northern Ireland. It has its own legal department but, in addition, since 1980, it has engaged solicitors in private practice to defend public liability claims against it. Solicitors so appointed constituted members of a Panel to do such work for a particular area in Northern Ireland. The method of appointing solicitors so to act has varied from time to time. In 1988, however, it was decided that Panel members should be appointed for three years and that at the end of each appointment there should be an open competition. In November 1990 all firms of solicitors in Northern Ireland were notified that three year appointments were to be made and applications were invited. For the "West Panel" a firm, Orr & Roundtree was appointed eventually until 30 June 1994. In May 1994 all "firms" of solicitors in Northern Ireland were again invited to apply for a new three year period of appointment. Nine "firms" of solicitors applied of whom one Millar, Shearer & Black of Cookstown Co. Tyrone was appointed. Included in the nine applicants were "John Hoy, Son & Murphy" and "Oliver M. Loughran & Co." They not having been appointed, Bernadette Kelly and Oliver Loughran applied to the Fair Employment Tribunal constituted under the Fair Employment (Northern Ireland) Act 1989, each contending that they believed that they had appropriate qualifications and experience for the work and that they had been discriminated against on the grounds of religious belief and/or political opinion contrary to sections 17 and 23 of the Act. It should be said at once that the Executive denies that there was any such discrimination but it took the points that the Tribunal had no jurisdiction since the Act did not apply in that (1) the applicants had not sought employment under "a contract personally to execute any work or labour" and (2) that a refusal or omission to appoint to a Panel was not a refusal or omission to confer a qualification. The Tribunal ordered these points to be dealt with as preliminary issues and decided on 18 April 1996 that neither Mr. Loughran nor Mrs. Kelly had shown that the Executive was an "employer" within the meaning of section 17 of the Act; nor was the Executive refusing to confer a qualification on them within the meaning of section 23 of the Act. Accordingly the Tribunal rejected their applications. The Court of Appeal on 22 May 1997 agreed with the Tribunal that no claim could be made under section 23 of the Act; they also agreed that Mrs. Kelly, as a partner in her firm, could not pursue her claim since she was not seeking to be employed under a "contract personally to execute" work. Her appeal was dismissed. On the other hand they held that Mr. Loughran, as a sole practitioner (i.e. sole principal and proprietor) could claim that he was seeking to be employed. His appeal was accordingly allowed. Before your Lordships Mr. Long Q.C. on behalf of the Executive has contended that the Tribunal was right that neither claimant sought "a contract personally to execute any work or labour." Mr. Loughran and Mrs. Kelly contend that their case should go forward to be heard on the merits. Mr. Long Q.C. showed your Lordships that the phrase "a contract personally to execute any work or labour" is not new or confined to the Act of 1975. It appears in section 10 of the Employers and Workmen Act 1875, in section 8 of the Industrial Courts Act 1919, section 1(6) of the Equal Pay Act 1970, section 82 of the Sex Discrimination Act 1975 and in section 78 of the Race Relations Act 1976. Moreover in section 29(6) of the Trade Union and Labour Relations Act 1974 "employment" includes "any relationship whereby one person personally does work or performs services for another." In other statutes an employee is defined as "an individual who has entered into or works under a contract" with an employer or of employment (e.g. section 8 of the Contracts of Employment Act 1963, the Redundancy Payments Act 1965, section 167 of the Industrial Relations Act 1971). He also referred your Lordships to a number of cases under the Truck Act (1 and 2 W4 c37) to the effect that a person who undertakes work and employs several or many men to do, or to assist in doing, the work is not an artificer or workman for the purposes of the Truck Act which prohibited payment other than in the currency of the realm (e.g. Ryder v. Warde [1848] 154 E.R. 405; Sharman v. Sanders [1853] 138 E.R. 116.) He referred also to Tanna v. Post Office [1981] I.C.R. 374 where the appellant applied to be appointed as a sub-postmaster. He was required only to provide premises and to ensure that services were provided without being obliged personally to do anything. In a case brought under section 4 of the Race Relations Act 1976, the Employment Appeal Tribunal held that he was not seeking to be employed "under a contract personally to execute any work or labour." The Employment Appeal Tribunal held that these words required "that the person entering into a contract shall himself be under an obligation personally to do work or labour." It may well be that some of what he undertakes to do he may delegate; but in our judgment it is essential, for there to be "employment," that the person making the contract shall himself undertake to do, at any rate, some of the work or labour. Two other cases have been referred to in detail by both sides. The first is Mirror Group Newspapers v. Gunning [1986] 1 W.L.R. 546. In that case an application was made by a woman to have transferred to her her father's agency for the wholesale distribution of Sunday newspapers. She said that this application was refused in breach of section 6 of the Sex Discrimination Act 1976. The Industrial Tribunal and the Employment Appeal Tribunal by a majority held that there was here employment in the sense of "a contract personally to execute any work or labour" since the agent had to be directly involved in the supervision of the work. It was accepted by both parties and by the Court of Appeal that this statutory definition of employment went beyond the relationship of master and servant. Oliver L.J. ruled that "what is contemplated by the legislature in this extended definition is a contract the dominant purpose of which is the execution of personal work or labour," (p. 551H). In that case it was not since "here the dominant purpose was simply the regular and efficient distribution of newspapers" (ibid). There was moreover no evidence that the agent was required personally to carry out the work though his personality was important and his personal involvement might be regarded as desirable. The dominant purpose of the contract was to ensure that newspapers were efficiently distributed. Balcombe L.J. and Sir David Cairns agreed that the relevant question was whether the dominant purpose was that the person contracting to provide the services under the contract "performs personally the work or labour which forms the subject matter of the contract" (p. 556H). That case does not answer directly the question as to who may personally or mainly perform work or labour although it does make it clear that the definition of employment is wide enough to include work done by an independent contractor. In In re Northern Ireland Electricity Services Application [1987] N.I. 271 a company complained that it had been refused a tender for work because of discrimination on the ground of religious belief or political opinion since the unions on the site refused to work with the company's employees, the unions believing the company to have IRA sympathies. Nicholson J. held that "person" in section 16 of the Fair Employment Act 1976 included a body corporate. He based this in part on the provisions of the Interpretation Act 1978 that "person" includes a body corporate but he also found a number of indications in the 1976 Act that a body corporate is included in the statutory provisions dealing with "person," though on occasion the word "individual" is used or intended in a narrower sense than "person." As to the former group of provisions he referred by way of example to section 8(4) which provides that "where, on an appeal under this section, the question arises whether a person has acted in a manner inconsistent with adhering to the Declaration of Principle and Intent." He took the view that in light of the provisions of section 7(3) and section 10(2), the latter referring both to an individual and a body corporate, it was "inescapable that 'person' in section 8 includes a body corporate." He further pointed to section 55 of the Act by which
He did not find it necessary to decide whether a body corporate could have a religious belief since it was enough that it should be discriminated against on the ground of the religious belief of its employees. In the present case the Court of Appeal did not "find it necessary to give a definitive ruling on the question whether a partnership or a limited company can bring a complaint under the Act of 1976 on the ground of discrimination or whether only an individual can be classed as an employee for the purposes of the legislation" (p. 130) though "we do, however, see some substance in the contention that the Act of 1976 contemplates only individual employees as complainants." The Court of Appeal considered that Mr. Loughran, though he described his business as a firm, was still a sole practitioner. "In substance he was therefore seeking to have himself appointed to the Panel. He designated himself as the solicitor who would be mainly concerned with the work to be done for the Executive." Accordingly the definition of employment in section 57 was satisfied and he could pursue his complaint. As far as Mrs. Kelly was concerned they found that they applicant for appointment was not Mrs. Kelly but the firm. "When a partnership firm is engaged under a contract to execute legal work we do not consider that an individual partner in that firm, even if he or she will be the person mainly responsible for carrying out the work can be said to have been employed under 'a contract personally to execute any work or labour' so as to bring the partner within the terms of section 57." Mrs. Kelly had failed as she was one of two partners in the firm though Carswell L.C.J. added "we cannot regard it as a desirable state of the law that the existence of a remedy should turn on such a distinction. It is nevertheless an inescapable conclusion in our opinion from the way in which the definition of 'employment' in section 57 has been drafted." In considering the issues raised on the appeal it is to be noted that the letter of 24 May 1994, giving notice of the intention to appoint panels stipulated that the principal or one of the principals in the firm should have been in practice on his/her own account for three years and that the solicitor(s) who would actually carry out the panel work has/have at least three years' post qualification experience. In the information sheet accompanying the letter which was to be filled in by the applicant the firm was told that it must designate "either one or two solicitors who would be mainly responsible for carrying out Panel work." Oliver M. Loughran & Co. designated Oliver M. Loughran; John Hoy, Son & Murphy designated Mrs. P.B.M Kelly. The question was then asked "if the firm is a partnership which partner would accept overall responsibility for the service to be provided to the Executive." Oliver M. Loughran & Co. replied "N/A"; John Hoy, Son & Murphy replied "as at 5 above" i.e. Mrs. Kelly. Your Lordships have been shown the contract of appointment of the firm actually selected for the West Panel dated 9 June 1994. That provides inter alia that "the firm will be offered and will accept all work within the scope of the Panel"; "no term or condition of this appointment is intended to diminish any legal duties which the firm would owe to the Executive in the absence of any such term or condition." By paragraph 12 "the Designated Solicitor(s) (as named in the Information Sheet completed by the Firm) will give priority to Panel work." The need to deal with the problem of religious and political discrimination in Northern Ireland had been underlined by the "Report and Recommendations on the Working Party on Discrimination in the Private Sector of Employment" in 1973. The long title to the Act of 1976 spells out that its object was "to establish an agency with the duties of promoting equality of opportunity in employments and occupations in Northern Ireland between the people of different religious beliefs and of working for the elimination of discrimination which is unworkable by virtue of the Act; to render unlawful in connection with such employments and occupations certain kinds of discrimination on the ground of religious belief or political opinion." My Lords, having considered all these matters I have no doubt that the Court of Appeal were right in respect of Mr. Loughran. The definition of employment is clearly wide enough to cover the provision of services by a professional man, as was held in Mirror Group Newspapers v. Gunning (supra). Whatever he called himself he was the individual seeking employment in the sense of someone offering to enter into a "contract personally to execute any work or labour." He was the person undertaking to do the work and he would be liable for any breach of the contract that was made. On the form he was said to be "mainly responsible for carrying out the Panel work." So far as "responsible" means legally responsible he was solely responsible. In so far as it means "would mainly in fact carry out the work" he was such person even if he was entitled to delegate some part of it to his assistant. Plainly it does not cease to be a contract "personally to execute any work" because his secretary types and posts the Executive's defence to any claim or that his assistant solicitor goes along to file such a defence. The dominant purpose is that he will do the essential part of the work. Mrs. Kelly's case raises different issues. The first as I see it, is whether there can ever be discrimination against a firm seeking employment in the sense of seeking to make a contract "personally to execute any work or labour." Two constructions are advanced. The first is that personally means individually by an natural person. The alternative is that, if the Interpretation Act is given effect, "personally" can include activity undertaken by a firm. Mr. Long Q.C. contends for the former and Mr. Gillan Q.C. for the latter. I have come to the conclusion that the second interpretation is the correct one. I start with the provision of the Interpretation Act 1978 that "unless the contrary intention appears" "person" includes a body of persons unincorporate. I do not think that any such contrary intention is to be deduced from the Act. The intention of the statute it seems to me is in favour of the wider definition applying for two reasons in particular. In the first place the intention of the Act of 1976 is clearly to outlaw discrimination on the grounds of religious or political opinion in the employment sphere. It would be wrong to ignore the object and purpose of the Act as seen in the long title to, and in Part III of, the Act. It is factually possible to discriminate against the partners of a firm or against the firm itself as it is against a sole practitioner. Prime facie one would expect the Act to outlaw both. In the second place the Act of 1976 clearly and deliberately adopts a wide definition of employment so as to include a contract to provide services and a firm can contract to provide services. If the definition had included only "workman" or "artificer" or "a contract of service" the position might well be different but with the extended definition of employment I consider that a contract by a firm to provide services is capable of being a contract "personally to execute any work or labour." Is it such a contract here? In my view it is. The contract is for the firm itself, i.e. personally, to execute work. The firm as such will be legally responsible for the doing of the work and will be liable for breach of the contract. The firm which contracts and is legally responsible consists of all the partners but clearly all the partners do not have to do all the work. It is sufficient that one or more of the partners is intended to and does execute the work subject to delegation of some activities by the firm in the same way as a sole practitioner can delegate. What is required is that the dominant purpose of the contract is that the firm undertakes to do, and by one of its partners is responsible for and does, the work undertaken to be done. The other construction, it seems to me, fails to give effect to the plain intention in its context of the Fair Employment (Northern Ireland) Act 1976. This, as I read it, was really the opinion of the Court of Appeal but they felt compelled to dismiss a claim brought by one of the partners in a firm. When an action is brought on a contract made by a firm all the partners should normally be made parties to the proceedings. Here we are not concerned with enforcing a contract but with a complaint of discrimination made by Bernadette Kelly who gave her address as John Hoy, Son & Murphy, William Street, Dungannon. Her complaint is that "in June 1994 I applied to undertake defence work. . . I was unsuccessful. I believe that I have appropriate qualifications and experience for the work and that I have been discriminated against on the ground of religious beliefs and/or political opinion." In fact it was the firm (i.e. both the partners) not she, which applied. She was the solicitor designated to be mainly responsible for carrying out the Panel work and whose experience was relied on to justify appointment. She was the partner who would accept overall responsibility for the services to be provided. Although the complaint could have been made, and perhaps would have been better made in the name of the firm or of both the partners, I consider that under the Fair Employment (Northern Ireland) Act 1976 it was open to one partner in the firm to complain that she, as a partner in the firm, as well as the firm itself, was subjected to discrimination when the firm was refused appointment. This is particularly so in this case where the firm's application was based entirely on her experience and on her acceptance of responsibility for the service to be provided. If, and in so far as there is discrimination against the firm or its constituent partners, there is discrimination against her of which she can individually complain under the statutory provisions. She is not prevented from complaining of discrimination under this Act by rules applying to the enforcement of contracts. I would therefore hold that the Fair Employment Tribunal had jurisdiction to hear her appeal under section 17 of the Act. It is not necessary in this case to consider the position of a limited company. There remains the question as to whether either Mr. Loughran or Mrs. Kelly can complain of discrimination under section 23 of the Act. The Tribunal referred to the decision in Department of the Environment for Northern Ireland v. Patrick Bone (unreported but dated 15 September 1993). In that case the court said:
In McLoughlin v. Queen's University of Belfast [1995] N.I. 82 the Court of Appeal said "the words 'registration' and 'enrolment' refer in our opinion to variants of conferment of qualifications upon persons who thereby achieve some status in relation to their work or the work which they propose to do." The Tribunal found that what was in issue here was the appointment of a solicitor to create a solicitor/client relationship "The respondent was not conferring any variant or qualification on the successful firm but that it would use their services, in particular types of work. . . it would not have increased their status had they been successful." The Court of Appeal agreed that neither appointment to the Panel, nor short listing an applicant, conferred any type of status on him. The claim therefore, they held, failed under section 23. Mr Gillan Q.C. forcefully argued that appointment to the Panel amounts to an "authorisation," "recognition" or "approval" which facilitates employment. He referred to the Reg. v. Department of Health, Ex parte Ghandi [1991] 1 W.L.R. 1053 where a claim was brought under section 12(1) of the Race Relations Act 1996 where it is provided that it is unlawful "for an Authority or Body which can confer an authorisation for, or facilitates, engagement in a particular profession or trade to discriminate." It was claimed that there had been a breach of the section in respect of the failure to appoint a doctor to a vacancy or inclusion on a medical list of a locality. He argues that section 23 of the Act of 1976 is wider since it does not refer to the grant of a qualification for the purpose of practising a profession but to the authorisation of a firm to engage in employment in a prestigious and much sought-after work, appointment which is a recognition of professional excellence and experience. I agree that the wording of the Act of 1976 is wider than that of the Act of 1996 and that the emphasis on "status" in Bone may be subject to further argument though the word "status" may give some indication of the essence of a "qualification." I am however satisfied that "qualification" as defined does not cover the appointment of a duly qualified professional man to carry out remunerated work on behalf of a client, however prestigious the client. If it were otherwise the appointment of a City firm of solicitors by a large United Kingdom company or a multi-national would amount to the grant of a qualification just as it would to appointment of a firm by a non-governmental public authority. I would accordingly reject the argument of the applicants on the basis of section 23 of the Act of 1976. The Court of Appeal and the Tribunal were clearly right in the result. I would dismiss the Executive's appeal in the case of Mr. Loughran and allow Mrs. Kelly's appeal under section 17 of the Act.
LORD GRIFFITHS
My Lords, The Northern Ireland Housing Executive wished to appoint solicitors in various areas of Northern Ireland to act on behalf of the Executive in public liability claims. One area was known as the West Panel and to this area the Executive wished to appoint one firm of solicitors for a period of three years. There were two important terms in the appointment. The first was that if the firm was a partnership it would nominate the partner who would have overall responsibility for the work and the other was that the firm would designate one or two solicitors "who would be mainly responsible for carrying out Panel work . . . and will give priority to Panel work." Nine firms of solicitors applied for the appointment to the West Panel. Among the unsuccessful applicants were the firms of John Hoy, Son & Murphy and Oliver M. Loughran & Co. Bernadette Kelly is one of two partners in the firm of John Hoy, Son & Murphy; Oliver Loughran had no partners and was practising on his own account under the firm name of Oliver M. Loughran & Co. In the application of John Hoy, Son & Murphy, Bernadette Kelly was named as the partner who would accept overall responsibility for the service to be provided to the Executive, and was also named as the designated solicitor who would be mainly responsible for carrying out panel work. In the application of Oliver M. Loughran & Co. Oliver Loughran was named as the designated solicitor and as he was practising on his own account without a partner he did not have to specify a partner who would have overall responsibility, he would naturally be responsible himself. Both Bernadette Kelly and Oliver Loughran complained to the Fair Employment Tribunal that the Executive had discriminated against them on the grounds of religious belief and/or political opinion, contrary to sections 17 and 23 of the Fair Employment (Northern Ireland) Act 1976. The Executive denied any discrimination and also took the points that the Tribunal had no jurisdiction to hear the issue of discrimination as (1) the applicant had not sought employment under "a contract personally to execute any work or labour" and (2) that a refusal to appoint to a panel was not a refusal or omission to confer a qualification. The Executive succeeded on both issues before the Tribunal. In the Court of Appeal, Oliver Loughran succeeded on the first point but Bernadette Kelly failed. Both failed on the second point. The relevant sections of the statute are:
(a) where that person is seeking employment . . .
I agree with your Lordships that section 23 has no application to an appointment of a solicitor to the West Panel, and that the appeals fail on that ground. I find the question under section 17 more difficult. Neither Bernadette Kelly nor Oliver Loughran were seeking employment as employees or apprentices, but were they seeking employment "personally to execute any work?" The Tribunal held that they were not: they held that the dominant purpose of the contract was not that a contracting party would personally execute the work or labour but that a designated solicitor would do so, and the fact that the contracting party and the designated solicitor might be one and the same person they regarded as fortuitous rather than purposeful and unrelated to the contract. Whilst I see the force of this argument I cannot accept it. It was of the first importance to the Executive that their work should be personally carried out by an identified solicitor of not less than three years' qualification. No doubt it was also of importance that the firm should be of good standing with a partner who would assume overall responsibility for the work, but if one is looking for a dominant purpose of the contract I would say it was to secure the services of a particular solicitor personally to defend their cases. The importance of this legislation has been stressed in your Lordships speeches and I would not wish to adopt an approach to its construction or application that cut down the protection it was intended to afford. In the case of Oliver Loughran he had applied to be appointed to the Panel and undertook personally, as the designated solicitor, to defend the cases against the Executive. If he had been successful, the terms of his retainer for each case in which he was instructed by the executive would have required him personally to carry out the work necessary for the defence of the claim. No doubt others would give assistance, such as secretarial, but the solicitor's work he would do himself. This seems to me to be a clear example of a contract personally to execute work. Oliver Loughran is the contracting party and he personally is to execute the work. The fact that he practices under the firm name of Oliver M. Loughran and Co. cannot stand in the way of his claim. Accordingly in agreement with the Court of Appeal and Lord Slynn of Hadley I would dismiss the appeal of the Executive in the case of Mr. Loughran. I turn now to the case of Bernadette Kelly. The wording of section 57 confines the remedy for unlawful discrimination to the party who contracts to provide the personal services. So if a firm of solicitors had designated an assistant solicitor, to defend the claims of the Executive, that assistant solicitor would have no claim for unlawful discrimination, as he would not be a contracting party, nor in my view would the firm have any claim. This may be considered unfortunate, but is the inevitable consequence of the drafting of the statute. But Bernadette Kelly, as a partner in the firm of "John Hoy, Son & Murphy," was a contracting party. A firm of solicitors has no legal existence, independent of the partners of the firm. The contract between the Executive and John Hoy, Son & Murphy, if it had come into existence, would have been a contract between the Executive and both partners of the firm. That being so Bernadette Kelly was seeking to enter into a contract personally to execute work within the meaning of section 57, and is entitled to pursue her claim for discrimination. For this reason I would allow her appeal. |
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