Representation:

Outline facts:-

Mrs Lax was employed as a retail recruitment manager ("RRM") for a pub chain which operated both tenanted and managed pubs. Her job involved recruitment of pub tenants and managers. In March 2002, she told her manager that she was pregnant and requested to be allowed to work part time on her return from maternity leave. Following discussions and consultations, the request was rejected in May 2002.

Her child was born in September 2002 and iIn February 2003, Mrs. Lax told her manager that she was unable to return to work full-time. She again requested a part-time job.

In the meantime, a reorganisation within Hardys & Hansons Plc had led to disappearance of her old RRM role and the creation of a new role of a tenant support manager ("TSM"). The TSM role incorporated the RRM function on the tenanted side and but included responsibility for the provision of training for tenants. Responsibility for recruitment for managed houses passed to the Area Managers.

In February 2003, Mrs. Lax was that there was no part-time role available. She was given three month's notice of dismissal on the ground of redundancy.

Mrs. Lax presented complaints of unlawful sex discrimination under Sex Discrimination Act 1975 s.1(2)(b) and unfair dismissal.

The central question for the tribunal was whether the refusal to permit the job share of a full time job amounted to unlawful indirect sex discrimination contrary to Sex Discrimination Act 1975 s.1(2)(b). Hardys & Hansons Plc argued that its decision was justifiable irrespective of the sex of the person to whom it was applied (section 1(2)(b)(ii)).

The tribunal did not accept that the TSM job was incapable of being split between two job sharers. Accordingly it held that Hardys & Hansons had unlawfully discriminated against Mrs Lax by insisting that the TSM job be performed on a full-time basis as that decision could not be objectively justified. Therefore the dismissal was also unfair dismissal as she should have been offered the opportunity of doing the TSM job on job-share or parttime basis and the failure so to do was unreasonable. Mrs Law was awarded £60,000 including £14,000 plus interest for injury to feelings (later reduced to £10,000 by the EAT - see Hardys & Hansons PLC v Lax, EAT on 28th Nov 2005)

Hardys & Hansons Plc appealed to the EAT. They argued that as a matter of law the employment tribunal had applied the wrong test. They argued that the correct test was not whether their decision was objectively justified but whether it was a decision within the band of reasonable responses open to a reasonable employer (see notes at Unfair dismissal/fair or unfair? ). They lost this appeal and appealed on to the Court of Appeal.

Decision:-

Hardys & Hansons Plc lost again.

The unfair dismissal question was relatively unimportant as the Court of Appeal held, as had the original tribunal, that "a finding of unfair dismissal follows inevitably" from the finding that the employer was "guilty" of unjustified indirect sex discrimination. The unfair dismissal aspect is therefore not considered further in this note.

The Court of Appeal held that correct application of the justification defence in Sex Discrimination Act 1975 1(2)(b)(ii) requires the employer to show that what the employer had done was objectively justifiable. The provision had been interpreted by the House of Lords (see Barry v Midland Bank plc 1999 (HL) [1999] ICR 859, HL) as requiring the employer to show

(a) that the measures correspond to a real need;
(b) are appropriate with a view to achieving that objective; and
(c) are reasonably necessary to that end

The Court of Appeal ruled that in deciding whether measures are reasonably necessary there is no "margin of discretion" and that the "range of reasonable responses" test which is used in unfair dismissal cases is not applicable. The word "reasonably" did no more than reflect "the presence and applicability of the principle of proportionality" and did not permit the margin of discretion or range of reasonable responses test for which the employer contended (see para 32 of the judgment of Pill LJ).

The Court of Appeal thus decided that the employment tribunal had applied the correct test. The next question was whether the tribunal had come to the right conclusion when it applied that test, ie that the employer's rejection of Mrs Lax's application for job share was not objectively justified and therefore amounted to unlawful indrect sex discrimination. Noting that the tribunal had hear all the evidence and had come to the conclusion the Court of Appeal "not without hesitation" agreed and dismissed the employer's appeal.

The Court of Appeal suggested that where the economics of a business or its working practices forms part of an argument for justification then " at least a basic economic analysis of the business and its needs" should be provided. That had not been done in this case and this was clearly an important factor in the employer losing. In this connection Thomas LJ said (para 55):

"Although the extent of the analysis of the economics of the business and its working practices must depend on the nature of justification advanced and of the enterprise being considered, the analysis must be through and critical and show a proper understanding of the business of the enterprise".