Employment Judge Hyams noted that in a similar equal value claim, Thandi v Next Retail Ltd, Next Distribution Ltd (Case No.1302019/18), the Employment Tribunal said in its judgment of 22 August 2024 that the expert evidence was "of some, but limited, assistance". He stated that the claimants contended that the expert evidence would not be of "material value" and that:
From paragraph 13 to paragraph 20 Employment Judge Hyams set out extensive quotations from Harvey on Industrial Relations and Employment Law that considered what might constitute a material factor, particularly if it related to cost.
Employment Judge Hyams then set out extracts from the respondent's pleaded case and the parties' submissions.
Employment Judge Hyams set out his conclusions from paragraph 34 under the heading "a discussion". It is clear reading the judgment as a whole that the fundamental basis of the decision was that expert evidence was not relevant to the primary material factor he thought Tesco was advancing, that a judgment against Tesco would result in increased prices contrary to the public interest:
The respondent did not rely on "the wider public interest, such as what a judgment in favour of the claimants would mean for the cost of living" but raised the impact of having equalised pay in the period in respect of which the claims are brought.
At paragraph 36 Employment Judge Hyams returned to the question of relevance referring back to a section of the respondent's pleading in which it asserted that raising the pay of shop staff would have distorted competition with other retailers which would be detrimental to the public interest:
In effect, Employment Judge Hyams concluded that the impact on the public of the respondent having to increase prices was irrelevant to any material factor defence – a matter that was yet to be determined – rather than holding that such expert evidence was not relevant in the sense that it could not assist in determining the material factor issues that were disputed by the parties in their pleaded cases.
At paragraph 37 Employment Judge Hyams stated that the "claimants asserted vigorously that such evidence would not be relevant at all". I cannot find any such assertions in their written submissions. Nor was it suggested that oral submissions to that effect were made.
At paragraphs 38 and 39 Employment Judge Hyams stated that he considered that evidence about "the effect on the respondent of the need to pay more to its stores staff as a result of a judgment in favour of the claimants" was something about which senior staff of the respondent would be able to give evidence. Where witnesses of fact will be able to deal with matters about which it is proposed to call an expert that is clearly a material consideration. That said the issue was not about the consequences of a judgment in the claimants' favour but whether there was a material factor that justified the pay differential in the time period covered by the claims. Holding that Tesco's witnesses could give evidence on the issue is not consistent with the assertion that the issue is irrelevant.
From paragraph 40 Employment Judge Hyams again considered the extent to which the respondent could rely on what he thought was part of its asserted material factor defence:
This again emphasises Employment Judge Hyams' reasoning that Tesco's pleaded case raised a matter that could not in law establish a "legitimate aim", rather than that expert evidence could not assist in determining the issue.
At paragraph 44 Employment Judge Hyams stated that he did not consider that Tesco being put to proof on its material factor defence justified the instruction of an expert.
Employment Judge Hyams then held that it was not necessary to consider the cost of instructing an expert:
Employment Judge Hyams stated:
In paragraphs 45 and 47 Employment Judge Hyams referred to the correct test of whether expert evidence was reasonably required to resolve the proceedings.
Appellate Courts and Tribunals should be slow to interfere in and will uphold robust case management. However, case management decisions are not immune from consideration on appeal if an error of law is established. Where an Employment Tribunal properly directs itself as to the legal test to be applied an appellate court should be slow to conclude that the Employment Tribunal has not correctly applied that correct self-direction: DPP Law Ltd v Greenberg [2021] IRLR 1016 .
Ground 4 asserts that the Employment Tribunal fundamentally misunderstood the case that was put on the Consequences Issue because Employment Judge Hyams thought that Tesco relied on the consequences that would result from a judgment against it. The transcript of the hearing shows that was the initial view of Employment Judge Hyams but that in the face of the concerted and agreed submissions of all parties that the material factor defence related to the period covered by the claims he appeared to accept that point. However, I can only conclude that Employment Judge Hyams went back to his original position because in the judgment he repeatedly refers to matters such as "what a judgment in favour of claimants would mean for the cost of living". I can only conclude that the Employment Judge did misunderstand the Consequences Issue when determining the application.
Ground 2 asserts that the Employment Tribunal failed to apply the correct legal test to the question of whether expert evidence is reasonably required to determine the proceedings. The fundamental assessment of the Employment Tribunal was that the Consequences Issue was not relevant to determining the dispute. The claimants contend the term relevance was used as a short hand for the question of whether expert evidence was reasonably required to resolve the issue. I do not accept that is the case. Employment Judge Hyams introduced the concept of relevance having conducted research into the extent to which issues related to cost could amount to a material factor. He concluded that the consequences of a judgment against Tesco could not provide justification.
The claimants contend that, notwithstanding what is said about relevance, paragraphs 38 and 44 demonstrate that Employment Judge Hyams concluded that there was nothing that expert evidence could add to what witnesses of fact called by Tesco could say about the Consequences Issue and the Markets Issue. The claimants contend that demonstrates that the Employment Judge concluded, without expressly stating it, that the expert evidence was neither necessary nor of possible assistance in determining the issues. I consider that this was the strongest point the claimants raised in support of the judgment.
The reasoning in paragraph 38 goes to the Consequences Issue. However, it is specifically predicated on the Consequences Issue being about "the effect on the respondent of the need to pay more to its stores staff as a result of a judgment in favour of the claimants". That looked to the future rather than the past. The Employment Tribunal should have been considering evidence that might go to the period relevant to the claims. It might well be more difficult for Tesco to put forward witnesses that could deal with the Consequences Issue in the relevant period. I also consider that this brief passage has to be seen in the context of a judgment that predominantly focussed on the wrong issue, relevance.
The reasoning in paragraph 44 goes to the Markets Issue but only to market rates and not to other components of that issue, such as the alleged distortion of those markets. The reasoning is extremely brief and does not address all of the components of the Markets Issue.
The Markets Issue and the Consequences Issue are in dispute between the parties. There has been no application to strike out any part of Tesco's pleadings. While it is open to the claimants to assert that there is a lack of clarity in the identification of these issues that is relevant to the question of whether expert evidence is reasonably required to resolve the proceedings, that does not mean that the issue is not in dispute between the parties. Employment Judge Hyams erred in law in finding against Tesco on the basis that the Consequences Issue was irrelevant to determining the claims.
Employment Judge Hyams referred to the correct overarching test in CPR 35.1 and Rule 10 of the Equal Value Rules at the beginning of his judgment and in his conclusion. There is no absolute requirement to refer to statutory guidance provided it is clear that the correct test has been applied. I appreciate the warning in Greenberg that one should be slow to conclude that a legal principle correctly identified has not been applied. All parties referred Employment Judge Hyams to the test in British Airways . Rather than apply that test he focussed incorrectly on relevance. Employment Judge Hyams should have first considered whether expert evidence was necessary to resolve the proceedings. If so, it should have been permitted. If expert evidence was not considered necessary to resolve the proceedings he should have then considered whether the expert evidence would be of assistance in resolving the issues. If so, the balance was to be assessed by consideration of all relevant factors including those set out at paragraph 63 of British Airways . Even if Employment Judge Hyams did give some consideration to the correct test under CPR 35.1 he did not go through the assessment that the parties agreed was appropriate to determine the overarching question of whether the expert evidence was reasonably required to resolve the proceedings. While he referred to two factors, cost and possible delay, he did not consider other relevant factors. Ground 2 is made out.
I have concluded that relevance was not the appropriate test and do not consider it is necessary to go on to consider Ground 1 that asserts that the finding of irrelevance was not reasonably open to the tribunal and/or perverse save that the finding is set aside.
Ground 3 asserts a failure to address Tesco's arguments on competition and collusion on the Markets Issue and to apply the law correctly. The Employment Tribunal did not consider the issue of collusion. But as I have concluded that the application must be considered afresh I do not consider it is necessary to consider this ground further .
I also do not consider it necessary to consider Ground 5, failure to take account of relevant considerations, and Ground 6, erroneous approach to questions of public interest in respect of the Consequences Issue as the application to adduce expert evidence will have to be determined afresh, assessing and taking account of all of the relevant factors.
I suggested to the parties that I could determine the application as encouraged in Kuznetsov v Royal Bank of Scotland [2017] IRLR 350. Tesco were content for me to do so, but the claimants contended that I should only do so if I concluded that the only possible decision was that the expert evidence was necessary or was not necessary. If a discretionary decision was required it should be remitted to the Employment Tribunal. I can only determine issues if the parties agree or there is only one possible answer. The parties do not agree to my determining the issue and I do not consider that there is only one possible answer.
The claimants have raised numerous factors that they contend should result in a determination in their favour. I do not consider it would assist to discuss those matters further because they will be for consideration afresh on remission.
Tesco contend that the remission should be to a new Employment Tribunal because the judgment was fundamentally flawed and there is a risk of a second bite of the cherry. The claimants contend that the remission should be to the same Employment Tribunal because the determination was not totally flawed, Employment Judge Hyams has been managing these hugely complex proceedings for a number of years and is familiar with them and remission could only be to an Employment Judge who is ticketed to conduct Equal Pay proceedings. I have considered the principles set out in Sinclair Roche & Temperley v Heard [2004] IRLR 763 . While I consider that the errors of law were unfortunate and serious, I consider that the judgment falls short of being totally flawed. I also consider it has to be seen in the context of the enormous burden of judging such litigation when large legal teams produce vast amounts of material. While the judge lost sight of the correct test to be applied to determining whether to admit expert evidence I consider that he can be trusted now to focus on the correct test and to apply it properly without attempting a second bite of the cherry. I have confidence in his professionalism and that on an application of the correct test and consideration of all of the relevant factors he will allow the application if he concludes that is the correct decision or refuse it if that is the correct decision. I have sought to avoid giving any hint of what I might have decided had the parties agreed that I retake the decision and nothing in this judgment should be seen as giving a steer. I would only add that all parties are represented by leading and junior Counsel with great expertise and experience in equal pay litigation. Particularly where they agree the correct approach to the law, very great care should be taken before deciding that they are all wrong and that a different test is to be applied.
It will be a matter for the Employment Tribunal to consider whether any further written or oral submissions are required before the application is determined.