Public sector employment

We begin by considering the ambiguous employment status of Crown servants.

CROWN SERVANTS

Crown Service covers the Civil Service, service in the armed forces (see below ) and nominated political posts and judicial office. Under the Employment Rights Act 1996 (the ERA), it is defined as "employment under or for the purposes of a government department or any officer or body exercising on behalf of the Crown functions conferred by a statutory provision" (s.191(3)).

Civil servants

The Civil Service is the machinery of government providing support and advice for ministers on policy matters, undertaking the implementation of policy and managing and providing public services. Employment in the Civil Service is no longer restricted to UK and Commonwealth citizens. The passing of the European Communities (Employment in the Civil Service) Order 1991¹ means that EEC nationals may, with certain specified exemptions, be employed in the Civil Service.

The primary distinction between civil servants and other public or private sector workers is that the Civil Service is regulated by the Royal Prerogative, a purely executive power which is exercised by Order in Council. This power authorises the Minister for the Civil Service and the Treasury to make regulations or give instructions for all relevant employment purposes. Most of these regulations and instructions are collected together in the Civil Service Pay and Conditions Code. The Civil Service Commission handles appointments to the Civil Service according to the principle of open competition, and the Treasury is responsible for pay and other matters of expenditure. The Office of the Minister for the Civil Service deals with matters of conduct, discipline, promotion, training and equal opportunities.

Ambiguous employment status

The nature of the employment relationship between civil servants and the state remains ambiguous despite the removal of many of the distinctions between private and public sector employment. The Introduction to the Civil Service Code states that "the employer/employee relationship exists between the individual civil servant and his employing department." On the other hand, para.11 of the Code holds out the Crown as the employer. It states: "all civil servants form part of the personal staff of the Sovereign ..." and are "servants of the Crown, holding office during the pleasure of the Crown."

However, any notion one might hold that these two provisions confer employee status on the civil servant either in respect of his or her department or in respect of the Crown is quickly dispelled by para. 14, which provides: "For the most part, the relationship between the civil servant and the Crown remains one regulated under the prerogative and based on personal appointment. As such, a civil servant does not have a contract of employment enforceable in the courts but rather a letter of appointment ..." This was confirmed in Inland Revenue Commissioners v Hambrook, in which Lord Chief Justice Goddard said: "An established civil servant is appointed to an office and is a public officer remunerated by moneys provided by Parliament so that his employment depends not on a contract but on appointment by the Crown."

An examination of the authorities on this issue reveals court judgments that have taken either the one view or the other at different times, as the Crown and civil servants have argued either for or against the existence of a contract, depending on the most appropriate legal position to adopt in the particular case. So in order to establish its right to unilaterally vary the terms of employment of GCHQ workers to exclude union membership in 1984, the Crown argued against the existence of a contractual relationship (Council of Civil Service Unions v Minister for the Civil Service - "the GCHQ case").

But in the Spycatcher litigation of 1987/88, the Crown argued (unsuccessfully, in the Australian courts) - in its attempt to prevent a former MI5 officer from publishing his memoirs - for a lifelong contractual duty of confidentiality between itself and its servants. When the Crown sought an injunction in the English courts to prevent English newspapers from disclosing those memoirs, the Court of Appeal accepted the existence of a contract without argument, but the House of Lords ruled that, although a duty of confidentiality did exist, it was to be found in equity, rather than in contract (Attorney-General v Guardian Newspapers Ltd (No.2)).

The authorities fall into three main groups. A first group of cases maintains that the relationship is not contractual. These include Inland Revenue Commissioners v Hambrook and R v Secretary of State for the Home Department, ex parte Benwell, in which it was accepted without argument that prison officers were not employed under contracts of employment. The legal arguments advanced in support of this proposition include: (1) that the Crown cannot bind itself in contract; (2) that the Crown's absolute power to dismiss "at will" (see below) is inconsistent with the existence of a contract; and (3) that there is an absence of intention on the part of the Crown to enter into legal relations with its servants.

In Kodeeswaren v Attorney-General of Ceylon, the Privy Council rejected the first proposition, taking the view that even if the relationship was not contractual in all aspects, a civil servant had a claim in contract as a result of which he or she could sue the Crown for arrears of pay. In Reilly v The King, the duty to pay wages was said to be one of the elements of the relationship resembling contract. Lord Atkin held in that case that the power of the Crown to dismiss at will was not inconsistent with the existence of a contractual relationship.

The third proposition was accepted by the High Court in R v Civil Service Appeal Board, ex parte Bruce, in which it relied on the Crown's constitutional position and on paras. 11 and 14 of the Civil Service Code to hold that the Crown had no intention to enter into legal relations with its servants. But it was dismissed by the High Court in its judgment in R v Lord Chancellor's Department, ex parte Nangle, in which it refused to follow ex parte Bruce.

A second group of cases takes the view that whether or not there exists an overall contract of employment, major aspects of the employment relationship have contractual force or are analogous with contract (for example, Riordan v The War Office). This group includes the line of authority which takes the view that civil servants may sue the Crown for arrears of pay (Kodeeswaren).

A third group of cases holds that the employment relationship is contractual. The leading cases in this group have been concerned with the availability or otherwise of public law remedies for Crown employees. In McClaren v Home Office, the view was taken that dismissal at will did not cancel out the existence of other terms as to a prison officer's service which were contractually enforceable and in respect of which the officer could pursue private law remedies for a breach of contract. And in ex parte Nangle, the High Court rejected the reasoning in ex parte Bruce, saying that the use of the word "appointment" rather than "contract" in para. 14 was neutral and did not negative an intention to create legal relations. The Court took the view that an employment relationship necessarily involved an intention to create legal relations unless this intention was expressly or impliedly excluded. Read in context, the Court said, para. 14's purpose was to describe a state of affairs as it was believed to be, and not to limit or exclude the enforceability of such rights or obligations. It could not be construed in the sense that all the matters relating to a contract of employment in the Civil Service Code relating to pay, pensions, hours, holidays etc were to be voluntary only. On the contrary, the Court found that these rights, obligations and entitlements amounted to the "stock in trade" of a legally enforceable contract of employment.

From the Crown's point of view, the existence of a contractual relationship would be beneficial in that, firstly, it would be able to enforce the lifelong contractual obligation of confidence that it argued for in Spycatcher. But the view taken by the House of Lords that this obligation can arise in equity makes it largely unnecessary for the Crown to rely on contractual arguments. Moreover, breach of confidentiality has always been a criminal offence under the Official Secrets Acts of 1911 and 1920. (The Crown could not rely on those Acts in Spycatcher since the author of the memoirs lived outside the Crown's jurisdiction.)

The Crown might also have used the existence of a contract to counter any attempts by civil servants or civil service unions to evade liability for unlawful industrial action, as some of the economic torts, particularly the tort of inducement of breach of contract, presuppose the existence of a contract. However, the application of the Trade Union and Labour Relations (Consolidation) Act 1992 (the TULR(C)A) to Crown employees means that both civil servants and their unions can be held liable for an employment-related tort occasioned in the course of industrial action (ss.245 and 273 of the TULR(C)A).

Statutory employment protection

The employment protection legislation treats Crown employees as if they have a contract for the purposes of applying statutory employment rights such as unfair dismissal to them (with some exceptions - see below). In this context, s.191(4) of the ERA states that "references to an employee or a worker shall be construed as references to a person in Crown employment" and "references to a contract of employment, or a worker's contract, shall be construed as references to the terms of employment of a person in Crown employment".

As para. 14 of the Civil Service Code itself acknowledges: "Recently, the legal position of civil servants has been radically changed by the growing trend for legislation to apply to the Civil Service either directly, by the provisions of the Acts themselves, or by governmental assurances that the conditions applying to civil servants will not be less favourable than those applying to other employees." So the regulations and instructions issued under the Royal Prerogative and the practice within the various government departments ensures that civil servants enjoy conditions more or less on a par with those in the private sector.

In R v Civil Service Appeal Board, ex parte Cunningham, however, the majority of the Court of Appeal rejected the argument that the government assurances referred to in para. 14 gave rise to a "legitimate expectation" on the part of civil servants that their conditions of service would be the same as for other employees. In that case, a civil servant applied for judicial review of the Civil Service Appeal Board's refusal to give reasons for an award of compensation made to him in respect of his unfair dismissal. The Board, as a public body, was under no statutory or general obligation to give reasons for its decisions, and it had never done so.

The High Court said that an industrial tribunal would have awarded Mr Cunningham twice the amount of compensation that the Board awarded, and that this gave the civil servant a legitimate expectation of substantial compensation, of which it would be unfair to deprive him without reasons being given. The majority of the Court of Appeal disagreed, taking the view that there was no practice or assurance that the Board would follow industrial tribunals in giving reasons for its decisions.

Other legislation applicable to civil servants include: the Sex Discrimination Act 1975 (the SDA - s.85); the Race Relations Act 1976 (the RRA - s.75); the Disability Discrimination Act 1995 (the DDA - s.64); and the Equal Pay Act 1970 (the EqPA - s.1(8)). On the other hand, under the ERA, Crown servants are excluded from the statutory rights to minimum notice periods and redundancy pay. (Express provision for more favourable terms of employment on these matters is made by the Civil Service regulations.)

Moreover, s.193 of the ERA reserves to the Crown the right to issue certificates excluding particular persons from certain employment protection rights "for the purpose of safeguarding national security".

Dismissal "at will"

Since civil servants are covered by the major statutory employment laws, the question whether they have a contract of employment may appear to be largely academic. It is also arguable whether a contract of employment would be of any value so long as there remains in existence the Crown's power at common law to dismiss at will. Para. 14 of the Civil Service Code confirms that "technically, the Crown still retains the right to dismiss a civil servant at pleasure." And a clause in civil servants' letters of appointment gives the Crown the right unilaterally to vary the conditions of service of civil servants at any time.

These powers are by no means obsolete. Their existence means that the Crown cannot be sued for wrongful dismissal, and a unilateral variation of contractual terms by the Crown may be construed as a dismissal at will and offer of re-employment on new terms, leaving the civil servant without a remedy (Attorney-General for Guyana v Norbrega). However, the GCHQ case made clear that the power of unilateral variation is subject to public law principles, such as the duty to consult.

PARLIAMENTARY STAFF

The staff of the House of Commons and the House of Lords are neither Crown servants nor employees under contracts of employment. Their anomalous status derives from parliamentary privilege which allows Parliament to run its internal affairs without judicial interference. In practice, the House of Commons (Administration) Act 1978 regulates staff appointments and keeps conditions of service broadly in line with those of civil servants. Parliamentary staff enjoy the same statutory employment protection rights as do civil servants (see above) and, for these purposes, they are deemed to have contracts of employment (ss.194 and 195 of the ERA). Section 194(6) of the ERA defines a "relevant member of the House of Lords staff" as "any person who is employed under a contract of employment with the Corporate Officer of the House of Lords". The corresponding definition for "a relevant member of House of Commons staff" is "any person who was appointed by the House of Commons Commission ..." (s.195(5)).

Parliamentary staff are entitled under the TULR(C)A provisions to bring "a civil employment claim" before the court or "industrial tribunal proceedings of any description" (ss.277(2) and 278(2A)). A civil employment claim is a "claim arising out of or relating to a contract of employment or any other contract connected with employment, or (b) a claim in tort arising in connection with employment." Similar provision is made in ss. 194(4) and 195(4) of the ERA.

Parliamentary staff can also bring claims under the EqPA (s.1(10A) and (10B)), the SDA (ss.85A and 85B), the RRA (ss.75A and 75B) and the DDA (s.65).

THE POLICE

Central government, local police authorities and the chief constables share responsibility for the organisation of the police force. In 1995, "freestanding" police authorities were created to assume responsibility for all area police forces outside London. The Police Act 1966 imposes a statutory duty on police authorities to maintain an adequate and efficient police force. Central government regulates this duty, making use of extensive powers of inspection, inquiry and veto. Regulations are made as to the government, administration and conditions of service of police officers, including pay, pensions, duties, holidays and discipline. The payment of wages is made by the local police authorities.

Police officers are neither Crown servants nor employees of the police authorities. Their status stems from their constitutional position as "independent" officers exercising "original authority" derived directly from the legal powers inherent in their office, and so they are answerable to the law alone. However, the chief constable exercises many of the functions of an employer. He or she has powers of "direction and control", appointment and promotion below the rank of chief constable, and has disciplinary authority for officers up to the rank of chief superintendent.

For the purposes of sex and race discrimination, police officers are treated as being employed either by the chief constable or the police authority (ss.17(1) of the SDA and 16(1) of the RRA), depending on which one is responsible for the act of discrimination. In contrast, the DDA does not apply to police officers.

The police are expressly excluded from many statutory employment rights, including unfair dismissal (s.200 of the ERA). In Lowrey-Nesbitt v Commissioner of Police of the Metropolis, a police constable sought to amend her sex discrimination/equal pay complaint so as to incorporate a claim for unlawful deduction from her wages under Part II of the ERA. An industrial tribunal chair refused leave to amend, on the basis that it was clear that Part II of the ERA did not apply to police officers, but the EAT allowed Ms Lowrey-Nesbitt's appeal. The EAT pointed out that s.200 of the ERA does not expressly exclude the police from the "Wages Act" provisions of the ERA, and it is at least arguable that a police constable constitutes a "worker" for the purposes of those provisions.

The Police (Health and Safety) Act 1997 (not yet in force) amends the Health and Safety at Work Act 1974 to provide that police officers shall be regarded as "employees" for the purposes of that Act. The new Act also amends the ERA so as to extend the right not to suffer detriment in health and safety matters (s.44) and the right to claim unfair dismissal on health and safety grounds (s.100) to police officers (see new ss.49A and 134A of the ERA).

THE ARMED FORCES

Members of the armed forces are Crown servants who are subject to military law. Express provision has to be made to bring them within the protection of the statutory employment provisions. The armed forces Act 1996 (the AFA) streamlined the arrangements for service personnel to complain to industrial tribunals, requiring internal procedures to be exhausted first.

Statutory protection against sex discrimination now extends to members of the armed forces, except where discrimination is necessary to ensure "combat effectiveness" (s.85(4) of the SDA). Employment in support of the armed forces is also subject to the sex discrimination law. The AFA has amended the provisions relating to industrial tribunal applications made under the SDA to provide that complainants who are servicemen or servicewomen must first make use of the armed forces internal redress procedures (see s.85(9A) and (9B) of the SDA). The time limit for complaints has also been extended from three to six months in these cases to allow time for efforts to settle complaints internally.

Until recently, s.75(9) of the RRA applied the race discrimination provisions to employment in the armed forces, but it excluded complaints from the jurisdiction of industrial tribunals, dealing with them by means of the special machinery provided for the redress of grievances within the services. The AFA has amended the RRA, allowing members of the armed forces to make race discrimination complaints to industrial tribunals, subject to the proviso that internal redress procedures must be used first. As under the SDA, the time limit for applications is extended to six months.

Section 1(9) of EqPA formerly excluded members of the armed forces from the right to claim equal pay for equal work. The AFA has now repealed s.1(9) and amended the EqPA so as to permit servicewomen to make tribunal complaints in respect of their service pay and conditions in the same way as civilian employees (s.7A of the EqPA). Again, internal redress procedures must be exhausted first.

The DDA does not cover the armed forces (s.64(7)).

Section 192 of the ERA provides for a number of statutory employment protection rights, including the right to complain of unfair dismissal, to extend to members of the armed forces in the same way as they do to other Crown servants. The AFA has amended s.192 so as to require that internal redress procedures must be used before a tribunal complaint is brought under these provisions. Section 192 has, however, not yet been brought into force.

LOCAL AUTHORITY EMPLOYEES

Local authorities are corporate bodies who exercise statutory powers and duties under the Local Government Act 1972, as amended by the Local Government Act 1985. Local authority workers are employed under contracts of employment.

The authorities also have a statutory duty to appoint chief officers for education, fire and other services. Central government has the power to control local authorities' finances, and to control their activities by initiating legislation on any aspect of their affairs. Their expenditure is also subject to supervision by auditors. This means that the ability of local authorities to employ staff on any particular terms and conditions may, in practice, be restricted by these external influences over finance and expenditure.

In Allsop v Council of the Metropolitan Borough of North Tyneside, North Tyneside Council wanted to adopt a more generous severance-payment scheme than provided for by Regulations made by the Secretary of State under the Superannuation Act 1972. The auditor challenged these payments as unlawful and applied to the High Court for judicial review. The High Court agreed with the auditor that the Regulations restricted the powers of a council to make payments under the scheme and that the council had no power to make payments in excess of the limits set by the regulations. The Court of Appeal upheld the High Court's decision.

This ruling confirmed that many such schemes operated by local authorities were unlawful. As a result, new Regulations² were made governing the size of compensation payments for local government employees dismissed by reason of redundancy or in the interests of the efficiency of their employer. The maximum payment that may be made under the new Regulations is on a sliding scale according to the employee's age and length of service, subject to an overall limit equivalent to 66 weeks' remuneration (inclusive of any redundancy payment made under the ERA). Subsequent Regulations³ introduced new definitions of "qualifying employment" and "continuous employment" for the purposes of calculating the amount of compensation payable.

The Local Government and Housing Act 1989 created a number of "politically restricted posts" within local government, disqualifying holders of these posts from holding certain publicly elected offices and restricting the range of political activities they may pursue. These restrictions take the form of terms and conditions which have been incorporated into the contracts of employment of restricted employees.

All the statutory employment protection laws are available to local authority employees in the same way as employees in the private sector. So far as statutory redundancy payments are concerned, the Redundancy Payments (Local Government) (Modification) Order 1983⁴ (as amended) modifies the ERA provisions so as to enable employees in relevant local government employment to count as continuous all of their service with several specified bodies. The Order has been amended on numerous occasions to extend the list of specified employers.

NHS EMPLOYEES

The National Health Service and Community Care Act 1990 (the NHSCCA) has effectively reorganised the NHS along market-led principles. Purchasers (eg the health authorities) buy services from selected providers (eg hospitals, ambulance services and community health units) with whom they enter into quasi-contractual relationships. Virtually all these providers have now acquired self-governing trust status. These NHS trusts are separate legal entities from the health authorities. This means that while central government remains responsible for the provision and funding of the NHS, the service is administered through the health authorities and the NHS trusts, which both employ NHS staff, each having autonomy in their personnel matters.

Although NHS staff are employees, their main terms and conditions of employment, such as pay, are prescribed in regulations made by the Secretary of State, who has control over salaries and wages. It is mandatory for the health authorities to apply these regulations, and terms and conditions for individual staff may not be varied without permission given by the Secretary of State. Statutory employment protection rights apply to NHS employees, and s.279 of the TUL(R)CA includes health service practitioners in the definition of "worker" for the purposes of that Act.

General practitioners, dentists, pharmacists and opticians are usually independent contractors (cf City and East London Family Health Services Authority v Durcan ). Their contracts are administered by the Family Health Services Authorities (FHSAs - previously Family Practitioner Committees). These authorities are not employers although they exercise disciplinary powers, including the power to withhold remuneration.

Transfer provisions

Special provision is made in the NHSCCA for employees affected by the creation of NHS trusts. Section 6 provides that the contracts of relevant health authority employees will have effect as if originally made with the trust, and all rights and liabilities under those contracts will be transferred to the trust, with effect from its operational date. This mirrors the protection under the Transfer of Undertakings (Protection of Employment) Regulations 1981⁵. It was made clear in Wilson and others v West Cumbria Health Care NHS Trust that s.6 of the NHSCCA applies so as to transfer liabilities arising both under contract and in tort, such as negligence claims, to an NHS trust.

The Court of Appeal held, in Gale v Northern General Hospital NHS Trust, that a student nurse who could be asked under his contract to undertake his clinical experience at any hospital in a wide area, fell outside the category of "relevant health authority employees". He could not show that he was employed to work solely at the hospital to which he was allocated for the latter part of his training, and so failed to establish that his employment transferred to that hospital when it acquired trust status. This meant that he was unable to establish the necessary two years' continuous employment for the purposes of bringing an unfair dismissal complaint, the transfer having broken his continuity.

The continuity of employment of specified health service employees for statutory redundancy pay purposes is preserved under the Redundancy Payments (National Health Service) (Modification) Order 1993⁶. These employees can now count as continuous all their periods of employment with specified employers, including past service which predates the Order (13 January 1994). The specified employers include the health authorities, NHS trusts and FHSAs.

Section 218(8)-(10) of the ERA provides for employees' continuity of employment to be preserved where they change their employer while undergoing professional training in the health service. The Employment Protection (National Health Service) Order 1996⁷ specifies the descriptions of employment in respect of which continuity is maintained under these provisions.

TEACHERS

Teachers are employed under contracts of employment. The Education Reform Act 1988 and the Education Act 1993 have fundamentally changed their employment position. In voluntary-controlled, county schools and special agreement schools the local education authorities (the LEAs) remain the employers of teaching staff. In voluntary-aided schools, the governing body is the employer. Grant-maintained schools receive their budgetary allocation from central government after opting out of local authority control, and the governing body becomes the employer. This brings about a corresponding reduction in the LEA's education budget and transfers all duties and rights arising out of contracts of employment of teaching staff to the new employer.

Even in the schools where the LEA is the employer, the governing body is given the power to make appointments and to dismiss staff. This situation leaves the LEAs with very few powers over their employment relationship with teaching staff, although they bear the running costs of schools and retain most of the burdens of employers. An LEA cannot usually refuse to appoint a head or deputy head teacher recommended by governors, and it must terminate the contract of any member of staff dismissed by the governors.

This distribution of powers between the LEAs and governing bodies has made necessary the modification of several employment protection rights (under powers granted to the Secretary of State by s.222 of the Education Reform Act) to ensure that employment law recognises the powers and responsibilities of governing bodies. The Education (Modification of Enactments Relating to Employment) Order 1989⁸ states that industrial tribunal applications for unfair dismissal, sex or race discrimination or failure to accord maternity rights should be brought against the governing body as the respondent, although compensation or legal costs will be awarded against the relevant LEA. Provision is made for the LEA to charge these costs to the governors for "good reason" (for example, where the LEA had advised the governors that it was likely to lose the case). The LEA remains the employer for the purposes of the EqPA because comparisons must be made between employees of the same employer. The LEA also remains responsible for itemised pay statements. The governing body deals with disciplinary matters.

Section 218(7) of the ERA preserves employees' continuity of employment when they move from employment by an LEA to employment by the governors of an LEA-maintained school (or vice versa); or where they move from one LEA-maintained school to another.

Under the School Teachers' and Pay and Conditions Act 1991, it is the Secretary of State who sets teachers' pay and terms and conditions of service.

Transfer provisions

The changeover of a school to grant-maintained status does not affect the contracts of employment of existing employees. Section 75(6) of the Education Reform Act states that the contract of employment is to have effect from the transfer date as if originally made between the employee and the governing body of the grant-maintained school. All the LEA's rights, duties and liabilities transfer to the governing body (s.75(7)). However, these provisions do not apply to staff "whose contract of employment terminates on the day immediately preceding the transfer date" (see Pickwell and Thomas v Governing Body of St George's Secondary School).

PUBLIC LAW REMEDIES

It has become increasingly important to be able to determine with some precision the form of the employment relationship between the state and its workers for purposes of the application to the workers of public law principles and remedies. Public law is the law which governs the exercise by public bodies and authorities of their (often statutory) powers and duties. In appropriate circumstances, the exercise of these public powers and duties may be challenged by way of an application for judicial review on one or more of the grounds specified in the GCHQ case. These are:

A breach of a public law duty on one of these grounds attracts a number of exclusively public law remedies known as the "prerogative orders" which may, at the court's discretion, be granted to the aggrieved party. These remedies include: certiorari, which has the effect of quashing the decision of the public body or authority; prohibition, which prohibits the body or authority from doing, or continuing to do something ruled illegal; and mandamus, which orders the body or authority to act and perform its duties. An applicant for judicial review may also seek a declaration of the rights of the respective parties or an injunction - remedies which are also available in private law proceedings. Damages may also be awarded if the court is satisfied that they would have been awarded if an ordinary private law action had been brought (that is, where there would otherwise have been a recognised cause of action such as in tort or contract). Note that the prerogative orders and injunctions are not available against the Crown itself. This leaves the declaration of rights as the major remedy against the Crown.

The public law remedies may be obtained only in the High Court on an application for judicial review under the special procedure laid down in Order 53 of the Rules of the Supreme Court. The prerogative orders are, in many ways, a superior remedy to those available in private law and are available for grievances occurring both during employment and upon termination. On the other hand, the applicant must apply for leave of the court before proceeding and must comply with a stringent three-month time limit within which the application must normally be made.

Public law does not apply automatically to the relationship between the state and its workers by the mere accident of being in public employment. It applies only when the state, in its capacity as employer, is exercising public powers and duties. It is also important to establish whether the rights at issue are based on contract or on the exercise of a statutory power, because it is mainly in the latter situation that the courts will accept that a case involves an issue of public law, or contains a sufficient "public element", such that judicial review is available (R v East Berkshire Area Health Authority, ex parte Walsh). The Court of Appeal in ex parte Walsh took the view that it is normally where there exists "a special statutory provision bearing directly upon the right of a public authority to dismiss the plaintiff" that judicial review will be available. However, in the GCHQ case, the House of Lords made clear that judicial review could be available in the absence of a statutory element of any sort, and that, in appropriate situations, judicial review could be available in respect of acts done pursuant to an exercise of the Crown's prerogative power. Even where an issue of public law is involved, judicial review, being a discretionary remedy, may still be refused if an alternative remedy - such as an industrial tribunal claim - is available.

In practice, distinguishing between the public and private law rights of public sector workers requires a close examination of the nature of the decision under challenge, the rights alleged to have been infringed and the remedy sought. In the GCHQ case, Lord Diplock said that, to qualify as a subject for judicial review, the decision of a public authority must have had consequences which affected some person (or body of persons) by either (a) altering rights or obligations of that person which were enforceable by or against him in private law; or (b) depriving him of some benefit or advantage which he had a "legitimate expectation" would not be withdrawn without reason, consultation or an opportunity to comment being given. Moreover, "the decision-maker must be empowered by public law ... to make decisions that, if validly made, will lead to administrative action or abstention from action by an authority ..."

In many cases, public sector workers will find that they are in no different position from those in the private sector, in respect of their rights against their employers (see McLaren v Home Office, below). In ex parte Nangle, the High Court held that a civil servant's complaints in respect of disciplinary proceedings should be pursued by way of a private law action for breach of contract. The Court held that the civil servant was employed by the Crown under a contract of employment (see above, pp.3-4), and so no remedy in public law was available. Secondly, and in any event, the Court indicated that there was no sufficient public law element in the case to justify the discretionary remedy of judicial review. The Court took the view that internal and purely "domestic" disciplinary proceedings between employer and employee were not an appropriate subject for judicial review. It distinguished the case from that of ex parte Bruce, where the disciplinary proceedings were conducted before the Civil Service Appeal Board, an independent body set up under the Royal Prerogative and which typified bodies which could be subject to judicial review. Moreover, Mr Bruce had no direct relationship with the CSAB, and had to invoke its jurisdiction by way of appeal.

The issue in R v Derbyshire County Council, ex parte Noble was whether there was a sufficient statutory underpinning of the employment of a deputy police surgeon so as to inject an element of public law into that employment to enable the applicant to challenge the decision to dismiss him by way of judicial review. The Court of Appeal answered in the negative, saying that the claims at issue arose out of Dr Noble's private contract for services with a public body, even though it was a contract which required the performance of certain duties in which the public had an interest. There was no statutory element or "statutory injection" regarding the question of dismissal.

The Court of Appeal said that the nature of the decision under challenge was crucial as to whether judicial review was appropriate in a particular case. It was a characteristic of "public law power" that it was exercised in the interests of the public and/or had broad application across whole categories or groups of workers (as in the GCHQ case). They were not decisions normally concerned with the employment conditions or dismissal of a specific individual, although an individual may be adversely affected by them. Dr Noble's complaint was about the way he and he alone had been treated. Any remedies sought by the doctor arose solely out of a private law right in contract between him and the council, and not out of some breach of a public duty placed upon the council.

The relationship between a general practitioner and a Family Practitioner Committee was at issue in Roy v Kensington, Chelsea & Westminster Family Practitioner Committee. The question was whether that relationship was contractual and, if it was, whether the GP was entitled to claim from the Committee the balance of the basic practice allowance allegedly owed to him by way of an ordinary private law action, or whether he was constrained to proceed by way of judicial review. The House of Lords took the view that the relationship was contractual and that the obligations and duties that the contract gave rise to, such as the payment of remuneration could, and should, be enforced by means of a private law action.

In McLaren v Home Office, the Court of Appeal was faced with the issue of whether a prison officer could proceed with his challenge to the prison governor's decision to impose a new shift system in breach of a local agreement by way of a private law action or by way of judicial review. The answer depended on the nature of the rights infringed and whether they could be truly classified as rights under public law or private law, the Court said. Lord Justice Woolf identified four principles to be considered:

The Court took the view that a prison officer could be employed under a contract of employment, but that, whether or not this was the case, he or she could still be dismissed at will or could have his or her conditions of service changed at will. Mr McLaren's specific complaints raised issues of private law. In his claim he sought declarations as to the terms of his employment and a sum which he alleged was due for services rendered. These were private law claims requiring private law rights to support them, and they fell into the first category of claims set out above. The Court concluded that he had a reasonable cause of action and that he could proceed with the civil proceedings he had commenced in the High Court.

"STATE" EMPLOYMENT UNDER EC LAW

Directives issuing from the European Community can have a major impact on employment rights throughout the Community because of the obligation upon EC member states to translate the provisions of Directives into domestic law. Failure to implement a Directive by the specified date lays the member state open to infringement proceedings by the European Commission. And, crucially, employees of public employers in that state can directly enforce their rights under the Directive in national courts and tribunals, provided the provisions relied upon are sufficiently clear, precise, unconditional and self-contained (Marshall v Southampton and South West Hampshire Area Health Authority (Teaching)). (Private sector employees do not have this right, but in Francovich v Italian Republic the ECJ ruled that, where a Directive requires rights to be conferred on individuals and the content of those rights can be determined by reference to the provisions of the Directive, any individual who suffers loss as a result of a failure by a member state to translate those rights into national law by the due date is entitled to sue the state for damages.)

In Foster and others v British Gas plc, the ECJ confirmed that, where an individual is employed by a "state" employer, that individual is entitled to rely directly on a clear EC Directive in support of a claim against the employer, where that state had failed to implement fully the terms of the Directive. The Court ruled that "a body, whatever its legal form" which "has been made responsible, pursuant to a measure adopted by the state, for providing a public service under the control of the state and has, for that purpose, special powers beyond those which result from the normal rules applicable in relations between individuals, is included ... among the bodies against which the provisions of a Directive capable of having direct effect may be relied upon."

In arriving at this conclusion, the ECJ referred to its own previous decision in Marshall, that an individual who is entitled to rely directly on the provisions of a Directive in an action against the state, may do so "regardless of the capacity in which the latter is acting, whether as employer or as public authority". The ECJ in Foster said that, although it did have jurisdiction to determine the categories of bodies against which a Directive's provision may be relied on, it is for national courts to decide whether a particular body falls within this category. The House of Lords later ruled that British Gas Corporation was, before privatisation, a "state" employer, and so the Equal Treatment Directive could be directly enforced against it by its employees. In arriving at this conclusion their Lordships accepted that the ECJ had laid down a "broad principle" couched in "purposive language", and that their application of its "plain words" could have a wide-ranging impact on UK industrial relations.

The Foster ruling sets out three conditions which, when fulfilled, identify a body as a "state body" or an "emanation of the state" for the purposes of the direct application of EC Directives. These are: the "public service" condition; the "control" condition; and the "special powers" condition. In Griffin and others v South West Water Services, the dispute as to whether a privatised water company was a "state body" or "emanation of the state", centred on the control condition. The High Court had accepted that the first condition was satisfied because South West Water Services had a statutory duty to "develop and maintain an efficient and economical system of water supply within its area" and to ensure that arrangements had been made for providing water in that area and for making it available to persons who demand it. The third condition was also satisfied as the water company had special powers including the power to impose temporary hosepipe bans and to enter premises for various purposes.

In considering the control condition, the High Court made the following points:

The High Court took the view that the control condition was satisfied in this case because the water company's appointment as water and sewerage provider for the South West region was made by the Secretary of State under his statutory powers, and that appointment could be varied or terminated under those powers by the Secretary of State or the Director-General of the regulatory body, the Office of Water Services. Moreover, the Secretary of State and the Director-General exercised wide powers of control over the manner in which the water company's functions were to be carried out, including the power to impose conditions on the company.

An important distinction was drawn between state bodies with specific and identifiable public functions and those which are essentially commercial undertakings in the Court of Appeal decision in Doughty v Rolls-Royce plc. Applying the Foster ruling in that case, the Court held that Rolls-Royce plc, before it was privatised, was not a state employer for the purposes of the direct application of the EC Equal Treatment Directive (No. 76/207/EEC). Although it was wholly owned by the Government at the time, and fulfilled the control condition, it failed the other two tests because it had not been made responsible for the provision of a public service, nor did it have special powers beyond those which arise between individuals.

However, in National Union of Teachers and others v Governing Body of St Mary's Church of England (Aided) Junior School and others, the Court of Appeal rejected the proposition that the Foster ruling laid down any "exclusive formula" for identifying a "state" body or an "emanation of the state". The Court stressed that the definition in Foster identified an employer fulfilling the criteria specified as being "included among" the category of state bodies, but did not necessarily exclude others. This case concerned a voluntary-aided church school charged with the provision of a public education service. In the Court's view, the governing principles of such a case included the need to prevent the state from taking advantage of its own failure to implement a Directive. Moreover, Community case law was clear that a body may be an "emanation of the state" although it is not under the direct control of the state. Applying these principles, the Court held that the church school was an "emanation of the state".

The Foster ruling has therefore given rise to a broad interpretation of "state" employment for EC law purposes, encompassing the great majority of workers in the public sector. This increases for the UK Government the practical consequences of failing to implement the requirements of an EC Directive.

¹ SI 1991/1221.

² The Local Government (Compensation for Redundancy) Regulations 1994 SI No.3025.

³ The Local Government (Compensation for Redundancy) (Amendment) Regulations 1996 SI No.456.

⁴ SI 1983/160.

⁵ SI 1981/1794.

⁶ SI 1993/3197.

⁷ SI 1996/638.

⁸ SI 1989/901.

Public sector employment: main points to note

CASE LIST

Allsop v Council of the Metropolitan Borough of North Tyneside 16.10.91 High Court and [1992] ICR 634 (CA)

Attorney-General v Guardian Newspapers Ltd (No.2) [1988] 3 All ER 545

Attorney-General for Guyana v Norbrega [1969] All ER 1604

City and East London Family Health Services Authority v Durcan 24.9.96 EAT 721/96

Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374

Doughty v Rolls-Royce plc [1992] IRLR 126

Foster and others v British Gas plc [1990] IRLR 353 (ECJ) and [1991] IRLR 268 (HL)

Francovich v Italian Republic [1992] IRLR 84

Gale v Northern General Hospital NHS Trust [1994] IRLR 292

Griffin and others v South West Waters Services [1995] IRLR 15

Inland Revenue Commissioner v Hambrook [1956] 1 All ER 807

Kodeeswaren v Attorney-General of Ceylon [1970] AC 1111

Lowrey-Nesbitt v Commissioner of Police of the Metropolis 16.5.97 EAT 559/97

McLaren v Home Office [1990] IRLR 338

Marshall v Southampton and South West Hampshire Area Health Authority (Teaching) [1986] IRLR 140

National Union of Teachers and others v Governing Body of St Mary's Church of England (Aided) Junior School and others [1997] IRLR 242

Pickwell and Thomas v Governing Body of St George's Secondary School 6.10.92 EAT 123/92 & 203/92

R v Civil Service Appeal Board, ex parte Cunningham [1991] IRLR 297

R v Civil Service Appeal Board, ex parte Bruce [1988] ICR 649

R v Derbyshire County Council, ex parte Noble [1990] IRLR 332

R v East Berkshire Area Health Authority, ex parte Walsh [1984] IRLR 278

R v Lord Chancellor's Department, ex parte Nangle [1991] IRLR 343

R v Secretary of State for the Home Department, ex parte Benwell [1985] IRLR 6

Re NUPE and COHSE's Application [1989] IRLR 202

Reilly v The King [1934] AC 176

Riordan v The War Office [1959] 3 All ER 552

Roy v Kensington, Chelsea & Westminster Family Practitioner Committee [1992] IRLR 233

Wilson and others v West Cumbria Health Care NHS Trust 3.8.94 Newcastle-upon-Tyne County Court