This was an appeal from an employment tribunal(ET)pre-hearing review judgment that refused the claimants' application to amend the comparators named in originating applications (ET1) for equal pay(already cited by other claimants).

The women are nurses (a female dominated occupational group seeking equal pay with men in male dominated ones).

The Appellants known as the 'Cross claimants' wanted to add comparators from different job groups: medical technical officers, laboratory scientific officers and maintenance and estates labourers, painters and estates officers.

When a new system of payment under Agenda for Change (AfC)was introduced it was realised that the old Whitley Council (WC) pay system meant that workers in female dominated groupings had been receiving less beneficial terms than those in male ones, there having been different collective bargaining units for different occupational groups.

When the nurses were assimilated to the new AfC pay scale the banding they received was supportive of claims for equal pay.

The Tribunal argued that as the parties had agreed that adding a new comparator constituted the addition of a new cause of action, and if as the tribunal believed, new contracts of employment came into being on assimilation to AfC, the application to amend was made over six months afterwards and was therefore presented out of time. The claimants disputed that the old contracts terminated on assimilation to AfC. They said the old contracts remained in force, and as such they were still in time.

In Cumbria County Council v Dow and others (No 2) [2008] the rules governing whether a contract is terminated or varied were analysed:

"when changes in a contract amount merely to a variation of a continuing contract and when they involve a termination of the contract and the creation of a new one. Certain principles are not in dispute.

• A contract may be terminated expressly or impliedly. It may be terminated by dismissal, resignation or by mutual consent.
• Implied mutual consent will be the most common form of termination where the individual enters a new contract with the same employer.
• The issue is ultimately one of intention.

In Marriott v Oxford and District Co-operative Society Ltd (No 2) [1969] 1 WLR 254 Lord Parker said, 'the answer is always one of intention: was the intention to make a new contract or was the intention merely to treat the old contract as in being but with certain variations.'For Lord Parker in Marriott the nature of the alleged variation was important.

A rescission can only come about when the change is so fundamental that nobody would claim that the original contract was still in force.

In Hogg v Dover College [1990] where employers had unilaterally varied the contract with hours and salary being significantly reduced a termination was recognised in that a unilateral change may constitute a dismissal whereas an agreed change will not.

The intention of the parties is determined objectively and subjective perceptions of parties are not relevant. Where a change is not fundamental the inference is that there exists a variation. (DOW No2 - EAT)

According to Chitty on Contracts

"Rescission will be presumed when the parties enter into a new agreement which is entirely inconsistent with the old, or, if not entirely inconsistent with it, inconsistent with it to an extent that goes to the very root of it. The change must be fundamental (Thirteenth Edition paragraph 22-028)

"… the question is whether the common intention of the parties was to 'abrogate', 'rescind', 'supersede' or 'extinguish' the old contract by a 'substitution' of a 'completely new' or 'self-subsisting' agreement." ". ...British & Beningtons Ltd v N W Cachar Tea Co Ltd [1923]

In Alcan Extrusions v Yates [1996] - employers unilaterally imposed a radically different shift system, wages and holidays. A tribunal held that the the employer had thereby terminated the employees' contracts.

The EAT decided, " ... whether or not the action of an employer in imposing radically different terms has the effect of withdrawing and thus terminating the original contract must ultimately be a matter of fact and degree for the industrial tribunal to decide provided always they ask themselves the correct question, namely, was the old contract being withdrawn or removed from the employee?"

From Marriott, Hogg and Alcan unilateral and fundamental changes had the effect of rescinding the old contract. Where in Pottter v N Cumbria where changes were not unilateral, changes may be possibly regarded as fundamental but not necessarily. The assessment is objective.

In Pottter v N Cumbria the EAT decided that the tribunal had erred in law or came to a perverse conclusion in deciding that the changes in terms and conditions were fundamental.

The claimants argued that the ET erred in failing to take into account the contractual similarities as well as the differences between the old and the new terms, that the jobs of the claimants and their place of work did not change. They argued taht ET finding that the Knowledge and Skills Framework (KSF) system for determining pay progression was 'a significant and major change to the terms and conditions of the claimants' was an error of law or perverse and that KSF was not a 'radical change' but just a different way of doing appraisals.

In Dow (No 2) the Employment Appeal Tribunal held that "The intention of the parties has to be determined objectively; the subjective perceptions of the parties are not relevant".

The ET took into account how the respective bodies and individuals such as one of the ET panel members ("of the firm view that Agenda for Change is a fundamental change")felt about the fundamental differences that existed in the varied contract, rather than the actual contractual differences that existed. The EAT found this to be an error of law.

"Their finding that the changes were fundamental to the claimants' contracts of employment was the basis for their conclusion that the WC terms and conditions had been rescinded and replaced by AfC. From their perception of the fundamental nature of the changes they inferred that the intention of the parties was to make a new contract. In our judgment the basis upon which the Employment Tribunal concluded that time for the presentation of claims under EqPA started to run in respect of each claimant from the date of their assimilation into AfC was erroneous in law and was perverse."

The EAT found that the move to AfC terms constituted a variation of existing contracts of employment and not their termination and replacement. Time for presentation of equal pay claims therefore did not start running from the date AfC terms began and therefore applications to amend the claims were not out of time. Regarding amendments of comparators the EAT remitted (returned) the case to a Tribunal to exercise its discretion.

The transcript of the decision in this case can be found: here