An overview of the main themes to emerge from recent case law
Although the Equal Pay Act 1970 has one of the shortest titles for a statute in legislative history, it has turned out to be one of the most tortuous to implement.
Caroline Underhill, Thompsons’ National Co-ordinator for Equal Pay (NHS), looks at some recent cases, and identifies the issues of most relevance for trade unionists.
Different pay, same employer
The law says that women and men should be paid equally for doing the same or similar work, or work of equal value, in the following circumstances:
• if they work for the same employer
• if they have terms and conditions that are broadly similar, but work in different places
• if they work for different employers, but have a “single source” that sets their pay and conditions (not including collective agreements).
In Armstrong -v- Newcastle upon Tyne NHS Hospital Trust, for example, the Court of Appeal said that women in one hospital trust could not compare themselves with men in another hospital trust because each trust, although part of the NHS, had separate pay and employment powers.
The women and men worked for different employers, at different places of work. Even when their employers merged to become one, there were no common terms and conditions.
There was, therefore, no single source for both the claimants and the comparators that was both responsible for and could remedy the inequality in pay.
It is clear from the Employment Appeal Tribunal (EAT) decision in Dolphin -v- Hartlepool Borough Council that the same principle applies to schools and those who work in voluntary aided, foundations, trust and academy schools cannot compare themselves with other local authority employees.
Comparing jobs
The man and woman must be doing the same work, or work that is rated as equivalent under a job evaluation scheme or work that is of equal value.
Once a job has been rated as equal with another one by a valid analytical job evaluation scheme, a woman cannot bring an equal value claim against her employer using men in higher grades as comparators (unless she can show the scheme is somehow invalid).
This is because the effect of the job evaluation scheme is that men’s jobs have been rated as having a higher value. The case of Bainbridge -v- Redcar & Cleveland BC makes clear, however, that a woman can bring an equal pay claim on the basis that she is in a job that is rated the same as or higher than a man.
Job evaluations must be kept up to date to take into account changes in jobs over time that affect the value of the jobs.
Equal value claims are the most difficult cases to bring because they involve an assessment of the woman’s job and the man’s job to determine whether they are of equal value. This assessment is normally done by a tribunal-appointed expert who assesses the jobs on the basis of fact agreed by the parties themselves (or the tribunal, if they cannot agree).
Parties can also call their own experts to give evidence to a tribunal about whether to accept the appointed expert’s view about the methodology used to assess the jobs. If they do, they can ask the tribunal to decide that the jobs were unequal because the methodology was flawed.
Sex discrimination and GMF defences
The real issue for tribunals to decide, however, is whether the pay difference between a woman and a man is due to sex discrimination – whether direct or indirect – and whether the difference in pay can be justified by a genuine material factor (GMF).
From the cases so far it seems that:
• If an employer can prove that the reason for the pay difference had nothing to do with sex discrimination then they have a valid GMF defence, and the woman’s claim will fail. It does not matter whether the explanation is reasonable or fair. In the absence of some evidence of sex discrimination any explanation for the pay difference, even that it was an error or mistake, will do.
• If the employer cannot come up with a GMF defence, they have to objectively justify the difference in pay. For example, in the 2007 case of Chief Constable of West Midlands Police -v- Blackburn, the EAT decided that the employer was justified in making additional payments to staff who worked nights even though it had an adverse impact on women. It said that the fair aim of additional reward for the unsocial hours and the “social, psychological and other stresses” that night work creates outweighed the small, in that particular case, discriminatory impact.
• The exact proportions of men and women affected by the differences in pay are relevant to the assessment of whether there is sex discrimination, but there is no single statistical formula that will prove sex discrimination in and of itself (Grundy -v- British Airways plc).
• Whether a difference in pay is justified by any particular explanation can change over time. What is justifiable at one point may not be justifiable later if the circumstances have changed.
See, for example, the decision in Joss -v- Cumbria County Council in relation to the refuse workers’ bonus scheme. Although it was genuine at one time it ceased to be a reasonable means of achieving a legitimate end because it was not really being used to improve productivity.
Pay protection
When an employer introduces a new pay system, they often provide short term protection for employees who will lose pay as a result. In general, pay protection is not unlawful as it may not have an adverse impact on women (or even if it does it can be justified).
In the Bainbridge and Surtees cases, heard by the Court of Appeal in January 2008, the court considered how to apply the above principles about sex discrimination and genuine material factor defences to pay protection in new pay systems introduced to achieve equal pay. Its decision is expected by May 2008.
Time limits
The Equal Pay Act says that claims must be brought within six months of the end of the woman’s employment. Joss -v- Cumbria County Council, which is being appealed to the Court of Appeal, looks at what should happen when a woman changes her job or her terms and conditions during a period of continuous employment.
The EAT placed great emphasis on the paperwork in the particular cases it was considering. It said that agreed variations to terms do not trigger the time limit, but changes implemented by new written contracts agreed by the employee (even if they are quite small), do trigger it.
If there is no paperwork it is unlikely that changes will trigger the time limit as even quite significant changes to a contract can be implemented by an agreed variation. But it is possible that an employer can say that a substantial change in job duties and terms is so significant as to amount to the end of one contract and the start of another. So, to be on the safe side, always get claims in within six months of any change.
A TUPE transfer is not, in itself, the end of one contract and the start of another because of the effect of the Transfer of Undertakings Regulations 2006 (and its 1981 predecessor). But the regulations do not apply to pensions. So a TUPE transfer will not trigger the time limit in claims for equal pay that are not pension claims unless there is some other contract change.
This has only been decided at tribunal level so far (Gutridge -v- Sodexho Ltd) but this will be the subject of an appeal later this year. In pension claims, the change of employer automatically ends one contract and starts a new contract with the new employer, so a transfer will always trigger the time limit.
Comment
A number of decisions in equal pay cases in the last year have highlighted the difficulties of bringing them and the extraordinary length of time they take to resolve. The various decisions also reflect just how difficult it is to advise on all the possible different twists and turns they can take.
While the object of the legislation is to prevent discrimination between men and women, 30 years on we still have a 17 per cent gender pay gap. Little wonder that some politicians and commentators doubt the effectiveness of the legislation, and the Equality and Human Rights Commission is now pressing for a review of equal pay law.
The most effective way of delivering equal pay in workplaces is through collective bargaining. Negotiations in the public sector to implement the Single Status Agreement in local government and Agenda for Change in the NHS have made a real difference to women’s pay. However, there are still huge differences in the private sector where opaque pay systems and a secretive approach to remuneration means the goal of equal pay is still some way off.