Week 17

Equal Pay

1.  Originates from Article 141 EC Treaty, which provides that Member States must adhere to the principle of paying men and women equally for equal work.

2.  Art. 141 may be relied upon directly by claimants suing public sector employers (Defrenne v Sabena Airways [1976]).

3.  Brought into English law by the Equal Pay Act 1970 which covers:

  1. Discrimination between the sexes in relation to pay, AND
  1. Discrimination in relation to ANY term of the contract

4.  It is important to recognise that the EqPA and the SDA are distinct and will apply in different situations. For the purposes of the exam it is important to make it clear which of the two statutes applies to any problem question.

The Equality Clause

5.  S.1(1) EqPA provides that, if a persons contract of employment does not contain an express equality clause – a clause expressly providing for equal pay between men and women in the three circumstances set out below – a term will be implied to that effect.

Equal Pay and Comparators

6.  Any claimant must have a comparator: a person of the opposite sex who meets the criteria below (unlike other forms of discrimination hypothetical comparators are not permitted).

  1. A comparator may be the claimants predecessor (MacCarthys Ltd v Smith [1978])
  1. Or their successor (Diocese of Hallam v Connaughton [1996])
  1. And the claimant and comparator may be employed by different employers provided the relationship between the employers is sufficiently close for the difference in pay to be “attributed to a single source” (Lawrence v Regent Office Care Ltd [2002])

Types of Claim

7.  There are three circumstances where a claim lies:

  1. S.1(2)(a) EqPA – Like Work

Men and women are entitled to equal pay for like work. This means work that is “of the same or broadly similar nature such that any differences are not of practical importance”.

Whether or not work is “like work” is a question for the courts who normally consider the matter in broad terms, for example, in Capper Pass v Lawton [1976] a female cook preparing 10 – 20 directors’ lunches was held to be doing like work with two male assistant chefs providing meals in the works canteen.

·  But, greater responsibility may be a difference of practical importance (Eaton v Nuttall [1977])

·  But, working different hours does not necessarily justify different rates of pay, but a shift or anti – social hours premium may be acceptable (Dugdale v Kraft Foods [1977])

b.  S.1(2)(b) EqPA – Work rated as equivalent

S.1(5) EqPA defines work rated as equivalent as existing when the claimant’s and comparators jobs have “been given equal value, in terms of the demand made on a worker under various headings (for instance, effort, skill, decision making)” as a result of a formal job evaluation scheme.

·  The scheme must be analytical, evaluating the jobs in terms of demands under certain headings, rather than a “whole job” approach. If such a scheme is in operation the ET is not allowed to substitute its view for that of the employer (Bromley v Quick [1988])

·  For exam purposes, work rated as equivalent only needs to be mentioned briefly unless the question makes specific reference to a job evaluation scheme.

  1. S.1(2)(c) EqPA – Work of equal value

Intended to protect women whose jobs were different to men and which had not been formally evaluated by the employer (Commission v UK [1981]).

If neither s.1(2)(a) or s.1(2)(b) EqPA applies the ET, or its appointed expert, may determine whether “in terms of the demands made upon her (for instance under such headings as effort, skill and decision making) the claimants work is of equal value to that of her comparator”.

The key case under this head is Hayward v Cammell Laird Shipbuilders Ltd (No.2) [1988] in which the work of a female cook was held to be equivalent with that of painters and joiners.

·  The key legal point to come out of this decision is that every individual term of the contract of employment must be not less favourable than the equivalent term in the comparators contract.

·  So, it is not permissible to justify lower wages with more “perks” such as additional paid leave or benefits in kind.

Token Men

8.  In Pickstone v Freemans plc [1988] the claimant was a female stock picker. All of the stock pickers were female apart from one male. The claimant’s chosen comparator was a, male, stock checker. The employer argued that as there was a man earning the same amount as she was as a stock picker she could not compare herself with a stock checker. The House of Lords rejected the argument holding that the EqPA must be interpreted purposively so as to comply with EC law.

The genuine material factor defence

9.  S.1(3) EqPA provides the statutory defence to any claim for equal pay –

the variation is genuinely due to a material factor which is not the difference in of sex and which is material to the particular case

the burden of proving the existence of such a material factor falls on the employer.

10. Examples of the types of things that have been held to amount to genuine material factors include:

·  “red-circling” (preserving the pay and benefits for an employee who has moved to a lower grade) but not indefinitely

·  “level of responsibility” (but it is a question of fact whether the material difference is genuine and indeed whether it exists at all and whether it justifies the differential) (see, amongst others, Redcar & Cleveland BC v Bainbridge)

·  “location” (in NAAFI v Varley [1977] it was accepted that the difference in living costs between London and Nottingham justified a different rate of pay)

·  “market forces” (on the whole a question of fact but note the rather interesting case of North Yorkshire CC v Ratcliffe [1996] where womens’ pay was cut during a competitive tendering process and it was held to reflect existing discriminatory practices and so was not the difference of sex

·  “part-time working” (but note that part timers, most of whom are women, are now protected against discrimination – less favourable treatment on grounds of their part time status)

11. Remember that the genuine material factor must not be the difference in sex.

·  In any exam question it may be necessary to discuss whether the difference appears to be sex based. In Strathclyde Regional Council v Wallace [1998] female teachers who were acting up as principal teachers claimed equal pay with male principal teachers. On the facts, however, teachers of both sexes were acting up and were treated in the same way. Therefore, the difference was due to a factor that was not gender related. Other differences did not have to be objectively justified.

·  N.B. In Cadman v Health & Safety Executive [2006] the ECJ ruled that employers will not normally have to show a specific justification for using length of service as a criterion in a pay system, even where this causes unequal pay between men and women.

Remedies

12. Claims must be brought in the ET within 6 months of the termination of the contract of employment during which the unequal pay was paid (s.2(4)EqPA).

·  Beware, this can mean termination of employment with a particular employer but it can also mean a change of job with the same employer which has the effect of changing the claimant’s circumstances so that there is no longer an inequality in pay, or sometimes the same inequality in pay.

13. In reality most claims are likely to start by the service of a statutory questionnaire in which a prospective claimant alleges that they think they are receiving unequal pay and naming their comparator.

·  The employer should respond to the questionnaire within 8 weeks stating whether the claimant does receive less pay than the comparator, if so, why and whether the employer agrees that the claimant is doing “equal work” (this term means like work, work rated as equivalent, or work of equal value)

·  If the employer fails to respond to a questionnaire without good reason and ET is entitled to draw negative inferences

14. The statutory grievance procedure applies (at the moment at least) to equal pay claims. The claimant must, therefore, send a statement of grievance and wait at least 28 days before presenting a claim to the employment tribunal.

·  As a result of sending a statement of grievance within the normal (6 month) time limit the time for bringing a claim in the ET is extended by a further 3 months

15. The remedy is a payment of a maximum of 6 years’ arrears of the unjustified pay differential (Levez v T H Jennings (Harlow Pools) Ltd (No.2) [2000]).

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