Equal Pay Update
Local Government Staff
Commission
9 February 2011
1
Equal Pay and its relevance
to Councils
• Single Status Agreement
– Introduces one JES to
evaluate all employees
– 1 pay spine for manual,
clerical, craft, AP&T and
management
– Creates harmonised T&Cs
for all employees
– Removes differential
treatment of the groups of
employees eg hours,
pensions, bonuses etc
2
Impact of Implementation of Single
Status Agreement
• Harmonisation –
– Issuing new contracts
– Implementation of JES, redesigning jobs
and slotting in on pay scale
– pay protection
– Buy out of T&Cs
• Extensive on going equal pay litigation in
GB councils on all the above key issues…
and more.
• Moving Equal Pay Claims into the Civil
Courts ?
• Implications of the current economic
climate
3
The Basics
• Legislation
• What is equal Work
• The definition of pay
• Comparators
• The purpose of the Equal
Pay Act 1970 as
amended
• GMF
4
Legislation
• Equal Pay Act 1970 (as
Amended
• Article 157 of the Treaty on the
Functioning of the European
Union
• Recast Equal Opportunities and
Equal Treatment Directive
• Equal Pay questionnaires
• IT Rules of Procedure 2005 and
Schedule 3
5
Equal Work under the
EPA (1)
• Man & Woman do
– Same or broadly similar work
(s1(2)(a)
• Eg M toilet attendant & F cleaner
– Work rated as equivalent
(s1(2)(b)
• JES has analytically compared the
work of the man & woman eg M
groundsman (£7ph) & F cleaner
(£5ph)– both Grade 1 on manual
JES
• Bainbridge – no RAE prior to JES
but evidence
• Hovell v Ashford and St Peters
Hospital NHS Trust (2009) CA –
pay banding and different points
does not mean RAE or EV.
6
Equal Work under the
EPA (2)
• Work which is of equal value
(s1(2)©
F clerical officer –scale 1 (£7ph)
compares with M refuse collector –
Grade 2 (£8.ph) in the absence of a
JES requires the jobs to be compared
by a JE expert appointed by the
tribunal to assess whether the work
is equal work. Not always necessary Hovell
• If a non discriminatory analytical JES has
graded the work of M & F in different grades
then the work is not equal.
• If JES then must challenge – Andron v
Birmingham City council 3mth hearing !
Redesigning of jobs and SD
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Comparators
•
•
•
•
•
•
•
Opposite sex – Hartlepool BC v Llewellyn (2009)
EAT – “piggyback claims
Same employment – City of Edinburgh Council
v Wilkinson and Dumfries & Galloway v North –
opposite decisions appeal to the Supreme Court
Single source of pay inequality
–
Armstrong v Newcastle NHS Trust, Lawrence
v Regent Office Care,Robertson v DETR,
Potter v N. Cumbria NHS Trust
Contemporaneous or predecessor
–
McCarthy’s v Smith
Not anomalous
–
Royal Copenhagen
Possibly hypothetical
–
Dolphin v Hartlepool and Middleton v
Tyneside
Comparator may be in a lower grade
–
Murphy v An Bord Telecom ECJ
–
SITA UK Ltd v Hope (2004) EAT
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Definition of Pay
• What is Pay?
– Basic pay
– Holiday entitlement
– Performance pay
– Contractual bonuses
– Fringe benefits
– Overtime payments Helmig, Elsner
v Lakeburg and Voss v Land Berlin
– Weekend enhancements
– Pensions
• Total package v each term
– Hayward v Cammell Laird – each
term is compared rather than
overall package
• What is a term
– Degnan v Redcar & Cleveland BC
[2005]
• Relationship between EPA and SDO
– Article 8 (11) & Asda v Hoyland
9
Approach to Equal
Pay Obligation
• Eliminate SD not fair pay.See HL
in Strathclyde Regional Council v
Wallace, Glasgow City Council v
Marshall, Rainey v Greater
Glasgow HA
• Rebuttable presumption of equal
pay: if M and W do equal work
but W paid less variation assumed
to be sex discrimination. Rainey v
Greater Glasgow Health Board
• Employer must provide GMF not
tainted by SD to explain
difference between the man and
the woman’s pay if they do equal
work.
10
Genuine Material
Factor Defence
• Elements to prove the GMF:the
reason must be
– Genuine ie not a sham
– Material ie significant and
relevant to the difference
– Must account for whole pay
difference
– Not tainted by sex
discrimination
– Applicable at the time
11
GMF and Sex
Discrimination
•
•
Direct sex discrimination
– Can direct discrimination be justified-ie
discrimination against a woman because she is
a woman
see Nelson v Carillion, MOD v Armstrong and
Parliamentary Commissioner v Fernandez,
Bainbridge (2) para 48- clear no.
Indirect sex discrimination
– What statistics constitute adverse impact:
Audit Commission v Haq (2010 EAT)
– Can be objectively justified and if so justified
will be lawful.
– Disparate Impact Enderby v Frenchay AHA,
BRS v Loughran (bare majority)
– “sufficient importance to override the disparate
impact”…”more serious the disparate
impact…the more cogent must be the objective
justification” Barry v Midland Bank
– “must be based on a legitimate objective. The
means chosen to achieve that objective must
be appropriate & necessary for that purpose”
Cadman v HSE
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Genuine Material Factor
Defence
Examples
– Market forces
– Seniority/length of service
Cadman v HSE, Danfoss
– Cost - contrast British Airways
cases of Cross / Grundy
– Pay Protection/ red circling –
Bainbridge 2
– Productivity
13
GMF issues in current
litigation
• If no direct SD and no adverse
impact no objective justification
required Villalba v Merrill Lynch,
Strathclyde RC v Wallace and
Glasgow CC v Marshall but see
also Brunnhofer v Bank der
Osterreich
• Gibson v Sheffield City Council –
on appeal to Supreme Court –if
GMF is ID but not related to SD
does employer have to justify
difference ?
• What if applicable at the time but
only ascertained after the eventSchonheit [2004]
14
Bonuses as a GMF (1)
• Distinction between lawful wet
weather and unlawful attendance
allowances:
– Attendance allowance was
not objectively justifiable.
– Wet weather allowance was
objectively justifiable.
Degnan v Redcar Council, Ryder &
Others v Warwickshire Council Council
& Redcar Council v Bainbridge
• If “bonus” originally reasonable
can it still constitute a GMF:
Bridges v Bury Metropolitan BC and
Sunderland CC v Brennan (on appeal to
EAT)
15
Bonuses as a GMF (2)
• Is there an obligation to develop a bonus
scheme for all workers ?
• Bainbridge - The employer was
required to show that it had a GMF for
the productivity scheme. Whether
productivity schemes could be developed
for other groups of staff was remitted
back to the tribunal in view of some
concessions made by the Council but it
was emphasised employers do not have
to construct productivity schemes for
other employees in order to prove a
GMF.
• Contrast Gibson v Sheffield City Council
on appeal to the Supreme Court
16
Pay Protection as a GMF
Redcar v Bainbridge (No 2) and
Surtees v Middlesborough
(2008 CA)
Facts
•
Redcar
F & M manuals RAE with different pay.
New pay rates meant lower pay rates
for M. PP to M for 3 years. Redcar had
conceded claims
•
Middlesborough
Same as Redcar but also F clericals
RAE under new JES also seeking PP on
basis that previous bonus was
discriminatory. Middlesborough had
not conceded claims
NB. Contrast manual workers already RAE
under a JES and clerical v manual
workers where no JES, hence only
prospective claims
17
Pay protection as a GMF
Redcar v Bainbridge (No 2) and
Surtees v Middlesborough (2008 CA)
• Redcar’ s PP scheme was not a valid GMF nor
an objective justification. Claimants
exclusion was discriminatory
• Middlesborough’s PP scheme was not a valid
GMF nor an objective justification.
Knowledge not relevant.
• Middlesborough’s collective bargaining
arrangements did not constitute a valid GMF
defence because
– Predominantly male groups received
bonuses and predominantly female
groups did not and the bonuses were not
productivity based and hence the
arrangements were tainted by SD
• The Claimants in Redcar were not precluded
from lodging EV claims as well as RAE claims
covering the same period because they were
separate claims
• The Claimants were not entitled to rely on a
JES to obtain back pay prior to its
implementation. They had to prove equal
work for the period and the JES might be
used as part of the evidence
18
Pay Protection as a GMF
Fearnon,Patterson & Toland
v Smurfit
(2008 NICA)
• Equal work not conceded but presumed
to permit GMF defence to be argued
– Women commenced employment
1983; Comparator 1969 then
promoted to Company Sales Manager
1988
– TUPE transfer of all workers 1994
– Comparator demoted to non
supervisory duties but pay protected
• NICA held the test was:– What were the reasons at time of
protection –were they non
discriminatory
– Did the GMF still retain the essential
attributes of genuineness &
materiality (nb GB cases of Bridges &
Brennan
• GMF found to explain pay differential
19
Cost as a GMF – A variation on
the Pay protection arguments
– Cost alone to end pay
differential will not generally
constitute a GMF if it continues
previous SD. Bainbridge
– Cost may provide justification
where properly pleaded:
Bainbridge
– Costs as one of a number of
factors may be lawful: Cross v
BA
– Woodcock v Cumbria NHS Trust
(EAT) – cost alone may justify
age discrimination where
disproportionately high. The
costs + factor is artificial
20
GMF and attitude of
the Unions
• Barker v Birmingham City Council
– can union intransigence
constitute a GMF ?
• Coventry CC v Nicholl – can union
attitude constitute a “supervening
cause”
• Focus of the union on pay
protection rather than right to
back pay was unlawful indirect
sex discrimination against female
membership- GMB v Allen
21
Remedies – Equality
Clause
• Application of equal pay principle
immediate not progressive–
Smith v Avdel – 1991 ECJ
• Entitlement to same pay as
comparator – Evesham v N.
Herts.Health Authority
22
Time Limits and Qualifying dates
for an IT claim
• Standard case – by 6 months from the
end of the employment
• Concealment case – where employee
did not know of unequal pay because
employer concealed the fact within 6
months of the discovery or when she
should reasonably have discovered the
facts.
• Disability case – after termination of
the employment within 6 months of the
cessation of the disability
• Stable employment relationship case
– within 6 months of the end of the SER
• Concealment/disability case – within
6 months of the latter of the two dates
23
Time Limits and Qualifying
dates for an Equal Pay
Claim to the IT
• Issues
– Variation of contract amounting to
termination can trigger the start of
the time limit depends on variation
and “stable employment relationship”.
see Slack v Cumbria County Council
(2009 CA)
– On a TUPE transfer breach of equal
pay by transferor must be brought
within 6 months of transfer but
ongoing breach of equality clause
permits claim against transferee after
6 months EAT in Gutridge v Sodexho
and NHS Trust claimants employed by
S and comparators by Trust contrast
Powerhouse Retail limited v
Burroughs and Jeffery v SoS for
Education (pensions not transferring
on TUPE so 6month time limit.
24
Remedies - Back Pay
• Standard case up to 6 years back pay
from date of IT claim if doing the equal
work for the period.
– From date of JES if no previous JES
– Max of 6 years if equal work undertaken
during that period eg if RAE but unequal
pay
(Bainbridge)
• Concealment or disability case – back
to the date of the contravention
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Remedies
• No injury to feelings award – see
Council of City of Newcastle v
Allan [2005]IRLR 504 EAT
• Interest % of total award for half
the period from date of lodgment
to date of IT decision
26
Breach of Contract Claims in
the High Court
• Abdullah v Birmingham City Council (HC
2011)
– Application to strike out County Court claim
– Wording of EPA permits a choice of venue
“may”.
– Entitled to lodge in tribunal or High Court.
– 6 year time limit for lodgment in High Court
from date of breach
– Recoverable arrears are 51/2years excluding
the 6 mth tribunal limit.
– But does equivalence preclude back dated
before 6 years from date of claim ?
– Abdullah distinguishes general contractual right
from pension rights back to 1976 as in Preston
• Ashby v Birmingham City Council (HC
pending)
– Similar issue awaiting a decision of the High
Court
27
Delays
• Allen v Carmarthenshire CC –
article 6 ECHR argument that IE
and GMF to run concurrently.
Intervention by the EHR
Commission
• Will we see more breach of
contract claims?
28