Equal pay 1: legal framework and preliminary issues

In our next Guidance Note , we will look at the substantive issues which must be determined on a claim under the EqPA, namely: whether the woman is employed on (a) "like work" with her comparator, (b) "work rated as equivalent" with his or (c) "work of equal value" to his; and whether (i) a term of the woman's contract is or has become less favourable to her than a term of a similar kind in her comparator's contract, or (ii) her contract does not include a term corresponding to a term benefiting that man included in his contract. In the third Guidance Note in this series, we will examine the defences and remedies available under the EqPA to employers and successful claimants respectively.

LEGAL FRAMEWORK

First, we examine the relationship between the EqPA and the SDA, the scope and effect of Article 119 and the Directive, and how Community law and domestic law interact.

EqPA and SDA

The EqPA was enacted "to prevent discrimination, as regards terms and conditions of employment, between men and women" in Great Britain. It came into force on 29 December 1975, the same day as the SDA, which outlaws "certain [other] kinds of sex discrimination and discrimination on the ground of marriage" in Great Britain.

The provisions of the EqPA and Parts I and II of the SDA are closely interlocking, and form in effect two complementary parts of a single comprehensive code aimed at eliminating sex discrimination in the field of employment. Both Acts "should be construed and applied as a harmonious whole and in such a way that the broad principles which underlie the whole scheme of the legislation are not frustrated by a narrow interpretation or restrictive application of particular provisions" (E Coomes (Holdings) Ltd v Shields).

On the other hand, rights under the two Acts are mutually exclusive (Peake v Automotive Products Ltd) and the remedies available under them are different. Further, provisions cannot be transposed directly from one Act to the other. It is appropriate to bear in mind the provisions of the SDA when considering the EqPA, but, at the end of the day, the provisions of the EqPA have got to be construed themselves (Durrant v North Yorkshire Area Health Authority and Secretary of State for Social Services).

In particular, the EqPA must be interpreted without bringing in the distinction, which the SDA makes, between so-called "direct" and "indirect" discrimination. The relevant question under the EqPA is whether equal treatment has been accorded for men and women employed on like work, work rated as equivalent or work of equal value (Ratcliffe and others v North Yorkshire County Council). If a woman claiming under the EqPA establishes a difference in treatment as between her and her comparator, her claim will succeed unless the employer makes out a "material factor" defence under s.1(3) of the EqPA (see our third Guidance Note in this series).

An industrial tribunal should always consider first whether the woman has a valid claim under the EqPA, before considering whether she has good grounds to complain under the SDA (Peake). The SDA contains complex provisions designed to prevent overlapping between the SDA and the EqPA (see the box on p.5), and it may often be difficult to determine whether a particular matter of complaint falls to be redressed under one Act or the other (Shields). The effect of those provisions, in so far as they distinguish between complaints to be made under the EqPA and under the SDA, is as follows:

A woman who is offered less money than a male comparator prior to accepting employment has the right to complain under the SDA. But, once employment has begun, any complaint by a woman that she is being paid less money than a male comparator must be brought under the EqPA (Oliver v J P Malnick & Co (No.2)).

Article 119

Article 119 outlines "the principle of equal pay", which is one of the foundations of the Community:

Each member state shall ... ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work.

For the purposes of this Article, "pay" means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives, directly or indirectly, in respect of his employment from his employer.

Equal pay without discrimination based on sex means - (a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement; (b) that pay for work at time rates shall be the same for the same job.

Article 119 prohibits any discrimination with regard to pay as between men and women, whatever the system which gives rise to such inequality (Barber v Guardian Royal Exchange Assurance Group). The width of the principle of equal pay is not subject to dissection so as to sanction discrimination in pay against women in some circumstances but not in others (Pickstone and others v Freemans plc).

The differences in pay prohibited by Article 119 are, however, exclusively those based on the difference in the sex of the workers concerned (Jenkins v Kingsgate (Clothing Productions) Ltd). A pay differential between two groups of workers does not constitute discrimination contrary to Article 119 if it may be explained by objectively justified factors unrelated to any discrimination on grounds of sex (Specialarbejderforbundet i Danmark v Dansk Industri, acting for Royal Copenhagen A/S).

The ECJ has held that an occupational pension scheme which excludes only married women from membership entails discrimination directly based on sex contrary to Article 119 (Fisscher v Voorhuis Hengelo BV and Stichting Bedrijfspensioenfonds voor de Detailhandel). And, in Grant v South-West Trains Ltd, an industrial tribunal has asked the ECJ to rule⁸ on whether, for the purposes of Article 119, "discrimination based on sex" includes discrimination based on an employee's sexual orientation and discrimination based on the sex of that employee's partner.

Insofar as it is established that a difference in pay is based on discrimination on grounds of sex, Article 119 has vertical and horizontal "direct effect" (Defrenne v SABENA (No.2); Murphy and others v Bord Telecom Eireann). That is to say, it confers on workers directly enforceable rights which they may rely on before industrial tribunals in proceedings against the state, or emanations of the state (in their capacity as employers), and against employers in the private sector.

Moreover, Article 119 imposes on employers an "obligation of result" whereby men and women must receive the same pay for the same work. It also creates for both workers and their dependants rights which they may enforce directly against the trustees of an occupational pension scheme, who must, in exercising their powers and performing their obligations as laid down in the trust deed, do everything in their power to comply with the principle of equal pay (Coloroll Pension Trustees Ltd v Russell and others).

The scope of the direct effect of Article 119 is, however, limited to "all forms of discrimination which may be identified solely with the aid of the criteria of equal work and equal pay" to which it refers, "without national or Community measures being required to define them with greater precision in order to permit of their application" (Jenkins). Among the forms of discrimination which may be identified in that way are "cases where men and women receive unequal pay for equal work carried out in the same establishment or service, whether public or private" (Defrenne (No.2)).

Article 119 may not have direct effect in an "equal value claim" (that is, a claim under s.1(2)(c) of the EqPA), at any rate where there is no machinery in the EqPA by which the criterion of what is "work of equal value" can be readily ascertained (Pickstone). And, according to the Court of Appeal, neither Article 119 nor article 1 of the Directive (see below) is directly effective in relation to "work rated as equivalent" within the meaning of s.1(2)(b) of the EqPA (O'Brien and others v Sim-Chem Ltd).

Equal Pay Directive

The Directive was adopted on 10 February 1975. It provides further details regarding certain aspects of the material scope of Article 119, and adopts various provisions whose essential purpose is to improve the legal protection of workers who may be wronged by failure to apply the principle of equal pay (Defrenne (No.2)).

Article 1 of the Directive confines itself to restating that principle, and to specifying the conditions for applying it where a job classification system is used for determining pay:

The principle of equal pay for men and women outlined in Article 119 ... means, for the same work or for work to which equal value is attributed, the elimination of all discrimination on grounds of sex with regard to all aspects and conditions of remuneration.

In particular, where a job classification system is used for determining pay, it must be based on the same criteria for both men and women and so drawn up as to exclude any discrimination on grounds of sex.

It follows that article 1, which is principally designed to facilitate the practical application of the principle of equal pay outlined in Article 119, in no way alters the content or scope of that principle as defined in that Article (Jenkins). In other words, article 1 is an adjunct to, and must have the same effect as, Article 119.

On the other hand, a Directive can only have vertical direct effect and the Court of Appeal has held that the Equal Pay Directive does not (Preston and others v Wolverhampton Healthcare NHS Trust and Secretary of State for Health; Fletcher and others v Midland Bank plc). It did not create any right additional to, or separate from, those conferred by Article 119 (Biggs v Somerset County Council). Nor can Crown servants or workers employed by emanations of the state rely on the Directive in parallel with, or instead of, Article 119 in order to circumvent the procedural rules applicable to claims under domestic law and those invoking Article 119 (Preston; Fletcher).

EC law and domestic law

The corollary of the direct effect of Article 119 is that it is automatically part of our law, without the need for implementing legislation (s.2(1) of the European Communities Act 1972). Industrial tribunals and civil courts, whose task it is to protect the rights conferred on workers by Article 119, must fully and uniformly apply the provisions of that Article from their entry into force and for so long as they continue in force (Amministrazione delle Finanze dello Stato v Simmenthal SpA). Tribunals and courts are also bound to ensure ultimate performance of the obligation of result imposed on employers and occupational pension scheme trustees by Article 119, and in order to do so they may make use of all means available to them under domestic law (Coloroll).

As well as being directly applicable, Article 119 takes precedence over any provisions of the EqPA or other prior or subsequent domestic legislation which conflicts with it (Macarthys Ltd v Smith (No.2)). By their entry into force, the provisions of Article 119 "render automatically inapplicable" any conflicting provision of domestic law (Simmenthal SpA).

Article 119 may, therefore, be relied on before industrial tribunals by workers seeking to have set aside any provision of domestic law which proves to be incompatible with that Article (Defrenne (No.2)), and tribunals and courts must disapply provisions of domestic law to the extent that is not possible to interpret and apply them in conformity with the requirements of Article 119 (Murphy). Further, in so far as domestic law prohibits employers and occupational pension scheme trustees from acting beyond their powers or in disregard of the trust deed, they must use every means available under domestic law to eliminate all sex discrimination in pay, such as recourse to the courts in order to amend the scheme rules or trust deed (Coloroll).

Article 119 may also be relied on by workers before industrial tribunals to disapply barriers to an equal pay claim which are incompatible with Community law generally. But it does not create rights of action which have an existence apart from domestic law (Barber v Staffordshire County Council). The jurisdiction of industrial tribunals is confined to complaints that may be presented to them under specific statutes, such as the EqPA and the SDA. They have no inherent, general or residual jurisdiction. Nor does Community law confer jurisdiction on them to determine claims invoking Article 119. They cannot, therefore, determine "free-standing" claims based on Article 119. They only have jurisdiction to apply Article 119 in the context of proceedings brought under one of the statutes that confer jurisdiction on them (Biggs).

Within the limits of their statutory jurisdiction, industrial tribunals must, when interpreting and applying domestic law, give it, where possible, an interpretation which accords with the requirements of the applicable Community law (Murphy). They must construe the EqPA so as to accord with the ECJ's interpretation of Article 119 (s.2(4) of the European Communities Act 1972), if that can be done without distorting the meaning of the EqPA, which must therefore be open to an interpretation consistent with Article 119 (Webb v EMO Air Cargo (UK) Ltd).

Moreover, provisions of the EqPA which were enacted in order to implement the UK's obligations under Article 119 and the Directive, such as s.1(2)(c), must be construed "purposively", so as to give effect to those obligations, if they are reasonably capable of bearing a meaning which does in fact comply with such obligations (Pickstone).

Although the EqPA must be construed so far as possible to make it accord with Article 119, there is no reason why it should not confer greater rights than those conferred by Article 119 (Jenkins v Kingsgate (Clothing Productions) Ltd (No.2)). Conversely, Article 119 can confer a directly enforceable right even though that right does not exist under domestic law (McKechnie v UBM Building Supplies (Southern) Ltd). But a worker may not rely on such a right if there is a sufficient remedy available under domestic law. It is only if there is a disparity between Article 119 and domestic law that it becomes necessary to consider whether the former has direct effect (Blaik v Post Office).

PRELIMINARY ISSUES

We now turn to the issues relating to the entitlement of a woman who makes any claim under the EqPA to have her claim heard by an industrial tribunal on its merits, starting with the question of whether she is "employed" at an "establishment in Great Britain".

Unlike a complaint of unfair dismissal, a claim under the EqPA may be made by a woman of any age (s.11(2) of the EqPA) and regardless of her length of service.

Whether "employed"

Section 1(6)(a) of the EqPA defines "employed" as "employed under a contract of service or of apprenticeship or a contract personally to execute any work or labour."

Thus, to be "employed", the woman must work under a contract of one of those descriptions, whether it is permanent or temporary and whether she works full time or part time. Any such contract must also, following the reasoning of the EAT in Leighton v Michael and Charalambous, be "legal" (that is, valid and enforceable): like a complaint of unfair dismissal, but unlike one of sex discrimination contrary to the SDA, a claim under the EqPA is directly founded on, relies on and seeks to enforce the relevant contract. It is immaterial, however, whether the law applicable to the contract is that of any part of the UK or not (s.1(11) of the EqPA).

A GP on the one side and each of the relevant Family Health Services Authorities and the Medical Practices Committee on the other have rights and obligations conferred by statute rather than by contract (Wadi v Cornwall and Isles of Scilly Family Practitioners Committee and Medical Practices Committee). A participant in a work experience scheme is also not "employed". Either there is no contract at all between him or her and the sponsor or, if there is, it is not a contract such as is referred to in s.1(6)(a) of the EqPA (Daley v Allied Suppliers Ltd).

The purpose of extending the EqPA's definition of "employed" beyond employment under a contract of employment or apprenticeship, to include employment under a contract personally to execute any work or labour, was so as to embrace within the definition work which is done by a self-employed person or "independent contractor" under a contract for services. The intention was to enlarge upon the ordinary connotation of "employment" so as to include persons outside the employer-employee relationship.

Section 1(8) of the EqPA further extends the definition of "employed" in s.1(6)(a) to Crown servants - other than statutory officeholders, such as JPs (Knight v Attorney-General and Lord Chancellor) and rent officers (Department of the Environment v Fox), and holders of any ministerial office listed in Schedule 2 to the House of Commons Disqualification Act 1975. The definition also covers members of the House of Commons and House of Lords staff (s.1(10A) and (10B)) and servicewomen (s.7A(1)); and it is clear from s.17 of the SDA that s.1 of the EqPA applies to employment in the police force (E Coomes (Holdings) Ltd v Shields).

The concept of a contract personally to execute any work or labour, lying outside the scope of an employer-employee relationship, is a wide and flexible one. For example, it applies to a self-employed person paid on a commission basis by his employer to engrave pens sold by his two self-employed colleagues. Such a person is engaged in an activity amounting to work or labour, is so engaged personally, and is discharging such functions under terms which are contractual (Quinnen v Hovells).

On the other hand, an agency worker is not "employed": a contract personally to execute work must be taken to refer to a contract between the party doing the work and the party for whom the work is done (BP Chemicals Ltd v Gillick and Roevin Management Services Ltd).

Further, the phrase "a contract personally to execute any work or labour" in its context contemplates a contract the dominant purpose of which is that the party who is contracting to provide services under the contract performs personally the work or labour which forms its subject-matter. The use of the word "any" in that phrase makes reference to the kind of work or labour to be done rather than its amount or quantity: "any" means "any kind of". Some obligation in a contract personally to do any work or labour (however small in relation to the contract as a whole) is not, therefore, of itself sufficient. The contract has to be looked at as a whole and, provided that there is some obligation by one contracting party personally to do any work or labour (even though other work can be delegated), it then has to be decided whether that is the dominant purpose of the contract (Mirror Group Newspapers Ltd v Gunning).

In Gunning, the Court of Appeal held that an agreement between a newspaper publisher and an independent wholesale newspaper distributor was not a contract personally to execute any work or labour. Its dominant purpose was simply the regular and efficient distribution of newspapers. In any event, although the expectation was that the distributor would be personally involved at least to the extent of overall day-to-day supervision of the work carried out, no term of the distributorship agreement obliged him personally to do anything other than pay for the newspapers supplied.

"Establishment in Great Britain"

Section 10 of the SDA provides:

(1) For the purposes of ... [s.1 of the EqPA] ('the relevant purposes'), employment is to be regarded as being at an establishment in Great Britain unless the employee does his work wholly or mainly outside Great Britain.

(2) Subsection (1) does not apply to -

(a) employment on board a ship registered at a port of registry in Great Britain, or

(b) employment on aircraft or hovercraft registered in the United Kingdom and operated by a person who has his principal place of business, or is ordinarily resident, in Great Britain;

but for the relevant purposes such employment is to be regarded as being at an establishment in Great Britain unless the employee does his work wholly outside Great Britain.

(3) In the case of employment on board a ship registered at a port of registry in Great Britain (except where the employee does his work wholly outside Great Britain, and outside any area added under [s.10(5) below]) the ship shall for the relevant purposes be deemed to be the establishment.

(4) Where work is not done at an establishment it shall be treated for the relevant purposes as done at the establishment from which it is done or (where it is not done from any establishment) at the establishment with which it has the closest connection.

(5) In relation to employment concerned with any activity falling within s.23(2) of the Oil and Gas (Enterprise) Act 1982 ... [s.10(1) and (2) above] shall each have effect as if the last reference to Great Britain included any area for the time being designated under s.1(7) of the Continental Shelf Act 1964 [or specified under s.22(5) of the Oil and Gas (Enterprise) Act 1982], except an area or part of an area to which the law of Northern Ireland applies.

Section 1(12) of the EqPA provides that "Great Britain" (that is, England, Scotland and Wales) "includes such of the territorial waters of the United Kingdom as are adjacent to Great Britain."

Section 10(1) of the SDA is to be construed as a comprehensive definition of "employment at an establishment in Great Britain" to be applied in all cases except where s.10(1) is specifically excluded by reason of s.10(2). On its true construction, s.10(1) excludes claims by those whose work is wholly or mainly done outside Great Britain unless it is done on a British-registered ship, or on a UK-registered aircraft or hovercraft "operated by a person who has his principal place of business, or is ordinarily resident, in Great Britain", when only employees whose work is done wholly outside Great Britain are excluded.

Accordingly, s.10(1) provides in effect that, for the purposes of s.1 of the EqPA, all employment (except as specifically excluded by s.10(2)) is to be regarded as employment at an establishment in Great Britain "unless the employee does his work wholly or mainly outside Great Britain." No account has to be taken, therefore, of such matters as the nationality of the parties, or of the place where the contract was made, of the proper law of contract, or even (as far as this definition is concerned) of the question whether the work is done at an establishment at all. In a case in which the employee is employed partly, but not mainly, in Great Britain, the industrial tribunal must have regard solely to the place of employment in Great Britain.

Section 10(4) is an ancillary provision which enables the particular establishment at which the work is to be "treated" as being done to be identified in cases where the identity of a particular establishment is material. Section 10(4) will also be relevant both in cases which fall within the general definition in s.10(1) and in cases falling within s.10(2)(b). Cases within s.10(2)(a) are specifically provided for in s.10(3). Section 10(4) cannot, however, be construed so as to enable a woman to bring a claim under the EqPA in a case where her work is done wholly or mainly outside Great Britain but she is working from, rather than at, an establishment, or is not working at any establishment at all (Haughton v Olau Line (UK) Ltd).

In Haughton, the Court of Appeal held that a woman employed by an English company as a cashier on a cross-Channel ferry was not employed at an establishment in Great Britain. The ferry was German-registered, and she did her work mainly outside British territorial waters.

In a case of employment on a British-registered ship, by a combination of s.10(1) and (2) of the SDA, s.10(1) can be read as providing: "... employment is to be regarded as being at an establishment in Great Britain unless the employee does his work wholly ... outside Great Britain" (Deria and others v General Council of British Shipping).

The woman's comparator

An essential feature of any claim under the EqPA, whether it is made under s.1(2)(a), (b) or (c), is a comparison of the woman's situation with that of a man in "the same employment" (see below). As we shall explain in our next Guidance Note, she must show that she is employed on "like work" with him, "work rated as equivalent" with his or "work of equal value" to his, but is treated less favourably than him as regards pay or other contractual terms of employment.

Similarly, consideration of whether the principle of equal pay enshrined in Article 119 has been applied requires a comparison between the pay of workers of different sexes for the same work or for work to which equal value is attributed (Specialarbejderforbundet i Danmark v Dansk Industri, acting for Royal Copenhagen A/S). Such work must be carried out at least in "the same establishment or service" (see below ), and the men and women concerned must be in "identical situations" (Birds Eye Walls Ltd v Roberts).

The situation of a woman taking maternity leave is not comparable either with that of a man or with that of a woman actually at work, but she is in a "special position" (Gillespie and others v Northern Health and Social Services Board and others). There may also be other cases in which a male comparator is not required: see Dekker v Stichting Vorminngscentrum voor Jonge Volwassenen (VJV-Centrum) Plus.

It is for the woman making a claim under the EqPA, not the industrial tribunal, to choose her comparator: it cannot substitute its choice of comparator for hers (Ainsworth v Glass Tubes & Components Ltd); and she is entitled to compare her pay and work with the pay and work of any man in the same employment (Pickstone). According to the Court of Appeal, however, he must be representative of the group or class of male employees from which he is selected as regards the relevant terms, etc of his contract (British Coal Corporation v Smith and others; North Yorkshire County Council v Ratcliffe and others).

The woman's claim will fail, according to the EAT in Collins v Wilkin Chapman, if the person she selects as her comparator is biologically a woman, determined as at birth, and there is no man whose situation can be compared with hers. Similarly, Article 119 requires a comparison between the pay of workers of different sexes (see above). It is therefore not applicable to occupational pension schemes which have at all times had members of only one sex (Coloroll).

That said, the ECJ ruled in P v S and Cornwall County Council that the scope of the EC Equal Treatment Directive (No.76/207/EEC) cannot be confined simply to discrimination based on the fact that a person is of one or other sex (see also Grant above). Arguably, therefore, Article 119 prohibits discrimination in pay against both transsexuals and homosexuals on the basis of their sexual orientation.

The woman's claim will also fail if she fails to identify her comparator by name in her originating application (IT1), unless she has a prima facie case (that is, a case in which the evidence in her favour is sufficient to call for an answer from the employer). In that event, she may apply for an order for discovery of documents in order to obtain the relevant name. But she may not ferret around in the documents in the employer's possession in order to make out some sort of case which until discovery took place did not even prima facie exist (Clwyd County Council v Leverton).

In Leverton, a woman employed as a nursery nurse made a claim under the EqPA on the basis of a joint recommendation by her employer and a trade union branch, referred to in a document, that the pay of nursery assistants compared unfavourably with that of clerical staff in local government. The EAT held that she had a prima facie case by virtue of that document, even though only 10% of all clerical staff were men. She was, therefore, entitled not to name her comparator, as her employer had asked her to do, until an industrial tribunal granted her application for discovery of the job descriptions of male clerical staff, as it was entitled to do.

The tribunal may also, on the woman's application, allow her to substitute a different comparator for the one named in her IT1. Such an application is for leave to amend the IT1 and, as such, a matter for the tribunal's discretion. It does not amount to the substitution of a new cause of action (Smith v Gwent District Health Authority and Secretary of State for Health).

Alternatively, the woman may at the outset select more than one male comparator. But, in Leverton v Clwyd County Council, Lord Bridge said: "... industrial tribunals should, so far as possible, be alert to prevent abuse of the equal value claims procedure [see our next Guidance Note] by applicants who cast their net over too wide a spread of comparators."

In this context, s.1(2)(c) of the EqPA (see the box) does not preclude a woman employed on like work with one man, or on work rated as equivalent with his, from claiming that she is employed on work of equal value to that of another man. The exclusionary words "not being work in relation to which para. (a) or (b) above applies" in s.1(2)(c) of the EqPA have effect only where the comparator is employed on like work with the woman or on work rated as equivalent to hers. There must be implied in s.1(2)(c) after the word "applies" the words "as between the woman and the man with whom she claims equality" (Pickstone).

A woman who makes a claim under s.1(2)(a) does not have to select as her comparator a man at present employed on like work with her, as long as he was so employed at some point in time (Sorbie and others v Trust House Forte Hotels Ltd). But the grammatical construction of s.1(2)(a) of the EqPA is consistent only with a comparison between a woman and a man employed on like work at the same time; the use of the present tense is inconsistent with a comparison between a woman and her predecessor in the job (Macarthys Ltd v Smith).

Despite that, a woman can compare her situation with that of her predecessor under Article 119. The principle of equal pay enshrined in that Article is not confined to situations in which men and women are contemporaneously doing equal work for the same employer. It applies where it is established that, having regard to the nature of her services, a woman has received less pay than a man who was employed before she started work and who did equal work for the employer (Macarthys).

Even if a woman cannot point to a contemporaneous or an immediately preceding male comparator, that does not, according to the EAT in Diocese of Hallam Trustee v Connaughton, prevent her from selecting her immediate male successor as "a notional rather than an actual contemporaneous comparator". In that case, the EAT was satisfied that the scope of Article 119 allowed the woman to advance a case to the effect that her male successor's contract was so proximate to her own as to make him an effective comparator.

On the other hand, a comparison cannot be made between a woman and a hypothetical man. A woman cannot claim the pay to which she would be entitled were she a man in the absence of any man who is concurrently doing, or previously did, equal work. In cases of actual discrimination falling within the scope of the direct effect of Article 119, comparisons are confined to parallels which may be drawn on the basis of concrete appraisals of the work actually performed by employees of different sex within the same establishment or service (Macarthys).

The same employment

Each of the comparisons which can be made by a woman for the purpose of s.1(2) of the EqPA must be made with a man in "the same employment". Section 1(6) of the EqPA provides:

... for purposes of [s.1] ... men shall be treated as in the same employment with a woman if they are men employed by her employer or any associated employer at the same establishment or at establishments in Great Britain which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes.

The phrase "establishments in Great Britain which include that one" does not mean that at least one of the woman's comparators must be employed at the same establishment as her: they may all be employed at other establishments (Leverton). The words "which include that one" are to be read with the following words "at which common terms and conditions of employment are observed". Those common terms and conditions must thus be observed not only at other establishments but also at the establishment at which the woman works if employees of the relevant classes are employed there (British Coal Corporation v Smith and others).

Accordingly, the comparison called for by s.1(6) is a comparison between the terms and conditions of employment observed at two or more establishments, embracing both the establishment at which the woman is employed and the establishment(s) at which her comparator(s) is or are employed, and applicable either "generally" or to a particular class or classes of employees to which both the woman and the man or men belong (Leverton).

The woman does not have to show that she shares common terms and conditions of employment with her comparator(s). What she has to show is that her comparators at other establishments and at her establishment share common terms and conditions of employment. If there are no such men at the woman's place of work, then she must show that like terms and conditions would apply if men were employed there in the particular jobs concerned (British Coal).

If, on the other hand, the woman and her comparators are all employed at the same establishment, the question of whether common terms and conditions of employment are observed does not arise. The phrase "and at which common terms and conditions of employment are observed" in s.1(6) relates to "establishments in Great Britain which include that one" rather than to "the same establishment" (Lawson and others v Britfish Ltd).

Section 1(6) poses the question as to whether the terms and conditions of employment "observed" at two or more establishments (at which the woman and her comparator(s) are employed) are "common", being terms and conditions of employment observed "either generally or for employees of the relevant classes" (Leverton).

To be "common", terms and conditions must be substantially comparable on a broad basis. They do not have to be identical subject only to de minimis differences. The terms and conditions of the relevant class must be sufficiently similar for a fair comparison to be made. It is sufficient for the woman to show that her comparators at other establishments and at her establishment were or would be employed on broadly similar terms (British Coal).

Common terms and conditions of employment must be observed either "generally" (that is, for all or perhaps for most workers) or for employees of the relevant classes (British Coal). So long as industrial tribunals direct themselves correctly in law to make the appropriate broad comparison, it will always be a question of fact for them, in any particular case, to decide whether, as between two different establishments, "common terms and conditions of employment are observed either generally or for employees of the relevant classes" (Leverton). Subject to a misdirection in law, it is also for the industrial tribunal to decide on the evidence what is or are the relevant class or relevant classes (British Coal).

The concept of common terms and conditions of employment observed generally at different establishments necessarily contemplates terms and conditions applicable to a wide range of employees whose individual terms will vary greatly as between themselves. Terms and conditions of employment governed by the same collective agreement represent the paradigm, though not necessarily the only example, of the common terms and conditions of employment contemplated by s.1(6) (Leverton).

In Thomas and others v National Coal Board, the EAT held that women employed as canteen assistants at various collieries were in the same employment as a man employed as a canteen attendant at a different colliery. Locally negotiated and differing entitlements to bonuses and concessionary coal formed a significant part of the women's pay, but the basic similarity of terms and conditions was not affected by these local variations. The entitlements were negotiated nationally, and it was only the amount which varied locally.

"Associated employers"

Section 1(6)(c) of the EqPA provides that "two employers are to be treated as associated if one is a company of which the other (directly or indirectly) has control or if both are companies of which a third person (directly or indirectly) has control."

The correct interpretation of the first part of s.1(6)(c) is that two employers are to be treated as associated if one (employer) is a company of which the other (employer - not necessarily a company) has control. The second part of s.1(6)(c) must mean: "if both [employers] are companies of which a third person [not necessarily a company] has control" (Hasley v Fair Employment Agency).

In Hasley, the Northern Ireland Court of Appeal held that the Fair Employment Agency and the Equal Opportunities Commission for Northern Ireland were not "associated employers" because, although they could be said to be controlled by the same government departments in the material respects, neither of them is a "company". They are both statutory bodies corporate and the word "company", unless specifically defined, does not normally extend to cover all bodies corporate.

Comparators under Article 119

The class of comparators defined in s.1(6) of the EqPA (see above) is more restricted than that available on the application of the principle of equal pay enshrined in Article 119. That Article is not, for example, confined to employment in undertakings which have a particular legal form, such as a limited company. The crucial question for the purposes of Article 119 is whether the woman and her comparator are employed in "the same establishment or service". To the extent that that is a wider class of comparators than is contained in s.1(6), which is confined to "associated employers", s.1(6) "is displaced and must yield to the paramount force of Article 119" (Scullard v Knowles and Southern Regional Council for Education and Training).

In Scullard, a woman employed by an independent voluntary association of local education authorities claimed equal pay with men employed by other similar associations. An industrial tribunal dismissed her claim because none of those associations was a "company" within the meaning of s.1(6). It followed that none of the woman's comparators was employed by an associated employer of her employer. Allowing the woman's appeal, the EAT remitted her claim to a different industrial tribunal to examine whether the various associations (even though none was a company) were directly or indirectly controlled by a third party, the extent and nature of control, and whether they constituted "the same establishment or service".

In Hayes and Quinn v Mancunian Community Health Trust and South Manchester Health Authority, an industrial tribunal decided that two dental surgery assistants employed by a health authority worked in "the same service" as a senior dental technician employed by an NHS trust.

Furthermore, neither the judgment of the European Court in Defrenne (No.2) nor its judgment in Macarthys treated Article 119 as being confined to work carried out "in the same establishment or service". Support for the view that Article 119 allows cross-establishment, cross-company and even cross-industry comparisons may be found in the Advocate-General's Opinion in Commission of the European Communities v Denmark: "... a comparison of duties within the same fixed establishment of an undertaking or even within a single undertaking will not always be sufficient. In certain circumstances, comparison with work of equal value in other undertakings covered by the collective agreement in question will be necessary ... in sectors with a traditionally female workforce comparison with other sectors may even be necessary."

The ECJ has yet to rule specifically on that point. But it has held that a comparison which involves the average pay of two groups of workers paid by the piece, for the same work or for work to which equal value is attributed, must:

Claim in time

Section 2 of the EqPA provides:

(1)Any claim in respect of the contravention of a term modified or included by virtue of an equality clause ... may be presented by way of a complaint to an industrial tribunal.

...

(4)No claim in respect of the operation of an equality clause relating to a woman's employment shall be referred to an industrial tribunal ... if she has not been employed in the employment within the six months preceding the date of the reference.

Section 2(1) has effect for the purposes of s.62 of the PA (see the box on p.5) as if the reference to an equality clause were to an equal treatment rule (s.63(4)(a) of the PA); and s.2(4) has effect for those purposes as if there were substituted for it: "No claim in respect of the operation of an equal treatment rule in respect of an occupational pension scheme shall be referred to an industrial tribunal ... unless the woman concerned has been employed in a description or category of employment to which the scheme relates within the six months preceding the date of the reference" (s.63(4)(c) of the PA).

Before a servicewoman can present a complaint to an industrial tribunal, she must have made a complaint under the applicable service redress procedures in respect of which a determination has been made (s.7A(5) of the EqPA). But the time limit for complaining to the tribunal is nine months from the end of the period of service during which the claim arose (s.7A(8)).

The time limit for making a claim under s.2(1) is the one specified in s.2(4), even though s.2(4) speaks of a claim being "referred" and s.2(1) of a complaint which is "presented". That time limit runs from the end of the particular contract alleged to contain the equality clause in respect of which the claim is made, rather than from the end of an employment relationship, more broadly defined, which may be pursuant to a number of different contracts with the same employer (such as that of a part-time teacher or lecturer employed at the same school or college for a number of years under successive fixed-term contracts, with breaks of service during the school holidays or between the end of one academic year and the beginning of the next) (Preston; Fletcher).

The words "employed in the employment" in s.2(4) mean engaged in the work giving rise to the claim for equal pay. They do not allow a woman who is still employed by the same employer, but no longer engaged in that work, to claim in respect of past discrimination more than six months after the discrimination has ceased (Honeywell Ltd v Farquhar).

Community law does not lay down any time limits applicable to claims invoking Article 119. It is, therefore, for domestic law to fix such time limits, provided they are not less favourable than those relating to similar domestic actions and they do not make it impossible in practice to exercise rights conferred by Article 119 (Rewe-Zentralfinanz eG and Rewe-Zentral AG v Landwirtschaftskammer für das Saarland). Although there are no relevant time limits in domestic law stated to apply to claims invoking Article 119, that does not mean that there are no time limits. The relevant time limits are those applicable to claims under analogous domestic legislation (Biggs).

Thus, the time limit applicable to claims invoking Article 119 is also the one specified in s.2(4) of the EqPA. That time limit faces all claims under the EqPA, and the EqPA is the mechanism by which claims invoking Article 119 come before industrial tribunals. The time limit is not less favourable in the case of a claim invoking Article 119 than in the case of a purely domestic claim under the EqPA. It is the same. Nor is the time limit so short as to make it impossible in practice to exercise rights conferred by Article 119. It is perfectly "reasonable" (Preston; Fletcher).

Permissible discrimination

Section 6(1) of the EqPA provides that an equality clause

shall not operate in relation to terms -

(a)affected by compliance with the laws regulating the employment of women, or

(b)affording special treatment to women in connection with pregnancy or childbirth.

In other words, where the claimant is a man, he cannot claim the benefit of terms included in his (female) comparator's contract in order to comply with statutory provisions regulating women's working conditions (very few of which remain in force). Nor is the man entitled to claim, for example, that he should be entitled to take paternity leave equivalent to the woman's contractual maternity leave entitlement, although women may claim that terms relating to maternity in their contracts are unfavourable to them. The expression "special treatment" in s.6(1)(b) of the EqPA means specially favourable treatment (Coyne v Exports Credits Guarantee Department).

Similarly, Article 119 requires that a woman taking maternity leave must be afforded "special protection". But it does not require that the woman should continue to receive full pay during maternity leave. Nor does it lay down specific criteria for determining the amount of benefit payable to her during that period, provided that that amount is not set so low as to jeopardise the protection of women before and after giving birth (Gillespie). Article 11(3) of the EC Pregnant Workers Directive (No.92/85/EEC) deems statutory maternity pay to be adequate if it guarantees income at least equivalent to statutory sickness benefit, not contractual sick pay. Therefore, contractual maternity pay cannot be regarded as inadequate if it is higher than statutory sickness benefit (Gillespie (No.2)).

Section 6(1B) of the EqPA provides that an equality clause "shall not operate in relation to terms relating to a person's membership of, or rights under, an 'occupational pension scheme' [as defined in the Pension Schemes Act 1993], being terms in relation to which, by reason only of any provision made by or under [s.62 or s.64 of the PA] (equal treatment), an 'equal treatment rule' [as defined in s.62 of the PA (see the box)] would not operate if the terms were included in the scheme."

The exceptions to an equal treatment rule, which are outside the scope of this article, aim to bring domestic law into line with the ECJ's interpretation of Article 119 in cases following Barber v GRE. The current exceptions are set out in s.64 of the PA and regs. 13, 14 and 15 of the Occupational Pension Schemes (Equal Treatment) Regulations 19952. The most significant of these allows the use of sex-based actuarial factors in calculating employers' contributions and determining prescribed benefits: see Neath v Hugh Steeper Ltd and Coloroll.

References

¹ Their counterparts applying to women employed at an establishment in Northern Ireland are the Equal Pay Act (Northern Ireland) 1970 and the Sex Discrimination (Northern Ireland) Order 1976.

² SI 1995/3183.

³ 1996 New Earnings Survey Part A, available from Stationery Office bookshops (or Subscriptions Department, Stationery Office Publications Centre, PO Box 276, London SW8 5DT), price £19.95.

⁴ "Briefings on women and men in Britain: pay", available free of charge from the EOC's Publications Unit, tel: 0161 832 8242.

⁵ COM(96) 336 final, available from the Stationery Office, ISBN 92 78 06073 9.

⁶ Available free of charge from the EOC's Marketing and Communications Department, tel: 0161 833 9244, ISBN 1 870358 64 3.

⁷ Labour Market Trends, April 1997, available from the Stationery Office, price £6.

⁸ The ECJ heard oral argument from the parties on 9 July 1997, and both the Advocate-General's Opinion and the ECJ's judgment are expected to be delivered later this year.

Equal pay 1: main points to note

The statutory framework: key provisions

Scheme of EqPA and PA

Section 1 of the Equal Pay Act 1970 (the EqPA) provides:

"(1)If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include (directly or by reference to a collective agreement or otherwise) an equality clause they shall be deemed to include one.

(2)An equality clause is a provision which relates to terms (whether concerned with pay or not) of a contract under which a woman is employed (the 'woman's contract'), and has the effect that -

(a)where the woman is employed on like work with a man in the same employment - ...

(b)where the woman is employed on work rated as equivalent with that of a man in the same employment - ...

(c)where a woman is employed on work which, not being work in relation to which paragraph (a) or (b) above applies, is ... of equal value to that of a man in the same employment -

(i)if (apart from the equality clause) any term of the woman's contract [determined by the rating of the work in a case falling within para. (b) above] is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and

(ii)if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed [and determined by the rating of the work in a case falling within para. (b) above ], the woman's contract shall be treated as including such a term."

Section 62 of the Pensions Act 1995, which must be construed as one with s.1 of the EqPA, provides:

"(1)An occupational pension scheme which does not contain an equal treatment rule shall be treated as including one.

(2)An equal treatment rule is a rule which relates to the terms on which -

(a)persons become members of the scheme, and

(b)members of the scheme are treated.

(3)... an equal treatment rule has the effect that where -

(a)a woman is employed on like work with a man in the same employment,

(b)a woman is employed on work rated as equivalent with that of a man in the same employment, or

(c)a woman is employed on work which, not being work in relation to which paragraph (a) or (b) applies, is ... of equal value to that of a man in the same employment,

but (apart from the rule) any of the terms referred to in subsection (2) is or becomes less favourable to the woman than it is to the man, the term shall be treated as so modified as not to be less favourable."

EqPA or SDA?

Section 6 of the Sex Discrimination Act 1975 (the SDA) provides:

"(1)It is unlawful for a person, in relation to employment by him at an establishment in Great Britain, to discriminate against a woman - ...

(b)in the terms on which he offers her that employment ...

(2)It is unlawful for a person, in the case of a woman employed by him at an establishment in Great Britain, to discriminate against her -

(a)in the way he affords her access to ... benefits ... or by refusing or deliberately omitting to afford her access to them ...

...

(5)Subject to s.8(3), s.6(1)(b) does not apply to any provision for the payment of money which, if the woman in question were given the employment, would be included (directly or otherwise) in the contract under which she was employed.

(6)Section 6(2) does not apply to benefits consisting of the payment of money when the provision of those benefits is regulated by the woman's contract of employment."

Section 8 of the SDA provides:

"...

(2)Section 1(1) of [the EqPA] ... does not apply in determining for the purposes of s.6(1)(b) of [the SDA] the terms on which employment is offered.

(3)Where a person offers a woman employment on certain terms, and if she accepted the offer then, by virtue of an equality clause, any of those terms would fall to be modified, or any additional term would fall to be included, the offer shall be taken to contravene s.6(1)(b).

(4)Where a person offers a woman employment on certain terms, and [s.8(3)] would apply but for the fact that, on her acceptance of the offer, [s.1(3) of the EqPA (see the third Guidance Note in this series)] ... would prevent the equality clause from operating, the offer shall be taken not to contravene s.6(1)(b).

(5)An act does not contravene s.6(2) if -

(a)it contravenes a term modified or included by virtue of an equality clause, or

(b)it would contravene such a term but for the fact that the equality clause is prevented from operating by [s.1(3) of the EqPA]."

CASE LIST

Ainsworth v Glass Tubes & Components Ltd [1977] IRLR 74

Amministrazione delle Finanze dello Stato v Simmenthal SpA [1978] ECR 629

Barber v Guardian Royal Exchange Assurance Group [1990] IRLR 240

Barber v Staffordshire County Council [1996] IRLR 209

Biggs v Somerset County Council [1996] IRLR 203 and [1995] IRLR 452

Birds Eye Walls Ltd v Roberts [1994] IRLR 29

Blaik v Post Office [1994] IRLR 280

BP Chemicals Ltd v Gillick and Roevin Management Services Ltd [1995] IRLR 128

British Coal Corporation v Smith and others [1996] IRLR 404 and [1994] IRLR 342

Clwyd County Council v Leverton [1985] IRLR 197

Collins v Wilkin Chapman 14.3.94 EAT 945/93

Coloroll Pension Trustees Ltd v Russell and others [1994] IRLR 586

Commission of the European Communities v Denmark [1985] ECR 427

Coomes E (Holdings) Ltd v Shields [1978] IRLR 263

Coyne v Exports Credits Guarantee Department [1981] IRLR 51

Daley v Allied Suppliers Ltd [1983] IRLR 14

Defrenne v SABENA (No.2) [1976] ICR 547

Dekker v Stichting Vormingscentrum voor Jonge Volwassenen (VJV-Centrum) Plus [1991] IRLR 27

Department of the Environment v Fox [1979] ICR 736

Deria and others v General Council of British Shipping [1986] IRLR 108

Diocese of Hallam Trustee v Connaughton [1996] IRLR 505

Durrant v North Yorkshire Area Health Authority and Secretary of State for Social Services [1979] IRLR 401

Fisscher v Voorhuis Hengelo BV and Stichting Bedrijfspensioenfonds voor de Detailhandel [1994] IRLR 662

Fletcher and others v Midland Bank plc [1997] IRLR 233 and [1996] IRLR 484

Gillespie and others v Northern Health and Social Services Board and others [1996] IRLR 214

Gillespie and others v Northern Health and Social Services Board and others (No.2) [1997] IRLR 410

Grant v South-West Trains Ltd 19.7.96, Truro industrial tribunal, case no.1784/96

Grimaldi v Fonds des Maladies Professionnelles [1990] IRLR 400

Hasley v Fair Employment Agency [1989] IRLR 106

Haughton v Olau Line (UK) Ltd [1986] IRLR 465

Hayes and Quinn v Mancunian Community Health Trust and South Manchester Health Authority 30.7.96, Manchester industrial tribunal, case no.16977/93

Honeywell Ltd v Farquhar 16.11.77 (S)EAT 554/77

Jenkins v Kingsgate (Clothing Productions) Ltd [1981] IRLR 228

Jenkins v Kingsgate (Clothing Productions) Ltd (No.2) [1981] IRLR 388

Knight v Attorney-General and Lord Chancellor [1979] ICR 194

Lawson and others v Britfish Ltd [1988] IRLR 53

Leighton v Michael and Charalambous [1996] IRLR 67

Leverton v Clwyd County Council [1989] IRLR 28 and [1987] ICR 158

Macarthys Ltd v Smith [1980] IRLR 210 and [1979] IRLR 316

Macarthys Ltd v Smith (No.2) [1980] IRLR 209

McKechnie v UBM Building Supplies (Southern) Ltd [1991] IRLR 283

Mirror Group Newspapers Ltd v Gunning [1986] IRLR 27

Murphy and others v Bord Telecom Eireann [1988] IRLR 267

Neath v Hugh Steeper Ltd [1994] IRLR 91

O'Brien and others v Sim-Chem Ltd [1980] IRLR 151

Oliver v J P Malnick & Co (No.2) [1984] ICR 458

P v S and Cornwall County Council [1996] IRLR 347

Peake v Automotive Products Ltd [1977] IRLR 105

Pickstone and others v Freemans plc [1988] IRLR 357

Preston and others v Wolverhampton Healthcare NHS Trust and Secretary of State for Health [1997] IRLR 233 and [1996] IRLR 484

Quinnen v Hovells [1984] IRLR 227

Ratcliffe and others v North Yorkshire County Council [1995] IRLR 439

Rewe-Zentralfinanz eG and Rewe-Zentral AG v Landwirtschaftskammer für das Saarland [1976] ECR 1989

Scullard v Knowles and Southern Regional Council for Education and Training [1996] IRLR 344

Smith v Gwent District Health Authority and Secretary of State for Health [1996] ICR 1044

Sorbie and others v Trust House Forte Hotels Ltd [1976] IRLR 371

Specialarbejderforbundet i Danmark v Dansk Industri, acting for Royal Copenhagen A/S [1995] IRLR 648

Thomas and others v National Coal Board [1987] IRLR 451

Wadi v Cornwall and Isles of Scilly Family Practitioner Committee [1985] ICR 492

Webb v EMO Air Cargo (UK) Ltd [1993] IRLR 27