test equal pay

Updating author: Tina McKevitt

On this page:
Summary
Future developments
Practical example
Action point checklist
Key references
Questions and answers
Transitional provisions
The right to equal pay
The comparator
Equal work
Like work
Work rated as equivalent
Work of equal value
Material factor defence
Indirect discrimination
Part-time workers
Pay secrecy clauses
Procedures and remedies in equal pay claims
Equal pay audits

Summary

2.307

The law relating to equal pay is governed by the Equality Act 2010, the core provisions of which came into force on 1 October 2010. The Equality Act 2010 largely consolidated the previous equal pay legislation - the Equal Pay Act 1970 - although it also introduced some new concepts.
The right to equal pay for equal work for men and women is derived from European legislation and from the Equality Act 2010. Men and women are entitled to equal pay with each other, although in practice it is usually women who claim the right. (See 2.310 The right to equal pay)
Section 138 of the Equality Act 2010 permits the use of equal pay questionnaires for tribunal applicants to seek information that is relevant to their claim. (See 2.310 The right to equal pay)
A woman may claim that she should be paid equally with a man who works for the same employer or for an associated employer. He does not have to work on the same premises as the woman. (See 2.311 The comparator)
A woman's work is equal to a man's work if it is like work, work rated as equivalent to his work or work of equal value to his work. (See 2.312 Equal work)
An employer can argue that, although a female employee has not been paid equivalently with a male employee who does equal work, the difference is due to a material factor that is a material difference between the woman's case and the man's case. (See 2.316 Material factor defence)
Section 77 of the Equality Act 2010 renders unenforceable pay secrecy clauses that purport to prevent employees from sharing information about contractual terms with a view to establishing whether or not there is any discrimination. (See 2.319 Pay secrecry clauses)
Although pay systems reviews are not required by law, the Equality and Human Rights Commission recommends a pay system review as the most appropriate method of ensuring that a pay system delivers equal pay free from sex bias. (See 2.321 Equal pay audits)

Future developments

2.308 Equality Act 2010: Most of the core provisions of the Equality Act 2010 came into force on 1 October 2010. However, certain provisions have not yet come into force. These include the following:

The provision allowing dual discrimination claims to be made in relation to direct discrimination combining no more than two of the following protected characteristics: age; disability; gender reassignment; race; religion or belief; sex; and sexual orientation. This is expected to come into force in April 2011. When enacted, the provision could encompass a dual discrimination claim in relation to contractual pay by an employee who does not have a comparator for the purposes of an equal pay claim.
The single public sector equality duty requiring public bodies to have due regard to the need to: eliminate discrimination, harassment, victimisation and other conduct prohibited by the Act; advance equality of opportunity; and foster good relations. The duty will replace the existing duty in relation to race, disability and gender equality, and extend to age, gender reassignment, pregnancy and maternity, religion or belief and sexual orientation. It is expected to come into force in April 2011.
Gender pay gap reporting. In January 2010, the Equality and Human Rights Commission (EHRC) published Proposals for measuring and publishing information on the gender pay gap (PDF format, 294K) (on the EHRC website), which sets out a menu of options for private and voluntary sector employers to report information on gender pay gaps. The menu consists of one narrative option and three quantitative options. From April 2010, the EHRC wants organisations with 500 or more employees to report voluntarily on gender pay gaps using two or more options, and employers with 250 to 499 employees to report using at least one option. Section 78 of the Equality Act 2010 empowers the Government to issue regulations with regard to the compulsory reporting of the gender pay gap in the private sector. If such regulations are produced, they are not expected to come into force until 2013 or later, with the aim of giving the current voluntary arrangements time to work.

Transitional provisions

2.309 Text

The right to equal pay

2.310 With effect from 1 October 2010, the Equality Act 2010 replaced the Equal Pay Act 1970. The position following the implementation of the Equality Act 2010 is explained below. However, there may be cases to which the Equal Pay Act 1970 still applies, including ongoing claims and cases under appeal. The position under the Equal Pay Act 1970 is explained in The right to equal pay prior to the implementation of the Equality Act 2010.

The right to equal pay under the Equality Act 2010

The Equality Act 2010 gives women and men the right to claim equal pay with each other under their contract of employment. It also addresses certain aspects of contractual maternity pay for women and gender equality in occupational pension schemes. Since the legislation confers rights on both men and women, references to women in this section should be read as applying equally to men (except where the reference is concerned with maternity). Equal pay legislation addresses discrimination in pay, and is not concerned with ensuring "fair" pay in general. Accordingly, comparison must always be made with a member of the opposite sex, unless a woman is claiming that her pay has been adversely affected by her pregnancy, or she does not have a comparator, in which case (in a situation involving alleged direct pay discrimination only) she may make a claim of direct sex discrimination under the Act, citing a hypothetical comparator.

Claims for equality in contractual pay and benefits are dealt with under chapter 3 of part 5 of the Equality Act 2010, entitled "Equality of terms". Gender equality in contractual pay and benefits is achieved by way of a sex equality clause implied into all employment contracts. Further, with regard to female employees only, a maternity equality clause is implied into all employment contracts. Under s.212(1) of the Act, a reference to an equality clause "means a sex equality clause or a maternity equality clause".

To claim equal pay under the equality of terms provisions of the Equality Act 2010, a claimant must generally prove that there is a person of the opposite sex (the comparator) who is employed by her employer or an associated employer, at the same establishment or at another establishment where common terms apply, and who is doing equal work, but with better contractual pay and/or other contractual benefits.

If the claimant can prove that this is the case, she will be entitled to equal contractual pay and contractual benefits with her comparator, unless the employer can establish a material factor defence that explains the difference in pay.

Claims in relation to non-contractual pay and benefits (for example discretionary bonuses), and direct discrimination claims where there is no comparator, are dealt with under the sex discrimination provisions set out in chapter 2 of part 5 of the Equality Act 2010, entitled "Prohibited conduct". However, under European law there is not the same distinction between contractual and non-contractual terms.

The right to equal pay on grounds other than gender is dealt with under the relevant provisions in the Equality Act 2010 dealing with the prohibited form of discrimination. For example, a claim that someone is being paid less because of his or her race would be dealt with under s.13 of the Act, by reference to the protected characteristic of race, as defined in s.9.

The Equality Act 2010 replaces certain provisions regarding gender equality that were previously found in the Pensions Act 1995 and the Occupational Pension Schemes (Equal Treatment) Regulations 1995 (SI 1995/3183) with regard to occupational pension schemes. Gender equality in such schemes is achieved by way of a sex equality rule implied into the scheme. Further, with regard to female employees only, a maternity equality rule is implied into all occupational pension schemes. Under s.212(1) of the Act, a reference to an equality rule "means a sex equality rule or a maternity equality rule".

The Equality Act 2010 and the European legislation are very complex. The following is intended as an outline of the main points to be aware of. Further advice should be taken in the event of a potential dispute about equal pay.

It is not possible to contract out of the effect of the right to equal pay by mutual agreement.

"Employment" is defined under s.83(2) of the Equality Act 2010 as meaning: employment under a contract of employment, a contract of apprenticeship or a contract personally to do any work; or employment as a Crown employee or as a "relevant member" of the House of Commons or House of Lords staff. This is a wider definition than is used in the Employment Rights Act 1996 and other employment legislation. The definition includes some people who would be considered to be self-employed. It is not always necessary for the woman and her comparator to be employed contemporaneously (see 2.311 The comparator).

Sex equality clause: The effect of s.66 of the Equality Act 2010 is that, where (as required by s.64) a woman is employed on work that is equal to the work that a comparator of the opposite sex does, and (for whatever reason) her contract of employment does not include a sex equality clause, it is to be treated as including one.

The effect of a sex equality clause is that:

if a female employee has a term in her contract that is less favourable than a term in her male comparator’s contract, that term is modified so as to be not less favourable (to ensure that the pay and pension provisions operate effectively together, this provision applies to a term of the woman’s contract relating to membership of or rights under an occupational pension scheme only insofar as a sex equality rule would have effect in relation to the term (s.66(3)));
if the woman’s contract does not contain a term corresponding to a beneficial term in her male comparator’s contract, her contract is modified so as to include such a term.

Under s.66(4), where a job evaluation scheme has rated the work of an employee and comparator as equivalent, the equality clause will give the employee the benefit of all the comparator’s terms, including those that have not been determined by the rating of the work.

The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) give - at para.226 - the following example of a situation in which the sex equality clause would operate: "A male employee’s contract includes a term that he can use his employer’s car for private purposes. His female comparator who does equal work does not benefit from this term. A sex equality clause will have the effect of including in her contract a term corresponding to that of her male comparator."

Each term of a claimant's employment is subject to the principle of equal pay. An employer cannot argue that the woman's claim to equal pay should not succeed because her employment benefit "package" is worth the same as her comparator's overall (Hayward v Cammell Laird Shipbuilders Ltd [1988] IRLR 257 HL), although, if the difference in pay is actually due to differences in other benefits, that could amount to a material factor defence (Leverton v Clwyd County Council [1989] IRLR 28 HL). Hayward was applied in Brownbill & others v St Helens & Knowsley Hospital NHS EAT/0074/10, in which the Employment Appeal Tribunal (EAT) held that a term in the claimants’ and the comparators’ contracts providing for enhanced rates of pay for unsociable hours worked during normal hours was a discrete term of the contract capable of comparison for equal pay purposes. The EAT rejected the employer’s argument that unsociable-hours pay related to the same subject matter as pay for any other hours worked during "normal hours", and that the relevant payments should therefore be aggregated. Hayward, Leverton and Brownbill were decided under the now repealed Equal Pay Act 1970, but the principles are likely to remain relevant under the Equality Act 2010.

Sex equality rule: The effect of s.67 of the Equality Act 2010 is that, where (as required by s.64) a woman is employed on work that is equal to the work that a comparator of the opposite sex does, if an occupational pension scheme does not include a sex equality rule, it is to be treated as including one.

The sex equality rule requires that:

women are to be treated equally to comparable men (and vice versa) in relation to the terms on which they are permitted to join the occupational pension scheme (with effect from 8 April 1976, the date of the European Court of Justice (ECJ) decision in Defrenne v Sabena (No.2) [1976] ECR 455 ECJ holding that the principle of equal pay under art.157 of the Treaty on the Functioning of the European Union is directly effective but should not be applied to periods of service prior to the judgment);
women are to be treated equally to comparable men (and vice versa) in relation to the terms on which they are treated once they have joined the scheme (with regard to pensionable service after 17 May 1990, the date of the ECJ judgment in Barber v Guardian Royal Exchange Assurance Group [1990] IRLR 240 ECJ establishing that occupational pensions are pay for the purposes of art.157 of the Treaty on the Functioning of the European Union.

The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) explain - at para.231 - that s.67 replaces equivalent equal treatment provisions in s.62 of the Pensions Act 1995, and give the following example of a situation in which the sex equality rule might operate: "A scheme rule requires employees to work full time before they may join the scheme. There may be a breach of the equality rule because the scheme rule may have an adverse impact on female employees, who are less able to comply with the requirement to work full time."

Section 67(7) of the Equality Act 2010 provides that, if the effect on persons of the same sex of a term as to membership or treatment under the scheme, or a term conferring a discretion as to those matters, differs according to their family, marital or civil partnership status, comparison must be made with persons of the opposite sex who have the same status.

In certain specified circumstances, s.68 of the Equality Act 2010 confers power on trustees or managers of occupational pension schemes to make alterations to the scheme in order to comply with a sex equality rule.

Maternity equality clause: Section 73 of the Equality Act 2010 provides that, where (for whatever reason) a woman’s contract of employment does not include a maternity equality clause, it is to be treated as including one. There is no need for the woman to cite a male comparator in order to rely on this provision.

Under s.74, the effect of a maternity equality clause is that, where a woman’s contract provides for maternity-related pay (meaning pay other than statutory maternity pay to which she is entitled as a result of being pregnant or in respect of times when she is on compulsory, ordinary or additional maternity leave):

her maternity-related pay should be calculated (or recalculated where necessary) to include any pay increase that she receives (or would have received if she had not been on maternity leave), if her contract does not already provide for this;
any pay or bonus related to time before her maternity leave, time when she is on compulsory maternity leave or time after the end of the "protected period" (which extends from the start of the pregnancy to the end of the additional maternity leave period or, if earlier, her return to work after the pregnancy) must be paid to her without delay at the time she would have received it had she not been on maternity leave, if her contract does not already provide for this;
on her return to work after maternity leave, her pay should take account of any pay increases that she would have received had she not been on maternity leave, if her contract does not already provide for this.

Maternity equality rule: Section 75 of the Equality Act 2010 provides that, if an occupational pension scheme does not include a maternity equality rule, it is to be treated as including one. There is no need for the woman to cite a male comparator.

The maternity equality rule requires that, if a term relating to membership of, accrual of rights under, or the determination of the amount of a benefit payable under an occupational pensions scheme does not treat time when the woman is on maternity leave (meaning compulsory, ordinary or additional maternity leave) in the same way as it treats time when she is not on leave, the term shall be modified to achieve that outcome. Equivalent provisions apply with regard to a term that confers a relevant discretion under the scheme that is capable of affecting those matters.

The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) explain - at para.264 - that s.75 replaces the previous provisions on unfair maternity provisions in para.5 of sch.5 to the Social Security Act 1989 and replicates aspects of regs.9 and 18A of the Maternity and Parental Leave etc Regulations 1999 (SI 1999/3312). The notes confirm that the provisions of this section apply only to women on unpaid ordinary maternity leave where the expected week of childbirth began on or after 6 April 2003. With regard to women on unpaid additional maternity leave, the provisions apply only where the expected week of childbirth began on or after 5 October 2008 and do not, in any event, apply to the accrual of rights under the scheme.

A woman’s contributions to the scheme in respect of the time when she is on maternity leave need be determined only by reference to the amount she is paid while on leave.

The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) give two examples of the operation of this provision, as follows:

A woman who is on maternity leave will be entitled to continuing membership of the scheme throughout the period of maternity leave whether or not she is paid.
A woman who is paid while on maternity leave will be entitled to accrue rights in the scheme as though she were paid her usual salary, but will only be required to make contributions based on her actual pay.

Exceptions: Schedule 7 to the Equality Act 2010 sets out the exceptions to the equality of terms provisions. An equality clause has no effect in relation to terms of work affected by compliance with laws regulating the employment of women or the appointment of women to personal or public offices. In addition, a man cannot make an equal pay claim arguing that he should benefit from the special protection given to pregnant women and women on maternity leave. The schedule also sets out certain exceptions with regard to occupational pension schemes that were previously contained in s.64 of the Pensions Act 1995.

Territorial scope: The Equality Act 2010 is silent as to the territorial scope of its employment provisions. The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) explain that this follows the precedent of the Employment Rights Act 1996 by leaving it "to tribunals to determine whether the law applies, depending for example on the connection between the employment relationship and Great Britain". This means that case law determining the territorial scope of the Employment Rights Act 1996 may be relevant in determining the territorial scope of the Equality Act 2010 (see 9.209 Employees excluded from the right in the Unfair dismissal rights on termination section). However, the test established under the Employment Rights Act 1996 may not be wide enough for the purposes of equal pay and discrimination law rights, many of which are derived from EU law.

European legislation: The Equality Act 2010 does not work in isolation. It is affected particularly by art.157 of the Treaty on the Functioning of the European Union, which provides that member states shall ensure that men and women receive equal pay for equal work. It is directly effective and can be relied on in cases before domestic tribunals and courts.

The courts will look to case law decided under art.157 in interpreting the Equality Act 2010. Individuals may bring claims under art.157 if this provides greater protection than the Equality Act 2010. UK domestic time limits and procedures apply to claims relying on European law.

Unlike the Equality Act 2010, art.157 does not apply to contractual terms that do not relate to pay, but it does apply to non-contractual pay. Article 157 also includes pensions.

The Equal Pay Directive (75/117/EC) (now the recast Equal Opportunities and Equal Treatment Directive (2006/54/EC)) supports art.157 and can be relied on directly by employees of public authorities.

The Equal Treatment Directive (76/207/EEC) (now the recast Equal Opportunities and Equal Treatment Directive) also covers pay and can be relied on directly by employees of public authorities in respect of claims relating to employment and working conditions including pay, whether contractual or non-contractual.

For the purposes of clarity, the recast Equal Opportunities and Equal Treatment Directive consolidated the Equal Pay Directive, the Equal Treatment Directive, and the Burden of Proof Directive (97/80/EC), which were repealed by the recast Directive with effect from 15 August 2009.

Equal pay questionnaires: Section 138 of the Equality Act 2010 allows a person who thinks that an employer (or a trustee or manager of an occupational pension scheme) may have breached an equality clause or rule to ask the proposed respondent questions on any matter that is, or may be, relevant.

The Equality Act 2010 (Obtaining Information) Order 2010 (SI 2010/2194) prescribes forms for use by both the person who suspects a breach and the proposed respondent in relation to breaches of the equality of terms provisions of the Act. However, there is no restriction on the form or manner in which questions can be posed or answers given, so a question or reply in a letter, rather than on the prescribed form, will still be admissible as evidence.

For any question or answer to be admissible as evidence in proceedings under the Act, the questions must be served before the proceedings are commenced or, where proceedings have been commenced, within 28 days of commencement or a later period specified by the court or tribunal.

Under s.138(4) a tribunal may draw an inference from the employer's failure to answer a question within eight weeks from the day on which it is served, or from its evasive or equivocal answer, unless the answer or failure to answer arises in certain circumstances (see 6.215 The questionnaire procedure in the Procedure in cases of discrimination section).

The right to equal pay prior to the implementation of the Equality Act 2010

Domestic legislation: The Equal Pay Act 1970 gives women and men the right to claim equal pay with each other under their contract of employment. Since the legislation confers rights on both men and women, references to women in this section should be read as applying equally to men. A comparison must always be made with a member of the opposite sex, unless a woman is claiming that her pay has been adversely affected by her pregnancy. Claims for equality in contractual pay and benefits are dealt with under the Equal Pay Act 1970 rather than the Sex Discrimination Act 1975. Claims in relation to non-contractual pay and benefits, for example discretionary bonuses, are dealt with under the Sex Discrimination Act 1975. However, under European law there is not the same distinction between contractual and non-contractual terms.

The right to equal pay on grounds other than gender is dealt with under the relevant equality legislation dealing with the prohibited form of discrimination. For example, a claim that someone is being paid less than a comparator of another race would be dealt with under the Race Relations Act 1976.

The Equal Pay Act 1970 and the European legislation are very complex. The following is intended as an outline of the main points to be aware of. Further advice should be taken in the event of a potential dispute about equal pay.

To claim equal pay under the Equal Pay Act 1970 a claimant must generally prove that there is a person of the opposite sex, the comparator, in the "same employment", doing equal work, but with better contractual pay and/or other contractual benefits.

If the claimant can prove that this is the case, she will be entitled to equal contractual pay and contractual benefits with her comparator unless the employer can prove that the difference in pay is genuinely due to a material factor that is not the difference in sex.

Each term of a claimant's employment is subject to the principle of equal pay. An employer cannot argue that the woman's claim to equal pay should not succeed because her employment benefit "package" is worth the same as her comparator's overall (Hayward v Cammell Laird Shipbuilders Ltd [1988] IRLR 257 HL), although, if the difference in pay is actually due to differences in other benefits, that could amount to a genuine material factor defence (Leverton v Clwyd County Council [1989] IRLR 28 HL). Hayward was applied in Brownbill & others v St Helens & Knowsley Hospital NHS EAT/0074/10, in which the EAT held that a term in the claimants’ and the comparators’ contracts providing for enhanced rates of pay for unsociable hours worked during normal hours was a discrete term of the contract capable of comparison for equal pay purposes. The EAT rejected the employer’s argument that unsociable-hours pay related to the same subject matter as pay for any other hours worked during "normal hours", and that the relevant payments should therefore be aggregated.

It is not possible to contract out of the effect of the right to equal pay by mutual agreement.

In order to claim equal pay, employees must be employed under a contract of service, or apprenticeship, or under a contract personally to execute any work or labour. Thus the right is not limited to employees, but extends to independent contractors, consultants and other workers. The employee need not be British, and the law covering her contract of employment need not be English law. The Equal Pay Act 1970 does not apply to employees who do their work wholly outside Great Britain unless the employer has a place of business at an establishment in Great Britain, the employee's work is for the purposes of the business carried on at that establishment, and the employee is ordinarily resident in Great Britain at the time when she applies for or is offered the employment or at any other time during the course of the employment.

European legislation: The Equal Pay Act 1970 does not work in isolation. It is affected particularly by art.157 of the Treaty on the Functioning of the European Union, which provides that member states shall ensure that men and women receive equal pay for equal work. It is directly effective and can be relied on in cases before domestic tribunals and courts.

The courts will look to case law decided under art.157 in interpreting the Equal Pay Act 1970. Individuals may bring claims under art.157 if this provides greater protection than the Equal Pay Act 1970. UK domestic time limits and procedures apply to claims relying on European law.

Unlike the Equal Pay Act 1970, art.157 does not apply to contractual terms that do not relate to pay, but it does apply to non-contractual pay and includes pensions, which, in domestic law, are subject to equal treatment provisions under the Pensions Act 1995 and the Occupational Pension Schemes (Equal Treatment) Regulations 1995 (SI 1995/3183).

The Equal Pay Directive (75/117/EC) (now the recast Equal Opportunities and Equal Treatment Directive (2006/54/EC)) supports art.157 and can be relied on directly by employees of public authorities.

Equal pay questionnaires: Section 7B of the Equal Pay Act 1970 allows complainants in equal pay cases to use a questionnaire to seek information that is relevant to their claim, eg the pay levels of other workers, from their employer. Employers have an eight-week time period in which to respond to a questionnaire. A tribunal is able to draw adverse inferences if the questionnaire is not returned within that time, unless the employer is able to provide a good reason.

Special treatment relating to pregnancy and maternity leave: A man cannot make an equal pay claim arguing that he should benefit from the special protection given to pregnant women and women on maternity leave.

The comparator

2.311 With effect from 1 October 2010, the Equality Act 2010 replaced the Equal Pay Act 1970. The position following the implementation of the Equality Act 2010 is explained below. However, there may be cases to which the Equal Pay Act 1970 still applies, including ongoing claims and cases under appeal. The position under the Equal Pay Act 1970 is explained in The comparator prior to the implementation of the Equality Act 2010.

The comparator under the Equality Act 2010

With the exception of claims concerned with pregnancy and maternity equality in pay and pension schemes (where no male comparator is required), the right to equal pay is engaged when, under s.64 of the Equality Act 2010, an employee is employed on work that is equal to the work done by a comparator of the opposite sex.

A woman claiming equal pay need not show that she is treated less favourably than every man employed by her employer. She may compare herself with one man or more than one. She is entitled to choose her own comparator. However, if the claimant chooses a comparator who is particularly untypical, the employer may be more likely to have a material factor defence (see 2.316 Material factor defence).

The woman’s comparator(s) may be employed by the woman's employer or by an associated employer, and may be based at the same establishment as the woman or at a different establishment where common terms apply. Section 80(3) of the Equality Act 2010 provides that, if work is not done at an establishment, it is to be treated as done at the establishment with which it has the closest connection.

Employers are associated if:

one is a company of which the other (directly or indirectly) has control; or
both are companies of which a third person (directly or indirectly) has control.

The effect of s.79(3) and (4) of the Equality Act 2010 is that a woman may cite as a comparator a man who is employed by the woman’s employer or an associate of her employer, and who either:

works (or previously worked) at the same establishment as she does; or
works (or previously worked) at an establishment other than the one at which she works, where common terms apply at the establishments (either generally or as between the woman and her comparator).

It is clear that a woman may compare herself with, for example, a predecessor in post, because s.64(2) of the Equality Act 2010 specifically provides that a woman does not have to compare herself with a man who is employed at the same time as her. The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) state at para.219 that this new provision is intended to ensure that the effect of pre-existing case law - Macarthys Ltd v Smith [1980] IRLR 210 ECJ - is maintained. In Macarthys it was ruled that a comparator does not have to be someone who is employed at the same time as the person making the equal pay claim, but could be a predecessor in the job.

This suggests that, although worded in more general terms, s.64(2) is not necessarily intended to allow comparisons to be made with a successor in post, which maintains the position established under the previous legislation. In Walton Centre for Neurology and Neurosurgery NHS Trust v Bewley [2008] IRLR 588 EAT (decided under the now repealed Equal Pay Act 1970), the Employment Appeal Tribunal (EAT) held that a previous decision of the EAT - Diocese of Hallam Trustee v Connaughton [1996] IRLR 505 EAT (also decided under the now repealed Equal Pay Act 1970) - that the comparator may be an employee's successor in the post was incorrectly decided and not to be followed. The EAT in Hallam had mistakenly relied on a passage from the European Commission's submission to the European Court of Justice (ECJ) in Macarthys, which had in fact been rejected by the ECJ. Having gone on to examine ECJ case law on, what is now, art.157 of the Treaty on the Functioning of the European Union), the EAT in Bewley came to the conclusion that art.157 does not permit a successor as a comparator.

The claimant cannot rely on a hypothetical comparator in support of a claim under the Equality Act 2010 (Macarthys Ltd v Smith [1980] IRLR 210 ECJ and Shaikh v Department for Constitutional Affairs and others [2005] All ER (D) 154 (Sep) EAT).

However, although, under s.70 of the Act, a sex discrimination claim is generally not permitted with regard to contractual terms, in the case of alleged direct sex discrimination only, where there is no comparator, s.71 of the Act permits a woman to cite a hypothetical comparator in support of a sex discrimination claim in relation to contractual pay under s.13 and s.39(2) of the Act (or, when enacted, a dual discrimination claim under s.14). The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) state at para.246 that this provision is "designed to allow claims to be brought where a person can show evidence of direct sex discrimination or dual discrimination (where sex is one of the protected characteristics in the combination) in relation to contractual pay but is unable to gain the benefit of a sex equality clause due to the absence of a comparator doing equal work". It cites the example of an employer telling an employee "I would pay you more if you were a man". In the absence of a male comparator, the woman cannot bring a claim for breach of a sex equality clause. However, she could bring a claim of direct sex discrimination against the employer.

Claims concerning indirect sex discrimination in contractual terms must be brought under the equal pay provisions, meaning that a comparator of the opposite sex will always be required.

A woman on maternity leave does not need to find a male comparator when complaining of pay discrimination related to pregnancy or childbirth under ss.72 to 76 of the Equality Act 2010. This means that a woman claiming that she is paid less or receives other less favourable contractual terms must show that the reason is related to her pregnancy or maternity leave, not that she is paid less than a comparable man, though such evidence will be relevant. This does not mean that a woman on maternity leave is entitled to her normal pay; this is usually replaced by statutory maternity pay.

European law does not require an employer to pay full pay to a worker absent due to a pregnancy-related illness if less than full pay would be paid to someone absent for the same length of time due to some other illness, provided that the amount of sick pay is not so low as to undermine the Community law objective of protecting female workers, in particular before giving birth: North Western Health Board v McKenna [2005] IRLR 895 ECJ. The ECJ did not indicate what it meant by the suggestion that a woman off sick for a reason related to her pregnancy must receive a minimum amount. Entitlement to statutory sick pay is likely to suffice, but if she is not entitled to statutory sick pay it is not clear how she is guaranteed the minimum amount necessary to protect her and whether this is the responsibility of the State or the employer.

Under European law, a comparator may not be necessary where the claimant is alleging discrimination originating in legislation or a collective agreement (Allonby v Accrington & Rossendale College [2004] IRLR 224 ECJ).

Same establishment/different establishment at which common terms apply: Under the now repealed Equal Pay Act 1970, if not employed at the same establishment, the comparator had to be employed at a different establishment where common terms and conditions applied. This issue generated a large amount of domestic and European case law, much of which is likely to remain relevant when interpreting relevant provisions in the Equality Act 2010. The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) state at para.282 that the provisions with regard to comparators in s.79 "generally reflect the effect of provisions in previous legislation".

In City of Edinburgh Council v Wilkinson and others [2010] IRLR 756 EAT (decided under the now repealed Equal Pay Act 1970), the EAT held that 52 women employed by the council in a range of administrative and clerical posts in places such as schools, hospitals and libraries were employed at the same establishment as their male comparators who were employed at different physical locations in jobs such as refuse collector, gardener, gravedigger and roadworker. The EAT formulated a presumption that "not only is the council a single undertaking but prima facie, it is a single establishment". It went on to state that the presumption will be set aside only if the facts demonstrate that there are subsets of its operation which ought properly to be regarded as separate establishments".

If the man is employed at a different establishment than the woman, she must show that there are common terms at the two establishments, either generally or as between herself and her comparator. It seems that the terms do not have to be identical. It is enough that they are applicable to a wide range of employees, even where the individual terms vary greatly within themselves (Leverton v Clwyd County Council [1989] IRLR 28 HL, decided under the now repealed Equal Pay Act 1970). If terms and conditions at different establishments are governed by the same collective agreement, they will satisfy the test. In Dolphin v Hartlepool Borough Council; Middleton v South Tyneside Metropolitan Borough Council [2006] All ER (D) 54 (Aug) EAT (decided under the now repealed Equal Pay Act 1970), the EAT held that support staff in voluntary aided schools were employed by the governing body and could not compare themselves with local education authority workers. However, school caretakers who were employed by the local authority could compare themselves with those employed in council departments. Although they were employed at different establishments, they were employed on common terms and conditions with their comparators.

When deciding whether or not two groups are employed on common terms and conditions, "common" means sufficiently similar for a broad comparison to be made. In South Tyneside Metropolitan Borough Council v Anderson and others [2007] IRLR 715 CA (decided under the now repealed Equal Pay Act 1970), the Court of Appeal held that school support staff employed on the recommendation of the governing body of a community school could succeed in their equal pay claims relying on male comparators who were employed by the local authority.

In City of Edinburgh Council v Wilkinson and others [2010] IRLR 756 EAT (decided under the now repealed Equal Pay Act 1970), the EAT held that "if it is shown that members of the comparator group are always employed on common terms and conditions, then it is legitimate to assume that they would be employed on those terms and conditions at the claimants' establishment" if they were to be employed there, irrespective of whether or not the comparators were likely to be employed there. This, as the EAT acknowledged, constituted a revision of its previous finding in Dumfries and Galloway Council v North and others [2009] IRLR 915 EAT (decided under the now repealed Equal Pay Act 1970) that female classroom assistants and nursery nurses employed by the council could not compare themselves with male manual workers employed on other premises as road workers, groundsmen, refuse collectors, refuse drivers and leisure attendants, because the women had failed to show that there was a real possibility of the comparator doing the same, or a broadly similar, job at the claimant's place of work.

In Hartlepool Borough Council v Llewellyn and other appeals [2009] IRLR 796 EAT (decided under the now repealed Equal Pay Act 1970), the EAT held that a man can bring a "piggyback" claim comparing himself with a female colleague doing like or comparable work (ie work rated as equivalent or work of equal value) who has herself succeeded in an equal pay claim.

The scope for comparisons under art.157 of the Treaty on the Functioning of the European Union appeared to be wider than the scope under the now repealed Equal Pay Act 1970, and may accordingly be wider than under the Equality Act 2010. The limits of comparisons under art.157 are still being explored. Cross-employer comparisons may be possible, but not where the difference cannot be attributed to a single source and there is no body responsible for the inequality that could restore equal treatment (Lawrence and others v Regent Office Care Ltd and others [2002] IRLR 822 ECJ). The concept of a "single source" is necessary in order to define the limits of the (otherwise undefined) permitted comparisons under art.157. However, as with the now repealed Equal Pay Act 1970, it is likely that a "single source" is not a requirement of s.79 of the Equality Act 2010. Although the Equality Act 2010 does not use the phrase "same employment" that appeared in s.1(6) of the Equal Pay Act 1970, it is likely that the former position under s.1(6) of the Equal Pay Act 1970, which set out the circumstances in which a comparator was to be treated as being in the "same employment", will continue to apply under s.79 of the Equality Act 2010. The "Equal pay code of practice" states: "The comparator must be in the 'same employment' as the claimant." In North Cumbria Acute Hospitals NHS Trust v Potter and others [2009] IRLR 176 EAT, decided under the now repealed Equal Pay Act 1970, the EAT held that, provided the "same employment" test was satisfied, it was not necessary to establish that the pay inequality was attributable to a "single source", which is concerned with comparisons for art.157 purposes only, although, on the facts, the trust was a single source.

In Scullard v (1) Knowles and (2) Southern Regional Council for Education and Training [1996] IRLR 344 EAT, a comparison was permitted between different NHS trusts that received funding from the same source. In South Ayrshire Council v Morton [2002] IRLR 256 CS, a comparison was allowed between head teachers in different local authorities. Both of these cases were decided under the now repealed Equal Pay Act 1970.

The ECJ ruled in Allonby v Accrington & Rossendale College and others [2004] IRLR 224 ECJ that a female lecturer employed via an agency could not claim equal pay in relation to a male lecturer employed directly by the college. The employment agency and the college could not be construed as being the same employer, and the differences in pay could not be attributed to a single source, so there was no single body responsible for the inequality. However, where the rights arose under state legislation, as with membership of the teachers' pension scheme, there was no requirement for a comparator in the same employment.

In Robertson and others v Department for Environment, Food and Rural Affairs [2005] IRLR 363 CA, the Court of Appeal upheld the EAT's finding that it is not possible to make cross-departmental comparisons within the civil service in order to establish an equal pay comparator under the now repealed Equal Pay Act 1970. Robertson was distinguished in North Cumbria Acute Hospitals NHS Trust v Potter and others [2009] IRLR 176 EAT (also decided under the now repealed Equal Pay Act 1970), in which the EAT upheld an employment tribunal’s decision that the employees were "in the same employment" for the purposes of the (now repealed) Equal Pay Act 1970 and that the NHS trust was, on the facts, a single source under art.157 responsible for pay inequality and restoring equality, although it had delegated its power to set pay and conditions to the Whitley Councils. In Robertson, each separate department used its discretion to introduce pay systems and negotiate pay settlements that best suited its particular needs. The departments operated separately and distinctly from one another and such similarities as existed were a matter of choice. However, in North Cumbria Acute Hospitals NHS Trust, the trust exercised its responsibility through the Whitley Councils without ceasing to be the single source.

The EAT also upheld the employment tribunal’s finding that the Secretary of State for Health was not the single source. However, it found that the tribunal had wrongly concluded that the Whitley Councils also constituted a single source. In the EAT’s view, these bodies were the mechanism for determining pay and conditions, but were not responsible for any inequality of treatment.

Finding the council to be the single source of inequality between female clerical workers and male manual workers in City of Edinburgh Council v Wilkinson and others [2010] IRLR 756 EAT (decided under the now repealed Equal Pay Act 1970), the EAT held that it is "not a matter of enquiring as to who was responsible for [originally] creating the inequality", but instead enquiring into who is responsible for "perpetuating the inequality (or who was perpetuating it when the claimant last worked) and who is able to put it right".

The comparator prior to implementation of the Equality Act 2010

A woman who wishes to rely on the Equal Pay Act 1970 must generally compare herself with a named man. She need not show that she is treated less favourably than every man employed by her employer. She may compare herself with one man or more than one.

The comparator may be someone in the same employment who:

works at the same time as the claimant; or
is her predecessor in the post (Macarthys Ltd v Smith [1980] IRLR 210 ECJ).

In Walton Centre for Neurology and Neurosurgery NHS Trust v Bewley [2008] IRLR 588 EAT, the EAT held that a previous decision of the EAT - Diocese of Hallam Trustee v Connaughton [1996] IRLR 505 EAT - that the comparator may be an employee's successor in the post was incorrectly decided and not to be followed. The EAT in Hallam had mistakenly relied on a passage from the European Commission's submission to the ECJ in Macarthys Ltd, which had in fact been rejected by the ECJ. Having gone on to examine ECJ case law on art.157 of the Treaty on the Functioning of the European Union, the EAT in Bewley came to the conclusion that art.157 does not permit a successor as a comparator.

The claimant cannot rely on a hypothetical comparator (Macarthys Ltd v Smith [1980] IRLR 210 ECJ and Shaikh v Department for Constitutional Affairs and others [2005] All ER (D) 154 (Sep) EAT).

The Court of Appeal ruled in Alabaster v Barclays Bank plc and Secretary of State for Social Security (No.2) [2005] IRLR 576 CA that a woman on maternity leave does not need to find a male comparator when complaining of pay discrimination related to pregnancy or childbirth. The remedy in respect of Mrs Alabaster's employer's breach of European law was to disapply those parts of s.1 of the Equal Pay Act 1970 that impose a requirement for a male comparator. This means that a woman claiming that she is paid less or receives other less favourable contractual terms must show that the reason is related to her pregnancy or maternity leave, not that she is paid less than a comparable man, though such evidence will be relevant. This does not mean that a woman on maternity leave is entitled to her normal pay; this is usually replaced by statutory maternity pay.

A claimant is entitled to choose her own comparator. However, if the claimant chooses a comparator who is particularly untypical, the employer may be more likely to have a material factor defence (see 2.316 Material factor defence).

To bring a claim under the Equal Pay Act 1970, the claimant must show that her comparator:

is employed by the same employer as her or by an associated employer; and
works at the same establishment (which can be made up of more than one workplace) as her, or at a different establishment where common terms and conditions apply.

An employer is an associated employer when one company is controlled by another company that is the employer, or when both companies are owned by a third company.

In City of Edinburgh Council v Wilkinson and others [2010] IRLR 756 EAT, the EAT held that 52 women employed by the council in a range of administrative and clerical posts in places such as schools, hospitals and libraries were employed at the same establishment as their male comparators, who were employed at different physical locations in jobs such as refuse collector, gardener, gravedigger and roadworker. The EAT formulated a presumption that "not only is the council a single undertaking but prima facie, it is a single establishment". It went on to state that the presumption will be set aside "only if the facts demonstrate that there are subsets of its operation which ought properly to be regarded as separate establishments".

If the man is employed at a different establishment than the woman, she must show that there are common terms and conditions at the two establishments for the particular class of employee in question. The terms and conditions do not have to be identical. It is enough that they are applicable to a wide range of employees, even where the individual terms vary greatly within themselves (Leverton v Clwyd County Council [1989] IRLR 28 HL). If terms and conditions at different establishments are governed by the same collective agreement they will satisfy the test. In Dolphin v Hartlepool Borough Council; Middleton v South Tyneside Metropolitan Borough Council [2006] All ER (D) 54 (Aug) EAT, the EAT held that support staff in voluntary aided schools were employed by the governing body and could not compare themselves with local education authority workers. However, school caretakers who were employed by the local authority could compare themselves with those employed in council departments. Although they were employed at different establishments, they were employed on common terms and conditions with their comparators.

When deciding whether or not two groups are employed on common terms and conditions, "common" means sufficiently similar for a broad comparison to be made. In South Tyneside Metropolitan Borough Council v Anderson and others [2007] IRLR 715 CA, the Court of Appeal held that school support staff employed on the recommendation of the governing body of a community school could succeed in their equal pay claims relying on male comparators who were employed by the local authority.

In City of Edinburgh Council v Wilkinson and others [2010] IRLR 756 EAT, the EAT held that "if it is shown that members of the comparator group are always employed on common terms and conditions, then it is legitimate to assume that they would be employed on those terms and conditions at the claimants' establishment" if they were to be employed there, irrespective of whether or not the comparators were likely to be employed there. This, as the EAT acknowledged, constituted a revision of its previous finding in Dumfries and Galloway Council v North and others [2009] IRLR 915 EAT that female classroom assistants and nursery nurses employed by the council could not compare themselves with male manual workers employed on other premises as road workers, groundsmen, refuse collectors, refuse drivers and leisure attendants, because the women had failed to show that there was a real possibility of the comparator doing the same, or a broadly similar, job at the claimant's place of work.

In Hartlepool Borough Council v Llewellyn and other appeals [2009] IRLR 796 EAT, the EAT held that a man can bring a "piggyback" claim comparing himself with a female colleague doing like or comparable work (ie work rated as equivalent or work of equal value) who has herself succeeded in an equal pay claim.

The scope for comparisons under what is now art.157 of the Treaty on the Functioning of the European Union appears wider than under the Equal Pay Act 1970 and the limits of comparisons under art.157 are still being explored. Cross-employer comparisons may be possible, but not where the difference cannot be attributed to a single source and there is no body responsible for the inequality that could restore equal treatment (Lawrence and others v Regent Office Care Ltd and others [2002] IRLR 822 ECJ). The concept of a "single source" is necessary in order to define the limits of the (otherwise undefined) permitted comparisons under art.157. However, a "single source" is not a requirement of s.1(6) of the Equal Pay Act 1970, which sets out the circumstances in which a comparator is to be treated as being in the same employment (North Cumbria Acute Hospitals NHS Trust v Potter and others [2009] IRLR 176 EAT). It was held in Potter that, provided that the "same employment" test was satisfied, it was not necessary to establish that the pay inequality was attributable to a "single source", which is concerned with comparisons for art.157 purposes only.

In Robertson and others v Department for Environment, Food and Rural Affairs [2005] IRLR 363 CA, the Court of Appeal upheld the EAT's finding that it is not possible to make cross-departmental comparisons within the civil service in order to establish an equal pay comparator. Robertson was distinguished in North Cumbria Acute Hospitals NHS Trust v Potter and others [2009] IRLR 176 EAT, in which the EAT upheld an employment tribunal’s decision that the employees were in "the same employment" for the purposes of the Equal Pay Act 1970 and that the NHS trust was, on the facts, a single source under art.157 responsible for pay inequality and restoring equality, although it had delegated its power to set pay and conditions to the Whitley Councils. In Robertson, each separate department used its discretion to introduce pay systems and negotiate pay settlements that best suited its particular needs. The departments operated separately and distinctly from one another and such similarities as existed were a matter of choice. However, in North Cumbria Acute Hospitals NHS Trust, the trust exercised its responsibility through the Whitley Councils without ceasing to be the single source.

Finding the council to be the single source of inequality between female clerical workers and male manual workers in City of Edinburgh Council v Wilkinson and others [2010] IRLR 756 EAT, the EAT held that it is "not a matter of enquiring as to who was responsible for [originally] creating the inequality", but instead enquiring into who is responsible for "perpetuating the inequality (or who was perpetuating it when the claimant last worked) and who is able to put it right".

Equal work

2.312 With effect from 1 October 2010, the Equality Act 2010 replaced the Equal Pay Act 1970. The position following the implementation of the Equality Act 2010 is explained below. However, there may be cases to which the Equal Pay Act 1970 still applies, for example ongoing claims and cases under appeal. The position under the Equal Pay Act 1970 is explained in Equal work prior to the implementation of the Equality Act 2010.

Equal work under the Equality Act 2010

Section 65 of the Equality Act 2010 provides that A’s work is equal to that of B if it is:

like B’s work (see 2.313 Like work);
rated as equivalent to B’s work (see 2.314 Work rated as equivalent); or
of equal value to B’s work (see 2.315 Work of equal value).

The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) state at para.221 that s.65 is designed to replicate the substance of the definitions in the now repealed Equal Pay Act 1970.

Equal work prior to the implementation of the Equality Act 2010

A woman is engaged on equal work with her comparator if they do:

like work (see 2.313 Like work);
work rated as equivalent under a job evaluation scheme (see 2.314 Work related as equivalent); or
work of equal value (see 2.315 Work of equal value).

Like work

2.313 With effect from 1 October 2010, the Equality Act 2010 replaced the Equal Pay Act 1970. The position following the implementation of the Equality Act 2010 is explained below. However, there may be cases to which the Equal Pay Act 1970 still applies, for example ongoing claims and cases under appeal. The position under the Equal Pay Act 1970 is explained in Like work prior to the implementation of the Equality Act 2010.

Like work under the Equality Act 2010

Section 65(2) of the Equality Act 2010 provides that A’s work is like B’s work if:

A’s work and B’s work are the same or broadly similar; and
such differences as there are between their work are not of practical importance in relation to the terms of their work.

Section 65(3) provides that, in making a comparison for the purposes of s.65(2), it is necessary to have regard to:

the frequency with which differences between their work occur in practice; and
the nature and extent of the differences.

The test for work that is the same or of a broadly similar nature is the nature of the job, not the specific tasks undertaken, so that, for instance, a cleaner in a kitchen will probably do work of a broadly similar nature to a cleaner on the factory floor in terms of duties and responsibilities. To decide whether or not work is of a broadly similar nature, various factors should be taken into account with reference to the responsibilities, knowledge and skill required to undertake it (Capper Pass Ltd v JB Lawton [1976] IRLR 366 EAT, decided under the now repealed Equal Pay Act 1970). Consideration should be given to what the claimant and her comparator actually do, which may not be the same as what they were employed to do.

With regard to differences between their work, it is necessary to examine the tasks that the woman and the man actually perform. If there are any differences in the tasks that they perform, this should be assessed with reference to the frequency with which the differences occur, and to the nature and extent of the differences. If the man has a much wider range of duties than the woman, this will constitute a significant difference (Dance v Dorothy Perkins Ltd [1978] ICR 760 EAT, decided under the now repealed Equal Pay Act 1970). The burden of proof is on the employer to show that any differences are of practical importance (E Coomes (Holdings) Ltd v Shields [1978] IRLR 263 CA, decided under the now repealed Equal Pay Act 1970). Any differences relied on must justify the whole of any pay differential.

In another case decided under the now repealed Equal Pay Act 1970, SITA UK Ltd v Hope EAT/0787/04, the Employment Appeal Tribunal (EAT) rejected the argument that a woman cannot be employed on like work with her male comparator if she undertakes more work than he does.

Like work prior to the implementation of the Equality Act 2010

A woman is engaged on like work to a man if both of the following conditions are satisfied:

The woman and the man do work of the same or a broadly similar nature. The test here is the nature of the job, not the specific tasks undertaken, so that, for instance, a cleaner in a kitchen will probably do work of a broadly similar nature to a cleaner on the factory floor in terms of duties and responsibilities. To decide whether or not work is of a broadly similar nature, various factors should be taken into account with reference to the responsibilities, knowledge and skill required to undertake it (Capper Pass Ltd v JB Lawton [1976] IRLR 366 EAT). Consideration should be given to what the claimant and her comparator actually do, which may not be the same as what they were employed to do.
There is no difference or no important difference in the tasks that the woman and the man actually perform. If there are any differences in the tasks that they perform, this should be assessed with reference to the frequency with which the differences occur, and to the nature and extent of the differences. If the man has a much wider range of duties than the woman, this will constitute a significant difference (Dance v Dorothy Perkins Ltd [1978] ICR 760 EAT). The burden of proof is on the employer to show that any differences are of practical importance (E Coomes (Holdings) Ltd v Shields [1978] IRLR 263 CA). Any differences relied on must justify the whole of any pay differential.

In SITA UK Ltd v Hope EAT/0787/04, the EAT rejected the argument that a woman cannot be employed on like work with her male comparator if she undertakes more work than he does.

Work rated as equivalent

2.314 With effect from 1 October 2010, the Equality Act 2010 replaced the Equal Pay Act 1970. The position following the implementation of the Equality Act 2010 is explained below. However, there may be cases to which the Equal Pay Act 1970 still applies, for example ongoing claims and cases under appeal. The position under the Equal Pay Act 1970 is explained in Work rated as equivalent prior to the implementation of the Equality Act 2010.

Work rated as equivalent under the Equality Act 2010

Under s.65(4) of the Equality Act 2010, A’s work is rated as equivalent to B’s work if a job evaluation study:

gives an equal value to A’s job and B’s job in terms of the demands made on the worker; or
would give an equal value to A’s job and B’s job in those terms were the evaluation not made on a sex-specific system.

A job evaluation system is "sex-specific" if, for the purposes of one or more of the demands made on a worker, it sets values for men different from those it sets for women (s.65(5)).

Section 80(5) of the Equality Act 2010 states that a job evaluation study is a study undertaken with a view to evaluating, in terms of the demands made on a person by reference to factors such as effort, skill and decision-making, the jobs to be done by some or all of the workers in an undertaking or group of undertakings.

If a job evaluation scheme commissioned or carried out by the employer has shown that a woman's work and a man's work have been rated as equivalent, the woman will be able to compare herself to the man for the purposes of the Equality Act 2010. In Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT (decided under the now repealed Equal Pay Act 1970), the Employment Appeal Tribunal (EAT) held that the comparison could be with comparators on a lower grade. This decision was upheld by the Court of Appeal (Redcar & Cleveland Borough Council v Bainbridge and others (No.1) [2007] IRLR 984 CA).

The scheme must be "analytical": Bromley and others v H & J Quick Ltd [1988] IRLR 249 CA (decided under the now repealed Equal Pay Act 1970). The jobs must be evaluated in terms of demands under headings such as effort, skill and decision-making. The evaluation must be objective and capable of impartial application. It must have analysed the jobs of both the claimant and her comparator. The claimant must have been employed in the undertaking in respect of which the job evaluation scheme was carried out.

If a woman's job has been rated lower than a man's under a job evaluation scheme, this will provide a defence to an equal pay claim, unless there are grounds for suspecting that the scheme discriminated on grounds of sex or there are other reasons why the scheme is not suitable to be relied on.

Job evaluation schemes, if carried out properly, will serve as conclusive evidence in any legal challenge brought under the Equality Act 2010. Therefore it is in employers' interests to carry out these schemes regularly in order to plan, monitor and justify the pay structure in the organisation as a whole.

In Bainbridge and others v Redcar & Cleveland Borough Council (No.2) [2007] IRLR 494 EAT, the EAT held that the implementation of a valid job evaluation scheme did not retrospectively determine a claimant's right to equal pay for work of equal value under the now repealed Equal Pay Act 1970. It is likely that the same principle would apply with regard to claims under the Equality Act 2010.

In Hovell v Ashford & St Peter's Hospital NHS Trust EAT/0163/08 (decided under the now repealed Equal Pay Act 1970), the claimant had been placed in the same pay band as her comparators following a job evaluation scheme, although she had been awarded fewer points. Part of her claim for backdated pay related to the period prior to the implementation of the new scheme. The EAT rejected her argument that the job evaluation scheme was effectively determinative of her equal value claim (which would now be made under s.65(6) of the Equality Act 2010) in respect of that earlier period. While the job evaluation scheme banding might be some evidence that the claimant's job was of equal value to those of her comparators, the employment judge had not erred in referring the equal value issue to an independent expert. The Court of Appeal agreed with the EAT that the employment judge's approach to the need for a report from an independent expert did not constitute a material error and declined to withdraw the reference to the expert. The Court stated that the employment judge was correct that "the fact that the difference in the points given by the job evaluation scheme is small does not of itself establish that the jobs are of equal value". However, the Court went on to state that a tribunal is not required to obtain a report from an independent expert before it can find that the claimant's job is of equal value to that of a comparator who has been awarded more points in a job evaluation scheme, and the employment judge had gone too far in asserting that this was the case (Hovell v Ashford and St Peter's Hospital NHS Trust [2009] IRLR 734 CA).

Unfortunately there is no simple blueprint for a job evaluation scheme, but guidance can be found in case law. In Eaton Ltd v J Nuttall [1977] IRLR 71 EAT (decided under the now repealed Equal Pay Act 1970), the various types of job evaluation scheme were described. The following types are acceptable for equal pay purposes:

"Points assessment". Each job is broken down into factors such as skills, responsibility, physical and mental requirements and working conditions. Points are awarded for each factor and then the points are added up and each job is placed in order. The factors may be weighted.
"Factor comparison". Key jobs are selected and analysed in terms of a limited number of factors. The proportion of the total wage attributable to each factor is decided and a scale is produced. Other jobs are then compared with this scale.

General principles for setting up job evaluation schemes are as follows:

Jobs should be assessed with reference to effort, skill and decision-making.
Jobs should not be analysed as a whole, but different factors should be identified into which jobs are broken down.
The scheme should always be objective, and not take into account subjective factors such as how well a particular employee carries out his or her duties.
The scheme should not contain indirectly discriminatory provisions, which are criteria with which more men than women are able to comply. For instance, physical strength is an indirectly discriminatory criterion, and it will be permissible only if it corresponds to the requirements of the job and is balanced by other factors with which women can more easily comply (as long as those factors also relate to the requirements of the job) (Rummler v Dato-Druck GmbH [1987] IRLR 32 ECJ).
An equal pay challenge can be brought under a job evaluation scheme only if the scheme has been accepted by the employer and the employee or her representatives.

Job evaluation is not an exact science. A job evaluation scheme may, therefore, band together jobs that are given close but not identical scores for the purpose of rating as equivalent for pay purposes. If this has been done, a claimant will be able to claim equal pay with a comparator in the same pay band although their scores were not exactly the same.

However, jobs will not have been rated as equivalent where the claimant is given a lower score than her comparator and pay banding has not put them in the same band (Home Office v (1) Bailey and others (2) Martin and others (3) Beachcroft and others [2005] IRLR 757 EAT, decided under the now repealed Equal Pay Act 1970).

Work rated as equivalent prior to the implementation of the Equality Act 2010

If a job evaluation scheme commissioned or carried out by the employer has shown that a woman's work and a man's work have been rated as equivalent, the woman will be able to compare herself to the man for the purposes of the Equal Pay Act 1970. In Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT, the EAT held that the comparison could be with comparators on a lower grade. This has now been upheld by the Court of Appeal (Redcar & Cleveland Borough Council v Bainbridge and others (No.1) [2007] IRLR 984 CA), although it decided that additional wording needed to be implied into s.1(5) of the Equal Pay Act 1970.

The scheme must be "analytical": Bromley and others v H & J Quick Ltd [1988] IRLR 249 CA. The jobs must be evaluated in terms of demands under headings such as effort, skill and decision-making. The evaluation must be objective and capable of impartial application. It must have analysed the jobs of both the claimant and her comparator. The claimant must have been employed in the undertaking in respect of which the job evaluation scheme was carried out.

Job evaluation schemes, if carried out properly, will serve as conclusive evidence in any legal challenge brought under the Equal Pay Act 1970. Therefore it is in employers' interests to carry out these schemes regularly in order to plan, monitor and justify the pay structure in the organisation as a whole.

In Bainbridge and others v Redcar & Cleveland Borough Council (No.2) [2007] IRLR 494 EAT, the EAT held that the implementation of a valid job evaluation scheme does not retrospectively determine a claimant's right to equal pay for work of equal value under s.1(2)(c) of the Equal Pay Act 1970.

In Hovell v Ashford & St Peter's Hospital NHS Trust EAT/0163/08, the claimant had been placed in the same pay band as her comparators following a job evaluation scheme, although she had been awarded fewer points. Part of her claim for backdated pay related to the period prior to the implementation of the new scheme. The EAT rejected her argument that the job evaluation scheme was effectively determinative of her equal value claim under s.1(2)(c) of the Equal Pay Act 1970 in respect of that earlier period. While the job evaluation scheme banding might be some evidence that the claimant's job was of equal value to those of her comparators, the employment judge had not erred in referring the equal value issue to an independent expert. The Court of Appeal agreed with the EAT that the employment judge's approach to the need for a report from an independent expert did not constitute a material error, and declined to withdraw the reference to the expert. The Court stated that the employment judge was correct that "the fact that the difference in the points given by the job evaluation scheme is small does not of itself establish that the jobs are of equal value". However, the Court went on to state that a tribunal is not required to obtain a report from an independent expert before it can find that the claimant's job is of equal value to that of a comparator who has been awarded more points in a job evaluation scheme, and the employment judge had gone too far in asserting that this was the case (Hovell v Ashford and St Peter's Hospital NHS Trust [2009] IRLR 734 CA).

Unfortunately there is no simple blueprint for a job evaluation scheme, but guidance can be found in case law. In Eaton Ltd v J Nuttall [1977] IRLR 71 EAT, the various types of job evaluation scheme were described. The following types are acceptable for equal pay purposes:

"Points assessment". Each job is broken down into factors such as skills, responsibility, physical and mental requirements and working conditions. Points are awarded for each factor and then the points are added up and each job is placed in order. The factors may be weighted.
"Factor comparison". Key jobs are selected and analysed in terms of a limited number of factors. The proportion of the total wage attributable to each factor is decided and a scale is produced. Other jobs are then compared with this scale.

General principles for setting up job evaluation schemes are as follows:

Jobs should be assessed with reference to effort, skill and decision-making.
Jobs should not be analysed as a whole, but different factors should be identified into which jobs are broken down.
The scheme should always be objective, and not take into account subjective factors such as how well a particular employee carries out his or her duties.
The scheme should not contain indirectly discriminatory provisions, which are criteria with which more men than women are able to comply. For instance, physical strength is an indirectly discriminatory criterion, and it will be permissible only if it corresponds to the requirements of the job and is balanced by other factors with which women can more easily comply (as long as those factors also relate to the requirements of the job) (Rummler v Dato-Druck GmbH [1987] IRLR 32 ECJ).
An equal pay challenge can be brought under a job evaluation scheme only if the scheme has been accepted by the employer and the employee or her representatives.

Work of equal value

2.315 With effect from 1 October 2010, the Equality Act 2010 replaced the Equal Pay Act 1970. The position following the implementation of the Equality Act 2010 is explained below. However, there may be cases to which the Equal Pay Act 1970 still applies, for example ongoing claims and cases under appeal. The position under the Equal Pay Act 1970 is explained in Work of equal value prior to the implementation of the Equality Act 2010.

Work of equal value under the Equality Act 2010

Under s.65(6) of the Equality Act 2010, A’s work is of equal value to B’s work if it is:

neither like B’s work nor rated as equivalent to B’s work; but
nevertheless equal to B’s work in terms of the demands made on A by reference to factors such as effort, skill and decision-making.

If a woman wishes to complain that she is paid less than her male comparator, but her work is not "like work" with his and the employer has not carried out a job evaluation scheme, she may nevertheless claim that her work is of equal value to the man's work. She may do an entirely different job to the man, so long as the job is of equal value in terms of demands such as effort, skill and decision-making. Equal value comparisons that have succeeded include those between speech therapists and clinical psychologists; cooks and carpenters; and kitchen assistants and refuse workers.

The claimant's job has to be of equal or greater value to that of her comparator. She cannot claim a proportion of her comparator's pay by arguing that her job is worth a proportionate part of his job. If the woman's job is of greater value than that of her comparator, she has only the right to be paid the same as her male comparator and not the right to be paid more than him.

Section 131(5) and (6) of the Equality Act 2010 provides that an employment tribunal must determine that A’s work is not of equal value to B’s work if A’s work and B’s work have been given different values by a job evaluation study, unless the tribunal has reasonable grounds for suspecting that the evaluation contained in the study was based on a system that discriminates because of sex or is otherwise unreliable. Section 131(7) states that a system discriminates because of sex if a difference (or coincidence) between values that the system sets on different demands is not justifiable regardless of the sex of the person on whom the demands are made.

Equal value cases have been notoriously complicated, long and expensive. However, from 1 October 2004, regulations simplified the complex rules of procedure relating to equal value tribunal cases and gave new case management powers to tribunals (see 6.225 Equal pay claims in the Procedure in cases of discrimination section).

The best way for an employer to avoid a challenge on equal value grounds is for it to have properly carried out and implemented job evaluation schemes in operation that have been agreed by employees or their representatives.

Work of equal value prior to the implementation of the Equality Act 2010

An employer will have a defence to an equal value claim if an analytical job evaluation scheme that is not tainted by sex discrimination has given the woman's job a lower value than that of her comparator.

The best way for an employer to avoid a challenge on equal value grounds is to have properly carried out and implemented job evaluation schemes in operation that have been agreed by employees or their representatives.

Material factor defence

2.316 With effect from 1 October 2010, the Equality Act 2010 replaced the Equal Pay Act 1970. The position following the implementation of the Equality Act 2010 is explained below. However, there may be cases to which the Equal Pay Act 1970 still applies, for example ongoing claims and cases under appeal. The position under the Equal Pay Act 1970 is explained in Material factor defence prior to the implementation of the Equality Act 2010.

Material factor defence under the Equality Act 2010

Under s.69(1) of the Equality Act 2010, the sex equality clause in A’s contract is of no effect in relation to a difference between A’s contract and her comparator B’s contract if the employer shows that the difference is because of a material factor (which, under s.69(6), must be a material difference between A’s case and B’s case):

reliance on which does not involve treating A less favourably because of her sex than the employer treats B; and
if the factor is shown to be indirectly discriminatory (in that, as a result of the factor, A and persons of the same sex doing equal work to A’s are put at a particular disadvantage when compared with persons of the opposite sex doing work equal to A’s), it is a proportionate means of achieving a legitimate aim.

This means that the factor must be neither directly nor indirectly discriminatory because of sex.

Direct discrimination in pay can never be justified, as recognised in Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA. However, with regard to justification of an indirectly discriminatory material factor, s.69(3) provides that "the long-term objective of reducing inequality between men’s and women’s terms of work is always to be regarded as a legitimate aim". This appears to reflect the decision in Redcar & Cleveland Borough Council, under the now repealed Equal Pay Act 1970, in which the Court of Appeal held that, in principle, discriminatory pay protection arrangements are capable of being justified (although the arrangements were not justified on the facts of the case). The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) state at para.240: "The intention to remove pay inequalities is a legitimate aim, and the question will be whether the imposition of the particular temporary pay protection arrangements is a proportionate means of achieving it."

The employer's motive and knowledge are irrelevant when determining whether or not pay arrangements are indirectly discriminatory, but "highly relevant" when deciding whether or not discrimination can be objectively justified (Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA, decided under the now repealed Equal Pay Act 1970).

The Equality Act 2010 explanatory notes (PDF format, 565K) (on the Government Legislation website) state at para.239 that s.69 of the Equality Act 2010 "incorporates the effect of EU law in respect of objective justification and indirectly discriminatory factors". In Bilka-Kaufhaus GmbH v Weber von Hartz [1986] IRLR 317 ECJ, the European Court of Justice (ECJ) held that the employer must show that the variation in pay between the man and the woman has occurred because it was pursuing measures that corresponded to a real need, and that the measures were both appropriate and necessary to meet that need. However, neither the notes nor the "Equal pay code of practice" refer to Bilka in the general context of objective justification.

It appears that justification is essentially a matter of fact for the employment tribunal. In Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA, the Court of Appeal held that, since the employment tribunal's decision that the pay discrimination was not objectively justified was not perverse, the Employment Appeal Tribunal (EAT) was wrong to interfere with that finding. The Court of Appeal restored the tribunal's decision that there had been unjustified pay discrimination under the now repealed Equal Pay Act 1970.

In deciding if a factor is justified, a tribunal will bear in mind the EAT's guidance in Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT (decided under the now repealed Equal Pay Act 1970), in which it held that "it is inherent in the principle of proportionality that where different means of achieving a particular objective could be achieved, the one which has the least discriminatory impact should be chosen". Thus, employers should consider if a different and less discriminatory means could be used to achieve their objective.

In Coventry City Council v Nicholls and others and other joined cases EAT/0162/08; EAT/0387/08 and EAT/0388/08 (decided under the now repealed Equal Pay Act 1970), the council introduced a productivity arrangement and bonus structure for refuse collectors, who were predominantly male, but did not establish a comparable structure for jobs that were carried out predominantly by women. The EAT upheld the tribunal's rejection of the genuine material factor that the council sought to rely on to justify the arrangement, and confirmed that the tribunal was entitled to find that the council's "twin objectives of reducing absenteeism and securing an effective service could have been achieved by less discriminatory means". The council also implemented a pay protection scheme, which extended only to employees who had lost pay under a new job evaluation scheme and not to those predominantly female employees who would have lost pay but for the inequality in pay that existed prior to the introduction of the scheme. The EAT allowed the employees' appeal against the tribunal's finding that the council was justified in implementing the scheme, and remitted the issue to the same tribunal for further consideration.

There is some conflicting authority about whether a material factor that is not discriminatory has to be objectively justifiable to provide a defence. The House of Lords held in Glasgow City Council and others v Marshall and others [2000] IRLR 272 HL (decided under the now repealed Equal Pay Act 1970) that the reason did not have to be objectively justified: it was enough that the reason genuinely accounted for the difference in pay, eg it was due to a mistake. The ECJ appeared to say the opposite in Brunnhofer v Bank der Österreichischen Postsparkasse AG [2001] IRLR 571 ECJ, but in Armstrong and others v Newcastle upon Tyne NHS Hospital Trust [2006] IRLR 124 CA (decided under the now repealed Equal Pay Act 1970) the Court of Appeal applied the Marshall approach that objective justification was required only where the factor relied on was indirectly discriminatory. In Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA (also decided under the now repealed Equal Pay Act 1970), the Court of Appeal opined that Armstrong was probably correct, but would be of practical effect only in cases where the statistical evidence of alleged indirect discrimination was not very strong or convincing. However, it declined to make any finding on the matter, being of the view that it did not affect the outcome of the case in hand.

In Gibson and others v Sheffield City Council EAT/0303/08 (decided under the now repealed Equal Pay Act 1970), the EAT rejected an attempt to rely on "strong" statistical evidence of disparate impact between predominantly male and predominantly female jobs to require objective justification of a bonus paid to comparators in jobs such as gardeners and street cleaners, but not paid to carers. The EAT held that the employment tribunal had been entitled to find that the difference in pay was not tainted by sex because the productivity bonus paid to the male comparators was genuine and a similar bonus was inappropriate for the carers. Accordingly, the council was not obliged to provide objective justification for the pay differential. However, the Court of Appeal subsequently allowed an appeal by the employees, holding that, despite the absence of direct sex discrimination, the pay practice was tainted by indirect sex discrimination. The Court of Appeal remitted the case to the tribunal to give the council the opportunity to justify the pay differential (Gibson and others v Sheffield City Council [2010] IRLR 311 CA).

While the Equality Act 2010 expressly provides that an indirectly discriminatory material factor has to be objectively justified, it does not extend that position to factors that are not discriminatory. However, it is possible that the position in relation to whether or not a genuine material factor that is not discriminatory has to be objectively justified to provide a defence may yet change as a result of further case law.

The factor relied on must still exist: Benveniste v University of Southampton [1989] IRLR 122 CA (decided under the now repealed Equal Pay Act 1970). The employer must prove that an original justification still justifies the difference in pay: Home Office v (1) Bailey and others (2) Martin and others (3) Beachcroft and others [2005] IRLR 757 EAT (decided under the now repealed Equal Pay Act 1970). The employer may rely on reasons that were not the reasons for the original introduction of the measure provided that the reasons now justify the difference in pay: Schönheit v Stadt Frankfurt am Main; Becker v Land Hessen [2004] IRLR 983 ECJ. However, the tribunal is likely to place less weight on "after the event" justification, thus making it more difficult for the employer to show there is a material factor defence: Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT (decided under the now repealed Equal Pay Act 1970 in connection with the council's failure to consider contemporaneously the potential discriminatory effect of paying an attendance allowance to a 100% male group and not to others, including female-dominated groups). This approach to retrospective justification was also endorsed by the Court of Appeal in British Airways plc v Grundy (No.2) [2008] IRLR 815 CA (also decided under the now repealed Equal Pay Act 1970).

If a factor accounts for part, but not all, of the difference in pay, the claimant will be able to claim the proportion of the difference in pay that is not attributable to that factor.

In "very exceptional" cases, a "supervening cause" might justify a pay differential that was previously explicable only by reference to sex discrimination (Coventry City Council v Nicholls and others and other joined cases EAT/0162/08; EAT/0387/08 and EAT/0388/08) (decided under the now repealed Equal Pay Act 1970). In Coventry City Council, the EAT rejected the council’s attempt to rely on union hostility to a unified pay and conditions structure for local government employees to justify continued pay discrimination. The EAT stated that it was "fully satisfied that union hostility to change is incapable of constituting a new explanation for the difference in pay such that it can be said that a pay differential whose roots lay firmly in sex discrimination, has at some indeterminate point ceased to have anything to do with sex".

Bonuses and productivity pay: In Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT (decided under the now repealed Equal Pay Act 1970), the claimants, who included caterers, argued that their overall pay was less than that of their male comparators because of a productivity scheme in place for their comparators, who included refuse collectors. The tribunal found that, although the productivity bonuses paid to the refuse workers were justified, as they resulted in savings and greater efficiency, it would have been possible to construct a bonus scheme for the claimants - who could not be subject to a similar productivity scheme - thus equalising their pay. The EAT held that, where there is a material factor that remains valid and properly explains the difference in pay, the employer does not generally need to introduce a similar scheme to equalise pay, particularly where such a scheme could not finance itself or involve any savings for the employer. Although the employer must show that the difference in pay was objectively justified throughout the relevant period, and ask why the disadvantaged group was not given the same opportunities to benefit as the advantaged group, there is no obligation to remove or mitigate the effects of any material factor simply because the disparity has continued for some time. The EAT therefore held that the bonuses were objectively justified on the facts.

In Redcar, the EAT upheld the tribunal's finding that it was justifiable to pay a wet-weather allowance to refuse workers and not to other groups except, as conceded by the employer, road-crossing officers. This was an allowance for working in wet weather, which was available only to those who worked outside. However, an additional attendance allowance paid to the refuse workers, but not to other female-dominated occupations, was held to be discriminatory and unjustified (a point that the employer had already conceded in respect of a similar allowance paid to gardeners).

In Hartlepool Borough Council and another v Dolphin and others [2009] IRLR 168 EAT (decided under the now repealed Equal Pay Act 1970), the EAT upheld the employment tribunal's finding that bonuses introduced for certain predominantly male occupations, such as joiners and electricians, in the 1970s were a "sham" and did not constitute a genuine material factor defence to claims by women who did not have access to such bonus schemes. The women succeeded in their claims and were paid arrears. Men working with these female claimants brought contingent equal pay claims, and in Hartlepool Borough Council v Llewellyn and other appeals [2009] IRLR 796 EAT the EAT held that a man can bring a "piggyback" claim under the now repealed Equal Pay Act 1970 comparing himself with a female colleague doing like or comparable work (ie work rated as equivalent or work of equal value) who has herself succeeded in an equal pay claim. The EAT rejected the council's appeal that the difference in pay between the male claimants and their female comparators was due to a material difference other than sex, namely that the female comparators had benefited from a tribunal award and the male claimants had not. The EAT also held that the claimants' recoverable pay should not be limited to the date on which the comparators presented their claims to the tribunal. It is likely that the same approach to "piggyback" claims will apply under the Equality Act 2010.

In Coventry City Council v Nicholls and others and other joined cases EAT/0162/08; EAT/0387/08 and EAT/0388/08 (decided under the now repealed Equal Pay Act 1970), the EAT upheld the tribunal's finding that the council's aims of reducing absenteeism and securing an effective service did not justify a productivity arrangement and bonus structure for refuse collectors, who were predominantly male, where no comparable structure was established for jobs that were predominantly female.

Factors that may be material factors: Examples of factors that may be material factors are as follows:

Length of service. In Cadman v Health and Safety Executive [2006] IRLR 969 ECJ, the ECJ held that employers do not generally need to provide specific justification for using length of service as a criterion for pay even if this does adversely affect female employees. In Cadman, the female employee's pay claim was based on four male comparators who were all paid more than she was. The difference was explained by the incremental pay system in operation in the Health and Safety Executive (HSE), which rewarded long service. Mrs Cadman had claimed that the use of length of service as a determinant of pay was indirectly discriminatory, as more men than women in the relevant workforce had longer service, and required objective justification under the equal pay legislation. The ECJ held that recourse to the criterion of length of service is appropriate to attain the legitimate aim of rewarding experience acquired that enables the worker to perform his or her duties better. However, the ECJ said that this would not apply where the worker provides evidence capable of raising "serious doubts" as to whether length of service is appropriate as a basis for determining pay, in which case the employer would have to justify it. One example may be where employees with shorter length of service can show that their performance is significantly better than those with longer service who are paid more. In Wilson v Health & Safety Executive [2009] IRLR 282 EAT (decided under the now repealed Equal Pay Act 1970), the EAT held that Cadman, properly interpreted, allows an employment tribunal to question the particular application of a length of service criterion where it is "satisfied that in the light of the evidence adduced by the claimant there is real reason to suspect that the employer has stepped beyond the margins which can properly be afforded to employers when considering whether added experience typically improves job performance". The Court of Appeal upheld the EAT decision in Wilson and stated that the Cadman "serious doubts" test operates as a filter on claims. It agreed with the EAT that the test for "serious doubts" as to the suitability of a length of service criterion is satisfied where the employee has established that there is "some basis for inferring that the adoption or use ... of the ... criterion was disproportionate". The Court of Appeal went on to state that the HSE was justified in applying the service-related criterion for only a five-year period, rather than the 10-year period applicable under the system (Wilson v Health & Safety Executive and Equality and Human Rights Commission [2010] IRLR 59 CA). It should be noted that length of service as a criterion for pay may be unlawful age discrimination if not objectively justified (see 6.725 Service-related benefits in the Age discrimination section).
Seniority.
Merit, qualifications or skill.
Economic factors or administrative efficiency. An example of an economic factor is a situation in which a particular type of employee is in high demand, and the employer offers vacancies at a higher rate of pay than previously while existing employees in that job still earn the lower rate of pay. However, there are significant problems with this type of argument, and it should always be approached with great care. Cost alone cannot justify discrimination: Steinicke v Bundesanstalt für Arbeit [2003] IRLR 892 ECJ.
The fact that the two employees have been appointed to different grades, although if this reason is simply a cloak for unlawful discrimination it will fail.
Costs. In Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT, the EAT, following the decision in Cross and others v British Airways plc [2005] IRLR 423 EAT, said that, although budgetary considerations could not be the sole justification for failing to give effect to the principle of equal pay under the now repealed Equal Pay Act 1970, they could be a factor to be weighed with other considerations when deciding if the difference in pay could be objectively justified. Salary protection arrangements are a good example, provided that there is no historic discrimination. In Redcar, the EAT held that transitional arrangements to cushion the pay of those moving to lower incomes will sometimes be appropriate. Although it may be possible to confer the benefit of the higher pay on everyone, the cost may reinforce the justification for limiting the benefit. Section 69(3) of the Equality Act 2010 expressly provides that "the long-term objective of reducing inequality between men’s and women’s terms of work is always to be regarded as a legitimate aim" with regard to objective justification of indirect pay discrimination. However, it seems likely that a pay protection provision that has the effect of continuing historic pay discrimination may not be objectively justified under s.69(1) because past discrimination contributed to the variation. This approach to objective justification under the now repealed Equal Pay Act 1970 was adopted by the EAT in Redcar and was endorsed by the Court of Appeal (Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA). The Court of Appeal noted that the employment tribunal would have been willing to take into account, as a relevant factor, the cost of including the women in the pay protection scheme, but it had not been supplied with any evidence. This was in contrast to the detailed costings provided in Cross.
Salary protection. It is becoming increasingly common for employees who are redeployed to a lower-paid position after a redundancy exercise to maintain their former salary. A woman may complain that she is not paid equally with a man who has been redeployed and whose salary has been protected, but the employer may be able to justify this because the man is a special case ((1) Snoxell and Davies v Vauxhall Motors Ltd (2) Charles Early & Marriott (Witney) Ltd v Smith and Ball [1977] IRLR 123 EAT, decided under the now repealed Equal Pay Act 1970). Again, this is a difficult argument to make, and decisions to protect salaries on redeployment (or for other reasons) should be taken only after consideration of the equal pay implications. The joined cases of Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA both concerned pay protection schemes introduced for those employees whose pay was reduced following the implementation of a new job evaluation scheme. The Court of Appeal held that neither employer was allowed to rely on its pay protection scheme either as a material factor defence or as objective justification for unequal pay under the now repealed Equal Pay Act 1970.
Unsocial hours of work. In Symington v ISS Facility Services Limited EAT/0050/08 (decided under the now repealed Equal Pay Act 1970), the EAT held that a man engaged on like work with a comparator who was paid more per hour because she worked the late shift had no reasonable prospect of succeeding in a proposed appeal against an employment tribunal's finding that a genuine material factor defence had been established.

Occupational pensions: Section 69(4) of the Equality Act 2010 provides that a sex equality rule has no effect in relation to a difference between A and B in the effect of a relevant matter if the trustees or managers of the scheme in question show that the difference is because of a material factor that is not the difference of sex. A relevant matter is:

a relevant term;
a term conferring a relevant discretion; or
the exercise of a relevant discretion in relation to an occupational pension scheme.

A term is relevant if it is a term on which persons become members of the scheme, or are treated. A discretion is relevant if its exercise in relation to the scheme is capable of affecting the way in which persons become members of the scheme or the way in which scheme members are treated.

Material factor defence prior to the implementation of the Equality Act 2010

In any claim under the Equal Pay Act 1970 it is open to the employer to show that the difference between the woman's pay and the man's pay is genuinely due to a material factor other than sex - the "genuine material factor defence". If the employer cannot, discrimination will have occurred since direct discrimination can never be justified, as recognised in Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA.

If the factor relied on relates to a pay arrangement that indirectly discriminates, it will provide a defence only if the factor is objectively justifiable. The employer's motive and knowledge are irrelevant when determining whether or not pay arrangements are discriminatory, but "highly relevant" when deciding whether or not discrimination can be objectively justified (Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA). The employer must show that the variation in pay between the man and the woman has occurred because it was pursuing measures that corresponded to a real need and that the measures were both appropriate and necessary to meet that need (Bilka-Kaufhaus GmbH v Weber von Hartz [1986] IRLR 317 ECJ). It appears that justification is essentially a matter of fact for the employment tribunal. In Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA, the Court of Appeal held that, since the employment tribunal's decision that the pay discrimination was not objectively justified was not perverse, the EAT was wrong to interfere with that finding. The Court of Appeal restored the tribunal's decision that there had been unjustified pay discrimination.

In deciding if a factor is justified, a tribunal will bear in mind the EAT's guidance in Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT, in which it held that "it is inherent in the principle of proportionality that where different means of achieving a particular objective could be achieved, the one which has the least discriminatory impact should be chosen". Thus, employers should consider if a different and less discriminatory means could be used to achieve their objective.

In Coventry City Council v Nicholls and others and other joined cases EAT/0162/08; EAT/0387/08 and EAT/0388/08, the council introduced a productivity arrangement and bonus structure for refuse collectors, who were predominantly male, but did not establish a comparable structure for jobs that were carried out predominantly by women. The EAT upheld the tribunal's rejection of the genuine material factor that the council sought to rely on to justify the arrangement, and confirmed that the tribunal was entitled to find that the council's "twin objectives of reducing absenteeism and securing an effective service could have been achieved by less discriminatory means". The council also implemented a pay protection scheme, which extended only to employees who had lost pay under a new job evaluation scheme and not to those predominantly female employees who would have lost pay but for the inequality in pay that existed prior to the introduction of the scheme. The EAT allowed the employees' appeal against the tribunal's finding that the council was justified in implementing the scheme, and remitted the issue to the same tribunal for further consideration.

There is some conflicting authority about whether a genuine material factor that is not discriminatory has to be objectively justifiable to provide a defence. The House of Lords held in Glasgow City Council and others v Marshall and others [2000] IRLR 272 HL that the reason did not have to be objectively justified: it was enough that the reason genuinely accounted for the difference in pay, eg it was due to a mistake. The ECJ appeared to say the opposite in Brunnhofer v Bank der Österreichischen Postsparkasse AG [2001] IRLR 571 ECJ, but in Armstrong and others v Newcastle upon Tyne NHS Hospital Trust [2006] IRLR 124 CA the Court of Appeal applied the Marshall approach that objective justification was required only where the factor relied on was indirectly discriminatory. In Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA, the Court of Appeal opined that Armstrong was probably correct, but would be of practical effect only in cases where the statistical evidence of alleged indirect discrimination was not very strong or convincing. However, it declined to make any finding on the matter, being of the view that it did not affect the outcome of the case in hand.

In Gibson and others v Sheffield City Council EAT/0303/08, the EAT rejected an attempt to rely on "strong" statistical evidence of disparate impact between predominantly male and predominantly female jobs to require objective justification of a bonus paid to comparators in jobs such as gardeners and street cleaners, but not paid to carers. The EAT held that the employment tribunal had been entitled to find that the difference in pay was not tainted by sex because the productivity bonus paid to the male comparators was genuine and a similar bonus was inappropriate for the carers. Accordingly, the council was not obliged to provide objective justification for the pay differential. However, the Court of Appeal subsequently allowed an appeal by the employees, holding that, despite the absence of direct sex discrimination, the pay practice was tainted by indirect sex discrimination. The Court of Appeal remitted the case to the tribunal to give the council the opportunity to justify the pay differential (Gibson and others v Sheffield City Council [2010] IRLR 311 CA).

The factor relied on must still exist: Benveniste v University of Southampton [1989] IRLR 122 CA. The employer must prove that an original justification still justifies the difference in pay: Home Office v (1) Bailey and others (2) Martin and others (3) Beachcroft and others [2005] IRLR 757 EAT. The employer may rely on reasons that were not the reasons for the original introduction of the measure, provided that the reasons now justify the difference in pay: Schönheit v Stadt Frankfurt am Main; Becker v Land Hessen [2004] IRLR 983 ECJ. However, the tribunal is likely to place less weight on "after the event" justification, thus making it more difficult for the employer to show there is a genuine material factor defence: Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT (in connection with the council's failure to consider contemporaneously the potential discriminatory effect of paying an attendance allowance to a 100% male group and not to others, including female-dominated groups). This approach to retrospective justification was also endorsed by the Court of Appeal in British Airways plc v Grundy (No.2) [2008] IRLR 815 CA.

If a factor accounts for part, but not all, of the difference in pay, the claimant will be able to claim the proportion of the difference in pay that is not attributable to that factor.

In "very exceptional" cases, a "supervening cause" might justify a pay differential that was previously explicable only by reference to sex discrimination (Coventry City Council v Nicholls and others and other joined cases EAT/0162/08; EAT/0387/08 and EAT/0388/08). In Coventry City Council, the EAT rejected the council’s attempt to rely on union hostility to a unified pay and conditions structure for local government employees to justify continued pay discrimination. The EAT stated that it was "fully satisfied that union hostility to change is incapable of constituting a new explanation for the difference in pay such that it can be said that a pay differential whose roots lay firmly in sex discrimination, has at some indeterminate point ceased to have anything to do with sex".

Bonuses and productivity pay: In Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT, the claimants, who included caterers, argued that their overall pay was less than that of their male comparators because of a productivity scheme in place for their comparators, who included refuse collectors. The tribunal found that, although the productivity bonuses paid to the refuse workers were justified, as they resulted in savings and greater efficiency, it would have been possible to construct a bonus scheme for the claimants - who could not be subject to a similar productivity scheme - thus equalising their pay. The EAT held that, where there is a genuine material factor that remains valid and properly explains the difference in pay, the employer does not generally need to introduce a similar scheme to equalise pay, particularly where such a scheme could not finance itself or involve any savings for the employer. Although the employer must show that the difference in pay was objectively justified throughout the relevant period, and ask why the disadvantaged group was not given the same opportunities to benefit as the advantaged group, there is no obligation to remove or mitigate the effects of any genuine material factor simply because the disparity has continued for some time. The EAT therefore held that the bonuses were objectively justified on the facts.

In Redcar, the EAT upheld the tribunal's finding that it was justifiable to pay a wet-weather allowance to refuse workers and not to other groups except, as conceded by the employer, road-crossing officers. This was an allowance for working in wet weather, which was available only to those who worked outside. However, an additional attendance allowance paid to the refuse workers but not to other female-dominated occupations was held to be discriminatory and unjustified (a point that the employer had already conceded in respect of a similar allowance paid to gardeners).

In Hartlepool Borough Council and another v Dolphin and others [2009] IRLR 168 EAT, the EAT upheld the employment tribunal's finding that bonuses introduced for certain predominantly male occupations, such as joiners and electricians, in the 1970s were a "sham" and did not constitute a genuine material factor defence to claims by women who did not have access to such bonus schemes. The women succeeded in their claims and were paid arrears. Men working with these female claimants brought contingent equal pay claims, and in Hartlepool Borough Council v Llewellyn and other appeals [2009] IRLR 796 EAT the EAT held that a man can bring a "piggyback" claim comparing himself with a female colleague doing like or comparable work (ie work rated as equivalent or work of equal value) who has herself succeeded in an equal pay claim. The EAT rejected the council's appeal that the difference in pay between the male claimants and their female comparators was due to a material difference other than sex, namely that the female comparators had benefited from a tribunal award and the male claimants had not. The EAT also held that the claimants' recoverable pay should not be limited to the date on which the comparators presented their claims to the tribunal.

In Coventry City Council v Nicholls and others and other joined cases EAT/0162/08; EAT/0387/08 and EAT/0388/08, the EAT upheld the tribunal's finding that the council's aims of reducing absenteeism and securing an effective service did not justify a productivity arrangement and bonus structure for refuse collectors, who were predominantly male, where no comparable structure was established for jobs that were predominantly female.

Factors that may be material factors: Examples of factors that may be material factors are as follows:

Length of service. In Cadman v Health and Safety Executive [2006] IRLR 969 ECJ, the ECJ held that employers do not generally need to provide specific justification for using length of service as a criterion for pay even if this does adversely affect female employees. In Cadman, the female employee's pay claim was based on four male comparators who were all paid more than she was. The difference was explained by the incremental pay system in operation in the HSE, which rewarded long service. Mrs Cadman had claimed that the use of length of service as a determinant of pay was indirectly discriminatory, as more men than women in the relevant workforce had longer service, and required objective justification under the equal pay legislation. The ECJ held that recourse to the criterion of length of service is appropriate to attain the legitimate aim of rewarding experience acquired that enables the worker to perform his or her duties better. However, the ECJ said that this would not apply where the worker provides evidence capable of raising "serious doubts" as to whether length of service is appropriate as a basis for determining pay, in which case the employer would have to justify it. One example may be where employees with shorter length of service can show that their performance is significantly better than those with longer service who are paid more. In Wilson v Health & Safety Executive [2009] IRLR 282 EAT, the EAT held that Cadman, properly interpreted, allows an employment tribunal to question the particular application of a length of service criterion where it is "satisfied that in the light of the evidence adduced by the claimant there is real reason to suspect that the employer has stepped beyond the margins which can properly be afforded to employers when considering whether added experience typically improves job performance". The Court of Appeal upheld the EAT decision in Wilson and stated that the Cadman "serious doubts" test operates as a filter on claims. It agreed with the EAT that the test for "serious doubts" as to the suitability of a length of service criterion is satisfied where the employee has established that there is "some basis for inferring that the adoption or use ... of the ... criterion was disproportionate". The Court of Appeal went on to state that the HSE was justified only in applying the service-related criterion for a five-year period, rather than the 10-year period applicable under the system (Wilson v Health & Safety Executive and Equality and Human Rights Commission [2010] IRLR 59 CA). It should be noted that length of service as a criterion for pay may be unlawful age discrimination if not objectively justified (see 6.725 Service-related benefits in the Age discrimination section).
Seniority.
Merit, qualifications or skill.
Economic factors or administrative efficiency. An example of an economic factor is a situation in which a particular type of employee is in high demand, and the employer offers vacancies at a higher rate of pay than previously while existing employees in that job still earn the lower rate of pay. However, there are significant problems with this type of argument, and it should always be approached with great care. Cost alone cannot justify discrimination: Steinicke v Bundesanstalt für Arbeit [2003] IRLR 892 ECJ.
The fact that the two employees have been appointed to different grades, although if this reason is simply a cloak for unlawful discrimination it will fail.
Costs. In Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT, the EAT, following the decision in Cross and others v British Airways plc [2005] IRLR 423 EAT, said that, although budgetary considerations could not be the sole justification for failing to give effect to the principle of equal pay, they could be a factor to be weighed with other considerations when deciding if the difference in pay could be objectively justified. Salary protection arrangements are a good example, provided that there is no historic discrimination. In Redcar, the EAT held that transitional arrangements to cushion the pay of those moving to lower incomes will sometimes be appropriate. Although it may be possible to confer the benefit of the higher pay on everyone, the cost may reinforce the justification for limiting the benefit. However, a pay protection provision that has the effect of continuing historic pay discrimination can not generally be a genuine material factor as past discrimination contributed to the variation. This approach was endorsed by the Court of Appeal (Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA). The Court of Appeal noted that the employment tribunal would have been willing to take into account, as a relevant factor, the cost of including the women in the pay protection scheme, but it had not been supplied with any evidence. This was in contrast to the detailed costings provided in Cross.
Salary protection. It is becoming increasingly common for employees who are redeployed to a lower-paid position after a redundancy exercise to maintain their former salary. A woman may complain that she is not paid equally with a man who has been redeployed and whose salary has been protected, but the employer may be able to justify this because the man is a special case ((1) Snoxell and Davies v Vauxhall Motors Ltd (2) Charles Early & Marriott (Witney) Ltd v Smith and Ball [1977] IRLR 123 EAT). Again, this is a difficult argument to make, and decisions to protect salaries on redeployment (or for other reasons) should be taken only after consideration of the equal pay implications. The joined cases of Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA both concerned pay protection schemes introduced for those employees whose pay was reduced following the implementation of a new job evaluation scheme. The Court of Appeal held that neither employer was allowed to rely on its pay protection scheme either as a genuine material factor defence or as objective justification for unequal pay.
Unsocial hours of work. In Symington v ISS Facility Services Limited EAT/0050/08, the EAT held that a man engaged on like work with a comparator who was paid more per hour because she worked the late shift had no reasonable prospect of succeeding in a proposed appeal against an employment tribunal's finding that a genuine material factor defence had been established.

Indirect discrimination

2.317 With effect from 1 October 2010, the Equality Act 2010 replaced the Equal Pay Act 1970. The position following the implementation of the Equality Act 2010 is explained below. However, there may be cases to which the Equal Pay Act 1970 still applies, for example ongoing claims and cases under appeal. The position under the Equal Pay Act 1970 is explained in Indirect discrimination prior to the implementation of the Equality Act 2010.

Indirect discrimination under the Equality Act 2010

The "Code of practice on equal pay" states: "Indirect discrimination arises where a pay system, policy or arrangement has a disproportionate adverse impact on women compared to their male comparators. If the employer cannot objectively justify it, the [material factor] defence will not be made out." For example, a large number of cases were brought under the now repealed Equal Pay Act 1970 alleging that giving particular rights only to full-time employees indirectly discriminates against women, because more women than men work part time.

The code states: "Where the disadvantaged group is predominantly women, and the group of advantaged comparators is predominantly men, it will be difficult for the employer to prove an absence of sex discrimination." In Grundy v British Airways plc [2008] IRLR 74 CA (decided under the now repealed Equal Pay Act 1970), the Court of Appeal said that, in assessing whether or not there is a difference in pay that disadvantages women, there is no principle of law that requires the tribunal to focus on the advantaged group. Here, support cabin crew argued that the policy of not putting them on an incremental pay scale - unlike cabin crew employed on equal work - was indirectly discriminatory. The support crew were overwhelmingly female, but a much smaller group in number than the cabin crew group, which was made up of an equal number of men and women. The tribunal held that the provision, criterion or practice of not paying increments to support cabin crew was to the detriment of a considerably larger proportion of women than men and could not be justified. The Court of Appeal upheld the tribunal's decision to focus on the smaller, disadvantaged group to assess the disproportionate impact of the practice, rather than on the larger group. As the smaller, female-dominated group suffered a disadvantage, this was sufficient to show adverse impact on women. In a separate decision, the Court of Appeal later upheld the tribunal's decision on the issue of objective justification: British Airways plc v Grundy [2008] EWCA Civ 875 CA.

In Somerset County Council and another v Pike [2009] IRLR 870 CA, the Court of Appeal held that the rules in the Teachers' Pension Scheme that exclude teachers in receipt of a teacher's pension who return to part-time work could be indirectly discriminatory under the now repealed Equal Pay Act 1970. The Court of Appeal, applying the House of Lords decision in Rutherford and another v Secretary of State for Trade and Industry (No.2) [2006] IRLR 551 HL, decided under the now repealed Equal Pay Act 1970, held that, by adopting the entire teaching profession irrespective of whether or not they were retired as the pool of comparison, the tribunal had brought into the equation people who have no interest in the advantage or disadvantage in question (the approach of excluding from the pool those who are uninterested in the advantage was approved by the Court of Appeal in Grundy v British Airways plc [2008] IRLR 74 CA). In Somerset County Council and another, the Court of Appeal agreed with the Employment Appeal Tribunal (EAT) that the tribunal had been wrong to reject the narrower pool of comparison advocated by the employee, and teachers in receipt of a teacher's pension who had returned to work were the correct pool of comparison.

In Blackburn and another v Chief Constable of West Midlands Police [2009] IRLR 135 CA (decided under the now repealed Equal Pay Act 1970), the Court of Appeal held that the inclusion of a requirement to undertake night work in eligibility criteria for special priority payments did not indirectly discriminate against female officers whose childcare responsibilities meant that they did not undertake night shifts. The special priority payments scheme had the legitimate aim of specifically rewarding those officers who worked nights. The Court agreed with the EAT that, if the legitimate aim of the special priority payments scheme was to reward night work, it was difficult to see how that objective would be achieved if those who did not undertake night work were paid the same amount. It is likely that a similar approach to the issue of objective justification would be taken under s.69(1) of the Equality Act 2010.

A "market forces" argument may be indirectly discriminatory, if the market forces in question are those that dictate that women should earn less than men for similar work (Ratcliffe and others v North Yorkshire County Council [1995] IRLR 439 HL, decided under the now repealed Equal Pay Act 1970). In Newcastle upon Tyne NHS Hospitals Trust v Armstrong and others EAT/0069/09 (decided under the now repealed Equal Pay Act 1970), a group of predominantly female domestic workers lost their bonuses as a result of the trust's successful in-house bid during a compulsory competitive tender exercise in 1985. The EAT held that the employment tribunal was entitled to find that the material factor relied on by the trust was "tainted by sex" because it originated in its intention to match market rates that the trust appreciated were depressed by factors peculiar to women, and that the continuation of the resulting differential had not been objectively justified by the costs or industrial relations implications of removing it or by the trust's attempts to phase it out.

The long-term objective of reducing inequality between men’s and women’s terms of work will always be a legitimate aim under s.69(3) of the Equality Act 2010, but whether or not it will amount to a successful material factor defence for the employer will depend on whether or not the means adopted for achieving that aim (for example, a temporary pay protection scheme for male employees whose jobs have been regraded under a new job evaluation scheme) are proportionate (s.69(1)(b)).

Indirect discrimination prior to the implementation of the Equality Act 2010

Indirect discrimination occurs when a provision, criterion or practice with which members of one sex can comply more easily than members of the other sex is applied. For example, a large number of cases have been brought alleging that giving particular rights to only full-time employees indirectly discriminates against women, because more women than men work part time.

In Grundy v British Airways plc [2008] IRLR 74 CA, the Court of Appeal said that, in assessing whether or not there is a difference in pay that disadvantages women, there is no principle of law that requires the tribunal to focus on the advantaged group. Here, support cabin crew argued that the policy of not putting them on an incremental pay scale - unlike cabin crew employed on equal work - was indirectly discriminatory. The support crew were overwhelmingly female, but a much smaller group in number than the cabin crew group, which was made up of an equal number of men and women. The tribunal held that the provision, criterion or practice of not paying increments to support cabin crew was to the detriment of a considerably larger proportion of women than men and could not be justified. The Court of Appeal upheld the tribunal's decision to focus on the smaller, disadvantaged group to assess the disproportionate impact of the practice, rather than on the larger group. As the smaller, female-dominated group suffered a disadvantage, this was sufficient to show adverse impact on women. In a separate decision, the Court of Appeal later upheld the tribunal's decision on the issue of objective justification: British Airways plc v Grundy [2008] EWCA Civ 875 CA.

In Somerset County Council and another v Pike [2009] IRLR 870 CA, the Court of Appeal held that the rules in the Teachers' Pension Scheme that exclude teachers in receipt of a teacher's pension who return to part-time work could be indirectly discriminatory. The Court of Appeal, applying the House of Lords decision in Rutherford and another v Secretary of State for Trade and Industry (No.2) [2006] IRLR 551 HL, held that, by adopting the entire teaching profession irrespective of whether or not they were retired as the pool of comparison, the tribunal had brought into the equation people who have no interest in the advantage or disadvantage in question (the approach of excluding from the pool those who are uninterested in the advantage was approved by the Court of Appeal in Grundy v British Airways plc [2008] IRLR 74 CA). In Somerset County Council and another, the Court of Appeal agreed with the EAT that the tribunal had been wrong to reject the narrower pool of comparison advocated by the employee, and teachers in receipt of a teacher's pension who had returned to work were the correct pool of comparison.

In Blackburn and another v Chief Constable of West Midlands Police [2009] IRLR 135 CA, the Court of Appeal held that the inclusion of a requirement to undertake night work in eligibility criteria for special priority payments did not indirectly discriminate against female officers whose childcare responsibilities meant that they did not undertake night shifts. The special priority payments scheme had the legitimate aim of specifically rewarding those officers who worked nights. The Court agreed with the EAT that, if the legitimate aim of the special priority payments scheme was to reward night work, it was difficult to see how that objective would be achieved if those who did not undertake night work were paid the same amount.

A "market forces" argument may be indirectly discriminatory, if the market forces in question are those that dictate that women should earn less than men for similar work (Ratcliffe and others v North Yorkshire County Council [1995] IRLR 439 HL). In Newcastle upon Tyne NHS Hospitals Trust v Armstrong and others EAT/0069/09, a group of predominantly female domestic workers lost their bonuses as a result of the trust's successful in-house bid during a compulsory competitive tender exercise in 1985. The EAT held that the employment tribunal was entitled to find that the material factor relied on by the trust was "tainted by sex" because it originated in its intention to match market rates that the trust appreciated were depressed by factors peculiar to women, and that the continuation of the resulting differential had not been objectively justified by the costs or industrial relations implications of removing it or by the trust's attempts to phase it out.

Part-time workers

2.318 With effect from 1 October 2010, the Equality Act 2010 replaced the Equal Pay Act 1970. The position following the implementation of the Equality Act 2010 is explained below. However, there may be cases to which the Equal Pay Act 1970 still applies, for example ongoing claims and cases under appeal. The position under the Equal Pay Act 1970 is explained in Part-time workers prior to the implementation of the Equality Act 2010.

Part-time workers under the Equality Act 2010

The Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551) prohibit discrimination against part-time workers on the ground of their part-time status, unless this can be objectively justified. This applies to contract terms that provide for less favourable treatment even if they have not been exercised (Sharma and others v Manchester City Council [2008] IRLR 336 EAT).

The protection applies to women and men part-timers and the comparison is between part-time workers and full-time workers (irrespective of their gender). However, there is an exception that allows employers to pay overtime rates to part-timers only once they have exceeded full-time hours.

For further information see the Part-time workers section.

Different treatment of part-timers might also give rise to indirect sex discrimination. The "Code of practice on equal pay" states: "A pay practice that treats part-time workers less favourably than comparable full-time workers is likely to be indirectly discriminatory against women, as more women than men work part-time. Unless an employer can objectively justify the pay differential or practice, it will be unlawful. It is unlikely that an employer could justify a different basic hourly rate for full-time and part-time workers."

In Voss v Land Berlin C-300/06 ECJ, the hourly rate for overtime was lower than the hourly rate for work carried out in the course of normal working hours. Ms Voss was a part-timer working 23 hours a week, whereas a full-time teacher worked 26.5 hours. She was paid the lower overtime rate for any hours above her normal 23 hours, and thus would receive less for working 26.5 hours (which involved 3.5 hours' overtime) than a full-time teacher. The European Court of Justice (ECJ) held that such a difference in pay would be contrary to art.141 of the Treaty establishing the European Community (now art.157 of the Treaty on the Functioning of the European Union) if it affected a considerably higher percentage of women and could not be justified. This was an unusual case in that the rate for overtime was lower than that for normal working hours. Where the rate for overtime is higher than that for normal working hours, the ECJ has held that overtime supplements can be withheld from part-timers until they have worked the equivalent of normal full-time hours (Stadt Lengerich v Helmig [1995] IRLR 216 ECJ).

Part-time workers prior to the implementation of the Equality Act 2010

For further information see the Part-time workers section.

In Voss v Land Berlin C-300/06 ECJ, the hourly rate for overtime was lower than the hourly rate for work carried out in the course of normal working hours. Ms Voss was a part-timer working 23 hours a week, whereas a full-time teacher worked 26.5 hours. She was paid the lower overtime rate for any hours above her normal 23 hours, and thus would receive less for working 26.5 hours (which involved 3.5 hours' overtime) than a full-time teacher. The ECJ held that such a difference in pay would be contrary to art.141 of the Treaty establishing the European Community (now art.157 of the Treaty on the Functioning of the European Union) if it affected a considerably higher percentage of women and could not be justified. This was an usual case in that the rate for overtime was lower than that for normal working hours. Where the rate for overtime is higher than that for normal working hours, the ECJ has held that overtime supplements can be withheld from part-timers until they have worked the equivalent of normal full-time hours (Stadt Lengerich v Helmig [1995] IRLR 216 ECJ).

Pay secrecy clauses

2.319 In In specified circumstances, s.77 of the Equality Act 2010 renders contractual terms that seek to prevent discussions about pay unenforceable and provides that certain acts connected with pay disclosures are protected acts for the purposes of the victimisation provisions in s.27 of the Act.

The Act does not impose a general prohibition on clauses that seek to prevent or restrict pay discussions: it is clauses that seek to prevent or restrict a "relevant pay disclosure" aimed at establishing the existence of discrimination that are unenforceable. A relevant pay disclosure is one that is made "for the purpose of enabling the person who makes it, or the person to whom it is made, to find out whether or to what extent there is, in relation to the work in question, a connection between pay and having (or not having) a particular protected characteristic".

The effect of the provision is that a contractual term that purports to prevent or restrict an employee from disclosing or seeking to disclose information about the terms of the employee’s work is unenforceable against the employee insofar as the employee makes or seeks to make a relevant pay disclosure. Further, a term that purports to prevent or restrict the employee from seeking disclosure of information from a colleague or former colleague is unenforceable against the employee insofar as the employee seeks a relevant pay disclosure from the colleague.

The "Code of practice on equal pay" states: "Restricting use of these clauses is intended to promote openness and dialogue about pay and bring an end to opaque pay structures." The code states that disclosure may be made to a colleague or a trade union representative. It advises that: "A discussion between a woman and a man for the purpose of establishing whether the man is being paid more than the woman could involve a relevant pay disclosure. However, two male colleagues simply comparing their respective salaries are unlikely to be making a relevant pay disclosure, unless they are investigating pay disparities which may be linked to race or another protected characteristic."

Section 77(5) provides that seeking a disclosure that would be a relevant pay disclosure, making or seeking to make a relevant pay disclosure, and receiving information disclosed in a relevant pay disclosure are protected acts for the purposes of a victimisation claim made by an applicant or an employee under s.27 read with s.39(3) or (4) of the Equality Act 2010.

Procedure and remedies in equal pay claims

2.320 For information on the procedure in equal pay claims see the Procedure in cases of discrimination section. For information on remedies see the Consequences of discrimination - remedies and penalties section.

Equal pay audits

2.321 The Equality and Human Rights Commission (EHRC) as part of its duties is obliged to keep under review the working of the Equality Act 2010 and to undertake action to eliminate unlawful discriminatory acts or practices.

Although pay systems reviews are not required by law, in its "Code of practice on equal pay", the EHRC advises that "an equal pay audit may be the most effective way of ensuring that a pay system is free from unlawful bias". It recommends a five-step equal pay audit model, which is discussed in detail in the code.

Stage 1: Decide the scope of the audit and identify the information required. This will include consideration of which employees are to be included, and the type of information required (for example, all the various elements of both full-time and part-time employees’ pay, including pensions and other benefits, and the sex, job, grade or pay band of each employee). The employer will also need to consider matters such as who should be involved in carrying out the audit.

Stage 2: Determine where men and women are doing equal work. The employer will need to check whether women and men are doing like work, work rated as equivalent or work of equal value. Where the employer does not have a non-discriminatory analytical job evaluation scheme in place, it will need to find another way of assessing whether or not women and men are doing equal work: the EHRC’s "Equal pay resources and audit toolkit" includes suggestions.

Stage 3: Collect and compare pay data to identify any significant pay inequalities between roles of equal value. This will involve calculating average basic pay and total earnings and comparing access to and amounts received of each element of the pay package, on a consistent basis. The pay comparisons should be reviewed to identify any gender pay inequalities that may merit further investigation.

Stage 4: Establish the causes of any significant pay inequalities and assess the reasons for them. The employer needs to find out if there is a real, material reason for the difference in pay that has nothing to do with sex of the jobholders and examine its pay systems to find out which policies and practices may have caused or may be contributing to any gender pay inequalities.

Stage 5: Develop an equal pay action plan to remedy any direct or indirect pay discrimination. If the pay differential arises from a factor that has an adverse impact on women, it has to be objectively justified.

Even where an audit reveals no pay inequalities between men and women (or on other protected grounds), the EHRC advises that employers should keep their pay systems under review by introducing regular monitoring undertaken jointly with trade unions.

From April 2010, the EHRC wants organisations with 500 or more employees to report voluntarily on gender pay gaps using two or more options, and employers with 250 to 499 employees to report using at least one option. See Proposals for measuring and publishing information on the gender pay gap (PDF format, 294K) (on the EHRC website), which sets out a menu of options for private and voluntary sector employers to report information on gender pay gaps. The menu consists of one narrative option and three quantitative options. Section 78 of the Equality Act 2010 empowers the Government to issue regulations with regard to the compulsory reporting of the gender pay gap in the private sector (see 2.308 Future developments).

Practical example

2.322 Lena works as a cleaner in the London office of Huge Inc, a large multinational. She complains to the human resources department that she is paid less than Glen, who is a desk porter at the offices of Huge (UK) Ltd in Basildon. As well as a higher rate of basic pay, Glen is entitled to a free bus pass. Lena receives a bonus, which is related to standards of cleanliness achieved. Both Lena and Glen receive a Christmas bonus.

Action required:

The employer should check whether Lena and Glen are employed by the same employer or associated employers.
It should look at Lena and Glen's contracts of employment. Are there discrepancies in basic pay? Is Glen's bus pass a contractual entitlement?
It should check whether there is a job evaluation scheme in place, or whether Lena and Glen could be described as doing work of equal value with reference to criteria such as effort, skill and decision-making.
It should decide whether there are any material factors distinguishing Glen from Lena. For instance, has Glen got longer service than Lena? Has Glen been redeployed from a higher-paid job? If so, was his previous pay based on any historic discriminatory factors?
It should not take into account factors that are irrelevant to the jobs that Lena and Glen do, and that are more difficult for a woman to achieve. For example, physical strength may be relevant to Glen's job if he is required to carry heavy items, but if not it should not be part of the assessment.
If the analysis shows that Lena is not paid equally with Glen for work of equal value or work rated as equivalent, it should ensure that Lena is brought up to the same level of remuneration as Glen in respect of each individual term of her contract of employment.
It should not proceed on the basis that Lena's bonus makes up for her lower rate of pay.

Action point checklist

2.323

Wherever possible, carry out and implement job evaluation schemes. These will provide a framework for planning, monitoring and justifying pay differentials, and they will be conclusive evidence in any equal pay challenge.
Approach each term in the contract of employment separately. For instance, do not try to compensate a woman who receives lower pay than a man with some other kind of benefit, or vice versa.
When devising criteria on which levels of pay are based, avoid things that are harder for members of one sex to do than members of the other. If such criteria are included in a pay structure, they must be relevant to the job in question.
Be careful to check the implications of protecting a redeployed employee's salary.

Key references

2.324

Legislation

Equal Opportunities and Equal Treatment Directive (2006/54/EC)
Article 157 of the Treaty on the Functioning of the European Union
Equality Act 2010
Equal Pay Act 1970
Sex Discrimination Act 1975
Pensions Act 1995
Occupational Pension Schemes (Equal Treatment) Regulations 1995 (SI 1995/3183)
Social Security Act 1989
Maternity and Parental Leave etc Regulations 1999 (SI 1999/3312)
Equality Act 2010 (Obtaining Information) Order 2010 (SI 2010/2194)
Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551)

Cases

Alabaster v Barclays Bank plc and Secretary of State for Social Security (No.2) [2005] IRLR 576 CA
Allonby v Accrington & Rossendale College and others [2004] IRLR 224 ECJ
Armstrong and others v Newcastle upon Tyne NHS Hospital Trust [2006] IRLR 124 CA
Bainbridge and others v Redcar & Cleveland Borough Council (No.2) [2007] IRLR 494 EAT
Barber v Guardian Royal Exchange Assurance Group [1990] IRLR 240 ECJ
Benveniste v University of Southampton [1989] IRLR 122 CA
Bilka-Kaufhaus GmbH v Weber von Hartz [1986] IRLR 317 ECJ
Blackburn and another v Chief Constable of West Midlands Police [2009] IRLR 135 CA
Boyle and others v Equal Opportunities Commission [1998] IRLR 717 ECJ
British Airways plc v Grundy (No.2) [2008] IRLR 815 CA
Bromley and others v H & J Quick Ltd [1988] IRLR 249 CA
Brownbill & others v St Helens & Knowsley Hospital NHS EAT/0074/10
Brunnhofer v Bank der Österreichischen Postsparkasse AG [2001] IRLR 571 ECJ
Cadman v Health and Safety Executive [2006] IRLR 969 ECJ
Capper Pass Ltd v JB Lawton [1976] IRLR 366 EAT
City of Edinburgh Council v Wilkinson and others [2010] IRLR 756 EAT
Coventry City Council v Nicholls and others and other joined cases EAT/0162/08; EAT/0387/08 and EAT/0388/08
Cross and others v British Airways plc [2005] IRLR 423 EAT
Dance v Dorothy Perkins Ltd [1978] ICR 760 EAT
Defrenne v Sabena (No.2) [1976] ECR 455 ECJ
Diocese of Hallam Trustee v Connaughton [1996] IRLR 505 EAT
Dolphin v Hartlepool Borough Council; Middleton v South Tyneside Metropolitan Borough Council [2006] All ER (D) 54 (Aug) EAT
Dumfries and Galloway Council v North and others [2009] IRLR 915 EAT
E Coomes (Holdings) Ltd v Shields [1978] IRLR 263 CA
Eaton Ltd v J Nuttall [1977] IRLR 71 EAT
Gibson and others v Sheffield City Council EAT/0303/08
Gibson and others v Sheffield City Council [2010] IRLR 311 CA
Glasgow City Council and others v Marshall and others [2000] IRLR 272 HL
Grundy v British Airways plc [2008] IRLR 74 CA
Hartlepool Borough Council and another v Dolphin and others [2009] IRLR 168 EAT
Hartlepool Borough Council v Llewellyn and other appeals [2009] IRLR 796 EAT
(1) Hartlepool Borough Council (2) Housing Hartlepool Ltd v Dolphin & others EAT/007/08 & EAT/008/08
Hayward v Cammell Laird Shipbuilders Ltd [1988] IRLR 257 HL
Home Office v (1) Bailey and others (2) Martin and others (3) Beachcroft and others [2005] IRLR 757 EAT
Hovell v Ashford & St Peter's Hospital NHS Trust EAT/0163/08
Hovell v Ashford and St Peter's Hospital NHS Trust [2009] IRLR 734 CA
Lawrence and others v Regent Office Care Ltd and others [2002] IRLR 822 ECJ
Leverton v Clwyd County Council [1989] IRLR 28 HL
Macarthys Ltd v Smith [1980] IRLR 210 ECJ
Newcastle upon Tyne NHS Hospitals Trust v Armstrong and others EAT/0069/09
North Cumbria Acute Hospitals NHS Trust v Potter and others [2009] IRLR 176 EAT
North Western Health Board v McKenna [2005] IRLR 895 ECJ
Ratcliffe and others v North Yorkshire County Council [1995] IRLR 439 HL
Redcar & Cleveland Borough Council v Bainbridge and others [2007] IRLR 91 EAT
Redcar & Cleveland Borough Council v Bainbridge and others (No.1) [2007] IRLR 984 CA
Redcar & Cleveland Borough Council v Bainbridge and Equality and Human Rights Commission and other appeals [2008] IRLR 776 CA
Robertson and others v Department for Environment, Food and Rural Affairs [2005] IRLR 363 CA
Rummler v Dato-Druck GmbH [1987] IRLR 32 ECJ
Rutherford and another v Secretary of State for Trade and Industry (No.2) [2006] IRLR 551 HL
Schönheit v Stadt Frankfurt am Main; Becker v Land Hessen [2004] IRLR 983 ECJ
Scullard v (1) Knowles and (2) Southern Regional Council for Education and Training [1996] IRLR 344 EAT
Shaikh v Department for Constitutional Affairs and others [2005] All ER (D) 154 (Sep) EAT
Sharma and others v Manchester City Council [2008] IRLR 336 EAT
SITA UK Ltd v Hope EAT/0787/04
(1) Snoxell and Davies v Vauxhall Motors Ltd (2) Charles Early & Marriott (Witney) Ltd v Smith and Ball [1977] IRLR 123 EAT
Somerset County Council and another v Pike [2009] IRLR 870 CA
South Ayrshire Council v Morton [2002] IRLR 256 CS
South Tyneside Metropolitan Borough Council v Anderson and others [2007] IRLR 715 CA
Stadt Lengerich v Helmig [1995] IRLR 216 ECJ
Steinicke v Bundesanstalt für Arbeit [2003] IRLR 892 ECJ
Symington v ISS Facility Services Limited EAT/0050/08
Voss v Land Berlin C-300/06 ECJ
Walton Centre for Neurology and Neurosurgery NHS Trust v Bewley [2008] IRLR 588 EAT
Wilson v Health & Safety Executive [2009] IRLR 282 EAT
Wilson v Health & Safety Executive and Equality and Human Rights Commission [2010] IRLR 59 CA

Codes of practice

Code of practice on equal pay

Documents

Equal pay policy
Questionnaire for obtaining information on equal pay under the Equality Act 2010

Questions and answers

2.325

Q80: Can a woman compare her pay and conditions with those of any man?

No, a woman's comparator must be a man employed on 'like work', 'work rated as equivalent' or 'work of equal value'. In addition he must be employed by the woman's employer or an associated employer, and work at the same establishment as her or at a different one where common terms and conditions apply. The comparator may be the woman's predecessor in the post, but cannot be her successor or a hypothetical comparator.

Q81: How does the law interpret 'like work' between a man and a woman?

A woman may claim equivalence with a man who does the same or broadly the same job as her. The test is the nature of the job and not the specific tasks undertaken so, for example, a cleaner in a kitchen will do broadly the same work as one on a factory floor. There must be no important difference between the tasks that the woman and the man perform. If the man has a much wider range of duties than the woman this will constitute a significant difference, meaning that there cannot be a valid claim for like work.

Q82: If a woman does a different job to a man but their jobs are rated as equivalent under a job evaluation scheme, can she claim equal pay with him?

Yes, if a job evaluation scheme commissioned or carried out by the employer has shown that a woman's work and a man's work have been rated as equivalent, the woman will be able to compare herself to the man for the purposes of the Equal Pay Act 1970. The scheme must be 'analytical', with the jobs evaluated in terms of demands under headings such as effort, skill and decision making.

Q83: Can an employee claim equal pay if she does not work on like work with her comparator and her employer has not carried out a job evaluation scheme?

Even if a woman does not perform like work to a male comparator and the employer has not carried out a job evaluation scheme, she can still claim her work is of equal value. The value of the jobs is measured by comparing them in terms of demands such as effort, skill and decision making. Successful equal value comparisons have been made between the work of, for example, speech therapists and clinical psychologists, and kitchen assistants and refuse workers. An employment tribunal can determine whether the claimant's work is of equal value to that of the comparator or appoint an independent expert to carry out an assessment of the respective value of the jobs.

Q803: Can an employer defend an equal value claim on the basis that it has carried out a job evaluation scheme?

Yes, although there is no obligation to carry out a job evaluation scheme, an employer will have a defence to an equal value claim if an analytical job evaluation scheme, untainted by sex, has been carried out and has given the claimant's job a lower value than that of her comparator.

Q84: How can an employer defend an equal pay claim?

An employer can defend an equal pay claim by showing that the difference between the claimant's pay and her male comparator's is genuinely due to a material factor other than sex. Some of the factors that may qualify are seniority, length of service or merit or skill.

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