The House of Lords handed down its opinion last week in Glasgow City Council v Marshall.
Whether the equality clause imposed under the Equal Pay Act 1970 can operate in the absence of evidence of sex discrimination.
The Respondent is an education authority. For historical reasons to do with different negotiated payscales, teachers and non-qualified 'instructors' at special schools operated by the Respondent were paid significantly different salaries, even though they did work of the same kind.
Seven women instructors claimed they were employed on like work with male teachers, and that they were therefore entitled to the same pay as their respective male counterparts. Conversely, one male instructor claimed he was employed on like work with female teachers, and that he was entitled to the same pay as female teachers.
First Instance Decision
The industrial tribunal, following a 52 day hearing, found the instructors and trachers were employed on 'like work'. They then went on to consider the EPA 1970, s1(3) defence (is the difference in pay due to a material factor which is not the difference of sex, and which is a material difference between the woman's case and the man's case?).
The education authority relied, for the purposes of s1(3), on the historical reasons for the difference in pay, namely the different pay scales resulting from different collective bargaining structures from different groups of trades union. They also relied on statistics demonstrating the absence of sex discrimination, which the applicants did not challenge.
The industrial tribunal held that the education authorities had failed to establish the section 1(3) defence. All they had done was point to a historical basis for the disparity in pay. That was not enough, and was simply demonstrative of inertia on the part of the employer. It held that the admitted absence of sex discrimination was not enough to establish the defence, and said that lack of sex discrimination was simply a factor, rather than conclusive, in establishing the 'material difference' defence.
The House of Lords' Decision
Lord Nicholls delivered the main speech, with whom the rest of the House agreed.
The House held that the industrial tribunal was wrong. It was inconceivable that the equality clause should operate where there is no suggestion of sex discriminatinon. To do so could not be reconciled with the gender-related elements of the statutory equality clause.
On the Applicants' interpretation of the Act, what matters is not sex discrimination but whether, within one establishment, there is a variation in pay or conditions between one employee doing like work with another. The sex of the employees would be neither here nor there, save that to get the claim off the ground the comparator would have to be of the opposite gender. That could not be right, for it would allow the Equal Pay Act to be called into action whenever mixed groups of workers were paid differently for doing work of equal value. Indeed, on the facts of this case, both male and female instructors would succeed on the Applicants' interpretation of s1(3) - and it would be most curious that, on the same facts, claims by both men and women of sex discrimination succeed.
Lord Nicholls said that the correct interpretation of the Act is as follows. There is a rebuttable presumption of sex discrimination, which arises once the gender-based comparison shows that a woman, doing like work or work rated as equivalent or work of equal value to that of a man, is being paid or treated less favourably than the man. The variation between her contract and the man's contract is presumed to be due to the difference of sex. The burden passes to the employer to show that the explanation for the variation is not tainted with sex discrimination. In order to discharge this burden the employer must satisfy the tribunal on several matters:
1. that the proffered explanation, or reason, is genuine, and not a sham or pretence
2. that the less favourable treatment is due to this reason. The factor relied upon must be the cause of the disparity. In this regard, and in this sense, the factor must be a 'material' factor, that is, a significant and relevant factor
3. that the reason is not 'the difference of sex'. This phrase is apt to embrace any form of sex discrimination, whether direct or indirect
4. that the factor relied upon is or, in a case within section 1(2)(c), may be a 'material' difference, that is, a significant and relevant difference, between the woman's case and the man's case.
Lord Nicholls went on to say that when section 1 is analysed, it is apparent that an employer who satisfies the third of these requirements is under no obligation to prove a 'good' reason for the pay disparity. In order to fulfil the third requirement he must prove the absence of sex discrimination, direct or indirect. If there is any evidence of sex discrimination, such as evidence that the difference in pay has a disparately adverse impact on women, the employer will be called upon to satisfy the tribunal that the difference in pay is objectively justifiable. But if the employer proves the absence of sex discrimination he is not obliged to justify the pay disparity.
This decision is one of common-sense, and echoes previous decisions (eg BRS v Loughran or Enderby - neither of which were mentioned in the judgment).
It would be absurd if the Equal Pay Act could be used to boost the pay of lower-paid employees when there exists a reason for the difference in pay other than sex discrimination. The grievance of the instructors was, in essence, not that the pay structures were discriminatory on grounds of sex, but that they were not 'fair'! In the absence of legislation rewarding work with 'fair' pay, the discrimination statutes should not be used to achieve the same result by the back door.