In equal pay cases, claimants have to show (among other things) that the difference in pay that they are complaining about can be attributed to a "single source".
The employer, on the other hand, has to show that there is a material factor (or reason) that accounts for the difference in pay, and which has nothing to do with sex.
In Armstrong and ors v Newcastle upon Tyne NHS Hospital Trust (2006, IDS 797), the Court of Appeal said that employers do not have to provide justification for a pay disparity unless the material factor is itself tainted by sex discrimination, and that workers working for one trust could not compare their pay with workers at another.
What were the basic facts?
In 1985, the mainly female domestic ancillary workers at Newcastle Health Authority lost their right to bonus payments when their work was contracted out, but the mainly male porters kept theirs as their work was not contracted out.
The authority was then divided into two trusts, but merged again in 1998. In 2001 some of the women brought claims of equal value with porters at the Royal Victoria Infirmary (RVI) against what had become their common employer, the Newcastle upon Tyne NHS Hospital Trust.
Because some of the women worked at a different hospital from the men, they first had to show that working for the same trust amounted to "the same employment" under the Equal Pay Act, or else constituted a "single source" of employment under article 141 of the EC Treaty.
For its part, the trust had to show that the difference in pay between the two groups had nothing to do with sex discrimination.
What did the tribunals decide?
The employment tribunal and the appeal tribunal said that the domestics and the porters working at different hospitals did not work "in the same employment", as the bonus schemes related to essentially different employment regimes.
And they also said their claims fell outside the scope of Article 141 because they were not all employed in the same establishment or service. There was, therefore, no "single source" of employment.
However, it found in favour of those domestics who did work at the RVI, saying that the trust's justification for the difference in pay (basically, that the porters would have put up more of a fight against a tendering process) was tainted by sex.
It said that the women had been adversely affected by the withdrawal of the bonus arrangements, and was not convinced by the trust's efforts to justify the difference.
The domestics who did not work at the RVI appealed, as did the trust, arguing that the tribunal was wrong to dismiss its material factor defence.
What did the Court of Appeal decide?
The court agreed with the tribunals that there was no single source of employment for the domestics who did not work at the RVI.
It relied on the case of Department for Environment, Food and Rural Affairs v Robertson, in which another Court of Appeal said that it was not enough for civil servants in different departments to have a common employer. There also had to be a single source responsible for the difference in pay. The same principle applied in this case.
As for the material factor defence, the court was guided by the House of Lords decision in Glasgow City Council v Marshal that employers do not have to justify a difference in pay, unless it can be shown to be due to sex discrimination. It upheld the trust's appeal and remitted the issue to the tribunal.
Comment
In direct conflict with the EAT in Sharp (LELR 107), this decision means that claimants have to show sex discrimination before the employer has to justify the pay difference. It also makes it far harder for claimants to rely on comparators who work for another employer, even if they had previously worked for the same employer and still had the same terms and conditions as them.