Bury Metropolitan Borough Council v Hamilton
Council of the City of Sunderland v Brennan

To defend an equal pay claim, employers have to show that any difference in pay between men and women is not tainted by sex discrimination and if it is, that they can objectively justify it. In Bury Metropolitan Borough Council v Hamilton; Council of the City of Sunderland v Brennan, the Employment Appeal Tribunal (EAT) said, in respect of pay protection, that if employers want to justify any difference on the ground of unaffordability, they must provide solid evidence.

The women’s union, Unison, instructed Thompsons to act on their behalf.

Basic facts

Women employed by Bury and Sunderland Councils claimed that they were entitled to productivity bonuses that had historically been paid to their male comparators under the Equal Pay Act 1970.

The women at Bury Council also claimed entitlement to “pay protection” which was afforded to the men, after the Council stopped paying them a bonus. The bonus earning men received pay protection for a year before they were subsequently transferred onto single status in 2008 (the women were not transferred until 16 months later).

For their part, the Councils claimed that the differences in pay were genuinely due to a material factor (the GMF defence) that had nothing to do with sex. The bonuses were genuinely performance-related, and had resulted in better productivity and savings for the Council. The women’s jobs, by contrast, had not been suitable for similar efficiency schemes.

Tribunal decision

The tribunal, however, disagreed, saying that although the bonuses were not a sham when first introduced, they “became a sham and were not genuinely linked to productivity.” As there was “no satisfactory evidence of a link between the bonus schemes and productivity” the GMF defence failed.

However, although the failure to pay a bonus to the women was potentially discriminatory, it said the Council could justify the introduction of a pay protection period as it had to abolish the bonuses as part of implementing the single status system. It was also “essential in industrial relations terms’.

In any event, even if it could be assumed that all the women were entitled to the bonus, it would have been impossible to calculate the amount of pay protection they were owed, as most had made multiple comparisons. And, in the absence of any precise calculation, the Council could not have afforded to agree an extension of the scheme.

EAT decision

The EAT said that the tribunal was wrong to focus on whether the employer’s explanation was genuine or a sham. Instead, it should have concentrated on whether the discrimination between the women and their comparators could be justified.

In this case, the Council did provide an explanation for the difference in treatment - that the jobs of the comparators were “bonusable” whereas those of the claimants were not. However, this was indirectly sex discriminatory and could not be justified because the Council could not show a link between the bonuses and productivity.

As for the pay protection cross appeal, the EAT said that the “practicability” of not being able to calculate the sums payable under pay protection did not constitute a defence.

It accepted that a Council might be able to show that the constraints on its finances were so pressing that it had no choice but to cushion the men's pay, but the employer “must be put to proof that what he had done was objectively justified in the individual case."

The Council had not shown the tribunal any evidence to support its case that extending pay protection was “unaffordable”, but had just made an assertion of“unaffordability”. This, said the EAT, was not enough.

“A case of justification on this basis can only be proved by adducing sufficiently detailed evidence, both of the costs themselves and of the financial context, to enable the tribunal to reach an informed view. ... the tribunal must be put in a position where it can assess the broad picture. That was not done here. ... It follows that we accept that there was no evidence before the Tribunal which entitled it to find that the Council had established that extending pay protection to the Claimants was unaffordable”.