Lawrence & Others v (1) Mitie/Securicor (2) Regent Office and (3) CCG
(unreported - EAT)
In a disappointing judgment, the Employment Appeal Tribunal has refused to endorse UNISON's progressive and expansive approach to the identity of comparators for the purpose of equal pay claims. The case follows on directly from the test case proceedings, which UNISON won, in Ratcliffe & Others v North Yorkshire County Council.
In that case, school meal workers, who had their pay and terms and conditions cut in preparation for CCT, claimed equal pay with grounds maintenance and highways workers. The House of Lords rejected the Council's material factor defence, finding that the Tribunal had been entitled to conclude that the general perception in North Yorkshire was that school meals work was 'women's work', such that the 'market forces' material factor defence was itself discriminatory.
In Lawrence, the facts of the case are exactly the same - indeed, the cases relate to the same CCT contracts as those in Ratcliffe. The only difference is that, instead of being won by the DSO, the contracts were awarded to the three Respondents. In Lawrence, the applicants claim that following a TUPE transfer, they can still compare their pay and terms and conditions of employment to those of comparators who remain in the employment of North Yorkshire County Council. There are many separate issues at stake in these proceedings, not least the effect of compromise agreements and redundancy payments at the time of the UNISON members' transfer from North Yorkshire County Council to the Respondents.
However, the sole issue before the Employment Appeal Tribunal was whether, disregarding any effects of TUPE, the applicants could say that they would be entitled to compare their pay and terms and conditions with comparators still employed by the Council.
Under the Equal Pay Act 1970, applicants are entitled to compare their pay and terms and conditions of employment with that of comparators 'in the same employment'. Broadly, a comparator is 'in the same employment' if he is employed by the same employer at the same establishment as the applicant, or is employed at a different establishment to the applicant, but at one at which common terms and conditions of employment are observed.
However, the equivalent Community law right, contained in Article 119 of the EU Treaty does not contain the same requirements that a comparator be "in the same employment". The relevant European cases have concluded that Article 119 includes the situation where applicants and comparators are "in the same establishment or service".
In Scullard v Knowles and another [1996] ICR 399, the EAT considered the situation of a manager employed by a regional Council funded by the department of the environment and whether or not she could compare herself with male managers employed by other regional Councils even though the Councils were not associated employers. In Scullard, the Employment Appeal Tribunal concluded that such a comparison could be made because the applicants and the comparators were employed "in the same service".
In Lawrence, UNISON argued that the scope of Article 119 was not actually restricted to applicants employed by the same employer or at the same establishment or indeed in the same service. These were criteria merely to assist where equality was not otherwise apparent. The applicant's jobs had been evaluated against those of the comparators whilst they were both employed by the Council and had been found to be rated as equivalent. UNISON argued that there were no requirements for the wages and terms and conditions for the applicants and comparators to be controlled by the same person.
In overall terms, the principal purpose of Article 119 and the Equal Pay Directive, as interpreted through the European authorities, was to remove discrimination in pay not only in individual undertakings but also on an industry wide basis.
The Employment Appeal Tribunal whilst accepting the logic of much of UNISON's submission, and condemning the "forensic outrage" expressed by the Respondents, decided that a line had be drawn. Although the precise ambit of Article 119, in the absence of a further Directive, was not precisely defined, limits had be drawn as to its scope. The EAT decided that an applicant and a comparator must be "in a loose and non technical sense in the same establishment or service". In essence, the EAT is saying that UNISON is ahead of its time in bringing this case - the relevant European legal principles are not yet established. In reaching this conclusion, the EAT appears to have been heavily influenced by a submission on the part of the Respondent that if such a comparison were capable of being made, the employer's opportunity to justify any pay differential would be severely restricted because it would not actually be the employer of the comparator. This should make no difference whatsoever - certainly when considered alongside the European concept of a comparator being in "the same service". There can be any number of largely independent employers within the same service.
At least for the time being, free standing comparisons after a TUPE transfer between applicants working in a contracted-out service and comparators still employed by the Council will fail in so far as the claim relates to pay and terms and conditions of employment after the transfer. However, Lawrence is likely to go to the Court of Appeal. There are also further arguments yet to be heard as to the effect of TUPE. If an applicant is able to compare her pay and terms and conditions of employment with a particular comparator before a TUPE transfer, why should she not be able to make the same comparison, because of the protection afforded by TUPE, after the transfer?