Grundy v BA (IDS 860)
The 1970 Equal Pay Act says that if a woman is doing the same work as a man, she is entitled to be paid the same, unless her employer can objectively justify the difference. In Grundy v BA (IDS 860), the Court of Appeal said that employers cannot justify different terms and conditions just because the agreement giving rise to them had been collectively negotiated.
Basic facts
In 1987 Mrs Grundy switched from working on a full-time cabin crew (CC) contract for BA to a part time Support Cabin Crew (SCC) contract. This was of particular benefit to women with childcare responsibilities. The SCC scheme was halted in 1994 and abolished in 2002, at which point Mrs Grundy was transferred onto a part-time CC contract.
However, although full-time and post-1994 part-time cabin crew were on an incremental pay scale giving them annual increases, Mrs Grundy had had no such increments on her SCC contract. The result was that she was getting about £4,000 less per year than a man doing like work and she brought a claim for equal pay.
Tribunal and EAT decisions
The tribunal looked at the difference in pay and said that it formed part of a “policy, criterion or practice” by BA of not paying increments to a “disadvantaged” group of SCC staff, compared to an “advantaged” group of full-time and part-time cabin crew staff. Given that women outnumbered men by about 14 to one in the disadvantaged group, it concluded that far more women than men were affected and that the practice could not be justified by BA.
The Employment Appeal Tribunal agreed on the second point, but said that the tribunal had been wrong to focus on the small SCC disadvantaged group rather than on the larger, advantaged CC group. As the percentage difference between the numbers of men and women in that group was negligible, it concluded there was no disparate impact between the two. Mrs Grundy successfully appealed against that decision (see weekly LELR 52).
BA appealed against the decision on objective justification, arguing that the SCC scheme had been negotiated as part of a collective agreement and could not therefore be changed without further consultation with the unions. It had also been necessary to avoid anomalies in the pay structure and to reward length of service.
Court of Appeal decision
The Court of Appeal, however, disagreed. It said that, although BA’s aims (employment relations and business efficiency) were perfectly legitimate, they did not stand up to the test for objective justification.
This involved striking a balance between the effect of the scheme and the employer’s reasonable needs, as per the guidance in Barry v Midland Bank plc 1997. As part of the balancing exercise, courts have to consider whether the scheme objective is legitimate and whether the means to achieve it are appropriate and reasonably necessary (bearing in mind that they may not be the only possible means).
However, the Court of Appeal took issue with the proposition in Barry that “the more serious the disparate impact the more cogent must be the justification”, saying that it was far from clear how to gauge the seriousness of the disparate impact. It concluded that it did not matter how many employees were affected, nor how small the differential given that “for an employee who is unlawfully underpaid 50p an hour, the difference may be between subsistence and poverty.”
The fact that the agreement had been reached with the trade unions was not particularly important. If justification is to be established employers must show that the facts that they rely on relate to the particular employment, the context and the relevant criteria. The agreement is just the end product. If negotiators overlook the possibility that differentials can arise that may have a disparate impact on employees of one gender, they cannot logically justify that oversight by reference to the agreement that they just negotiated.
Comment
All this decision really says is that an employer cannot objectively justify a difference in pay by pointing to agreements that were separately negotiated. Once there is evidence of a discriminatory impact on women, they need something more to justify the difference. The tribunal rejected BA’s evidence that excluding the staff from the incremental pay rises was a way of avoiding pay anomalies or could be explained by length of service as the disadvantaged group had the same length of service.
Perhaps the easiest way of thinking about this is to ask the question: what is the advantage to the employer in terms of employment relations or business efficiency of excluding a group of staff from the normal service based increments that everyone else gets. The fact that the employer was negotiating at different times or with different groups does not by itself explain the advantage. The Court of Appeal may not realize that most negotiators have to conduct negotiations with employers who are not necessarily forthcoming with information, but it is clear that that it wants negotiators to think about the effects of their agreements in terms of unlawful discrimination.