Tyldesley v TML Plastics [1996] IRLR 395
Strathclyde Regional Council v Wallace [1996] IRLR 670
British Road Services Limited v Loughran [1997] IRLR 92
Three recent cases have examined the employer's defence to an equal pay claim. Where an employee (usually a woman) can show that she does like work or work of equal value and yet is paid less than male colleagues, an employer may still successfully defend the claim. But only if he can show that the difference is explained by a genuine material factor which is not the difference of sex. And the employer may also have to go further to objectively justify the difference.
So what is required of an employer to show a genuine material factor defence and when must he also objectively justify the pay difference?
Ms Tyldesley was an inspection supervisor. She earned £9,250 a year and won her claim of like work with a male supervisor recruited at a salary of £12,500.
The employers tried to explain the difference by saying that Mrs Tyldesley had not fully embraced a recently introduced total quality management system. Her comparator, they said, had previous experience of operating in a total quality management environment.
The Industrial Tribunal ruled that Ms Tyldesley was entitled to equal pay as the employer had not established a good and objectively justified ground for offering the man a higher rate of pay. The IT said it was necessary for the employer to show that they were pursuing measures that corresponded to a real need and were appropriate and necessary to meeting that need.
The Employment Appeal Tribunal has overturned this decision. It held that the IT had placed an additional burden on the employer that was not required. It is only necessary to objectively justify a pay difference where the material factor relied on to explain the difference is 1) itself a factor of sex, 2) is tainted by sex discrimination, or 3) is indirectly discriminatory.
Without one of these features, if the explanation given caused the difference in pay or was a sufficient influence to be significant and relevant, the explanation does not have to be objectively justified. The case has been sent back to the IT.
Tyldesley has been upheld and reaffirmed in the subsequent case of Strathclyde v Wallace. Ms Wallace was a teacher performing the duties of a principal teacher, but was not receiving a principal teacher's salary. In Strathclyde Regional Council there were 134 unpromoted teachers performing principal teachers duties, 81 of whom were men and 53 were women.
Nine women brought equal pay claims using a male comparator who had been appointed as a principal teacher and was receiving the higher salary. Once again the Tribunal found that they were performing like work and the case turned on the strength of the employer's defence.
The employers relied on financial constraints and the promotion structure for teachers. The Industrial Tribunal rejected the material factor defence.
The EAT found that the IT had applied the right test, in the sense that they had not required objective justification but were merely unconvinced that the differences in treatment were caused by the factors relied on.
However, the case was overturned in the Scottish Court of Session (equivalent to the Court of Appeal) which found that the IT had in fact looked for objective justification of the system the employers relied on.
The Court of Session reiterated the approach set out in Tyldesley: a difference in pay explained by a factor not itself a factor of sex or tainted by sex discrimination should, in principle, be a valid defence.
This could reduce the scope of equal pay cases where there is no underlying apparently discriminatory pattern in the workforce. The judgments appear to be saying that even if a factor which the employers seek to rely on cannot be supported on its merits, this will not undermine the genuine material factor defence, unless there is a taint of sex discrimination. The employer must also convince the tribunal that the reason put forward is genuine.
In the more encouraging decision of British Road Services v Loughran, the Northern Ireland Court of Appeal has set out when the more stringent test of objective justification of the employer's defence will be applied in equal pay cases. The NICA held that where a significant number of the claimant group are women, the employers will need to objectively justify the material factor relied on to explain the difference in pay.
In other words they will need to show the factor was necessary in that they were pursuing measures that corresponded to a real need and was appropriate and necessary to meeting that need. In short, they must not only explain the reason for the pay difference but satisfy the IT that it is a very good reason that actually works.
In the Loughran case 75% of the Applicants group - clerical workers - were women and all their comparators - warehouse operatives - were men.
The employers had tried to argue that where separate collective bargaining agreements were being used as a defence, objective justification would only be required where the statistical pattern was the same as in Enderby. In Enderby the Applicant's job was carried out almost exclusively by women and the comparator job, predominantly by men. The NICA rejected this narrow definition and upheld the original Industrial Tribunal decision in the women's favour.