Brunnhofer v Bank der Osterreichischen Postparkasse AG [2001] IRLR 571

The need for transparency in pay systems is a recurring theme in European Court of Justice equal pay decisions. In Brunnhofer v Bank der Osterreichischen Postparkasse AG, the European Court considered a pay system which included performance related monthly pay supplements. Ms Brunnhofer's monthly supplement was lower than that of her male colleague, where both she and her male colleague were doing jobs that were classified the same under a collective agreement.

The bank's explanation for the difference in pay was that at the time that the male colleague was recruited Ms Brunnhofer's performance was poor. He was considered to be a more able employee and was therefore given more responsibility. To reflect the greater responsibility his monthly supplement was higher than hers.

The Court held that the bank's defence did not succeed. It was not lawful to decide that the male comparator was a better performing employee before he had even started his employment so as to justify a higher supplement for him rather than the existing employee, Ms Brunnhofer. Such performance pay 'cannot be determined objectively at the time of that person's appointment'. The quality of their performance can only be assessed during the actual performance of their activities.

The Court were also required to decide whether the fact that both Ms Brunnhofer and her male comparator were in the same category of collective agreement was sufficient to establish same work or work of equal value. Unsurprisingly, the Court held that the collective agreement alone was not enough. To establish the same work or work of equal value under Article 141, the same classification under a collective agreement should be supplemented by evidence of precise and concrete factors based on activities actually performed by the employees. It was for the national Court to determine the issue of the same or comparable work, and in carrying out this exercise the Court would also have to decide whether Ms Brunnhofer's reduced responsibilities affected the issue.

It has been noted that in the European Court's summary of the structure of equal pay cases, they make no mention of there being any burden on an Applicant to raise an inference of discrimination before an employer is obliged to objectively justify a difference in pay. Whether this is a signal that the House of Lords decision in Glasgow City Council v Marshall [2000] IRLR 272 will need to be revisited remains to be seen.

This point will also be explored in the next stage of the Preston v Wolverhampton Healthcare NHS Trust part time pension test cases to be heard in the Tribunal later this year.