Interpretation of Legislation

Employment Law – Equal Pay – Sex Discrimination – Interpretation of Legislation

The case of Redcar and Cleveland Borough Council v Bainbridge and Others [2007] concerned employment issues relating to the equality of men and women. The claimants in the case brought claims concerning pay disparities between themselves and their male comparators. According to s.1(5) of the Equal Pay Act 1970 (“the 1970 Act”), so far as is material:

“A woman is to be regarded as employed on work rated as equivalent with that of any men if, but only if, her job and their job have been given an equal value, in terms of the demand made on a worker under various headings (for instance effort, skill, decision), on a study undertaken with a view to evaluating in those terms the jobs to be done by all or any of the employees in an undertaking or group of undertakings, or would have been given an equal value but for the evaluation being made on a system setting different values for men and women on the same demand under any heading.”

The claimants, who were female, brought equal pay claims against the defendant employer. The claimants had been employed in both manual and white collar positions and had been subject to differing grading and payment schemes. Their basic rates of pay were equivalent to those of their male comparators.

However, a disparity arose from the existence of productivity agreements which had led to bonuses being paid to members of the comparator groups. The effect of the bonus schemes meant that the comparators received significantly more pay than the claimants, in some cases even up to 46% more.

On the 1^st of April 2004, the defendant implemented a large-scale re-organisation following a job evaluation scheme. That new scheme implemented a number of pay protection provisions that were to operate for a maximum period of four years to allow the pay of the female claimants to reach that of their male comparators. The claims which were lodged before the 27^th of January 2004 were conceded by the defendant. However, the defendant maintained that the disparities of pay that were the subject of the claims lodged after that date were objectively justifiable under the ‘genuine material factor’ defence under s.1(3) of the 1970 Act.

The claims were brought under s.1(2)(b) and s.1(2)(c) of the 1970 Act, and various comparators were chosen by the claimants, including some lower graded workers. The tribunal held that it was permissible for a claimant to rely on a comparator who was placed in a lower grade in the job evaluation study. The defendant appealed against this decision, and the claimants cross-appealed.

The Employment Appeal Tribunal (“EAT”) upheld the decision. It decided that where an employer had attempted to justify pay disparity caused by a pay protection scheme that was intended to rectify a pay disparity caused by earlier sex discrimination, that ‘genuine material factor’ put forward by the employer was sex tainted, and therefore incapable of justifying the disparity caused by that scheme.

The defendant appealed.

The defendant argued that the EAT had misconstrued s.1(2)(b) of the 1970 Act, which should have been given a narrow construction due to the fact that a claimant who fell outside its terms could still advance an equal value claim under s.1(2)(c). The issue was whether a woman, who could undoubtedly base a 'rated as equivalent claim' on comparison with a man in the same grade, could, having regard to s.1(5) of the 1970 Act and its Community context, alternatively base such a claim on comparison with a man who had been placed in a lower grade by the job evaluation study, but who in actuality received more pay.

The appeal was dismissed.

It was held that a woman could base a 'rated as equivalent' claim on a comparison with a man who had been placed in a lower grade by the job evaluation study but who in fact received more pay. It would be construed that s.1(5) of the 1970 Act would read as follows:

“A woman is to be regarded as employed on work rated as equivalent with that of any men if, but only if, her job and their job have been given an equal value or her job has been given a higher value, in terms of the demand made on a worker under various headings (for instance effort, skill, decision), on a study undertaken with a view to evaluating in those terms the jobs to be done by all or any of the employees in an undertaking or group of undertakings, or would have been given an equal value, or her job would have been given a higher value, but for the evaluation being made on a system setting different values for men and women on the same demand under any heading.”

Any claims under s.1(2)(b) and s.1(2)(c) were two different and mutually exclusive ways of securing equal pay for work of equal value. The defendant's submission that a narrow construction of s.1(2)(b) was justifiable, due to the fact that a claimant who fell outside its terms may nevertheless still advance an equal value claim under s.1(2)(c), could not be accepted.

It was well known that equal value claims which could not be based on an existing job evaluation study could be very expensive and time consuming. It was held that s.1(2)(b) did not stand alone, it fell to be read in conjunction with s.1(5). Once the latter section had been suitably interpreted, s.1(2)(b) required no additional words. The analysis and comments of the EAT that s.1(2)(b) and (c) were intended to implement the same Community principle of equal pay for equal work or work of equal value had therefore been correct.

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© RT COOPERS, 2008. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.