KEEPING PAY EQUAL - unison.org.uk€¦ · KEEPING PAY EQUAL Online supplement Equal Pay and the Law...
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£ KEEPING PAY EQUAL Online supplement Equal Pay and the Law Guidance on Local Grading and Pay Reviews Trade Union Side of the Local Government Services NJC
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for web[1].docxOnline supplement Equal Pay and the Law
Guidance on Local Grading and Pay Reviews Trade Union Side of the
Local Government Services NJC
How to obtain case judgments .......................................................................................................... 2
Which judgments do tribunals and other courts have to follow? ..................................................... 3
What route can equal pay claims take? ............................................................................................. 3
What about in Northern Ireland? ...................................................................................................... 3
What is the impact of the Scotland Act 2016? .................................................................................. 4
How does the Equality Act 2010 (EqA) work in relation to equal pay? ............................................. 4
Who is covered by the Equality Act? ................................................................................................. 4
Fixed term employees and equal pay ................................................................................................ 5
Agency workers and equal pay .......................................................................................................... 6
Part time workers and equal pay ....................................................................................................... 7
Job evaluation and the role of union negotiators ............................................................................. 8
What is ‘pay’ under the Equality Act? ............................................................................................... 8
Who can be a comparator for an equal pay claim? ......................................................................... 10
What does ‘single source’ mean and how does it affect Article 157 claims? .................................. 11
Is there a legal definition of ‘job evaluation’? ................................................................................. 14
What if the employer wants to use two JE schemes? ..................................................................... 15
What is indirect sex discrimination for equal pay purposes? .......................................................... 15
What are the main material factor defences? ................................................................................. 17
TUPE protection ............................................................................................................................... 20
What could happen if a collective agreement is discriminatory? .................................................... 23
What are the time limits for equal pay cases? ................................................................................ 24
Settling equal pay claims ................................................................................................................. 25
Pay discrimination and protected characteristics (other than sex) ................................................. 25
Measuring pay gaps (other than gender) ........................................................................................ 27
Gender pay gap reporting ................................................................................................................ 27
The Equality Framework for Local Government (EFLG) ................................................................... 28
Accessing data for local grading and pay reviews ........................................................................... 30
Disclosure of information to trade unions for collective bargaining purposes ............................... 30
The Public Sector Equality Duty – specific duties ............................................................................ 33
Northern Ireland: Equality schemes ................................................................................................ 35
SUPPLEMENT TO PART 2 – EQUAL PAY AND THE LAW
Who is the Supplement for? This Guidance is a supplement to NJC Trade Union Side Guidance on Equal Pay and the Law which is in Part 2 of the NJC Trade Union Side Guide on Pay and Grading Reviews in local government organisations.
The Supplement is intended for lay representatives and paid officials, particularly those closely involved in or supporting union representatives carrying out local grading and pay reviews, such as members of the local negotiating team and full-time officials.
The content goes into more detail on some of the topics covered in Part 2, particularly in relation to the law. It assumes that you have a working knowledge of equal pay and discrimination law i.e. that you are familiar with the key legal concepts and broadly how they apply in practice.
There are some new topics in the Supplement (not included in Part 2) but most sections have a related section in Part 2 which should be read first.
How to obtain case judgments Using the references given for the cases mentioned in Part 2, you can access the full judgments online apart from employment tribunal (ET) judgments.
HM Courts and Tribunals announced in June 2016 that new ET judgments would be available online but that no decision had yet been taken on converting existing judgments. The online service covers judgments in both England and Wales and Scotland and includes some transcripts going back to 2015.
About 100 decisions from 2016 are already up there, and you can search by name, date, judge or jurisdiction code.
Here is the link: https://www.gov.uk/employment-tribunal-decisions
For earlier ET judgments, currently you have to make a written request to the Bury St Edmunds Tribunal office or (for Scottish ET judgments) the Glasgow office but check online in case the position changes.
Legislation is available online. Public libraries may also have statutes, law reports, guides to the law and publications that report and comment on cases.
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Which judgments do tribunals and other courts have to follow? Not all judgments have the same status. Employment tribunal (ET) judgments (England, Wales and Scotland) are not binding on other tribunals. They are (as lawyers put it) no more than persuasive. In other words, they do not have to be applied by other tribunals, even if the facts and circumstances of two cases seem to be identical. Exceptionally, some important equal pay tribunal cases (which have not been appealed) have been cited approvingly by judges in the appellate courts (i.e. the Employment Appeal Tribunal and above).
The decisions of the higher courts are binding authority on the lower courts (i.e. employment tribunals) and create ‘precedents’ which tribunals should follow (where they tally with the particular circumstances of the case). These decisions are known as ‘case law’ i.e. judge-made law as opposed to statute (law made by the Parliament/Assembly).
Judgments of the Employment Appeal Tribunal (EAT) are binding authority on employment tribunals (ETs) in Great Britain. Decisions of the Court of Appeal are binding on ETs and the EAT (in England and Wales) while decisions of the Inner House of the Court of Session are binding on the EAT and ETs in Scotland. Decisions of the Supreme Court (and its predecessor, the House of Lords) are binding on all domestic (UK) courts, including those in Northern Ireland.
What route can equal pay claims take? Most equal pay claims are dealt with in the employment tribunal but in some circumstances cases can be taken to the county court or High Court (England & Wales) or sheriff court (in Scotland). Appeals from the judgments of these courts go to the High Court and (in Scotland) the Court of Session (Outer House); and from there to the Supreme Court.
Judgments of employment tribunals can only be appealed to the EAT on a point of law – basically, the party who wants to the appeal (the appellant) has to show that the ET got the law wrong in some way.
In certain circumstances, tribunals in the UK can refer cases to the Court of Justice of the European Union (CJEU) but usually references to the CJEU are made by the higher courts where (for instance) a ruling is sought on the interpretation or application of EU law to the case in question.
What about in Northern Ireland? The Equality Act 2010 does not apply in Northern Ireland - there is separate legislation on equal pay and sex discrimination. Equal pay claims are made to the Industrial Tribunals, as are discrimination claims apart from those relating to religion or belief and political opinion. They are dealt with by the Fair Employment Tribunal. Decisions of both bodies can be appealed (on points of law) to the Court of Appeal.
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What is the impact of the Scotland Act 2016? At the time of writing, in Scotland, the employment tribunals and the EAT were ‘reserved tribunals’ although all powers over their management and operation are devolved to the Scottish Parliament, under the Scotland Act 2016. This means that (with some exceptions) employment law will continue to be made by the Westminster Parliament and apply in England, Wales and Scotland; likewise, judgments of the EAT in England and Scotland will continue to be binding authority in ETs in both countries and Wales.
The legislation on equal pay, set out in the Equality Act 2010, will continue to apply in Scotland (it remains ‘reserved’ under the Scotland Act 2016). However, the 2016 Act gives powers to the Scottish Parliament to impose new statutory requirements on public bodies in Scotland (and cross-border public authorities with Scottish functions), including the introduction of gender quotas and the consideration of socio-economic inequality when making strategic decisions.
Given its powers under the Scotland Act, the Scottish Government has announced its intention to abolish employment tribunal fees. Please check with your union’s Scottish office for updates.
How does the Equality Act 2010 (EqA) work in relation to equal pay? As explained in Part 2, the old provisions of the Equal Pay Act 1970 are included (with some changes) in Part 5 of the EqA 2010, ‘Equality of Terms’(sections 64-71).
Who is covered by the Equality Act? This section expands on the Part 2 content.
What about those on zero-hours contracts? According to the (former) BIS – the Department of Business, Innovation & Skills - ‘zero hours contract’ is a non-legal term used to describe many different types of casual agreements between an employer and an individual.’ (BIS, 2015).1
BIS (2015) explains that ‘generally speaking, a zero hours contract is one in which the employer does not guarantee the individual any hours of work. The employer offers the individual work when it arises, and the individual can either accept the work offered, or decide not to take up the offer of work on that occasion.’
Self-employed people are not covered by the EqA 2010 or Article 157 TFEU. Nevertheless, there can be argument about whether a person is ‘in employment’ or is self-employed.
Article 157 provides a right to equal pay to ‘workers’. A worker is a person who ‘performs services for an under the direction of another person in return for which he receives remuneration’. ‘Worker’ is not intended to include an independent provider of services ‘who is not in a relationship of subordination with the person receiving the service’. (There is now apparently little difference between Article 157 and the EqA 2010 in the definition of ‘worker’ and a person who is ‘employed’.)
1 ‘Zero hours contract’ is not defined in the 2015 Regulations prohibiting exclusivity terms in zero hours contracts.
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If a person on a zero hours contract does not have a ‘contract of employment’, she would be covered by the EqA 2010 if she is otherwise ‘employed’ i.e. she has a contract (written or oral) to personally do the work (basically, where she cannot send someone else to do the work in her place).
The distinction made between employed and self-employed workers can be a problem for casual workers.
What about casual workers?
In general, casual workers are classified as independent contractors rather than employees because there is no obligation on the employer to offer them work and no obligation on the part of person to accept work that is offered. In legal terms, there is no ‘mutuality of obligation’.
Casual work is typified by breaks between periods of work. This can cause problems for casual workers who regularly work for the same employer and claim that they are employees or contracted personally to do the work. For example, in Windle v Secretary of State for Justice (2016 EWCA Civ 459) the claimants were court interpreters. They had to show that they worked in a subordinate position, carried out the work personally and were integrated into the employer’s business. The interpreters’ claim fell - the Court of Appeal decided that because they were under no obligation to accept any next assignment, this pointed towards them not being in a subordinate position.
The outcome of cases where the employment status of the claimant is at issue will depend on the particular facts of each case but Windle is unhelpful in ruling that ‘mutuality of obligation’ between assignments is a relevant factor to be taken into account in assessing the extent of subordination. This was already the position in relation to unfair dismissal claims (under ERA 1996), but the Court of Appeal have extended it to discrimination claims (under the EqA 2010) including equal pay claims. The judgment could make it harder for zero hours workers and other casual workers who do not have a contract of employment to show that they have a contract personally to do work. (At the time of writing, it was not known if Windle would be appealed to the Supreme Court – please check for updates.)
The statutory definition of ‘fixed-term contracts’(see below) could cover ‘seasonal’ or ‘casual’ employment contracts that last for a short period or cover a specific task, for example, a summer deck-chair attendant. A casual worker may also be able to be classed as an employee in certain other circumstances – please refer to other union guidance for further information.
Note: Unlike temporary employees, there is no reference in the Green Book to casual workers.
Fixed term employees and equal pay The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (the FTE Regs) provide protection to an employee who is employed under a fixed-term contract.
The Regulations apply to ‘employees’ not ‘workers’. (They exclude employees working under a contract of apprenticeship or an apprenticeship agreement.)
Under the Regs, a fixed-term employee has the right ‘not to be treated less favourably than the employer treats a comparable permanent employee as regards the terms of his
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contract, or by being subjected to any other detriment by any act, or deliberate failure to act, of the employer’ (Reg 3(1)). The Regs cover pay and pensions.
In Coutts and Co plc and anor v Cure and anor (2005 ICR 1098 EAT), the EAT held that non- payment of a (non-contractual) bonus to a fixed-term employee amounted to a detriment. The comparator (a permanent employee) and the claimant must be employed by the same employer; engaged in the same or broadly similar work; and work at the same establishment.
The fixed-term employee must show that the less favourable treatment was ‘on the ground that’ she (or he) ‘is a fixed-term employee’ – Reg 3(3)(a). But her claim will fail if the less favourable treatment ‘is justified on objective grounds.’ This will include situations where, taken as a whole, the fixed-term employee’s contract is at least as favourable as the comparable employee’s contract. The ‘total package’ approach is different from the EqA ‘term by term comparison approach.
A claim under the FTE Regs will fail if the employer shows the treatment was for a reason other than on the ground that she is a fixed-term employee.
Note: The Green Book Part 2:9 states that ‘temporary employees shall receive pay and conditions of service equivalent to that of permanent employees.
Agency workers and equal pay The Agency Workers Regulations 2010 seek to protect agency workers in their relationship with ‘temporary work agencies’ and ‘hirers’ (the end-users of an agency worker’s services). Temporary work agencies (TWA) and hirers must ensure that an agency worker who has completed a 12 weeks qualifying period receives the same pay as he or she would be entitled to for doing the same job, at the time the qualifying period commenced, had he or she been recruited directly by the hirer – Reg 5(1). Pay is pay for work done and includes basic pay, overtime payments, allowances for working shifts or unsocial hours, payments for annual leave and bonus payments. (But any bonus, incentive payment or reward that is not directly attributable to the amount or quality of the work done is excluded.) Most benefits in kind fall outside the scope of ‘pay’.
Where the ‘Swedish derogation’ applies, i.e. where the agency worker has a permanent contract of employment with the TWA which satisfies certain conditions and she is paid a minimum amount between assignments, she is not entitled to parity of pay under the Regulations.
The EqA 2010 definition of who is ‘employed’ for equal pay purposes applies to agency workers but she may have difficulty finding a comparator with whom she is ‘in the same employment’. The ‘common terms’ argument might assist here (see the earlier sections in Part 2 on who is covered by the EqA equality of terms provisions).
The EqA 2010 s.41 prohibits (specified) discrimination by ‘principals’ (end-users) against agency workers but there is no similar provision in respect of equal pay.
There has been considerable litigation over the question of when agency workers are employees of the end-user. The leading case is James v Greenwich London Borough Council 2007 ICR 577 EAT (approved by the Court of Appeal, 2008, ICR 545). The threshold for establishing employment status is high.
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Part time workers and equal pay Union representatives need to take careful account of the differences between the Part- time (Prevention of Less Favourable Treatment) Regulations 2000 (the PWT Regs) and the EqA 2010 in advising members who work part-time which route might be best to use in challenging less favourable treatment.
Most part-time workers in local government are women and will be covered by the EqA 2010 equality of terms provisions for equal pay purposes – as will men working part-time where the comparator is a female employee. An exception to this is where part-time workers do not have a contract of employment or apprenticeship or a contract personally to do work (see earlier sections of Part 2).
A part-time worker cannot claim equal pay (i.e. under the EqA equality of terms provisions) on the basis that he or she is a part-time worker – she can only make an equal pay claim on the basis of her sex, i.e. she is paid less than a person of the opposite sex. (The comparator can work full or part-time.)
The Part-time (Prevention of Less Favourable Treatment) Regulations 2000 (the PWT Regs), give part-time workers (men and women) a right not to be treated less favourably than full- time workers unless any difference in treatment can be objectively justified.
Under the Regulations, a part-time worker can compare her or his treatment only with a full-time comparator (of either sex).
The part-time worker and her comparator must be engaged in ‘the same or broadly similar work’ having regard, where relevant, to whether they have a similar level of ‘qualification, skills and experience – Reg 2(4)(a) (ii). This is a different test to that used by the EqA 2010. Where a female part-time worker is doing the same or broadly similar work to a full-time male worker in the same employment but is paid less, she may be better advised to pursue an equal pay claim, depending on whether it can be shown that she is doing equal work with her comparator.
Under the PTW Regs, it is not entirely clear that the comparison of contractual terms has to be made on a term by term basis (as it must for equal pay claims – as explained in Part 2).
The claimant and comparator must be in the same employment but this does not include an associated employer (as it does under the EqA 2010).
Note: This is a very brief outline of the PTW Regs – please refer to other union guidance for more detailed information.
Part-time workers and training courses
Paid time-off for training (for example) is ‘pay’ within the meaning of Article 157 (Arbeiterwohlfahrt der Stadt Berlin eV v Bötel 1992 IRLR 423, ECJ; Davies v Neath Port Talbot Borough Council 1999 ICR 1132, EAT).
Part 2 of the Green Book states:
‘8.1 Part time employees shall have applied to them the pay and conditions of service pro- rata to comparable full time employees in the same authority, except for:
a) training and development - where part time employees should have access equal to that of full time employees and when on training courses outside their contracted daily hours shall be paid on the same basis as full time employees’
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b) the car allowance scheme - which applies to part time employees in full on the same basis as full time employees.’
(Note that this provision applies to female and male part-time employees.)
Job evaluation and the role of union negotiators Part 1 of the Guide stressed the importance of union representatives being involved in the job evaluation process in organisations at every stage.
What if the JE process is not finished?
This question was answered briefly in Part 2 – also see Part 1.
What if pay and /or benefits are non-contractual?
It may not always be clear whether an element of pay (such as a performance-related payment) is contractual or not. Under the previous legislation, to protect her position, a claimant doing equal work with her comparator (but receiving less performance-related pay) would submit an equal pay claim and a sex discrimination claim. If the tribunal established (for example) that the payment was contractual, the sex discrimination claim could fall away. Pleading in the alternative (as the lawyers call it) is still possible under the EqA 2010 although the equality of terms provisions seems to be stricter about excluding sex discrimination claims (see section 70).
Union representatives should get legal advice on how claims should be framed where there is doubt about which route applies - sex discrimination or equality of terms. (It is important to bear in mind that different time limits apply to equal pay and sex discrimination claims).
Maternity pay
Maternity pay (contractual and statutory) is in scope of Article 157, however the ECJ has held that women taking maternity leave are in a special ‘protected’ position, so their situation is not comparable with that of men or women actually at work. Therefore they are not entitled under Article 157 or the recast Directive to full pay during maternity leave, although they must receive pay rises awarded during maternity leave. (Gillespie v Northern Health and Social Services Board 1996 IRLR 214 ECJ). See the Part 2 section on maternity leave for information on the provisions of the EqA 2010.
The ECJ has held that a public employer’s scheme to make subsidised nursery places available to employees did not constitute ‘pay’ under Article 157 (Lommers v Minister van
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Landbouw, Natuurbeheer en Visserij 2002 IRLR 430, ECJ) but that they were a ‘working condition’ under the (then) EU Equal Treatment Directive, now part of the recast Directive. (By ‘working condition’ the ECJ meant that the nursery places facilitated the exercise of the occupational activity of the employees concerned.)
What is the remedy in successful equal pay cases?
The Act entitles the claimant to equality in pay and other contractual terms of employment. This means:
! The less favourable term of her contract is modified so as to not be less favourable than the corresponding term in his contract. (So, for example, if her basic hourly rate of pay was lower, it would have to raised to his hourly rate of pay)
! If she does not have a term which corresponds to a term in his contract (that benefits him), the terms of her contract are modified so as to include such a term. Generally, successful claimants will be entitled to back pay – the pay she should have been receiving - and possibly interest on the arrears.
Issues for union representatives to consider in settling members’ claims or potential claims are outlined later in the section ‘Settling equal pay claims’
Can the employment tribunal (ET) make recommendations to the employer to put right wider pay discrimination?
In some circumstances, the tribunal can order the employer to carry out an equal pay audit (outlined in Part 2).
However, the power of the tribunal to make recommendations (beyond those affecting the successful claimant/s) was removed by the Deregulation Act 2015. Tribunals can no longer make wider recommendations to ‘obviate or reduce the adverse effect of a contravention’ of the EqA, Part 5 (Work) - which covers equal pay and employment related discrimination claims. For example, where the tribunal found that a system for assessing performance indirectly discriminated against the complainant, it could not recommend that the employer investigate the effects on other female employees (unless they were part of a multiple claim).
In an indirect discrimination case, the tribunal cannot make a recommendation if it is satisfied that the ‘provision, criterion or practice’ (PCP) which caused the problem was not applied with the intention of discriminating against the complainant (EqA 2010, s.124).
Can the court order an unenforceable term in a contract to be modified or removed?
An enforceable term in a contract of employment is a term that ‘constitutes, promotes or provides for treatment prohibited by the Act’.
The county court or (in Scotland) sheriff may order an unenforceable term to be removed or modified (s.143) on ‘the application of a person who has an interest in the contract’. But this is rarely done because every person who would be affected by the removal or modification of the term has to be given notice of the application and the opportunity to make representations.
(This power does not apply to any term that may breach the Public Sector Equality Duty – there are separate provisions on enforcing the PSED.
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Who can be a comparator for an equal pay claim? Is it possible to have a hypothetical comparator?
Not for an equal pay claim - there is a possibility that a claimant could use a hypothetical comparator if she was subject to direct discrimination in relation to pay, for instance, if an employer said ‘I would pay you more if you were a man’. This would be a discrimination claim (EqA, s.71(2).
Indirect discrimination claims in relation to non-contractual terms can have hypothetical comparators.
Are there circumstances where there is no need for a comparator in an equal pay case?
Only in limited circumstances.
To bring an equal pay case, in certain circumstances, women on maternity leave are not required to have a male comparator (EqA 2010, ss.72-76).
Secondly, a comparator is not required where a discriminatory provision derives from national law (for example, an indirectly discriminatory rule in the Teachers’ Superannuation Scheme), and a statistical analysis demonstrates adverse impact on one sex (Allonby v Accrington and Rossendale College and ors, 2004 ICR 1328, ECJ).
In most indirect discrimination claims, the claimant must have a comparator but she does not necessarily have to show that a ‘provision, criterion or practice’ (PCP) of the employer is causing the disadvantage – in some cases, statistical evidence which demonstrates adverse impact is sufficient to establish prima facie sex discrimination.
If the claimant has longer service than the comparator and she wins her equal pay case, what happens to her pay?
Usually the claimant has more than one comparator because there is no guarantee at the outset which ones will be found by the tribunal to be doing equal work with her.
In Evesham v North Hertfordshire Health Authority and another (2000, ICR 612, CA), the claimant’s work was rated higher (under a JE scheme) than the comparator’s work but she was paid less. However, her pay could only be raised to the level of his pay – this is the effect of the modification of the term in her contract to be no less favourable (but not more favourable) than the term in his contract.
The Evesham case highlights the importance of choosing the right comparator/s. The claimant, a speech therapist, cited a sole male clinical psychologist as her comparator who had much shorter service than her and this was reflected by the fact that he was on a low point on his payscale. If she had chosen a clinical psychologist with commensurate years of service to her, she might have achieved a higher rate of pay (provided, of course, her job had been rated as equivalent to his).
‘Same establishment’ and the EqA 2010
Part 2 cited the case of City of Edinburgh v Wilkinson and ors (2014 CHIS 27). On the face of it, Wilkinson is an unhelpful judgment which could narrow the scope for ‘same
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establishment’ claims. However this case was taken under the Equal Pay Act 1970 – the EqA 2010 is worded differently in respect of these provisions.
There is also a new and (at the time of writing) untested provision in the EqA 2010, section 80(3): ‘If work is not done at an establishment, it is to be treated as done at the establishment with which it has the closest connection’.
Having wider scope for ‘same establishment’ claims could be important if Brexit results in closing off the Article 157 route (‘same service’ claims).
What does ‘single source’ mean and how does it affect Article 157 claims?
This section supplements Part 2 by outlining the history of the ‘same service - single source’ litigation.
The ECJ ruled that Article 119 (now 157) permits equal pay comparisons with persons employed in the ‘same establishment or service as the claimant’ (Defrenne v Sabena 1976 ICR 547, ECJ) whether public or private (Macarthys Ltd v Smith, 1980 ICR672, EAT).
In Scullard v Knowles & Southern Regional Council for Education and Training (1996 IRLR 344), the EAT permitted Ms Scullard, a unit manager employed by a (then) Training & Education Regional Council, to name as her comparators male unit managers employed by other such bodies, all of which were independent of the Secretary of State for Employment but funded by the Department of Employment. Initially, this judgment raised the prospect that ‘same service’ claims might enable cross-employer claims in local government. (The 1997 national single status agreement did not prescribe national grades – authorities were required to carry out local grading and pay reviews. This meant that it was possible for men and women employed by different authorities but doing equal work to be paid differently.) At the time, it was also hoped that Article 157 claims might stop private contractors from cutting the pay of their ex-local authority employees. However, Scullard was followed by a clutch of judgments which have limited the use of Article 157 to challenge pay inequality in cross-employer cases.
The ‘same service’ argument was deployed by UNISON in Lawrence & others v Regent Office Care Ltd and ors (2003 ICR 1092 ECJ). The claimants included female school meals staff who transferred from North Yorkshire County Council to a private contractor. They ended up working on less favourable terms and conditions than men still employed by the Council whose jobs had been ‘rated as equivalent’ in value to their jobs by the local government Manual Workers’ job evaluation scheme. The union argued that even though the women were no longer working for the council but for a different employer, they were entitled to equal pay because they were still working in the ‘same service’. The ECJ held that where differences in pay cannot be attributed to a single source, equal pay claims will not be in scope of Article 141 (now 157). To put it more simply, in the words of the original tribunal’s decision, ‘the person who discriminates has to be in control both of the women’s wages and the comparator’s wages’. In this case, the employers argued successfully that there must be a common source from which the terms and conditions of both the claimant and comparator derive (as when different employers are required to apply the same collective agreement, or where terms and conditions have been laid down by statute or a regulation).
Furthermore, it was argued that unless the difference in pay can be traced to a single source, the employer who is accused of sex discrimination (because he pays women workers less
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than the male comparator’s employer) is not in a position to explain the difference or to explain why that difference is objectively justified. The Advocate-General’s opinion (adopted by the ECJ) put it in this way: ‘...Article 141 is addressed to those who may be held responsible for [the pay difference] i.e. the legislature, the parties to a collective works agreement and the management of a corporate group...On the other hand, if differences in pay arise [where] respective employers are separately responsible for the terms and conditions ...within their own undertaking or establishment, they cannot possibly be held individually accountable for any differences in the terms and conditions ...between those undertakings’.
If the women’s and the comparators’ (different) employers were party to the national agreement, grading and pay would be determined by local collective agreements rather than a ‘single source’, suggesting that claims across authorities under Article 141 would be ruled out. Even if the claim for equal pay was in relation to a contractual term derived from Part 2 of the national agreement which is binding on all NJC (or SJC) authorities, individual employers are responsible for pay disparity and putting it right, not the NJC/SJC.
The ECJ judgment in Lawrence appears to severely limit scope for comparisons between claimants employed by a local authority which has opted out of the national agreements and comparators employed by an NJC/SJC authority (or vice versa).
Subsequent Article 157 cases confirmed that the ‘single source’ test sets a high bar for claimants.
In Allonby v Accrington & Rossendale College and ors (2004 IRLR 224 ECJ), the ECJ ruled that a female lecturer employed through an agency could not claim equal pay with male lecturers employed directly by the College. Ms Allonby had been employed originally as a part-time lecturer on a series of short term contracts. As a cost-cutting measure, her contract was not renewed and she was re-engaged as a sub-contractor of an agency, as a self-employed person. She was paid on a fee per assignment basis by the agency. Her comparator was paid by the College under conditions determined by the College. Her fee and some other benefits were then reduced compared with directly employed lecturers. The fact that her fee was influenced by the amount the College paid the agency was not held to meet the ‘single source’ requirement – it was ‘not a sufficient basis for concluding that the college and ELS [the agency] constitute a single source to which can be attributed the differences identified in Ms Allonby’s conditions of pay and those of the male worker paid by the college’. Accordingly, her equal pay claim failed.
In Dolphin and ors v Hartlepool Borough Council and ors (EAT 0559/05), female support staff in voluntary-aided schools, employed by the governing bodies of those schools, sought equal pay with male workers employed by the Council at different establishments. The EAT upheld the tribunal’s decision that the claimants could not show they were in the ‘same service’ as the men by virtue of there being a ‘single source’. Although the governing bodies and the Council applied the same pay scales, the voluntary-aided schools were run by the governing bodies as separate entities and operated autonomously in engaging staff as an employer and being responsible for staff terms and conditions. Consequently, the Council was not the ‘single source’ responsible for setting their terms and conditions and for restoring equality.
In Robertson & others v Department for Environment, Food and Rural Affairs (2005 EWCA Civ 138), the Court of Appeal upheld a judgment of the EAT that a group of male civil servants were not entitled to compare their pay with women civil servants working in another government department. Technically, they had the same employer (the Crown), but responsibility for pay negotiation had been delegated by the Crown to each department or agency. The employment tribunal had decided that the Treasury had material control over the terms and conditions to such a degree that it could properly be regarded as being a ‘single
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source’. The EAT and the Court of Appeal disagreed. The Court held that working for the same employer is not sufficient to establish common employment for the purposes of an Article 141 claim. Neither the Treasury nor the Cabinet Office was involved in negotiations within different departments and there was no coordination between the different sets of negotiations. Therefore the Crown could not be said to be the body (the ‘single source&rsquo
Guidance on Local Grading and Pay Reviews Trade Union Side of the
Local Government Services NJC
How to obtain case judgments .......................................................................................................... 2
Which judgments do tribunals and other courts have to follow? ..................................................... 3
What route can equal pay claims take? ............................................................................................. 3
What about in Northern Ireland? ...................................................................................................... 3
What is the impact of the Scotland Act 2016? .................................................................................. 4
How does the Equality Act 2010 (EqA) work in relation to equal pay? ............................................. 4
Who is covered by the Equality Act? ................................................................................................. 4
Fixed term employees and equal pay ................................................................................................ 5
Agency workers and equal pay .......................................................................................................... 6
Part time workers and equal pay ....................................................................................................... 7
Job evaluation and the role of union negotiators ............................................................................. 8
What is ‘pay’ under the Equality Act? ............................................................................................... 8
Who can be a comparator for an equal pay claim? ......................................................................... 10
What does ‘single source’ mean and how does it affect Article 157 claims? .................................. 11
Is there a legal definition of ‘job evaluation’? ................................................................................. 14
What if the employer wants to use two JE schemes? ..................................................................... 15
What is indirect sex discrimination for equal pay purposes? .......................................................... 15
What are the main material factor defences? ................................................................................. 17
TUPE protection ............................................................................................................................... 20
What could happen if a collective agreement is discriminatory? .................................................... 23
What are the time limits for equal pay cases? ................................................................................ 24
Settling equal pay claims ................................................................................................................. 25
Pay discrimination and protected characteristics (other than sex) ................................................. 25
Measuring pay gaps (other than gender) ........................................................................................ 27
Gender pay gap reporting ................................................................................................................ 27
The Equality Framework for Local Government (EFLG) ................................................................... 28
Accessing data for local grading and pay reviews ........................................................................... 30
Disclosure of information to trade unions for collective bargaining purposes ............................... 30
The Public Sector Equality Duty – specific duties ............................................................................ 33
Northern Ireland: Equality schemes ................................................................................................ 35
SUPPLEMENT TO PART 2 – EQUAL PAY AND THE LAW
Who is the Supplement for? This Guidance is a supplement to NJC Trade Union Side Guidance on Equal Pay and the Law which is in Part 2 of the NJC Trade Union Side Guide on Pay and Grading Reviews in local government organisations.
The Supplement is intended for lay representatives and paid officials, particularly those closely involved in or supporting union representatives carrying out local grading and pay reviews, such as members of the local negotiating team and full-time officials.
The content goes into more detail on some of the topics covered in Part 2, particularly in relation to the law. It assumes that you have a working knowledge of equal pay and discrimination law i.e. that you are familiar with the key legal concepts and broadly how they apply in practice.
There are some new topics in the Supplement (not included in Part 2) but most sections have a related section in Part 2 which should be read first.
How to obtain case judgments Using the references given for the cases mentioned in Part 2, you can access the full judgments online apart from employment tribunal (ET) judgments.
HM Courts and Tribunals announced in June 2016 that new ET judgments would be available online but that no decision had yet been taken on converting existing judgments. The online service covers judgments in both England and Wales and Scotland and includes some transcripts going back to 2015.
About 100 decisions from 2016 are already up there, and you can search by name, date, judge or jurisdiction code.
Here is the link: https://www.gov.uk/employment-tribunal-decisions
For earlier ET judgments, currently you have to make a written request to the Bury St Edmunds Tribunal office or (for Scottish ET judgments) the Glasgow office but check online in case the position changes.
Legislation is available online. Public libraries may also have statutes, law reports, guides to the law and publications that report and comment on cases.
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Which judgments do tribunals and other courts have to follow? Not all judgments have the same status. Employment tribunal (ET) judgments (England, Wales and Scotland) are not binding on other tribunals. They are (as lawyers put it) no more than persuasive. In other words, they do not have to be applied by other tribunals, even if the facts and circumstances of two cases seem to be identical. Exceptionally, some important equal pay tribunal cases (which have not been appealed) have been cited approvingly by judges in the appellate courts (i.e. the Employment Appeal Tribunal and above).
The decisions of the higher courts are binding authority on the lower courts (i.e. employment tribunals) and create ‘precedents’ which tribunals should follow (where they tally with the particular circumstances of the case). These decisions are known as ‘case law’ i.e. judge-made law as opposed to statute (law made by the Parliament/Assembly).
Judgments of the Employment Appeal Tribunal (EAT) are binding authority on employment tribunals (ETs) in Great Britain. Decisions of the Court of Appeal are binding on ETs and the EAT (in England and Wales) while decisions of the Inner House of the Court of Session are binding on the EAT and ETs in Scotland. Decisions of the Supreme Court (and its predecessor, the House of Lords) are binding on all domestic (UK) courts, including those in Northern Ireland.
What route can equal pay claims take? Most equal pay claims are dealt with in the employment tribunal but in some circumstances cases can be taken to the county court or High Court (England & Wales) or sheriff court (in Scotland). Appeals from the judgments of these courts go to the High Court and (in Scotland) the Court of Session (Outer House); and from there to the Supreme Court.
Judgments of employment tribunals can only be appealed to the EAT on a point of law – basically, the party who wants to the appeal (the appellant) has to show that the ET got the law wrong in some way.
In certain circumstances, tribunals in the UK can refer cases to the Court of Justice of the European Union (CJEU) but usually references to the CJEU are made by the higher courts where (for instance) a ruling is sought on the interpretation or application of EU law to the case in question.
What about in Northern Ireland? The Equality Act 2010 does not apply in Northern Ireland - there is separate legislation on equal pay and sex discrimination. Equal pay claims are made to the Industrial Tribunals, as are discrimination claims apart from those relating to religion or belief and political opinion. They are dealt with by the Fair Employment Tribunal. Decisions of both bodies can be appealed (on points of law) to the Court of Appeal.
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What is the impact of the Scotland Act 2016? At the time of writing, in Scotland, the employment tribunals and the EAT were ‘reserved tribunals’ although all powers over their management and operation are devolved to the Scottish Parliament, under the Scotland Act 2016. This means that (with some exceptions) employment law will continue to be made by the Westminster Parliament and apply in England, Wales and Scotland; likewise, judgments of the EAT in England and Scotland will continue to be binding authority in ETs in both countries and Wales.
The legislation on equal pay, set out in the Equality Act 2010, will continue to apply in Scotland (it remains ‘reserved’ under the Scotland Act 2016). However, the 2016 Act gives powers to the Scottish Parliament to impose new statutory requirements on public bodies in Scotland (and cross-border public authorities with Scottish functions), including the introduction of gender quotas and the consideration of socio-economic inequality when making strategic decisions.
Given its powers under the Scotland Act, the Scottish Government has announced its intention to abolish employment tribunal fees. Please check with your union’s Scottish office for updates.
How does the Equality Act 2010 (EqA) work in relation to equal pay? As explained in Part 2, the old provisions of the Equal Pay Act 1970 are included (with some changes) in Part 5 of the EqA 2010, ‘Equality of Terms’(sections 64-71).
Who is covered by the Equality Act? This section expands on the Part 2 content.
What about those on zero-hours contracts? According to the (former) BIS – the Department of Business, Innovation & Skills - ‘zero hours contract’ is a non-legal term used to describe many different types of casual agreements between an employer and an individual.’ (BIS, 2015).1
BIS (2015) explains that ‘generally speaking, a zero hours contract is one in which the employer does not guarantee the individual any hours of work. The employer offers the individual work when it arises, and the individual can either accept the work offered, or decide not to take up the offer of work on that occasion.’
Self-employed people are not covered by the EqA 2010 or Article 157 TFEU. Nevertheless, there can be argument about whether a person is ‘in employment’ or is self-employed.
Article 157 provides a right to equal pay to ‘workers’. A worker is a person who ‘performs services for an under the direction of another person in return for which he receives remuneration’. ‘Worker’ is not intended to include an independent provider of services ‘who is not in a relationship of subordination with the person receiving the service’. (There is now apparently little difference between Article 157 and the EqA 2010 in the definition of ‘worker’ and a person who is ‘employed’.)
1 ‘Zero hours contract’ is not defined in the 2015 Regulations prohibiting exclusivity terms in zero hours contracts.
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If a person on a zero hours contract does not have a ‘contract of employment’, she would be covered by the EqA 2010 if she is otherwise ‘employed’ i.e. she has a contract (written or oral) to personally do the work (basically, where she cannot send someone else to do the work in her place).
The distinction made between employed and self-employed workers can be a problem for casual workers.
What about casual workers?
In general, casual workers are classified as independent contractors rather than employees because there is no obligation on the employer to offer them work and no obligation on the part of person to accept work that is offered. In legal terms, there is no ‘mutuality of obligation’.
Casual work is typified by breaks between periods of work. This can cause problems for casual workers who regularly work for the same employer and claim that they are employees or contracted personally to do the work. For example, in Windle v Secretary of State for Justice (2016 EWCA Civ 459) the claimants were court interpreters. They had to show that they worked in a subordinate position, carried out the work personally and were integrated into the employer’s business. The interpreters’ claim fell - the Court of Appeal decided that because they were under no obligation to accept any next assignment, this pointed towards them not being in a subordinate position.
The outcome of cases where the employment status of the claimant is at issue will depend on the particular facts of each case but Windle is unhelpful in ruling that ‘mutuality of obligation’ between assignments is a relevant factor to be taken into account in assessing the extent of subordination. This was already the position in relation to unfair dismissal claims (under ERA 1996), but the Court of Appeal have extended it to discrimination claims (under the EqA 2010) including equal pay claims. The judgment could make it harder for zero hours workers and other casual workers who do not have a contract of employment to show that they have a contract personally to do work. (At the time of writing, it was not known if Windle would be appealed to the Supreme Court – please check for updates.)
The statutory definition of ‘fixed-term contracts’(see below) could cover ‘seasonal’ or ‘casual’ employment contracts that last for a short period or cover a specific task, for example, a summer deck-chair attendant. A casual worker may also be able to be classed as an employee in certain other circumstances – please refer to other union guidance for further information.
Note: Unlike temporary employees, there is no reference in the Green Book to casual workers.
Fixed term employees and equal pay The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (the FTE Regs) provide protection to an employee who is employed under a fixed-term contract.
The Regulations apply to ‘employees’ not ‘workers’. (They exclude employees working under a contract of apprenticeship or an apprenticeship agreement.)
Under the Regs, a fixed-term employee has the right ‘not to be treated less favourably than the employer treats a comparable permanent employee as regards the terms of his
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contract, or by being subjected to any other detriment by any act, or deliberate failure to act, of the employer’ (Reg 3(1)). The Regs cover pay and pensions.
In Coutts and Co plc and anor v Cure and anor (2005 ICR 1098 EAT), the EAT held that non- payment of a (non-contractual) bonus to a fixed-term employee amounted to a detriment. The comparator (a permanent employee) and the claimant must be employed by the same employer; engaged in the same or broadly similar work; and work at the same establishment.
The fixed-term employee must show that the less favourable treatment was ‘on the ground that’ she (or he) ‘is a fixed-term employee’ – Reg 3(3)(a). But her claim will fail if the less favourable treatment ‘is justified on objective grounds.’ This will include situations where, taken as a whole, the fixed-term employee’s contract is at least as favourable as the comparable employee’s contract. The ‘total package’ approach is different from the EqA ‘term by term comparison approach.
A claim under the FTE Regs will fail if the employer shows the treatment was for a reason other than on the ground that she is a fixed-term employee.
Note: The Green Book Part 2:9 states that ‘temporary employees shall receive pay and conditions of service equivalent to that of permanent employees.
Agency workers and equal pay The Agency Workers Regulations 2010 seek to protect agency workers in their relationship with ‘temporary work agencies’ and ‘hirers’ (the end-users of an agency worker’s services). Temporary work agencies (TWA) and hirers must ensure that an agency worker who has completed a 12 weeks qualifying period receives the same pay as he or she would be entitled to for doing the same job, at the time the qualifying period commenced, had he or she been recruited directly by the hirer – Reg 5(1). Pay is pay for work done and includes basic pay, overtime payments, allowances for working shifts or unsocial hours, payments for annual leave and bonus payments. (But any bonus, incentive payment or reward that is not directly attributable to the amount or quality of the work done is excluded.) Most benefits in kind fall outside the scope of ‘pay’.
Where the ‘Swedish derogation’ applies, i.e. where the agency worker has a permanent contract of employment with the TWA which satisfies certain conditions and she is paid a minimum amount between assignments, she is not entitled to parity of pay under the Regulations.
The EqA 2010 definition of who is ‘employed’ for equal pay purposes applies to agency workers but she may have difficulty finding a comparator with whom she is ‘in the same employment’. The ‘common terms’ argument might assist here (see the earlier sections in Part 2 on who is covered by the EqA equality of terms provisions).
The EqA 2010 s.41 prohibits (specified) discrimination by ‘principals’ (end-users) against agency workers but there is no similar provision in respect of equal pay.
There has been considerable litigation over the question of when agency workers are employees of the end-user. The leading case is James v Greenwich London Borough Council 2007 ICR 577 EAT (approved by the Court of Appeal, 2008, ICR 545). The threshold for establishing employment status is high.
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Part time workers and equal pay Union representatives need to take careful account of the differences between the Part- time (Prevention of Less Favourable Treatment) Regulations 2000 (the PWT Regs) and the EqA 2010 in advising members who work part-time which route might be best to use in challenging less favourable treatment.
Most part-time workers in local government are women and will be covered by the EqA 2010 equality of terms provisions for equal pay purposes – as will men working part-time where the comparator is a female employee. An exception to this is where part-time workers do not have a contract of employment or apprenticeship or a contract personally to do work (see earlier sections of Part 2).
A part-time worker cannot claim equal pay (i.e. under the EqA equality of terms provisions) on the basis that he or she is a part-time worker – she can only make an equal pay claim on the basis of her sex, i.e. she is paid less than a person of the opposite sex. (The comparator can work full or part-time.)
The Part-time (Prevention of Less Favourable Treatment) Regulations 2000 (the PWT Regs), give part-time workers (men and women) a right not to be treated less favourably than full- time workers unless any difference in treatment can be objectively justified.
Under the Regulations, a part-time worker can compare her or his treatment only with a full-time comparator (of either sex).
The part-time worker and her comparator must be engaged in ‘the same or broadly similar work’ having regard, where relevant, to whether they have a similar level of ‘qualification, skills and experience – Reg 2(4)(a) (ii). This is a different test to that used by the EqA 2010. Where a female part-time worker is doing the same or broadly similar work to a full-time male worker in the same employment but is paid less, she may be better advised to pursue an equal pay claim, depending on whether it can be shown that she is doing equal work with her comparator.
Under the PTW Regs, it is not entirely clear that the comparison of contractual terms has to be made on a term by term basis (as it must for equal pay claims – as explained in Part 2).
The claimant and comparator must be in the same employment but this does not include an associated employer (as it does under the EqA 2010).
Note: This is a very brief outline of the PTW Regs – please refer to other union guidance for more detailed information.
Part-time workers and training courses
Paid time-off for training (for example) is ‘pay’ within the meaning of Article 157 (Arbeiterwohlfahrt der Stadt Berlin eV v Bötel 1992 IRLR 423, ECJ; Davies v Neath Port Talbot Borough Council 1999 ICR 1132, EAT).
Part 2 of the Green Book states:
‘8.1 Part time employees shall have applied to them the pay and conditions of service pro- rata to comparable full time employees in the same authority, except for:
a) training and development - where part time employees should have access equal to that of full time employees and when on training courses outside their contracted daily hours shall be paid on the same basis as full time employees’
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b) the car allowance scheme - which applies to part time employees in full on the same basis as full time employees.’
(Note that this provision applies to female and male part-time employees.)
Job evaluation and the role of union negotiators Part 1 of the Guide stressed the importance of union representatives being involved in the job evaluation process in organisations at every stage.
What if the JE process is not finished?
This question was answered briefly in Part 2 – also see Part 1.
What if pay and /or benefits are non-contractual?
It may not always be clear whether an element of pay (such as a performance-related payment) is contractual or not. Under the previous legislation, to protect her position, a claimant doing equal work with her comparator (but receiving less performance-related pay) would submit an equal pay claim and a sex discrimination claim. If the tribunal established (for example) that the payment was contractual, the sex discrimination claim could fall away. Pleading in the alternative (as the lawyers call it) is still possible under the EqA 2010 although the equality of terms provisions seems to be stricter about excluding sex discrimination claims (see section 70).
Union representatives should get legal advice on how claims should be framed where there is doubt about which route applies - sex discrimination or equality of terms. (It is important to bear in mind that different time limits apply to equal pay and sex discrimination claims).
Maternity pay
Maternity pay (contractual and statutory) is in scope of Article 157, however the ECJ has held that women taking maternity leave are in a special ‘protected’ position, so their situation is not comparable with that of men or women actually at work. Therefore they are not entitled under Article 157 or the recast Directive to full pay during maternity leave, although they must receive pay rises awarded during maternity leave. (Gillespie v Northern Health and Social Services Board 1996 IRLR 214 ECJ). See the Part 2 section on maternity leave for information on the provisions of the EqA 2010.
The ECJ has held that a public employer’s scheme to make subsidised nursery places available to employees did not constitute ‘pay’ under Article 157 (Lommers v Minister van
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Landbouw, Natuurbeheer en Visserij 2002 IRLR 430, ECJ) but that they were a ‘working condition’ under the (then) EU Equal Treatment Directive, now part of the recast Directive. (By ‘working condition’ the ECJ meant that the nursery places facilitated the exercise of the occupational activity of the employees concerned.)
What is the remedy in successful equal pay cases?
The Act entitles the claimant to equality in pay and other contractual terms of employment. This means:
! The less favourable term of her contract is modified so as to not be less favourable than the corresponding term in his contract. (So, for example, if her basic hourly rate of pay was lower, it would have to raised to his hourly rate of pay)
! If she does not have a term which corresponds to a term in his contract (that benefits him), the terms of her contract are modified so as to include such a term. Generally, successful claimants will be entitled to back pay – the pay she should have been receiving - and possibly interest on the arrears.
Issues for union representatives to consider in settling members’ claims or potential claims are outlined later in the section ‘Settling equal pay claims’
Can the employment tribunal (ET) make recommendations to the employer to put right wider pay discrimination?
In some circumstances, the tribunal can order the employer to carry out an equal pay audit (outlined in Part 2).
However, the power of the tribunal to make recommendations (beyond those affecting the successful claimant/s) was removed by the Deregulation Act 2015. Tribunals can no longer make wider recommendations to ‘obviate or reduce the adverse effect of a contravention’ of the EqA, Part 5 (Work) - which covers equal pay and employment related discrimination claims. For example, where the tribunal found that a system for assessing performance indirectly discriminated against the complainant, it could not recommend that the employer investigate the effects on other female employees (unless they were part of a multiple claim).
In an indirect discrimination case, the tribunal cannot make a recommendation if it is satisfied that the ‘provision, criterion or practice’ (PCP) which caused the problem was not applied with the intention of discriminating against the complainant (EqA 2010, s.124).
Can the court order an unenforceable term in a contract to be modified or removed?
An enforceable term in a contract of employment is a term that ‘constitutes, promotes or provides for treatment prohibited by the Act’.
The county court or (in Scotland) sheriff may order an unenforceable term to be removed or modified (s.143) on ‘the application of a person who has an interest in the contract’. But this is rarely done because every person who would be affected by the removal or modification of the term has to be given notice of the application and the opportunity to make representations.
(This power does not apply to any term that may breach the Public Sector Equality Duty – there are separate provisions on enforcing the PSED.
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Who can be a comparator for an equal pay claim? Is it possible to have a hypothetical comparator?
Not for an equal pay claim - there is a possibility that a claimant could use a hypothetical comparator if she was subject to direct discrimination in relation to pay, for instance, if an employer said ‘I would pay you more if you were a man’. This would be a discrimination claim (EqA, s.71(2).
Indirect discrimination claims in relation to non-contractual terms can have hypothetical comparators.
Are there circumstances where there is no need for a comparator in an equal pay case?
Only in limited circumstances.
To bring an equal pay case, in certain circumstances, women on maternity leave are not required to have a male comparator (EqA 2010, ss.72-76).
Secondly, a comparator is not required where a discriminatory provision derives from national law (for example, an indirectly discriminatory rule in the Teachers’ Superannuation Scheme), and a statistical analysis demonstrates adverse impact on one sex (Allonby v Accrington and Rossendale College and ors, 2004 ICR 1328, ECJ).
In most indirect discrimination claims, the claimant must have a comparator but she does not necessarily have to show that a ‘provision, criterion or practice’ (PCP) of the employer is causing the disadvantage – in some cases, statistical evidence which demonstrates adverse impact is sufficient to establish prima facie sex discrimination.
If the claimant has longer service than the comparator and she wins her equal pay case, what happens to her pay?
Usually the claimant has more than one comparator because there is no guarantee at the outset which ones will be found by the tribunal to be doing equal work with her.
In Evesham v North Hertfordshire Health Authority and another (2000, ICR 612, CA), the claimant’s work was rated higher (under a JE scheme) than the comparator’s work but she was paid less. However, her pay could only be raised to the level of his pay – this is the effect of the modification of the term in her contract to be no less favourable (but not more favourable) than the term in his contract.
The Evesham case highlights the importance of choosing the right comparator/s. The claimant, a speech therapist, cited a sole male clinical psychologist as her comparator who had much shorter service than her and this was reflected by the fact that he was on a low point on his payscale. If she had chosen a clinical psychologist with commensurate years of service to her, she might have achieved a higher rate of pay (provided, of course, her job had been rated as equivalent to his).
‘Same establishment’ and the EqA 2010
Part 2 cited the case of City of Edinburgh v Wilkinson and ors (2014 CHIS 27). On the face of it, Wilkinson is an unhelpful judgment which could narrow the scope for ‘same
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establishment’ claims. However this case was taken under the Equal Pay Act 1970 – the EqA 2010 is worded differently in respect of these provisions.
There is also a new and (at the time of writing) untested provision in the EqA 2010, section 80(3): ‘If work is not done at an establishment, it is to be treated as done at the establishment with which it has the closest connection’.
Having wider scope for ‘same establishment’ claims could be important if Brexit results in closing off the Article 157 route (‘same service’ claims).
What does ‘single source’ mean and how does it affect Article 157 claims?
This section supplements Part 2 by outlining the history of the ‘same service - single source’ litigation.
The ECJ ruled that Article 119 (now 157) permits equal pay comparisons with persons employed in the ‘same establishment or service as the claimant’ (Defrenne v Sabena 1976 ICR 547, ECJ) whether public or private (Macarthys Ltd v Smith, 1980 ICR672, EAT).
In Scullard v Knowles & Southern Regional Council for Education and Training (1996 IRLR 344), the EAT permitted Ms Scullard, a unit manager employed by a (then) Training & Education Regional Council, to name as her comparators male unit managers employed by other such bodies, all of which were independent of the Secretary of State for Employment but funded by the Department of Employment. Initially, this judgment raised the prospect that ‘same service’ claims might enable cross-employer claims in local government. (The 1997 national single status agreement did not prescribe national grades – authorities were required to carry out local grading and pay reviews. This meant that it was possible for men and women employed by different authorities but doing equal work to be paid differently.) At the time, it was also hoped that Article 157 claims might stop private contractors from cutting the pay of their ex-local authority employees. However, Scullard was followed by a clutch of judgments which have limited the use of Article 157 to challenge pay inequality in cross-employer cases.
The ‘same service’ argument was deployed by UNISON in Lawrence & others v Regent Office Care Ltd and ors (2003 ICR 1092 ECJ). The claimants included female school meals staff who transferred from North Yorkshire County Council to a private contractor. They ended up working on less favourable terms and conditions than men still employed by the Council whose jobs had been ‘rated as equivalent’ in value to their jobs by the local government Manual Workers’ job evaluation scheme. The union argued that even though the women were no longer working for the council but for a different employer, they were entitled to equal pay because they were still working in the ‘same service’. The ECJ held that where differences in pay cannot be attributed to a single source, equal pay claims will not be in scope of Article 141 (now 157). To put it more simply, in the words of the original tribunal’s decision, ‘the person who discriminates has to be in control both of the women’s wages and the comparator’s wages’. In this case, the employers argued successfully that there must be a common source from which the terms and conditions of both the claimant and comparator derive (as when different employers are required to apply the same collective agreement, or where terms and conditions have been laid down by statute or a regulation).
Furthermore, it was argued that unless the difference in pay can be traced to a single source, the employer who is accused of sex discrimination (because he pays women workers less
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than the male comparator’s employer) is not in a position to explain the difference or to explain why that difference is objectively justified. The Advocate-General’s opinion (adopted by the ECJ) put it in this way: ‘...Article 141 is addressed to those who may be held responsible for [the pay difference] i.e. the legislature, the parties to a collective works agreement and the management of a corporate group...On the other hand, if differences in pay arise [where] respective employers are separately responsible for the terms and conditions ...within their own undertaking or establishment, they cannot possibly be held individually accountable for any differences in the terms and conditions ...between those undertakings’.
If the women’s and the comparators’ (different) employers were party to the national agreement, grading and pay would be determined by local collective agreements rather than a ‘single source’, suggesting that claims across authorities under Article 141 would be ruled out. Even if the claim for equal pay was in relation to a contractual term derived from Part 2 of the national agreement which is binding on all NJC (or SJC) authorities, individual employers are responsible for pay disparity and putting it right, not the NJC/SJC.
The ECJ judgment in Lawrence appears to severely limit scope for comparisons between claimants employed by a local authority which has opted out of the national agreements and comparators employed by an NJC/SJC authority (or vice versa).
Subsequent Article 157 cases confirmed that the ‘single source’ test sets a high bar for claimants.
In Allonby v Accrington & Rossendale College and ors (2004 IRLR 224 ECJ), the ECJ ruled that a female lecturer employed through an agency could not claim equal pay with male lecturers employed directly by the College. Ms Allonby had been employed originally as a part-time lecturer on a series of short term contracts. As a cost-cutting measure, her contract was not renewed and she was re-engaged as a sub-contractor of an agency, as a self-employed person. She was paid on a fee per assignment basis by the agency. Her comparator was paid by the College under conditions determined by the College. Her fee and some other benefits were then reduced compared with directly employed lecturers. The fact that her fee was influenced by the amount the College paid the agency was not held to meet the ‘single source’ requirement – it was ‘not a sufficient basis for concluding that the college and ELS [the agency] constitute a single source to which can be attributed the differences identified in Ms Allonby’s conditions of pay and those of the male worker paid by the college’. Accordingly, her equal pay claim failed.
In Dolphin and ors v Hartlepool Borough Council and ors (EAT 0559/05), female support staff in voluntary-aided schools, employed by the governing bodies of those schools, sought equal pay with male workers employed by the Council at different establishments. The EAT upheld the tribunal’s decision that the claimants could not show they were in the ‘same service’ as the men by virtue of there being a ‘single source’. Although the governing bodies and the Council applied the same pay scales, the voluntary-aided schools were run by the governing bodies as separate entities and operated autonomously in engaging staff as an employer and being responsible for staff terms and conditions. Consequently, the Council was not the ‘single source’ responsible for setting their terms and conditions and for restoring equality.
In Robertson & others v Department for Environment, Food and Rural Affairs (2005 EWCA Civ 138), the Court of Appeal upheld a judgment of the EAT that a group of male civil servants were not entitled to compare their pay with women civil servants working in another government department. Technically, they had the same employer (the Crown), but responsibility for pay negotiation had been delegated by the Crown to each department or agency. The employment tribunal had decided that the Treasury had material control over the terms and conditions to such a degree that it could properly be regarded as being a ‘single
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source’. The EAT and the Court of Appeal disagreed. The Court held that working for the same employer is not sufficient to establish common employment for the purposes of an Article 141 claim. Neither the Treasury nor the Cabinet Office was involved in negotiations within different departments and there was no coordination between the different sets of negotiations. Therefore the Crown could not be said to be the body (the ‘single source&rsquo
