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1215668_equal_payAs previously reported on this blog the Supreme Court has handed down judgment in the case of North & Ors v Dumfries and Galloway Council (Scotland) [2013] UKSC 45. In unanimously allowing the appeal, the Court held that male employees of the respondent local authority were in fact ‘in the same employment’ as the female appellants, notwithstanding the fact that they were employed at different establishments and on different terms and conditions from that of the appellants. Accordingly, the female appellants have satisfied the threshold conditions in order to bring claims alleging that they are employed under less favourable terms and conditions than certain male employees.  These claims will now proceed back in the Employment Tribunal.

Background

The appellants were 251 females employed variously as school classroom assistants, support for learning assistants and nursery nurses in the respondent’s local authority education service. The appellants’ employment contracts specified the particular school where they were to be based and stated that they may be required to work at additional locations. The appellants sought to select as their comparators groundsmen, road workers, refuse drivers, collectors and a leisure attendant who were employed by the local authority under a different collective agreement. The employment contracts for these manual workers specified the particular depot where they were to be based and (similarly to the female appellants) that they may be required to work at additional locations. Although the manual workers did sometimes work at the schools in which the female appellants were employed they were not based at them.

Under the Equal Pay Act 1970 (replaced with minor changes by the Equality Act 2010) (the “Act”) an individual can claim equal pay with a comparator of the opposite sex employed on equal work “in the same employment” unless the difference is due to a genuine material factor, not sex.  In order to be in the same employment for this purpose, under section 1(6) of the Act, both the claimant and the comparator have to be employed by either the same or an associated employer at either: (i) the same establishment; or (ii) a different establishment where common terms and conditions are observed either generally or for the relevant classes of employee.  This test was considered in the House of Lords in British Coal Corporation v Smith and others [1996] ICR 515.

Employment Tribunal (“ET”) Decision

The ET applied the test in British Coal Corporation concluding that the female school employees and the male comparators would be on broadly similar terms if they were employed at the same establishment and accordingly held that both were in the same employment.

Employment Appeal Tribunal (“EAT”) Decision

The EAT held that an essential part of the test in British Coal Corporation is that a claimant must firstly show that there is a real possibility of the chosen comparator being employed at the same establishment either in the job they carried out at the other establishment or in a broadly similar job.  The female employees submitted an argument that this real possibility test ran counter to European law, particularly Article 141 of the EC Treaty, and that section 1(6) of the Act should be construed or modified in a manner consistent with European law. The female employees’ argument failed and the EAT reversed the ET’s earlier decision.

Court of Session (Inner House, Second Division) Decision

The Court of Session found that there was no need to show “a real possibility” that the male comparators would be employed at the same establishment as the female employees. This test was not set out in statute or in precedent, and it placed an additional burden on the female employees.  Despite this, the female employees failed to demonstrate that they were “in the same employment” as their male comparators and, therefore, even though the EAT judgment contained an error of law, its ultimate determination was correct.

In relation to the European law argument, the Court held that it had not been requested to grant a declaration that section 1(6) of the Act was incompatible with Article 141 or to give a ruling on the effect of the direct application of Article 141.  The appeal only concerned the proper construction of section 1(6) of the Act in the particular circumstances of the case.

Supreme Court Decision

In finding in favour of the appellants, the Supreme Court considered the “common terms and conditions” wording in section 1(6) of the Act stating that it is established law that this wording refers to the terms and conditions under which the manual workers were or would be employed if they had been employed at the same establishment as the appellants. The court stated that section 1(6) of the Act does not look for a complete correspondence between what such terms were or would be in the appellants’ place of work, it is enough that they were or would be broadly similar.

The Court held that the ET had been entitled to conclude that, in the unlikely event that the manual workers were employed in the schools alongside the female employees, there was no compelling evidence that the manual workers would not be employed on broadly similar terms.

The respondent was not entitled to say that no manual workers would ever be employed on those or any other terms at the same establishment as the appellants.  If this were the case employers would be able to arrange things so that men could be employed at one establishment and women at another. The object of the legislation was to secure equality of treatment not just for the same work but also for work rated as equivalent or assessed by experts to be of equal value.

The Court stated that it was not the function of the “same employment” test to establish that the jobs done by the appellants and the manual workers were comparable, rather that comparability would be established by the “like work”, “work rated as equivalent” and “work of equal value” tests.

Further, the Court agreed with the Court of Session that there was no indication in British Coal Corporation that there must be “a real possibility” that the chosen comparators could or might perform their jobs in the claimant’s workplace. This requirement would add “an unwarranted gloss” to the equal pay legislation.

The construction of section 1(6) of the Act put forward by the appellants was more consistent with European Union law than that put forward by respondent. The Court held that the decision of the ET should be restored.

Comment

The Supreme Court has provided useful guidance on the interpretation of section 1(6) of the Equal Pay Act 1970 in the situation where the claimant and the comparator are employed at different establishments.

As set out above, the key question for the Court was whether, if the comparators were transferred to undertake their present jobs in a different location, they would remain on their existing terms of employment.

The purpose of the legislation is to allow for comparisons across workplaces and between workers who are not, and may never be, in the same workplace. The Court has confirmed that this broad construction concurs with EU law, which allows for an equal pay comparison to be made regardless of the employees’ location and which requires there to be a possibility of making comparisons between the sexes, even where there may be a high degree of gender segregation in the workforce.