All employment contracts in Great Britain are deemed to have an equality clause. The aim of this is to ensure that women employed in ‘like work’ to men will be employed on no less favourable terms than their male counterparts.
However, an employer can justify different treatment of men and women if it can show that it is due to a ‘genuine material factor’ that is not the difference of sex. This is broken down into two components:
- establishing that there was a legitimate aim; and
- establishing that it was not possible to achieve that aim in a less discriminatory manner.
Blackburn & anor v Chief Constable of West Midlands Police [2008]
In Blackburn 29 female police officers with childcare responsibilities claimed that they were indirectly discriminated against by not being paid a special allowance given to those who were working night shifts on a 24/7 rotating shift pattern.
The Employment Tribunal (ET) found that the 24/7 criterion (and, in particular, the night-shift element) had a disparate impact on women because fewer women than men could work these hours.
The question then was whether the disparate impact could be justified. The ET held that the police force, as the employer, had not given the matter of inequality for women with childcare responsibilities sufficient attention to satisfy it that payment of the special allowance was the only way to reward those on the night shift.
EAT and CA find for the employer
The Employment Appeal Tribunal (EAT) and Court of Appeal (CA) disagreed with the ET.
The EAT stated that:
‘The payment of money to compensate for the economic disadvantages suffered by those who have childcare responsibilities is not what the Equal Pay Act requires…
‘It is highly desirable that employers adopt flexible work practices which will enable women to work part-time or at hours compatible with their childcare, even if that involves incurring some cost in achieving that. But it does not follow at all that they should then pay the women on the basis of the work they would have done if they had not had the childcare responsibilities.’
What does this mean for employers?
This is a very strong decision confirming that, while a pay structure may effectively penalise women with childcare responsibilities, this in itself is not sufficient to enable women to succeed in a claim. The EAT and the CA made it clear that where a legitimate aim is made out – the 24/7 rotas and rewarding those who worked the unsocial hours – it will not condone payments to women who are unable to work those hours because of childcare commitments.
‘Red circling’ and equal pay
In Fearnon & ors v Smurfit Corrugated Cases Lurgon (Ltd) [2008] the Court of Appeal in Northern Ireland looked at red circling and equal pay.
‘Red circling’ is jargon for preserving the contractual entitlements of an employee’s conditions. There are many instances where red circling of a person’s pay or other terms – eg holiday – occurs. One of the most frequent scenarios is where a company buys another company or part of another organisation. The incoming employees, if they are on higher salaries or better conditions, may find themselves red-circled, ie protected from being assimilated with the ‘host’ employees. Equally, it could be the other way round, so that the host employees are on preferential terms and are therefore red-circled.
This can lead to men and women undertaking the same roles, but on different terms and conditions.
While the idea of red circling is often used as a device to allow those on less favourable terms an opportunity to catch up with the pay of the person red-circled, in some cases it leads to an ongoing preferential position for the person red-circled. This may lead to claims under the equal pay or sex discrimination legislation.
In Fearnon the Northern Ireland Court of Appeal held that, while red circling a person’s pay may be justified at the time (in this case for the purposes of justification under the Equal Pay (Northern Ireland) Act), it does not mean that the justification remains for all time.
The Court said that it was necessary for the employer to justify the red circling at the time it occurred and also to justify why the difference of pay has continued.
By Andrea Nicholls, partner and joint head of the employment group, Salans.