Local government – Bonus payments – Equal pay – Sex discrimination

Gibson and Others v Sheffield City Council: CA (Civ Div) (Lords Justice Pill, Maurice Kay, Lady Justice Smith): 10 February 2010

The appellant female workers (G) appealed against a decision (EAT/0303/08/ZT) of the Employment Appeal Tribunal (EAT) upholding a decision of the employment tribunal dismissing their appeals against the refusal of their equal pay claim against the respondent local authority.

G were employed by the local authority as carers. The local authority paid bonuses to the male comparators but not to G; it relied on section 1(3) of the Equal Pay Act 1970 and the genuine material factor defence. G issued proceedings. The employment tribunal held that the bonus scheme was a genuine scheme introduced to achieve greater productivity from part of the workforce, who were predominantly male. It held that the nature of G’s work was such that the principle of a productivity bonus payment was not conducive to care work. The employment tribunal applied the case of Armstrong v Newcastle upon Tyne NHS Hospital Trust [2005] EWCA Civ 1608, [2006] IRLR 124 and held that the pay differential was not tainted by sex and that no objective justification of the difference in pay was required. The EAT upheld the decision.

Held: (1) The employment tribunal’s decision, that the pay differentials between G and the male comparators were not tainted by sex, was perverse. The productivity bonus created a disparity between the pay of men and women even though that was not the intention when introducing it. It was intended to improve productivity in the men’s work which was unsatisfactory. The effect of the bonus was discriminatory. A sexual taint was present. The impossibility of applying the productivity bonus to women’s work was genuine enough, but that did not remove the sexual taint from the operation of the scheme. The scheme had a disparately adverse effect on the women’s work as compared with the men’s work, and the sexual taint was present. The local authority, as employers, had to show that the scheme was objectively justified. Accordingly, the matter was remitted.

(2) The decision in Armstrong was correctly decided, Armstrong approved. An employer who could prove that a difference in pay as between a man and a woman was due to a material factor which was not the difference of sex was protected by the defence contained in section 1(3), Cumbria CC v Dow (No1) [2008] IRLR 91 EAT, Coventry City Council v Nicholls [2009] IRLR 345 EAT, and Glasgow City Council v Marshall [2000] 1 WLR 333 HL considered.

Appeals allowed.

Thomas Linden QC, Anya Palmer (instructed by Thompsons, Unison Legal Services) for the appellants; Beverley Lang QC, Dominic Bayne (instructed by in-house solicitor) for the respondent.