Discrimination – Contract terms – Equal pay – Women

S Brownbill & Ors v St Helens & Knowsley Hospital NHS Trust: EAT (Mrs Justice Cox): 6 August 2010

The appellant female employees (F) appealed against an employment tribunal’s decision that the terms of their contracts of employment were no less favourable than their respective male comparators (M).

F were employed by the respondent NHS trust and claimed that the terms in their contracts of employment relating to enhanced payments for working unsocial hours were less favourable than similar terms in M’s contracts. F claimed that the terms should be modified, having regard to section 1(2) of the Equal Pay Act 1970. The tribunal found that the terms in F and M’s contracts for working unsocial hours related to their respective basic pay for normal working hours and were comparable, but that F were unable to rely on the formula used for M’s pay enhancement for an increase in their own basic pay. F argued that the tribunal had applied the wrong test, conflating discrete contractual terms regarding enhanced payments with basic pay entitlement in order to produce an aggregate sum. It was clear from the relevant contractual terms that there was an obvious differential between them in relation to the same subject matter.

Held: (1) The present case concerned contractual terms providing for the payment of enhanced rates contingent on normal hours of work being done at unsocial times. The tribunal found them to be distinct terms of the contract with sufficient content to make it possible to compare them so that the benefits conferred could be contrasted, unlike the position in Redcar and Cleveland BC v Degnan [2005] EWCA Civ 726, [2005] IRLR 615 where a broader overall, aggregated, approach to comparison of pay was adopted, Degnan distinguished. The tribunal clearly found that it was that discrete term in each of F and M’s contracts which was capable of being compared but had erred in failing to compare them, as required under section 1(2), Hayward v Cammell Laird Shipbuilders Ltd (No2) [1988] AC 894 HL followed, Barber v Guardian Royal Exchange Assurance Group (C-262/88) [1991] 1 QB 344 ECJ and Jamstalldhetsombudsmannen v Orebro Lans Landsting (C236/98) [2000] ECR I-2189 ECJ (6th Chamber) considered. The case was remitted to the tribunal for further determination.

(2) It was a common misunderstanding of the equal pay legislation that a female worker was not entitled to equal pay if she appeared to be better paid than her comparator when aggregating discrete elements of pay. However, amalgamating discrete components of pay tended to obscure historic discrimination. The policy of the 1970 act was clear, namely to ensure transparency in pay structures and effective redress for women who considered that they were being discriminated against in respect of any element of their pay. As the 1970 act was not a fair wages statute, it was impermissible for the tribunal to select the terms regarding pay to be compared for the purposes of achieving a broadly equitable outcome, Hayward considered. What was important was to ensure transparency and the provision of non-discriminatory pay structures, not to seek to amalgamate distinct components of pay in order to see whether any particular claimant was as well paid or better paid than her chosen comparator.

Appeal allowed.

Karon Monaghan QC, Richard Stubbs (instructed by Thompsons (Manchester)) for the appellants; John Bowers QC, Seamus Sweeney (instructed by Mace & Jones (Liverpool)) for the respondent.