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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Bradley v Royal Holloway and Bedford New College, University of London (Equal Pay Act : Material factor defence and justification) [2014] UKEAT 0459_13_3004 (30 April 2014) URL: https://www.bailii.org/uk/cases/UKEAT/2014/0459_13_3004.html Cite as: [2014] UKEAT 459_13_3004, [2014] UKEAT 0459_13_3004 |
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At the Tribunal | |
Before
THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)
(SITTING ALONE)
APPELLANT | |
UNIVERSITY OF LONDON |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | MS KARON MONAGHAN QC and MISS LAURA PRINCE (of Counsel) University and College Union Legal Services Carlow Street London NW1 7LH |
For the Respondent | MR OLIVER SEGAL QC and MR STUART BRITTENDEN (of Counsel) Mills & Reeve LLP Solicitors Botanic House 100 Hills Road Cambridge CB2 1PH |
SUMMARY
EQUAL PAY ACT – Material factor defence and justification
A female professor claimed equal pay under the Equal pay Act 1970 with two male professors at the college where she taught and researched. They were assumed to be engaged on like work/work of equal value. In each of their cases, significant sums in addition to their original basic pay had been given to them when it was learned by the College that approaches had been made to "poach" them away from its service. This was a wholly genuine reason, which the ET held was made for sound business reasons. It decided that the genuine material factor defence provided for by s.1(3) of the Act had been made out, and that the differences in pay were unrelated to sex. It was argued that in doing so the ET did not adequately deal with evidence produced by both College and Claimant which showed on available statistics that male academic staff were paid more than female staff, and evidence that retention payments were more likely to be made to men than to women because (inter alia) men were likely to be more mobile. This was rejected: the ET sufficiently reasoned why it thought that this evidence did not establish any "taint" of sex, the burden being on the claimant to produce some evidence to show this once a genuine reason causative of the difference in pay had been identified. No issue of justification thus arose.
The ET also however held that a comparison could be made globally between the "retention-related" terms in the men's contract with those in hers, which it identified in fact though it had not been invited to do so by either party, and which the College had never claimed to rely on as a reason for the difference in pay. Indeed, it held that it eliminated any difference. This was an error: both the Act and European law called for a term by term comparison, and not an overall view of the value of remuneration and employment arrangements. It was however unnecessary for the ET to consider the question, since it had no obvious relevance to the question whether there was a genuine material factor, unrelated to sex, which explained the differences in retention payment (as such) which the ET had found to exist. The error was immaterial to the decision, which appeared clear, and which was reached without error after a correct statement of the applicable law.
THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)
The Equal Pay Act
"If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include... an equality clause they shall be deemed to include one.
(2) An equality clause is a provision which relates to terms, whether concerned with pay or not, of a contract under which a woman is employed..."
It was agreed between the parties for the purpose of the discrete issue that the Claimant was employed on like work or work of equal value to those of the professors.
(3). An equality clause...shall not operate in relation to a variation between the woman's contract and the man's contract if the employer proves that the variation is genuinely due to a material factor which is not the difference of sex and that factor... must be a material difference between the woman's case and the man's or in other cases may be a material difference."
The Facts
"It was not disputed, and we find, that it was enormously in the Respondent's interest to retain Professor Gammerman. Using our nous as an industrial jury, we also find that it was certainly in the Respondent's interests to act relatively speedily to prevent uncertainty, limit the time for the other university to enhance their position and restrict any extended period of discussion by, as Professor Hill put it, pre-empting matters."
The Employment Tribunal Judgment
"We ask: does the Respondent explain part of the difference in salary between the Claimant and her comparators as based on its desire to retain them in employment. We recognised above that the rewards for remaining a loyal servant, that is for being retained in employment, may be paid in sundry ways. Our findings are that Professors Gammerman and Smith each received specific benefits when it was known that other academic institutions were seeking to poach them. For Professor Gammerman there were two lump sum increases totalling £22,000 and that included a £4,000 setoff to bite when he ceased to be Head of Department. For Professor Smith it was a research chair and a relatively modest salary increase, later boosted somewhat to maximise his full economic cost. We accepted this latter point is one which reflects the availability and the amount of external funding, which the Respondent was legitimately entitled to take into account. We also accept that it was at material times reasonably necessary for the Respondent to maximise its income."
"We accept that this retention issue, mixed with commercial savvy in respect of available external funding, entirely explains the creation of the research chair and the salary increase."
That is a finding of fact. It leaves, on its face, no obvious room for there being any sex taint. But in any event the Tribunal went on, at paragraph 5.64. Conceptually, having established that the employer had satisfied the Tribunal that it had a genuine reason, a material factor both significant and relevant, for paying retention sums to Professor Gammerman and Smith, it was then concerned with whether or not the Claimant could show that the factor might be related to sex. At 5.64 the Tribunal said this;
"The Claimant has argued, and called Professor Frank, to establish retention payments are inherently gender discriminatory or discriminatory in operation. Based on a relatively small survey (of economics professors, approximately 1995 to 2000 including only 17 female Respondents) Professor Frank concluded that men were more likely to be more able to move, more likely to attract external interest or offers, and more likely to be the subject of increased pay offers by universities desiring to retain them. The Respondent, through Miss Bailey's evidence about statistics at its college over the years and by urging that Professor Frank's statistics were so small as to be unreliable sought to refute the gender taint. We find that whatever the position generally or for lower-level academics, in respect of the London area which includes the Respondent and professors, it is not established that there is a gender taint in retention payments. This is because it is often not necessary for professors to spend much time at their home university and/or because there are so many universities including those with prestigious research ratings within accessible travel distance and/or for other reasons as for example that the husband might move if the higher earning wife as perhaps if the Claimant wanted to since her husband's income is apparently dependent on her work."
"Evidence from Gemma Bailey was relied on by the Respondent as demonstrating that woman academics at the Respondent have received market forces supplements and/or retention payments in proportions approximately equal to or better than the percentage of women in employment when compared to men. We accept Miss Prince's challenge that the information upon which Miss Bailey based her evidence was incomplete because it did not include Professor Gammerman. However, we find from the face of the document that is because it deals with awards after 2003 when the present system of recording was implemented.
5.25 We therefore do not accept criticisms in respect of the period from 2003 onwards. We recognise that although information is provided up to and including January 2013 that latter date is outside our period."
"Given the small numbers involved it is difficult to draw conclusions from these figures (in all the years if you added or took away one female professor the percentages would look very different) but it is clear that women did receive retention payments from the College as well as men in about the same proportions as the proportion of male to female professors in the College at the time."
"6.5 As to the Claimant, we have found (at paragraphs 5.64 and 5.84) that in order to retain her in employment the Respondent gave preferential intellectual property rights, at least in part to lure her in the first place, so far as we can establish, but thereafter to retain her, hugely preferential spin-out company terms, precisely the terms she desired in respect of 50% work for the Respondent, leading to 100% pension rights, in part due to the availability of external funding.
6.6 We understand and adopt the obligation to engage in a term by term comparison as set out in Heywood v Brownville, but we consider that to look simply at annual gross pay or particular retention pay increase, would misrepresent the matter. The Respondent has first to identify each element (term) of any differential in pay. The Claimant then has to prove that a particular term is less favourable to her. We are not persuaded that the retention-related terms of the Claimant's remuneration, summarized at paragraph 6.5 above, are less favourable than the comparable retention related terms of her comparators. Quite the reverse. Our primary conclusion in respect of the different terms attributable to retention is that the Claimant has achieved a bargain at least equal to and actually very much better than that of her comparators. Even without actuarial evidence in respect of pensions, we are satisfied that she has achieved greater financial rewards than her comparators in response to the Respondent's desire to keep them all in their employment. Only by ignoring the equivalent or comparable terms in the Claimant's contract and looking solely at the retention-pay increases awarded to the comparators but not to her could we come to a different conclusion. But that would be artificial, one-sided and not in accordance with the law. It would permit the Claimant to acquire the wonderful bargain she has secured and then wholly to ignore them because they were expressed in a different format or style. We are not required to do that."
The Grounds of Appeal
".....unless the undertaking shows that the exclusion is based on objectively justified factors unrelated to any discrimination on grounds of sex".
"...where an undertaking applies a system of pay which is totally lacking in transparency, it is for the employer to prove that his practice in the matter of wages is not discriminatory, if a female worker establishes, in relation to a relatively large number of employees, that the average pay for women is less than that for men."
"When elimination of all discrimination on grounds of sex is to be applied to all aspects and conditions of remuneration I consider this requires each of these aspects to be considered and discrimination existing in any aspect to be eliminated irrespective of the other aspects. It does not appear to me to be a natural reading of Article 1 to say that if the remuneration as a whole provides the same result for a man and a woman it does not matter that some aspects of the remuneration discriminate in favour of the woman so long as there are corresponding discriminations in other aspects in favour of the man."
"...the court has already held that if the national courts were under an obligation to make an assessment and a comparison of all the various types of consideration granted, according to the circumstances, to men and women, judicial review would be difficult and the effectiveness of article 119 would be diminished as a result. It follows that genuine transparency, permitting effective review, is assured only if the principle of equal pay applies to each of the elements of remuneration granted to men or women."
Brunhoffer v Bank der Österreichischen Postsparkasse AG [2001] IRLR 571 reinforces that (see paragraph 35).