The same but different

More than six years after 251 women raised their claims for equal pay against Dumfries & Galloway Council, the Supreme Court has upheld their right to compare their terms and conditions with men who are also employed by the council but work in or from different workplaces: North v Dumfries & Galloway Council [2013] UKSC 45. The judgment has been heralded by the appellants’ trade union, UNISON, as “historic”, and they say it will lead to over 2,000 women sharing an estimated £12 million in compensation from 23 Scottish councils and three in England.

Basis of the claim

The appellants are all women employed as classroom assistants, learning support assistants or nursery nurses. Between 2006 and 2007 they raised equal value pay claims against Dumfries & Galloway Council, comparing their work with that of refuse workers, groundsmen and refuse drivers who, unlike the claimants, were all entitled to bonus or supplementary payments.

The council argued that the claims should be dismissed because the claimants and their chosen male comparators were not in “the same employment”. Its argument rested on the fact that the male comparators worked in different establishments, and so the claims could not pass the threshold set by s 1(6) of the Equal Pay Act 1970 (EPA 1970).

Bringing a well founded equal pay claim requires the identification of an individual, or group of individuals, of the opposite sex who are in the same employment and doing either like work, work rated as equivalent, or work of equal value. Section 1(6) provides that women and men shall be treated as being in the same employment if they are employed at establishments in Great Britain which include the one at which the claimant is employed and at which common terms and conditions of employment are observed, either generally or for employees of the relevant classes.

Successive tests

At first instance, the employment tribunal identified that in cases such as this, s 1(6) requires the claimants to show that if the male comparators were employed at the same establishment, they would be employed on broadly similar terms as they were at the time. The tribunal held that the claimants had satisfied this test and allowed the claim to proceed to establish the question of equal value.

The council appealed successfully to the employment appeal tribunal (EAT) on the basis that the tribunal had asked the wrong question: it should have asked whether the claimants had shown that there was a “real possibility” that their comparators could be employed at the same establishment doing the same or a broadly similar job to the one that they undertook at their own establishment.

The claimants then appealed to the Court of Session. However, before the appeal came before the court, the EAT, in City of Edinburgh Council v Wilkinson [2010] IRLR 756, reconsidered its position and rejected the “real possibility” test. In Wilkinson, the EAT held that the question was whether the claimants had shown that it is likely that the comparators would, wherever they worked, always be employed on the same terms and conditions.

The Court of Session in North agreed that the proper interpretation of s 1(6) did not rest in the “real possibility” test, and held that the question identified by the employment tribunal was correct. However, it refused the appeal, finding that the tribunal was not entitled, on the evidence presented, to conclude that the comparators’ terms and conditions would be the same if they worked at the same establishment as the claimants.

The final word

Mrs North and her colleagues appealed to the Supreme Court. Their appeal was upheld unanimously and the decision of the employment tribunal restored. In particular, the judgment confirmed that the employment judge had asked the right question and was entitled to answer it in the way she did.

In rejecting the council’s argument, the court found that both the “real possibility” and the “feasibility” test added an “unwarranted gloss” to the interpretation of s 1(6) provided by Lord Slynn of Hadley in British Coal Corporation v Smith [1996] ICR 515. In doing so, the judgment re-establishes that what s 1(6) requires is for the claimant to show that different classes of employee share common terms and conditions.

The judgment also helpfully focuses attention on the purpose of UK equal pay law, and provides some words of guidance on the function of the “same employment” test. Its function is simple: “to establish the terms and conditions with which the comparison is to be made” (para 35). In what could be viewed as a gentle reminder to large employers faced with multiple claims such as this, Lady Hale observes that the “same employment” test should not be used as an alternative for determining the comparability of work or for establishing whether there is a material factor explaining the difference in pay, nor as a way of avoiding the difficult issues associated with both.

EHRC intervention

For the Commission, the case raised important points of law of direct relevance to our statutory functions, which is why we intervened at both the Court of Session and the Supreme Court. The main focus of our intervention was the extent to which EU and domestic law allows women to compare their work with that of men undertaking work of equal value who, although employed by the same employer, do not and would never work at the same location as the women. However, we also took the opportunity to raise the question of the compatibility of the “same employment” test with the fundamental right to equal pay set down in article 157 of the Treaty of the Functioning of the European Union (TFEU).

In the Commission’s view, nowhere in EU law is it suggested that the right to equal pay for work of equal value can be limited if a man and a woman are not co-located in the same workplace. Nor is there any indication that the right to equal pay applies only where a woman can compare her terms and conditions with men working in a common establishment or on common terms and conditions. In fact, the EU principle of equal pay has very wide application and has been held to apply even where women and men are employed by different employers. In these cases, the question turns on whether there is a body, “a single source”, which has the capacity to secure equal pay (see Lawrence v Regent Office Care Ltd [2003] ICR 1092).

We also highlighted our view that the judgment of the Court of Appeal in Department for Environment, Food and Rural Affairs v Robertson [2005] IR 750 was wrongly decided. We acknowledged that it probably was not necessary for the Supreme Court to decide this point in this case, but nonetheless, we wanted to draw the court's attention to why it should not be assumed that this is correct law.

Lady Hale agreed that it was not necessary to determine this question in North, because it is clear that the difference in pay is attributable to a “single source”. Although obiter, Lady Hale referred usefully to the principles laid down by Lawrence. There, the Attorney General identified three types of cases where it has been held that it is possible to make comparisons across more than one employer if the regulation of terms and conditions is “traceable to one source”.

Comment

This judgment is obviously a positive step forward for Mrs North and her colleagues who are directly affected by it. However, it is also important for two other reasons.

First, it establishes that domestic equal pay law does not limit the right to equal pay to situations where a woman can point to a man who is doing equal work in the same workplace. In doing so, this recognises that the undervaluing of “women’s work” can be perpetuated by the segregation of women and men into different jobs and this is challengeable under equal pay law.

Secondly, and although obiter, Lady Hale confirms that under EU law the right to equal pay is not limited to women and men working for the same employer. In cases where questions arise about comparators, the application of domestic equal pay law must be compatible with EU law, which has established that the question is not whether the women and men are in the same employment but whether the difference in treatment is attributable to a single source, which is capable of putting it right.

This discussion on EU law is particular relevant in Scotland, where as part of the second wave of equal pay claims, the meaning of s 1(6) is again being questioned, this time in Armstrong v Glasgow City Council [2013] UKEATS/0027/BI, which has been appealed to the Court of Session. This case raises the question of whether a group of women who were transferred by Glasgow City Council to work for arms’ length external organisations (ALEOs) can compare their terms and conditions with men who remain in the direct employment of the council. North, therefore, is unlikely to be the final word on the “same employment” test.