England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
EAT/0060/04/DA

		Royal Courts of Justice Strand, London, WC2A 2LL
		22/03/2005

Lord Justice Peter Gibson:

1. This is an appeal in one part of extensive litigation brought by nearly 2,000 employees of the Prison Service, for which body the respondent, the Home Office, is responsible. The claimants are in administrative, executive, secretarial and support grades. They claim equal pay under the Equal Pay Act 1970 ("the 1970 Act") with comparators in other grades in the Prison Service predominantly occupied by men, such as prison officers and prison governors. Each of the two appellants on the appeal, Ms. T Clemens and Mrs. H Pollak, was in 1999 a Higher Executive Officer ("HEO"), the highest of the grades of the various claimants. (The HEO grade has since been abolished, but it is convenient to refer to that grade for the purposes of this appeal.) The comparators on which they rely are in the grades of Governor 4 and 5 and Principal Officer. The standard grounds of application for HEO claimants also list Senior Officers as a comparator group but no Senior Officer comparator is relied on by the appellants. The appellants' cases were selected by their trade union as lead cases. It is hoped that the decision on their cases will enable progress to be made on other cases involving HEO claimants.
2. The order under appeal is that made on 2 July 2004 by the Employment Appeal Tribunal ("the EAT"), His Honour Judge Wilkie Q.C. presiding. By that order the EAT allowed an appeal by the Home Office from the decision sent to the parties on 27 November 2003 of an Employment Tribunal ("ET") sitting at London South. The ET thereby determined the following preliminary issue: was the Home Office required objectively to justify the provision of less favourable terms of employment to the appellants, who had been evaluated as performing work of equal value to that of the male comparators, but who were paid at a lower rate and enjoyed less beneficial terms and conditions of employment in other respects than those comparators? The ET determined that issue in the affirmative. The EAT disagreed, holding that the Home Office was not required to provide that justification. The appeal to this court is brought with the permission of the EAT.
3. At this point it is convenient to set out the material provisions of s. 1 of the 1970 Act:

"1   Requirement of equal treatment for men and women in same employment

(1)   If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include (directly or by reference to a collective agreement or otherwise) 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 (the 'woman's contract'), and has the effect that –

….

(b) where the woman is employed on work rated as equivalent with that of a man in the same employment -

(i) if (apart from the equality clause) any term of the woman's contract determined by the rating of the work is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and

(ii) if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed and determined by the rating of the work, the woman's contract shall be treated as including such a term.

(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 –

(a) in the case of an equality clause falling within subsection (2) …. (b) above, must be a material difference between the woman's case and the man's;

….

(5)   A woman is to be regarded as employed on work rated as equivalent with that of any men if, but only if, her job and their job have been given an equal value, in terms of the demand made on a worker under various headings (for instance effort, skill, decision), on a study undertaken with a view to evaluating in those terms the jobs to be done by all or any of the employees in an undertaking or group of undertakings, or would have been given an equal value but for the evaluation being made on a system setting different values for men and women on the same demand under any heading.

"

4. Both sides have found helpful guidance on s. 1(3) in the exegesis by Lord Nicholls in Glasgow City Council v Marshall [2000] ICR 196 at pp. 202, 203:

"The scheme of the Act is that a rebuttable presumption of sex discrimination arises once the gender-based comparison shows that a woman, doing like work or work rated as equivalent or work of equal value to that of a man, is being paid or treated less favourably than the man. The variation between her contract and the man's contract is presumed to be due to the difference of sex. The burden passes to the employer to show that the explanation for the variation is not tainted with sex. In order to discharge this burden the employer must satisfy the tribunal on several matters. First, that the proffered explanation, or reason, is genuine, and not a sham or pretence. Second, that the less favourable treatment is due to this reason. The factor relied upon must be the cause of the disparity. In this regard, and in this sense, the factor must be a "material" factor, that is, a significant and relevant factor. Third, that the reason is not "the difference of sex." This phrase is apt to embrace any form of sex discrimination, whether direct or indirect. Fourth, that the factor relied upon is or, in a case within section 1(2)(c), may be a "material" difference, that is, a significant and relevant difference, between the woman's case and the man's case.

When section 1 is thus analysed, it is apparent that an employer who satisfies the third of these requirements is under no obligation to prove a "good" reason for the pay disparity. In order to fulfil the third requirement he must prove the absence of sex discrimination, direct or indirect. If there is any evidence of sex discrimination, such as evidence that the difference in pay has a disparately adverse impact on women, the employer will be called upon to satisfy the tribunal that the difference in pay is objectively justifiable. But if the employer proves the absence of sex discrimination he is not obliged to justify the pay disparity."

Although Lord Nicholls refers only to s. 1(2)(c), it is not suggested that his guidance is inapplicable to a case within s. 1(2)(b).

5. Pursuant to the Prison Service Job Evaluation Scheme the work of the appellants was rated, as the Home Office accepts, as equivalent with that of their comparators. I should add, for the sake of completeness, that the Home Office denies that the work of other claimants has been rated as equivalent with that of their comparators, or that the work of any of the claimants is of equal value to that of their comparators for the purposes of s. 1 (2)(c) of the 1970 Act, as is claimed by all the claimants including the appellants. There is also a difference between the parties as to the extent of any difference on pay and other terms and conditions between the claimants and the comparators. The details of such disputes do not matter for the purposes of this appeal. What does matter is that the Home Office says that there are a number of genuine material factors which are the cause of any differential on pay and other terms and conditions and which are unrelated to any difference of sex. In particular the Home Office relies on the different working arrangements applicable to the comparator grades, who have a contractual liability to work shifts and unsocial hours and to do so on a regular basis, whereas the claimants do not have such liability.
6. In the case of the appellants the dispute between them and the Home Office is whether it can establish that any less favourable treatment of them in comparison with the comparators is genuinely due to a material factor which is not the difference of sex and which is a material difference. The Home Office does not accept that it is obliged by s. 1 (3) of the 1970 Act objectively to justify any such difference. That is what gave rise to the preliminary issue.
7. Mrs. Pollak commenced her proceedings in the ET as long ago as 22 February 1999 and Ms. Clemens did so on 3 March 1999. Other claimants began to lodge their Originating Applications about this time and further Originating Applications have continued to be lodged thereafter. Statistics as to the gender composition of the various relevant grades were provided to the ET which relied on the March 2000 figures. The ET thought it appropriate to include the Senior Officer grade in the statistics. That was not correct in relation to the appellants who had chosen not to rely on Senior Officers among their comparators. Ms. Gill, appearing with Mr. Cooper for the appellants, helpfully produced the following table showing a total pool consisting of HEOs, Governors 4 and 5 and Principal Officers, with one column containing the ET's figures and another containing those figures as corrected by the removal of the Senior Officers and by certain other minor corrections:

	Tribunal's figures	Corrected figures from table of statistics
Total number in pool	6,253	2,404
Total men in pool	5,519	2,033
Total women in pool	743	371
Men in disadvantaged group	187	184
Women in disadvantaged group	191	189
Men in disadvantaged group as proportion of total men	3.4%	9.05%
Women in disadvantaged group as proportion of total women	26%	51%
Ratio (proportion of disadvantaged women : proportion of disadvantaged men)	8:1	6:1

8. From that table it can be seen that the disadvantaged group of HEOs consisted of men and women in approximately equal numbers in March 2000. There were also statistics available to the ET which showed that the percentage of female HEOs had risen from 39.3% of all HEOs in 1995 to 45.2% in 1999, with the further increase to just over 50% in 2000. There was also evidence from the Home Office that the great majority of HEOs would have been promoted from the grade of Executive Officers, the great majority of whom would in turn have been promoted from the grade of Administrative Officers. Ms. Gill told us, without objection from Miss Slade Q.C. (appearing with Ms. Eady and Mr. Moretto for the Home Office) that the lower administrative, executive, secretarial and support grades in the Prison Service consist predominantly of women.
9. Before the ET the appellants accepted that they bore the burden of showing that the difference in pay has had a disparately adverse impact on women; that acceptance continued both before the EAT and this court. We were informed by Ms. Gill that that concession was made because of the decision of this court in Nelson v Carillion Services Ltd. [2002] ICR 1256. In that case it was held that the burden of proving disproportionate adverse impact lay on the complainant (see para. 36). That being part of the reasoning of this court, it is binding on us, despite some doubts of my own on it which are similar to those articulated by Waller L.J. in his judgment.
10. The ET in its Extended Reasons first noted (in para. 16) that indirect discrimination under the Sex Discrimination Act 1975 depended on the existence of a requirement or condition which it was necessary to satisfy in order to enjoy the benefits claimed (see s. 1(1)(b) of that Act). The ET said (in para. 17) that the appropriate question to ask when searching for a requirement or condition is what one has to do to obtain the advantage enjoyed by the comparator group, and it answered that question by saying that one has to be a member of that comparator group.
11. The ET next examined the appropriate pool which it identified as all those subject to the job evaluation exercise implemented by what is known as Phase 1 applicable to HEOs and Governors and Senior Officer classes. The constituency of the pool is not an issue on this appeal.
12. The ET then considered Enderby v Frenchay Health Authority [1994] ICR 112 and R. v Secretary of State for Employment, ex p. Seymour-Smith [1999] ICR 447. The ET preferred what it called the broader approach in Seymour-Smith, which, it said, was endorsed by the House of Lords in Barry v Midland Bank [1999] ICR 859. The ET referred to the remarks of Lord Nicholls at p. 869:

"In order to decide whether the bank's scheme has a disparately adverse impact on women, a comparison must be made between, on the one hand, the respective proportions of men in the bank who are not disadvantaged by the difference in treatment of which complaint is made and those who are disadvantaged and, on the other hand, the like proportions regarding women in the workforce …. A better guide will often be found in expressing the proportions in the disadvantaged group as a ratio of each other."

13. The ET indicated that the comparison produced by the "better guide" was that which it proposed to make and that the justification for doing so was that indicated by Lord Nicholls, viz. that otherwise the proportions by themselves could be misleading because they are affected by the comparative sizes of the non-disadvantaged group and the disadvantaged group. In para. 29 it set out the figures which are contained in the column headed "Tribunal's figures" in the table, including the proportion of women in the pool who are disadvantaged as compared to women in the pool as a whole and the proportion of men in the pool who are disadvantaged as compared to men in the pool as a whole. It said that that produced a ratio of advantaged to disadvantaged of approximately 8:1. It continued:

"Our conclusion is that the difference indicated by these proportions is plainly significant. Although we have not compared the figures for 1999 indications are that they would be very little different and we would be surprised if the ratio was any less significant. In our view, therefore, there is a prima facie case of indirect discrimination unless the differences are objectively justified."

14. In para. 34 the ET gave a summary of its conclusions, again repeating that there was a condition or requirement attaching to the enjoyment of the advantage that Governors and Senior Officers had over HEOs, viz. that one has to join the advantaged group, and that, on using the method of statistical analysis set out by Lord Nicholls in Barry, the comparison indicated a ratio of advantaged to disadvantaged of 8:1; that, it said, raised a prima facie case of indirect discrimination on grounds of sex, and so the Home Office was required to justify objectively any variation in pay and conditions between HEOs and their chosen comparators.
15. On the appeal to the EAT Judge Wilkie accurately identified the principal issue as being what was the appropriate method for investigating whether, on the facts of this case, a prima facie case of sex discrimination arose so as to give rise to the obligation on the Home Office objectively to justify the difference. The EAT considered Enderby and Seymour-Smith. It noted the criticism made by the Home Office of the ET's reasoning that it was a circular argument to say that the requirement or condition for being a member of the advantaged group is that one has to be a member of the advantaged group. That criticism the EAT held to be well-founded. It expressed its conclusion in para. 26 of its judgment in this way:

"In our view there is a clear and sensible difference between: on the one hand assessing the disparate impact of a requirement, or a condition, or a provision, criterion or practice which presents a barrier to or militates against women becoming a member of a particular work group; and, on the other, considering whether a disparity of pay which has arisen as between two work groups by reason of a history of different arrangements for collective bargaining evidences sex discrimination. In the former case it is sensible to compare the extent to which men and women across a pool can satisfy the provision, criterion or practice in order to become a member of that working group. By so doing the disparate impact of the provision, condition or practice may be measured. On the other hand, where it is simply a question of whether membership of a particular working group and a history of collective bargaining operates disparately as between sexes it makes sense, as it did in Enderby, to consider that if the advantaged group is predominantly male and the disadvantaged group is predominantly female then there is a prima facie case of discrimination. Where, however, the advantaged group is predominantly male and the composition of the disadvantaged group is neutral in gender terms then the situation may not be fair, but it is not prima facie discriminatory on grounds of sex."

16. Accordingly, the EAT allowed the appeal. It pointed out that whether or not Senior Officers should be included in the pool, the outcome is the same.
17. On the appeal to this court Ms. Gill for the appellants submits that the correct approach is for the ET to ask itself the simple factual question whether in the circumstances of any particular case there is evidence of prima facie discrimination in the pay policy or other unequal treatment about which complaint is made. She says that there is no reason in principle or basis in authority for adding a gloss to the statute and drawing a distinction of legal principle between different types of case. She submits that the proper approach to statistical evidence when determining whether there is evidence of prima facie discrimination is the approach set out in Seymour-Smith. Any other conclusion, she argues, would result in uncertainty, impracticality and inconsistency.
18. Miss Slade Q.C. supports the conclusions and reasoning of the EAT. She stresses that the purpose of the 1970 Act is to give a right of equal pay where the reason for a difference in pay is the difference in sex, and that that Act is not a fair wages Act. She submits that the ET approached the issue before it on the basis that this was a "requirement or condition" case. She contends that, if the ET was wrong on this, its decision cannot stand. She says that there is a genuine material factor arising out of the separate pay bargaining structures, which explains the difference in pay between the HEOs and the comparators and that it is for the appellants to prove that that reason for the difference itself discriminates on the ground of sex. I would comment that I have difficulty with that submission because of the placing by s. 1(3) on the employer of the burden of proving that the genuine material factor is other than the difference of sex. However, more importantly for the appeal, Miss Slade submits that the ET erred by treating this as a case in which sex discrimination is produced as a result of the adverse impact of the application of a requirement or condition rather than a case in which sex discrimination may be presumed from the gender composition of different occupational groups. She says that the present is not a "requirement or condition" case to which Seymour-Smith applies but a case like Enderby where a comparison falls to be made between different groups. But she submits that, unlike Enderby where the disadvantaged group consisted predominantly of women, the present case is one where the disadvantaged group consists equally of men and women, and so there is no prima facie case of discrimination.
19. I agree with Miss Slade that the ET's attempt to fashion a condition or requirement out of the circumstances of the present case has resulted in a circular argument. That is unsustainable in logic and in law. In truth no requirement or condition applicable to the comparator grades has been identified and, in my judgment, the EAT was quite right to reject that part of the ET's reasoning as wrong in law. That leads on to the question whether Miss Slade is right to say in consequence that the ET's decision cannot stand. In para. 29 of its decision the ET has made findings of fact based on the statistics before it. It has sought to decide whether the pay practices of the Prison Service have had a disparately adverse impact on women by following Lord Nicholls' better guide in Barry and expressing the proportions in the disadvantaged group as a ratio of each other. Although the figures used by the ET were incorrect, primarily because of the inclusion of Senior Officers in the pool, the corrected figures, as can be seen from the final column of Ms. Gill's table set out in para. 6 above, show a ratio of advantaged to disadvantaged of 6:1. Miss Slade does not challenge the figures of para. 29, but submits that they cannot be utilised in the present case as only an Enderby-type comparison is appropriate, and while she accepts that the statistics provide some evidence of prima facie discrimination, she says that they are insufficient to justify the conclusion of prima facie discrimination, because the ET does not refer, for example, to the figures for years before March 2000.
20. If the ET is not precluded from using its statistical approach to determine prima facie discrimination, I cannot see why its findings in para. 29 should not stand even though it was wrong on what it held on the question of a condition or requirement. It had all the statistics including those of previous years and it was entitled to conclude that the figures for March 2000 were valid and that the conclusion of prima facie discrimination could be drawn from them. The corrected figures justify the same comments as were made by the ET: the difference indicated by the corrected proportions is plainly significant, leading to a prima facie case of indirect discrimination in the absence of objective justification.
21. It is not in dispute that there is no statutory provision prescribing how an ET should investigate whether a prima facie case of sex discrimination has arisen. Nor is it in dispute that, when indirect discrimination is relied on, statistics of gender-composition of the relevant groups need to be examined. It is for the tribunal of fact, the ET, to make the relevant assessment (see Enderby para. 17 and Seymour-Smith paras. 61 and 62).
22. In Enderby the ECJ described the relevant question referred to it by this court thus:

"Whether the principle of equal pay for men and women requires the employer to prove, by providing objective justification, that a difference in pay between two jobs assumed to be of equal value, of which one is carried out almost exclusively by women and the other predominately by men, does not constitute sex discrimination."

23. The ECJ answered that question in this way:

"The question referred

13. It is normally for the person alleging facts in support of a claim to adduce proof of such facts. Thus, in principle, the burden of proving the existence of sex discrimination as to pay lies with the worker who, believing himself to be the victim of such discrimination, brings legal proceedings against his employer with a view to removing the discrimination.

14. However, it is clear from the case law of the court that the onus may shift when that is necessary to avoid depriving workers who appear to be the victims of discrimination of any effective means of enforcing the principle of equal pay. Accordingly, when a measure distinguishing between employees on the basis of their hours of work has in practice an adverse impact on substantially more members of one or other sex, that measure must be regarded as contrary to the objective pursued by article 119 of the Treaty, unless the employer shows that it is based on objectively justified factors unrelated to any discrimination on grounds of sex: see Bilka-Kaufhaus G.m.b.H. v. Weber von Hartz (Case 170/84) [1987] ICR 110, 125, para. 31; Kowalska v. Freie und Hansestadt Hamburg (Case C-33/89) [1992] I.C.R. 29, 35, para. 16 and Nimz v. Freie und Hansestadt Hamburg (Case C-184/89) [1991] ECR I-297, 320, para. 15. Similarly, where an undertaking applies a system of pay which is wholly 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: see Handels-og Kontorfunktionaerernes Forbund i Danmark v. Dansk Arbejdsgiverforening (Case 109/88) [1991] I.C.R. 74, 80, para. 16.

15. In this case, as both the health authority and the United Kingdom observe, the circumstances are not exactly the same as in the cases just mentioned. First, it is not a question of de facto discrimination arising from a particular sort of arrangement such as may apply, for example, in the case of part-time workers. Secondly, there can be no complaint that the employer has applied a system of pay wholly lacking in transparency since the rates of pay of National Health Service speech therapists and pharmacists are decided by regular collective bargaining processes in which there is no evidence of discrimination as regards either of those two professions.

16. However, if the pay of speech therapists is significantly lower than that of pharmacists and if the former are almost exclusively women while the latter are predominantly men, there is a prima facie case of sex discrimination, at least where the two jobs in question are of equal value and the statistics describing that situation are valid.

17. It is for the national court to assess whether it may take into account those statistics, that is to say, whether they cover enough individuals, whether they illustrate purely fortuitous or short term phenomena, and whether, in general, they appear to be significant.

18. Where there is a prima facie case of discrimination, it is for the employer to show that there are objective reasons for the difference in pay. Workers would be unable to enforce the principle of equal pay before national courts if evidence of a prima facie case of discrimination did not shift to the employer the onus of showing that the pay differential is not in fact discriminatory: see, by analogy, Handels-og Kontorfunktionaerernes Forbund i Danmark v. Dansk Arbejdsgiverforening (Case 109/88) [1991] I.C.R. 74, 79, para. 13.

19. In these circumstances, the answer to the first question is that, where significant statistics disclose an appreciable difference in pay between two jobs of equal value, one of which is carried out almost exclusively by women and the other predominantly by men, article 119 of the Treaty requires the employer to show that that difference is based on objectively justified factors unrelated to any discrimination on grounds of sex."

24. It is to be observed that in para. 14 the ECJ was considering the cases which had previously been determined by it and placing them in two categories. One comprised cases involving measures distinguishing between employees on the basis of their hours of work which in practice had an adverse impact on substantially more members of one or other sex. The other was where a system of pay, wholly lacking in transparency, was applied. In para. 15 it was pointed out that the Enderby case was different in that it did not fall into either of those categories. In para. 16 the ECJ turned to the situation where the facts were as set out in the question which it was answering, and gave its answer in those terms. The ECJ does not purport to be defining exhaustively the only circumstances in which a prima facie case of discrimination can be established. For example, no one would suggest that the first category should be limited to cases involving part-time workers. What the ECJ was doing was describing the circumstances which applied in the cases already decided and another and different set of circumstances which applied to the case which it was then deciding.
25. In Seymour-Smith the applicants had called into question whether the establishment of a two-year qualifying period for an employee to be able to claim unfair dismissal had such a degree of disparate effect as between men and women as to amount to indirect discrimination. The relevant question which the House of Lords referred to the ECJ was:

"(3) What is the legal test for establishing whether a measure adopted by a member state has such a degree of disparate effect as between men and women as to amount to indirect discrimination for the purposes of article 119 of the E.C. Treaty unless shown to be based on objectively justified factors other than sex?"

26. In answering that question the ECJ pointed out in para. 52 that Article 119 sets out the principle that men and women should receive equal pay for equal work and that that principle excludes not only the application of provisions leading to direct sex discrimination but also the application of provisions which maintain different treatment between men and women at work as a result of the application of criteria not based on sex where those differences of treatment are not attributable to objective factors unrelated to sex discrimination. It continued in paras. 59 – 62:

"59. Next, as the United Kingdom Government was right to point out, the best approach to the comparison of statistics is to consider, on the one hand, the respective proportions of men in the workforce able to satisfy the requirement of two years' employment under the disputed rule and of those unable to do so, and, on the other, to compare those proportions as regards women in the workforce. It is not sufficient to consider the number of persons affected, since that depends on the number of working people in the member state as a whole as well as the percentages of men and women employed in that state.

60. As the court has stated on several occasions, it must be ascertained whether the statistics available indicate that a considerably smaller percentage of women than men is able to satisfy the condition of two years' employment required by the disputed rule. That situation would be evidence of apparent sex discrimination unless the disputed rule were justified by objective factors unrelated to any discrimination based on sex.

61. That could also be the case if the statistical evidence revealed a lesser but persistent and relatively constant disparity over a long period between men and women who satisfy the requirement of two years' employment. It would, however, be for the national court to determine the conclusions to be drawn from such statistics.

62. It is also for the national court to assess whether the statistics concerning the situation of the workforce are valid and can be taken into account, that is to say, whether they cover enough individuals, whether they illustrate purely fortuitous or short term phenomena, and whether, in general, they appear to be significant: see Enderby v. Frenchay Health Authority (Case C-127/92) [1994] ICR 112, 161, para. 17. It is, in particular, for the national court to establish whether, given the answer to the fourth question [that the point of time at which the legality of a rule is to be assessed is to be determined by the national court], the 1985 statistics concerning the respective percentages of men and women fulfilling the requirement of two years' employment under the disputed rule are relevant and sufficient for the purposes of resolving the case before it."

27. Because the statistics showed that 77.4% of men and 68.9% of women fulfilled the requirement applicable in that case of two years' employment, the ECJ commented that they did not prima facie show that a considerably smaller percentage of women than men was able to fulfil the requirement. The ECJ gave its answer to the referred question in this way:

"65. Accordingly, the answer to the third question must be that, in order to establish whether a measure adopted by a member state has disparate effect as between men and women to such a degree as to amount to indirect discrimination for the purposes of article 119 of the Treaty, the national court must verify whether the statistics available indicate that a considerably smaller percentage of women than men is able to fulfil the requirement imposed by that measure. If that is the case, there is indirect sex discrimination, unless that measure is justified by objective factors unrelated to any discrimination based on sex."

28. That was a clear case of a condition or requirement which had to be satisfied. In Barry the question was whether a severance scheme basing a severance payment on length of continuous service and termination salary was indirectly discriminatory to women who were more likely than men to work part-time. The comparison which Lord Nicholls said (in the passage cited in para. 12 above) must be made was based on Seymour-Smith. But it is hard to see why the statistical approach applied in Seymour-Smith should not be capable of being employed in cases where there is no condition or requirement but there is a pay disparity between two occupational groups. Provided that the ET is satisfied as to the validity of the statistics and the appropriateness of their use, in my judgment it is free to use that statistical approach in order to determine whether there has been prima facie discrimination. In particular, I do not see anything in Enderby that precludes such approach.
29. I am left unpersuaded by the EAT's attempt in para. 26 of its judgment, cited in para. 15 above, to identify a clear and sensible difference between a condition or requirement case on the one hand and cases where no such condition or requirement is identified. In each case the ET is concerned to determine whether what on its face is a gender-neutral practice may be disguising the fact that female employees are being disadvantaged as compared with male employees to an extent that signifies that the disparity is prima facie attributable to a difference of sex. The distinction drawn by the EAT between true "requirement or condition" cases and "cases involving disparity of pay which has arisen between two work groups" may not always be capable of clear definition or consistent practical application, as Ms. Gill pointed out. Usually the disparity of pay between two work groups will reflect the fact that they do different work, and there may well be features of the work of the advantaged group which could be elevated to a requirement or condition. For example, where the disadvantaged group works in ordinary office or shop hours and the advantaged group does shifts or unsocial hours, it might be said that there was a requirement or condition for entry into the advantaged group of availability to work shifts or unsocial hours. The same statistics would be available whichever categorisation was used, and yet, if the Home Office was right, if it could be labelled a "requirement or condition" case the Seymour-Smith approach could lead to a conclusion of prima facie discrimination whereas, if it were categorised as a case involving disparity of pay between two work groups, prima facie discrimination could only be found if the disadvantaged group was predominantly female (or male) and the advantaged group predominantly of the other gender. As Ms. Gill submitted, the difference between a formal requirement or condition for obtaining a benefit which divides two groups of workers and a division by reference to jobs for which different amounts are paid is one of form rather than substance, and a common approach to the two types of case has the merit of ensuring that the 1970 Act is applied consistently to all forms of indirect discrimination.
30. I can see no justification for the imposition of a high threshold for satisfying the test of prima facie discrimination. Where, as here, there is one group of employees of an employer which contains a significant number, even though not a clear majority, of female workers whose work is evaluated as equal to that of another group of employees of the employer who are predominantly male and who receive greater pay, it would be very surprising if an ET were to be precluded by the presence in the disadvantaged group of a significant number of men from holding that that disparity in favour of men required justification by the employer. In the present case it may well be that, as the Home Office suggests, there is a genuine material factor which is not the difference of sex and which justifies that disparity. Whether there is such factor is for further determination.
31. For these reasons, and principally because the ET has found from the statistics that there is a prima facie case of discrimination and has not been shown to be materially wrong in so doing, I would allow the appeal, set aside the order of the EAT and restore the decision of the ET.

Lord Justice Waller:
 


32. I have found the point in issue on this appeal extremely difficult to resolve. One reason I believe to be because whereas Section 1(3) at first sight seems straightforward, difficulties have arisen in the establishment of what has to be proved by whom, and in the way the evidential burden may shift.
33. Section 1 is concerned with the equality of pay and equality of terms as between men and women for the same job. We in this case are concerned with disparity in pay. Section 1(3) allows the employer to prove that a variation is "genuinely due to a material factor which is not the difference of sex."
34. On the words of the subsection, if a woman can point to a job being performed by a man on a higher rate of pay, which is the same job as she is performing or its equivalent in value, the subsection seems simply to place the onus on the employer of proving that "genuinely" there is a material factor explaining the difference which has nothing to do with the difference in sex. One way that an employer might start to go about that would be to show that the woman is simply one amongst 100 persons on less pay the other 99 of which are men, and/or that the man who is receiving more is one out of 100 the other 99 of which are women. In either case the figures would simply be a starting point, and it could be (though my figures are so extreme, it seems unlikely) that special features would lead to the conclusion that he had not established that it was not a difference in sex which lead to the existence of the disparity. I have to say that I do not read the subsection at least at first blush, as imposing a two stage process in which the woman having pointed to a higher paid man has some burden of establishing a prima facie case that there is discrimination, which then imposes an evidential burden on the employer to justify the factor.
35. In Glasgow City Council v Marshall to which my Lord has referred, guidance is provided by Lord Nicholls, but the feature of the case, which strikes me, is that the applicant instructors "did not challenge the absence of sex discrimination". [Page 200F]. So what the case was about was whether the employer had to objectively justify the reason where there was no sex discrimination. Lord Nicholls held that he did not. He held that "..if an employer proves the absence of sex discrimination he is not obliged to justify the pay disparity."[203B]. He also pointed out at 200E "On this [i.e. on that contended for by the instructors] interpretation the Act could be called into operation whenever mixed groups of workers are paid differently but are engaged on work of equal value."
36. It is however important to stress that at 200F-G in the guidance quoted by my Lord, Lord Nicholls made clear that "The scheme of the Act is that a rebuttable presumption of sex discrimination arises once the gender based comparison shows that a woman, doing like work or work rated as equivalent or work of equal value to that of a man, is being paid or treated less favourably than the man."
37. I have to say that I do not understand why the applicants in this case should have to accept that there was some onus on them to show "disparate impact". I understand that the concession was made in reliance on Nelson v Carillion Services [2002] ICR 1256. We did not explore that decision during the hearing of the appeal and it may be that the concession in the light of that authority was rightly made. But, by an applicant being compelled to take on that burden, cases, in my view, get into an unnecessary evidential tangle, because one finds oneself considering (a) is there a prima facie case that the difference in pay is due to sexual discrimination; (b) if so, what is the employer's position - is it open to the employer to prove that it was not, and can he do that without establishing what his genuine reason was? Or is the establishment of a prima facie case sufficient to place on the employer the burden of establishing a genuine reason, which is not the difference in sex?
38. In the circumstances of this case, on the wording of the subsection and in the light of the rebuttable presumption referred to by Lord Nicholls, why should it not be sufficient for the applicant women to establish that they were being paid less than men doing the equivalent job? If they made no concession that sex discrimination is not involved, why should it not then be for the employer to prove by whatever evidence he wishes that the difference between the rate of pay for the applicants and the men doing the equivalent job was genuinely not due to the difference in sex? In seeking to prove that matter they might wish to deploy the statistics, or produce any other evidence that showed that the difference was not due to any difference in sex, and indeed show if he could that there were genuine material factors to account for the disparity.
39. It seems that route is not available. But the above leads me to the view that Section 1(3) cannot demand a high threshold for the establishment of a disparity which prima facie is due to sex. Thus where a difference in pay is established, and statistics seem to indicate a possibility of a disproportionate impact on women when looking at both the advantaged and disadvantaged groups as a whole, those statistics must provide sufficient evidence to get those carrying the burden over the hurdle of placing the onus on the employer to show that there were material factors which were not the difference in sex. For the reasons given by my Lord in my view the ET were entitled to reach the conclusion they did.

Sir Martin Nourse:

40. I agree with both judgments.