Industrial Tribunals Northern Ireland Decisions

 
THE INDUSTRIAL TRIBUNALS

CASE REF: 123/08

CLAIMANT: Elizabeth Hamilton

RESPONDENT: Department of Finance & Personnel

DECISION

The unanimous decision of the tribunal is that the respondent has established a genuine material factor defence for the purposes of the Equal Pay Act 1970 (as amended) and the claim for equal pay is therefore dismissed.

Constitution of Tribunal:

Vice President: Mrs Smyth

Members: Mr Killen

Ms Galloway

Appearances:

The claimant was represented by Mr M McEvoy, Barrister-at-Law, instructed by Equality Commission for Northern Ireland.

The respondent was represented by Mr M Wolfe, Barrister-at-Law, instructed by Department of Finance & Personnel.

1. The claimant is a female security guard who has been paid on the SGB 2 pay band since she commenced employment as a security guard in the Northern Ireland Civil Service in September 1998. She compares herself with male security guards who are paid on the higher SGB 1 pay band. The respondent concedes that the claimant and her comparators do the same work and that the claimant is paid less. The issue for the tribunal to determine is:-

"Whether the respondent has established a genuine material factor defence for the purposes of Section 1(3) of the Equal Pay Act 1970."

2. The tribunal heard evidence from the claimant and from Mr Ryan Dobson, Ms Blathnaid Smyth, and Mr Chris McRoberts on behalf of the respondent. The tribunal also considered a bundle of agreed documents and bundles of authorities.
3. The tribunal found the following facts proved on a balance of probabilities:-

(3.1) In February 1998 there was a recognition that security guards who were paid at SGB 1 level (all of whom were male) had been incorrectly graded and an agreement was reached (hereinafter referred to as the '1998 Agreement') between trade union and management sides that all security guards employed after February 1998 would be graded at the lower SGB 2 level. It was also agreed that the existing security guards would be 'red-circled' at SGB 1 level and continue to be paid at that grade. The claimant concedes that the decision to give those guards pay protection was motivated by the desire to preserve their contractual position and was not tainted by sex discrimination.

(3.2) The claimant was originally employed in the Northern Ireland Civil Service as a Civilian Search Officer at SGB 1 level until 27 January 1984 when she was retired on medical grounds.

(3.3) The claimant returned to work as a security guard in the Northern Ireland Civil Service on 21 September 1998 after sitting a medical assessment on 9 March 1998 when she was found to be fit to work, and attending an interview in July 1998.

(3.4) Documentation relating to the claimant's application for reinstatement into the Northern Ireland Civil Service which predated the 1998 Agreement refers to the security guard post at SGB 1 level. However, all documentation which post-dated the Agreement, including the invitation to attend interview clearly refers to the post as SGB 2 level. The tribunal is satisfied that when the claimant accepted the offer of employment as a security guard she was aware that she would be paid at SGB 2 level.

(3.5) The claimant alleged in her witness statement that she had queried her pay banding with her line manager, Mr McRoberts, and was told that the other security guards were graded at SGB 1 following a red-circling exercise. However, in oral evidence, she corrected her statement and stated that she was told her post had been 'downgraded' and the term 'red-circling' had not been mentioned. Mr McRoberts accepted that the claimant had queried her grading, and that he had explained that security guards had been incorrectly graded at SGB 1 and a security guard employed post-February 1998 would be graded at SGB 2. The claimant further alleged that Mr McRoberts told her that her wages would eventually 'catch up' with the security guards who had pay protection. Mr McRoberts did not accept that he had made such an assertion and the tribunal is not satisfied that he did so in view of the clear evidence that the respondent never intended to reduce the differential in pay between the two grades.

(3.6) The tribunal accepts that after February 1998, all new security guard employees were graded at SGB 2, with the exception of Mr Topping, Mrs Burns, Mrs Whitley, Mr Mathieson and Mr McKee.

(3.7) The tribunal accepts Mr Dobson's evidence that the reason Mr Topping was permitted to transfer from the post of messenger to the post of security guard at SGB 1 level in August 2000 was because Mr Topping had been off work on long-term absence following a complaint of sexual harassment against his line manager and an exception was made to facilitate Mr Topping's return to work. Mr Topping's substantive grade had been SGB 1 before the transfer.

(3.8) The tribunal also accepts Mr Dobson's evidence that the reason Mrs Burns, Mrs Whitley, Mr Mathieson and Mr McKee were appointed security guards at SGB 1 grade after February 1998 was because each of them had applied for, and successfully obtained the post prior to the February 1998 agreement. However, they could not take up appointment until they were released from their own Departments. It was considered unfair in those circumstances to require them to take up the post at a lower grade from that which had been offered to them.

(3.9) The claimant was the first security guard appointed after the February 1998 Agreement and in accordance with the agreement she was graded SGB 2 level. She remained the only security guard at that grade until the next security guard was appointed on 6 August 2001. This guard was Mr Mahoney and it is significant that although he had held the grade of SGB 1 whilst a messenger, he was required to accept downgrading to SGB 2 level as a condition of transferring to the security guard discipline. Subsequently, Mr McMillen was also required to accept downgrading to SGB 2 level as a condition of transferring to this discipline.

(3.10) Since the claimant was appointed a security guard, all subsequent security guards have been male, with the exception of Ms Dunlop in 2004, and all have been appointed at SGB 2 level, apart from Mr Topping, Mrs Whitley, Mrs Burns, Mr McKee, and Mr Mathieson for the reasons already set out at Paragraphs (2.7) and (2.8) above.

(3.11) In October 2000, Central Personnel Group, which is a division of the respondent Department received a letter from Mary Donnelly from Establishment Branch of the Department of Education where the claimant was employed as a security guard. Mrs Donnelly queried the effect of the pay protection provided by the February 1998 Agreement in view of the fact that the claimant had raised the issue of equal pay. At that time the claimant was the only female security guard, and of the six security guards employed, four were graded at SGB 1, and two, including the claimant, were graded at SGB 2. In particular, Mrs Donnelly queried whether the intention of the agreement was that SGB 1 security guards would remain on that pay band indefinitely rather then move to SGB 2 pay band on a 'mark time' basis. Mrs Donnelly also queried whether an employee at SGB 1 grade in a different discipline who wished to transfer to the security guard discipline could do so at SGB 1 grade.

(3.12) In response, it was confirmed that the 1998 Agreement had the effect of 'ring fencing' the existing security guards who had been graded SGB 1 in error, so that they would be treated separately from all security guards employed thereafter. The response also confirmed that any employee who wished to transfer to the post of security guard would have to do so at SGB 2 level even if his/her substantive grade was SGB 1.

(3.13) The claimant raised a grievance regarding the differential in pay within the security guard discipline, stating her belief that her treatment amounted to unlawful discrimination and breach of the equal pay legislation. At the grievance hearing, Mr Dobson refused to discuss the equal pay case on the basis that it was 'a legal matter'. An equal pay questionnaire had been sent out at this stage, although proceedings had not yet been lodged. Mr Dobson did however agree to deal with the grievance in terms of relevant Northern Ireland Civil Service procedures.

(3.14) On 9 January 2008, Mr Dobson responded in writing to the points made at the grievance hearing. He stated that he was 'satisfied that the Department in grading security guard posts at SGB 2, [had] acted entirely in accordance with the agreement reached with TUS (Trade Union Side) in 1998'. As regards the equal pay case, Mr Dobson confirmed that 'this matter [was] being progressed with The Departmental Solicitor's Office'.

(3.15) The tribunal accepts that the respondent has taken no steps since 1998 to reduce the pay differential between security guards paid at SGB 1 level and those paid at SGB 2 level and that it does not intend to do so. The tribunal further accepts that as a result of pay increments the differential between both groups has widened.

(3.16) It is also apparent that since the overwhelming majority of security guards paid at SGB2 level is male, a greater proportion of men have been adversely affected in comparison with women by the respondent's failure to reduce the differential.

4. The law

(4.1) The purpose of the Equal Pay Act 1970 (as amended) is to eradicate discrimination between men and women with regard to all aspects and conditions of remuneration. Section 1(1) provides that if the terms of a contract under which a woman is employed at an establishment in Northern Ireland do not include an equality clause they shall be deemed to include one.

(4.2) The material provision (so far as this case is concerned) is Sub-section (2) which requires that a woman employed in the same or like work as a man should enjoy the same pay and conditions. Sub-section (3) deals with the circumstances in which certain provisions of Sub-section (2) will not apply, and so far as is material, it provides:-

"(3) An equality clause falling within Sub-section (2)(a,)(b) or (c) 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."

(4.3) In Glasgow City Council & Others v Marshall & Others [2000] IRLR 272 the House of Lords held that where a woman is doing like work with a man, and is paid less, there is a rebuttable presumption of sex discrimination, and the burden passes to the employer to show that the explanation for the variation is not tainted with sex. The employer must satisfy the tribunal on the following matters:-

(1) that the proffered explanation, or reason, is genuine and not a sham or pretence;

(2) 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. The factor must be 'material' in a causative sense, rather than in a justificatory sense.

(3) that the reason is not 'the difference of sex' which is apt to embrace any form of sex discrimination, whether direct or indirect;

(4) 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.

An employer who proves the absence of sex discrimination, direct or indirect, is under no obligation to prove a 'good' reason for the pay disparity. If there is any evidence of sex discrimination, such as evidence that the difference in pay has a disparate 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.

(4.4) In Villalba v Merrill Lynch & Co Inc & Others [2007] ICR 469, Elias J set out at Paragraphs 114 – 117 three different circumstances in which pay arrangements may be tainted by sex:-

"First, there may be a difference in treatment which is specifically on sex grounds. A woman is paid less simply because she is a woman. That is the classic form of direct discrimination.

Second, there may be a difference in treatment which, whilst not specifically on grounds of sex, results from the adoption of a criterion or practice which adversely impacts on women because they are women. Typically this may be because the social role which women habitually perform makes it more difficult for them to place themselves in the category of the worker attracting higher pay. Treating part-timers less favourably is the classic example.

Third, where cogent, relevant and sufficiently compelling statistics demonstrate that women suffer a disparate impact when compared with men, there is an irrefutable presumption that sex has indirectly tainted the arrangements, even though it may not be possible to identify how that has occurred, and the differential needs to be objectively justified."

(4.5) In Fearnon, Patterson and Toland v Smurfit Corrugated Cases Lurgan Limited [2008] NICA 45 the Court of Appeal stated that:-

"to qualify as a contemporaneous genuine material factor accounting for the discrepancy in salary, the reasons for it at the time that the difference in earnings is challenged must be examined. Otherwise it would be possible for an unscrupulous employer to allow a difference in earnings to persist while knowing that the initial reason for it no longer obtained. It is to be remembered that the onus of establishing that there is such a genuine material factor rests on the employer throughout."

In that case, which also concerned 'red-circling', the court emphasised that the tribunal must consider:-

(a) not just the motive for the introduction of the red-circling, but also the reasons that it has been continued;

(b) whether the preservation of the red-circling accorded with 'current notions of good industrial practice';

(c) whether it would have been possible to phase out the difference in pay levels or whether adjustments could be made to the respective rates of increase in earnings so as to equalise the salaries paid to the claimant and her comparators.

(4.6) In Redcar & Cleveland Borough Council (appellants) v Bainbridge [2008] EWCA Civ 885, the Court of Appeal in England and Wales was asked to consider whether the respondent had proved a genuine material factor defence in circumstances where the reason relied on was the red-circling of employees whose pay was reduced following the implementation of the Single Status Agreement. The purpose of the implementation of the Single Status Agreement was the eradication of unequal pay between male and female employees. The court held that it would be artificial to exclude the historical position in a case where it was relevant. The men who were red-circled had received bonuses which women had not received on grounds of sex. The effect of the red-circling was to maintain the inequalities which had previously existed. Therefore, the reason for the pay differential was indirectly the difference in sex. In these circumstances, the employer had to justify its reason for excluding the women from pay protection on objective grounds.

(4.7) In United Biscuits Ltd v Young [1978] IRLR 15, the Employment Appeal Tribunal held that an employer could not rely on a red-circle defence in circumstances where two employees were subsequently admitted to the circle, and the employer had not led evidence that the considerations which justified the original red-circling continued to apply at the time the two employees were admitted. It was accepted by the employer in that case that the original considerations had eventually ceased to be relevant.

(4.8) In McPherson v Rathgael Centre for Children and Young People and Northern Ireland Office (Training Schools Branch) [1991] IRLR 206 the Court of Appeal overturned a decision of the industrial tribunal accepting a genuine material factor defence in the absence of evidence showing objective justification by the respondent. However, Hutton LCJ expressed reservation about the failure of the respondent both before the tribunal and the court to raise the issue of whether the claimant who was the only female in a group of predominantly men, paid at the same level, could properly compare herself with a male comparator doing like work and paid at a higher rate.

(4.9) In Benveniste v University of Southampton [1989] IRLR 122 the Court of Appeal held that an employer could not rely on considerations which had originally justified the red-circling of employees, in circumstances where the employer accepted that those considerations had ceased to apply, and yet the female claimant continued to be paid less for like work.

5. The submissions of the parties

(5.1) Both parties submitted written submissions which are attached to this decision. The parties also made oral supplementary submissions.

6. Conclusions

(6.1) Although the claimant concedes that the reason for the introduction of red-circling was untainted by sex, it is submitted that the period of time during which the claimant was the only security guard at SGB 2 level caused the once genuine material factor to become tainted by sex. The claimant was the first security guard appointed after the 1998 Agreement and the next guard, Mr Mahoney, was not appointed until 2001. In that three year period it is submitted that statistically the pay differential had a disparate adverse impact on women in comparison with men.

(6.2) Both counsel accept that the date at which the equal pay claim must be considered is the date proceedings were lodged. However, although at that date the overwhelming majority of security guards at SGB 2 level is male, Mr McEvoy submits that this is irrelevant because as in Redcar the three year period during which he contends there was sex discrimination has caused the material factor to become tainted by sex and this historical inequality prevents the respondent relying on a genuine material factor defence. The pay differential must therefore be objectively justified.

(6.3) In determining whether the once genuine material factor defence has become tainted by sex, the tribunal considered the three circumstances identified by Elias J in Villalba in which pay arrangements may be tainted by sex which are set out at Paragraph 3.4 above. The circumstance which is material to this case is the third circumstance, that is "where cogent, relevant and sufficiently compelling statistics demonstrate that women suffer a disparate impact when compared with men ... ". In such circumstances, Elias J stated that:-

"there is an irrebuttable presumption that sex has indirectly tainted the arrangements, even though it may not be possible to identify how that has occurred, and the differential needs to be objectively justified."

This circumstance arises from the case of Enderby v Frenchay Health Authority [1994] ICR 112 in which the ECJ established that statistics alone may in a sufficiently powerful case create an irrebuttable presumption of prima facie indirect sex discrimination.

(6.4) Mr McEvoy submits that in the three year period that the claimant was the only guard employed at SGB 2 she represented a group which was 100% female. Therefore, he contends, that there is an irrebuttable presumption that sex has indirectly tainted the arrangements and the respondent must objectively justify the discrimination.

(6.5) The tribunal notes Paragraph 113 of the decision in Villalba in which Elias J explains what is required to satisfy the Enderby test:-

"113 ... the statistics must at least show that it is reasonable to infer that the treatment of the disadvantaged group must have resulted from some factor or combination of factors which impinge adversely on women because of their sex, even though no obvious feature causing this disparate treatment can be identified, and indeed even though the employer has apparently demonstrated to the contrary."

(6.6) The tribunal does not accept that it is reasonable to infer from the statistical evidence that the treatment of the claimant must have resulted from some factor or combination of factors which impinge adversely on women because of their sex. The tribunal accepts the respondent's contentions that it was simply coincidental that the first security guard appointed after the 1998 Agreement happened to be a woman, and the reason she remained the only guard at SGB 2 level for three years was because, by mere chance, it was three years before another security guard was appointed. As the tribunal has already stated, when the second guard, Mr Mahoney, was appointed, not only was he appointed to the same grade as the claimant, but he was required to accept downgrading from his substantive SGB 1 level in order to be appointed to that post. Mr McMillen similarly had to accept downgrading to SGB 2 level when he was subsequently appointed.

(6.7) The claimant relies on the decision in Fearnon, Patterson and Toland  v Smurfit Corrugated Cases Lurgan Limited wherein the Court of Appeal makes it clear that it should not be assumed "that because it was right to institute the system, that it will remain right to maintain it indefinitely." The onus remains on the respondent to prove that there is a genuine material factor justifying the differential in pay, not just at the time the decision was made, but also at the time the differential is challenged. The respondent contends that the reason justifying the differential in pay in 1998 remains valid today, namely that the correct grading for security guards is SGB 2 albeit there is a need to preserve the contractual position of those erroneously graded at SGB 1. The claimant does not challenge the respondent's assertion that she is paid at the correct grade but challenges the failure to take steps to reduce the differential.

(6.8) In particular, the claimant points to the fact that the respondent made no pretence that it had ever considered removing the pay protection arrangement, and indeed it went further in asserting that it had no intention of doing so, or even reducing the pay differential by means of 'mark-time' or 'freeze and catch-up'. Mr McEvoy pointed out that these were factors which the Court of Appeal in Fearnon stated the tribunal must consider, along with an examination of whether the preservation of the red-circling accorded with 'current notions of good industrial practice'.

(6.9) The tribunal is satisfied that the stance adopted by the respondent does not accord with current notions of good industrial practice. The pay differential has widened over time as increments have been paid. The dissatisfaction shared by all security guards paid at SGB 2 level, whether male or female, is apparent from the fact that a large number of the claimant's male colleagues also brought equal pay claims, albeit they were subsequently withdrawn. As Phillips J stated in Outlook Supplies Ltd v Parry [1978] 2 All ER 707 at Page 711:-

" ... the protection of wages, even when done for a good reason, gives rise to much misunderstanding and upset, which increases as time goes on, and it is accordingly desirable that where possible such arrangements should be phased out ... ."

(6.10) However, the tribunal does not understand the decision in Fearnon to mean that a failure on the part of a respondent to consider whether it was necessary to prolong such an arrangement, or whether the preservation of the red-circling accords with current notions of good industrial practice will inevitably mean that the claimant can sustain a claim under the Equal Pay Act 1970 (as amended).

(6.11) In considering this question the tribunal takes into account the fact that all security guards appointed after the 1998 Agreement were appointed at the SGB 2 band, regardless of whether they were male or female with the exception of Mr Topping, Mr Matheson, Mr McKee, Mrs Whitley and Mrs Burns.

(6.12) In respect of Mr Topping, although the claimant did not challenge the genuineness of the respondent's reasons for red-circling him, Mr McEvoy relied on the decision in United Biscuits Ltd v Young [1978] IRLR 15 in his submission that the admission of Mr Topping to the red-circle after the 1998 Agreement meant that the respondent could not rely on the agreement to justify the differential.

(6.13) However, the tribunal does not accept this submission. The tribunal accepts that the genuine material factor upon which the respondent seeks to justify the differential between Mr Topping and the claimant is not the same genuine material factor upon which it seeks to justify the differential between the claimant and the other security guards red-circled in February 1998. In effect, Mr Topping was in a red-circle of his own because of the particular circumstances of his employment situation and the need to facilitate his return to work. The decision in United Biscuits therefore does not assist the claimant.

(6.14) In respect of Mr Matheson, Mr McKee, Mrs Whitely and Mrs Burns, the claimant does not challenge the respondent's explanation that although they were appointed after February 1998, they had applied for, and been offered appointments at SGB 1 level prior to the 1998 Agreement. The reason their appointments post-dated the agreement was because they each had to obtain a release date from their departments. The very fact that this group contained two women supports the respondent's case that the factor justifying the differential in pay remained untainted by sex even after the claimant's appointment.

(6.15) The failure of the respondent to take any steps since 1998 to reduce the effect of the pay differential, or to ensure that the preservation of the red-circling accorded with 'current notions of good industrial practice' does not alter the fact that there is no evidence of sex discrimination in this case. The tribunal is mindful that the obligation under the Equal Pay Act is to ensure that there is no inequality in remuneration between men and women, not to ensure fairness between employees.

(6.16) Although in McPherson the Court of Appeal stated that an employer was required to objectively justify any variation between a woman's contract and a man's contract that was expressly subject to a consideration of whether a woman was entitled to ignore a number of men with whom she was paid equally. This question was raised before this tribunal, and it is satisfied that in the circumstances of this case, taking into account recent jurisprudence from the House of Lords in Glasgow City Council & Others v Marshall & Others there is no requirement on the respondent to objectively justify the preservation of the red-circle.

(6.17) The tribunal acknowledges that the sense of grievance felt by the claimant and her male colleagues who are paid at the SGB 2 level is entirely justified. However, there has been no breach of the equal pay legislation, and accordingly the claim is dismissed.

Vice President:

Date and place of hearing: 6 – 9 April 2009 and 23 April 2009, Belfast

Date decision recorded in register and issued to parties:

THE INDUSTRIAL TRIBUNALS

Case No 123/OSIT


Between
ELIZABETH ROSE HAMILTON
Claimant:


-and-

DEPARTMENT OF FINANCE AND PERSONNEL


Respondent:

_____________________________________________
SUBMISSIONS ON BEHALF OF THE CLAIMANT

Issues to be determined by the Tribunal

1. The Tribunal is asked to determine whether the Respondent is entitled to rely on the defence of genuine material factor contained in s.1(3) of the Equal Pay Act (NI) 1970 in respect of the differential in pay as between the Claimant and her male comparators.


Sources of evidence

2. The tribunal heard evidence from the Claimant and on behalf of the Respondent from Mrs Blaithnaid Smyth, Mr Chris McRoberts and Mr Ryan Dobson .


Findings of fact


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3. On the basis of the evidence presented to it, it is respectfully submitted that the Tribunal is entitled to find the following facts.

4. An Agreement was made on 20 February 1998 between the Respondent and the Trade Unions which operated to protect the pay and conditions of security guards who had been erroneously graded as SGB1s in the late 1980's.

5. This Agreement was a purportedly genuine and material factor at the time that it was made, since its ostensible purpose was to preserve the contractual position of those SGB1 security guards who were the subject of it, albeit that no consideration was given to the question of how long the pay protection should last.

6. The Claimant was previously employed by the Northern Ireland Civil Service but left work on grounds of medical retirement in 1984. On 21 September 1998, she was re-employed as an SGB2, based firstly at the Department of Education, where she was the only female security guard, and the only such guard graded as an SGB2. As at 21 September 1998, all the pay-protected SGB1s were male.

7. Subsequent to the Claimant's re-employment, four other employees (two male, two female) were permitted to take up positions as security guards at SGB1 with pay protection on the basis that they had been offered those positions as security guards prior to the implementation of the 20 February 1998 Agreement.

8. The Claimant was originally aggrieved that she had been 're employed', as opposed to being reinstated, since this had been what she was led to believe upon her application to return to work. However, she subsequently accepted that this was the basis on which she was returning to work with the Respondent in view of the February 1998 Agreement. The Claimant has not at any time accepted the continued existence of pay protection as between


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her and her SGB1 colleagues, the overwhelming majority of whom have historically been male.

9. The Tribunal heard evidence from the Claimant about a discussion with her then line manager Chris McRoberts, which took place around the time of her re-employment in late 1998. The discussion was about the length of time the pay protection was to last. It is accepted that the Tribunal is entitled to conclude that the evidence about this discussion was somewhat vague. Mr. McRoberts could not recall it. The Claimant's evidence was that the indication from Mr. McRoberts about a limit of 5 years on this pay protection arose in the course of an apparently informal discussion, but beyond this discussion there was no documentation to support it. There was no exploration of any time limit in the witness statement of Mrs. Blaithnaid Smyth. It must be, however, that whatever may have been said about the phasing out of this pay protection, it did not translate into action on the part of the Respondent.

10. In August/September 2000, following the resolution of an internal grievance involving a complaint of sex discrimination by a male member of staff, Mr. Dobson transferred the individual concerned, Mr David Topping, to the security guards as an SGB1, thus admitting him into the pay protected red circle. This was some 2¹/2 years after the February 1998 agreement. At the material time, the Claimant was the sole SGB2.

11. In October 2000, the Claimant's concerns about the ongoing pay differential were relayed in correspondence between Mary Donnelly, who was the establishment officer at the Department of Education where the Claimant was then based, and Russell Welsh. The correspondence from Ms Donnelly disclosed an obvious concern about the continued existence of the pay protection post the admission of David Topping into the red circle and the ramifications of that decision for equal pay.

12. The Donnelly/Welsh correspondence should have sounded a warning at that point in time that the pay protection issue would have to be addressed, but
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the concerns expressed by Ms Donnelly appear to have been dismissed by Mr. Welsh never, it seems, to be revisited No assessment was made about the equality impact of the perpetuating pay differential It is critical to remember that the only person negatively affected by this state of affairs was the Claimant.

13. This situation remained until 6 August 2001, when the ranks of the SGB2 security guards were increased upon the transfer of Mr. Les Mahoney across from his position with the Respondent as a messenger-driver In doing so, he accepted a voluntary downgrading to SGB2. With the exception of Ms Barbara Dunlop in 2004, new entrants to the security guards have since this time been male, in keeping with the overall gender profile of the security guard position since at least 1998.

14. In 2006, the Claimant sought redress of the pay protection issue through the presentation of a statutory questionnaire. During the course of the hearing the Tribunal was taken to the Respondent's response as provided by Mr. Dobson on 9 June 2006.

15. On 5 October 2007, the Claimant and some of her male SGB2 colleagues brought grievances concerning the issue pay protection issue before Mr. Dobson, who told the Claimant and the concerned colleagues at a grievance meeting on 13 November 2007 that he would not be addressing the equal pay issue since it would be "a legal matter" and it would not he appropriate to discuss it at [the grievance] meeting."

16. In fact proceedings were not begun by the Claimant and her male colleagues until after this meeting The Claimant's claim was presented to the Office of the Industrial Tribunals on 4 January 2008.

17. As at the date of these proceedings the Respondent has taken no measures to eradicate the red-circle, to mitigate its effects or to assess the equality impact of its continued existence In fact in its replies the Respondent has baldly stated that "[t]he ring fencing exercise is likely to remain in place until


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the last security guard on the SGB1 pay scale either retires or leaves the
NICS"

18. It is respectfully submitted on the Claimant's behalf that the ostensible purpose for which the Agreement was intended in 1998 no longer obtains, and indeed has not obtained since, at the very latest the date of the admission of Mr. Topping into the red circle in August 2000. The Respondent has remained wilfully ignorant of the discriminatory consequences of their failure to act, given the existence of these proceedings and the questionnaire and grievance which preceded them, of the potential consequences for equal pay which have arisen in the interim.

19. The Respondent has manifested no intention whatsoever of wanting to phase out this patently unfair pay protection In fact, it has plainly admitted that its intention is to permit it to remain in place indefinitely While it is unfair on the Claimant's male colleagues, she has suffered more deeply and for a longer period, in a way which is plainly tainted by a historical failure to grasp the fact of the discriminatory treatment she suffered in pay as a female SGB2.

20. Rather than wither on the vine, the pay differential has in fact widened since it has only widened as some 11 years have elapsed. This cannot be the purpose of pay protection; rather, it defies the definition of protection and has served to institutionalise pay inequality within the ranks of the Respondent's security guards.


Relevant law

General principles applying to the defence of genuine material factor

21. Section 1(3)(a) of the Equal Pay Act (Northern Ireland) 1970 (as amended) provides that:


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

22. In this case, the Claimant has accepted that the introduction of agreement permitting the pay protection of the SGB1 guards in February 1998, a number of months prior to her re-employment, was at the time an ostensibly genuine and material factor explaining the reasoning for the protection in the first place.

23. However, the important caveat is that at that material time no women were affected until her employment in the following September. The facts then demonstrate that between September 1998 and the transfer of Les Mahoney on 6 August 2001, the treatment of the Claimant as the only woman, and the only SGB2, was clearly tainted by sex.

24. In Glasgow City Council v Marshall [2000] IRLR 272, HL, Lord Nicholls formulated the following approach to s 1(3) :
"[18]… 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


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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 s.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.

[19] When s.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 obiectivel justifiable. But if the employer proves the absence of sex discrimination he is not obliged to justify the pay disparity" (emphasis added)

25. In his discussion of the Marshall decision, Michael Duggan postulates that "[i]f justification had been in point, ie there had been discrimination, a purely historical explanation would not have of itself sufficed" (Equal Pay Law and Practice [20091 at paragraph 10 27).

26. In McPherson v Rathgael Centre for Children and Young People and the Northern Ireland Office 119911 IRLR 206 at paragraph 25, Hutton LCJ (as he then was) held that "it is not enough for [an employer] to prove that he had no intention of discriminating against the woman employee o the ground of her sex" Just as with complaints under the Sex Discrimination (Northern


7

Ireland) Order 1976, so it is under the Equal Pay Act (Northern Ireland) 1970, that discriminatory intention is irrelevant, while discriminatory effect is central.

27. An employer cannot be ignorant of the potentially discriminatory effects of pay protection arrangements In Bainbridge v Redcar and Cleveland Borough Council Surtees v Middlesborough Borough Council [20081 IRLR 776, the English Court of Appeal stated that :
''…[w]hether an employers arrangements discriminate against women either directly or indirectly is a question of fact and it is to be determined objectively. Whether or not the employer knew or realised that he was discriminating is irrelevant, as is the question of whether he intended to discriminate Questions of knowledge, motive and intention are relevant indeed important, at the stage of justification but quite irrelevant at the stage of deciding whether the arrangement was or was not prima facie discriminatory.

…[W]e wish to draw attention to the way in which the EAT drew a distinction between an employer who has actual knowledge that his arrangements are or will be discriminatory and one who only suspects that that will be so. Although we accept that the distinction is not without significance, we do not think too much should turn on such a distinction. As we said earlier, there will be gradations of knowledge ranging from actual knowledge at one end of the scale to complete and genuine ignorance at the other. However, we think it would be most unattractive if an employer who turned a blind eye to the potential discriminatory effect of his arrangements were to be in a better position on justification than one who investigated the position thoroughly and realised that the arrangements were indeed discriminatory. Such a distinction would put a premium on a failure to monitor pay arrangements and properly to investigate an allegation


8

of pay discrimination when first made" (per Mummery U at paragraphs 158-159)

Entry of outsiders into a Red Circle

28. The entry of an outsider into the red circle destroys that red circle United Biscuits v Young 11978] IRLR 15 .

29. In Harvey on Industrial Relations and Employment Law at it is remarked that "[i]f the employer lets an outsider into the red circle, that will destroy his defence, because the women can then claim parity with the outsider. Or to put the point a different way, she can demonstrate that the red circle is not the real reason why she is being treated less favourably" (at Division K, paragraph 272)

30. There is authority for the proposition that explanations for paj protection of other employees on humane grounds should be treated carefully In Benveniste v University of Southampton [1989] IRLR 122 Neill LJ remarked that:

"With all due respect I do not find any assistance in the red circle cases where certain individual employees have been treated as falling into a special or different category because on humane grounds their salaries have been protected at a higher rate over a period. They remain protected employees. In the present case, however, once it is accepted that the financial constraints came to an end in 1981, or at any rate by October 1982, the special factors which justify the lower salary disappear I am not persuaded that it can be right that the appellant should continue to be paid on a lower scale once the reason for payment at the lower scale had been removed. There was no justification for the lower rate of pay other than the circumstances existing at the date of her appointment " (at paragraph 30)
9

Historical explanations and pay protection

31. Harvey comments (at Division K, paragraph 278), that "[a]lthough it may be lawful to perpetuate protected salaries, it is as a matter of good industrial relations practice desirable to phase out the red circle as soon as possible, for memory dims, and what began as a demonstrably fair special case, later becomes seen as an unjustifiable anomaly […]" (Harvey, Division K, paragraph 275), and at paragraph 278 "as with red circling, so with any other form of 'historical anomaly, it is not enough to explain how the anomaly came about. The issue is whether it can be presently justified on grounds other than sex.


In Outlook Supplies v Parry [1978] 2 All ER 707, the EAT held that on the facts the existence of a red circle for some two years was too long to warrant justification for the purposes of s 1(3) Phillips J used the opportunity to clarify the commentary about the perpetuation of red circling exercises provided in Snoxell v Vauxhall Motors Ltd Charles Early & Marriott (W,tney) Ltd v Smith [19771 IRLR 123 stating that:

"We wish to draw attention to the following matters (i) we stress the point that cases arising under s 1(3) can never be solved by rule of thumb, or by attaching a label, such as saying This is a "red circle case' It is necessary to look at all the circumstances, (ii) the 'protection' of wages, even when done for good reason, gives rise to much misunderstanding and upset, which increases as time goes on, and it is accordingly desirable that where possible such arrangements should be phased out, (iii) for the same reason Joint consultation is desirable where it is intended to introduce such a practice or, if it has been introduced, to continue it, (iv) in such cases, when determining whether the employer has discharged the onus on him under s 1(3), it is relevant for the industrial tribunal to take into account the length of time which has elapsed since the protection was introduced, and whether the employers have acted in accordance with current

10

notions of good industrial practice in their attitude to the continuation of the practice.

32. This guidance was cited with approval by the Northern Ireland Court of Appeal in Fearnon Patterson and To/and v Smurfit Corrugated Cases (Lurgan) Limited 120081 NICA 45, which went on to find that it was
"incumbent on the tribunal to examine not only the motive for the introduction of red-circling, but also the reasons that it has been continued It is wrong to assume that because it was right to institute the system, that it will remain right to maintain it indefinitely…''


The Court of Appeal focused on the requirement upon an employer to lead evidence to show that the red-circling was still necessary Kerr Xi found that:

"No evidence appears to have been proffered to the tribunal to justify the continuation of the red-circling Apart from recording the employers' claim that the reasons justifying the difference in pay in 1994 continued to apply, the tribunal makes no reference whatever to the issue No examination of why the employers considered that it was necessary to prolong the arrangement took place No discussion of whether the preservation of the red-circling accorded with 'current notions of good industrial practice' was undertaken There was no inquiry as to whether it would have been possible to phase out the difference in pay levels or why adjustments could not be made to the respective rates of increase in earnings so as to equalise the salaries paid to the appellants and their comparator The tribunal appears to have accepted without demur the unvarnished claim that the reasons for the red-circling continued to apply, unsupported as it was by any evidence Given that, as we have said, the onus of establishing this central tenet of the respondents' case rested on the employers, we cannot accept that this was a correct approach.''


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33. In Home Office v Bailey [2005] IRLR 757, the EAT found that the failure of the employer to lead evidence to explain why a red circle introduced in 1987 still persisted in 1999 entitled a Tribunal to find that the employer was not permitted to rely on that red circle as a genuine material factor. In that case, the employer failed to provide justificatory evidence over and above that which obtained at the time the red circle was introduced .

Application of the relevant law to the findings of fact

34. It is the submission of the Claimant that as regards her situation, the Respondent has not been able to satisfactorily discharge the third of the requirements as described by Lord Nicholls in Marshall (set out at paragraph 24 above). There was plainly a sex taint in the arrangements regarding her pay from 21 September 1998 onwards.

35. To this end, following Mcpherson, the assertion that the Respondent would have treated the Claimant in the same way, were she a man, is inconsequential, there is no evidence to support the contention, much less that this is of any value. The fact remains that she was the only woman to have been so treated in the period from September 1998 to the date of these proceedings.

36. The entry of David Topping into the pay protected red circle operates to destroy the red circle as a genuine material defence, irrespective of the considerations which may have been at play in the decision to so admit Mr. Topping, they are not the considerations which warranted entry into the red circle to begin with and thus this decision was a device which cannot permit the Respondent reliance upon the red circle defence after August 2000.

37. No consideration was given by the Respondent despite the expression of concern by Mary Donnelly about the ramifications for equality of pay in light of Mr. Topping's admission into the red circle The Respondent's failure to
12


examine the continued existence of pay protection at this time is not excusable in the respectful submission of the Claimant.

7. The Respondent has palpably failed to justify the continuation of the red circle by reference to any assessment of its continued existence. This is exactly the mischief identified by the Court of Appeal in Fearnon and Others .There has been no explanation as to why the pay protection arrangement has not faded out by reference to a freeze and catch-up arrangement or by reference to mark-time. Indeed it seems that the Respondent has not bothered to test these waters with the trade unions with whom the 1998 Agreement was originally conceived .
8. The Tribunal is encouraged to treat with extreme caution any proposition that the Claimant's position could somehow or other have been diluted because subsequent (i e, post-David Topping) entrants to the SGB2 grade have (with one exception) been male. To do so would be to overlook the fact that the males who previously lodged and withdrew claims were not affected by the entry of David Topping into the red circle and to erroneously contextualise the Claimant's claim arising more from disgruntlement as between two grades getting two levels of pay for the same work rather to properly grasp the important factual distinctions between the Claimant and the other male SGB2s. The chance recruitment of more males into the ranks of the SGB2s cannot be considered to have operated to mitigate or dissipate the effects of evident historical discrimination sustained to the Claimant in circumstances where an invidious historical pay practice is being allowed to remain in perpetuity.
9. In all the circumstances the Tribunal is respectfully invited to find for the Claimant .


Mark McEvoy
Counsel for the Claimant
The Bar Library
91 Chichester Street
BELFAST
13

BTI RJQ
19 Apr 2009



14

Case No. 123/081T
IN THE INDUSTRIAL TRIBUNALS IN NORTHERN IRELAND

BETWEEN:
ELIZABETH HAMILTON
Claimant:

-and-

DEPARTMENT OF FINANCE AND PERSONNEL
Respondent:

……………………………………………………………….

SUBMISSIONS ON BEHALF OF THE RESPONDENT

…………………………………………………………………

The Facts
As has been acknowledged there is little apparent difference or controversy
between the parties regarding the factual background to this case. It is submitted that the following relevant facts have been established:-

1. In 1988 a restructuring of support grades within the Northern Ireland Civil Service took place. Arising out of that review the security guard discipline
were designated as SGB1 (see page 208).

2. Shortly after this designation had been made management side reached the view that a mistake had been made and that security guards ought to have been designated at the lower grade of SGB2 (page 229.) In her
witness Statement Blathnaid Smyth referred to the documentation which highlighted how management side tried to persuade the trade union side to agree to the re-grading of security staff at the appropriate grade of
SGB2. Agreement could not be reached and any secunty guard who was recruited to the Service was employed at SGB1.

3. This all changed from the 20 February 1998. The documentation shows that management side and trade union side agreed that security guards
already in post would continue to hold the grade of SGB 1 and be paid accordingly, while all workers to be recruited to the security guard
discipline from that date, whether from within the NICS or from outside, would be appointed at the SGB2 grade see pages 285, 286, 287.

4. As appears from page 74 it was the view of trade union side that it would have amounted to a breach of contract to force the existing SGB1 security guard staff to accept a reduction in their grading. The existing security guard staff were therefore "red circled" or "ring fenced" at the SGBI grade.

5. The Claimant had worked as a security guard until 1984 when she retired on grounds of ill health. When she retired she was graded at SGS1. By
1998 her health had improved sufficiently to allow her to seek employment
as a security guard once again. Indeed she had been applying for
reinstatement to the position of security guard at SGB1 for some time before 1998. In 1997 her application to be reinstated at SGB1 was
rejected because of concerns about her health. In 1998 occupational
health found that she was "probably fit to give regular and effective
service …" (page 75). Thereafter, she successfully attended for interview for a security guard post at the SGB2 grade, and started work with the Department of Education on the 21 September 1998 (pages 91-94).

6. Subsequently, in 2001, the Claimant transferred to work as a security guard at the Stormont Estate where she was employed by the
Respondent for the first time .

7. When the Claimant started work as a security guard in September 1998 she was the only security guard working at SGB2. it Is accepted by the Respondent that from the commencement of her employment with the Department of Education and then with the Respondent, the Claimant has been carrying out like work compared with that of her male comparators in the SGB1 grade, arid that she has been paid less for the same work.

8. Apart from a small number of "exceptions" every security guard who has been appointed since the 20 February 1998 has, like the Claimant, been appointed to their post in the SGS2 grade. Thus, subject to those
"exceptions" (which are discussed below) all external appointments and all internal appointments to the ranks of the security guards have been to the grade of SGB2, regardless of gender.

9. The "exceptions" can be described as follows

a. Firstly, in or about October 1997 four employees-Mrs Margaret Burns, Mr. W Alan Mathieson, Mr. R Harry Mckee and Mrs
Margaret Whitley - applied to the Respondent to work as security guards. At that time they were employed In other Civil Service jobs at the grade of SGB1. Those who applied for security guard
positions at that time expected to be appointed at SGB1. This
group of four were successful in this application process and were
'recommended to fill the post of SGB1 Security Guard" as appears


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from a document signed by Mr. Dobson and dated 30 January 1998 (page 283). However, by the 20 February 1998 none of the four had been released from their current posts or placed in security guard posts. Accordingly, although the decision had been made to appoint them at SGB1 before the 20 February, a question arose as to whether they could be appointed at SGB1 in light of the agreement reached on that date. A decision was taken by
Personnel that because the posts had been trawled at SGB1 and because the process had moved to the pre-appointment stage, it would be appropriate to appoint at the SCB1 level. (See the
handwritten annotation on the document at page 287).

b. Secondly, on 7 August 2000 Mr. Dobson was notified by a trade union representative that a Mr. David Topping was complaining that he was suffering from "persistent bullying, victimisation, sexual harassment and unequal treatment" by management ;(see
Appendix A to Mr. Dobsan's statement). Mr. Dobson investigated the matter and held discussions. He was anxious to get Mr.
Topping back to work and to try to resolve the harassment
complaint. In this context and as part of a solution to what appeared to be a serious equal opportunities and health issue it was
considered appropriate to allow Mr. Topping to transfer into a
security guard post on no less favourable terms: Appendix D. At that time Topping had been employed in the transport unit at SGB1 and he retained this grade when he moved to security .

10. As has been stated, apart from these "exceptions" every other security guard appointed since 20 February 1998 has been appointed at the SGB2 grade. Thus, even workers who have held the SGB1 grading in other disciplines have been required to downgrade to SGB2 in order to secure appointments to security guard posts. This has been demonstrated in the cases of Mr. Les Mahoney (page 353) and Mr. Andrew McMillan (page 383).

11. The sense of grievance felt by the Claimant is also shared by her male SGB2 colleagues in the security guards. A number of the male SGB2s joined forces with the Claimant by lodging grievances with the Respondent (see page 119) and by commencing equal pay proceedings against the Respondent citing Margaret Burns as their comparator. Subsequently, those proceedings were withdrawn .

12. Although the Respondent was caused to look at the grading issue
generally in light of the grievances which had been lodged, no review of the issue has taken place since the agreement came into affect in


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February 1998, no attempt has been made to mitigate the effects of the pay differential and the Respondent intends to maintain the differential until all SGB1s have left the Service.


The Defence:

13. The Respondent has always accepted that the Claimant does like work compared with the male security guards employed in the SGB1 grade. However, the fact of like work and less pay is not sufficient to sustain a complaint that there has been a breach of the Equal Pay Act (NI)1970. It has been repeatedly said that the legislation has nothing whatever to do with achieving "fair wages." On the contrary, its sole purpose is to
eradicate discrimination in pay and conditions based on sex.

14. In this case the Respondent has endeavoured to demonstrate that there are reasons for the pay differential which are unrelated to the difference of sex, which explain and justify the pay disparity. In other words the
Respondent believes that it can rely on a genuine material factor (or
factors in this case) In order to defend the pay disparity, as provided for by section 1(31 of the Act.

15. Section 1(3) provides as follows:-

An equality clause falling within sub-section 2(a) 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 in sex and that factor:-

(a) in the case of an equality clause falling within Subsection
2(1) must be a material difference between the woman's case and the men's…

11. The Respondent has made it clear that a different material factor explains the variation in pay between the Claimant and Mr. Topping, to that which explains the variation in pay between the Claimant and the rest of the
    male SGBls.
12. At page 59-60 the nature of those defences was sketched cut and is
    repeated here:-


4

Is the Respondent entitled to rely on the defence of genuine material factor far the purposes of Section 1(3) of the Equal Pay (Northern Ireland) Act 1970 as between the claimant's contract of employment and that of her comparator, Mr. David Topping?


The genuine material factor defence: From February 1998 the normal grading rule was that those who were recruited as security guards whether externally or from within the Service, such as the Claimant, were graded SGB2 and paid on the SGB2 pay band. Mr. Topping was recruited as a security guard from within the Service in August2000 and appointed as SGBI as an exception to this grading rule. The Respondent will defend the variation between the Claimant's pay and that of Mr. Topping by relying on a genuine material factor defence based on the particular circumstances of his case. The Respondent claims that the particular
circumstances which justified a personally protected salary for Mr. Topping were that he had been on long term absence from his post as a driver/messenger SGB 1, having raised a complaint of sexual harassment. It was necessary to transfer him from his post to the security guard discipline on terms which were no less favourable to him in order to secure his return to work and to resolve his grievance.

Is The Respondent entitled to rely on the defence of genuine material factor for the purposes of Section 1(3) of the Equal Pay (Northern Ireland) Act 1970 as between the claimant's contract of employment and that other comparators the 'Former SGB1' Security Guards?

The Genuine Material Factor Defence: in the case of these comparators the Respondent says that the genuine material factor justifying the variation in pay is the fact that, unlike the Claimant, each of these comparators were employed by the Respondent as SGB1 security guards prior to February 1998. In February 1998 management side and trade union side reached an agreement wherein it was acknowledged that SGB2 was the correct grade for a security guard in the Northern Ireland Civil Service. Those who were security guard SGB1 on that date were red circled and remained as SGB1going forward, and those who were recruited
atema fly or from within the Service after that date, such as the Claimant, were graded SGB2 and paid on the SGB2 pay

5

band, with the exception of Mr. Topping (for the reasons set
out above) .


The Law

13. The classic approach to cases where like work and less pay has been demonstrated, an approach which has been relied upon in many subsequent cases, was that set out by Lord Nicholls in Glasgow City Council —v- Marshall [2000] ICR 196 (AT PAGES 201 -203):-

The scheme of the [Equal Pay] Act Is that a rebuttable presumption of sex discrimination arises once the gender based comparison shows that a woman, doing like work... to that of a man, is being paid or treated less favourably than a man. The variation between her contract and the mans 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 proferred explanation, or reason, is genuine and not a sham or pretence. Second that the less favourable treatment is due to this reasan. The factor relied upon must be the cause of the disparity. In this regard and in this case, the factor must be a material 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.. . 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 in under no obligation to prove a 'goad' 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 it the employer proves the absence of sex discrirnination he is not obliged to justify the pay disparity.

6





19. It is now the established position in domestic law that save in
circumstances where the factor relied upon to explain the pay variation is itself tainted by sex, there is no requirement on the part of the employer to objectively justify the difference in pay. Some uncertainty had been caused in this regard by the decision of the ECJ in Brunnhofer [2001] ECR 1-4961 That uncertainty has now, apparently, been resolved; see Parliamentary Commissioner for Administration and the Health Service Commissioners —v- Fernandez [2004J IRLA 22, Villalba —v-Merrill Lynch and Co Inc [200711CR 469.

20. In Villalbe Silas, J. put the position most crisply at page 521 where he stated;

The elimination of discrimination on ground of sex cannot in our view begin to require objective justification for
differences in pay in circumstances where the employer has satisfactorily rebuffed direct sex discrimination and where
there is no independent evidence of any kind to show that sex has had any influence on the difference in pay. It is only in the language of Lewis Carroll that such a pay differential not tainted in any way by sex could be rendered unlawful under provisions which outlaw sex discrimination. It could of course be rendered unlawful under a wider principle of fair wages which entitled the tribunals to become wage settling bodies, but that is not the law.

The Arguments:

21. It was not suggested to the Respondent's witnesses that the proferred explanations for the variation in pay (both in the case of Topping as well
as with the other males) were anything other than genuine. Nor was there any attempt to suggest that the factors relied upon by the Respondent are not the cause — that is the material cause — of the disparity. Furthermore, there was no attempt to explore with the witnesses whether the pay
protection at issue exhibited signs of sex discrimination, or to challenge the Respondent's claim that the factors relied upon were a significant and relevant difference between the Claimant's case and the circumstances of her comparators.

22. In the opening to this case counsel for the Claimant conceded that as of 1998 the Respondent would have had a firm basis for a genuine material factor defence. However, he went on to say that the Tribunal will be asked to consider whether as of January 2008 the respondent could still show that the factors relied upon were both genuine and material' As the Court
7

of Appeal held in Fearnon and others —v- Smurfit [2008] NICA 45 (at page 6), a Tribunal will wish to examine 'not only the motive for the introduction of the red-circling, but also the reasons that it has continued," but plainly the reasons for continuing with the red circling may remain sound and non-discriminatory. The Claimant's side did not suggest to the Respondents witnesses how what was once genuine and material (and lawful) had ceased to become so.

23. It is submitted on behalf of the Respondent that the factors relied upon remained genuine and material by January 2008. The Respondent's position is straightforward. Shortly after the grading review in 1988 it realised that security guards were improperly graded at SGB1. It took some 10 years until February 1998 to reach an agreement with trade union side to revert to the proper grading going forward. Those who had the benefit of the erroneous grading were to be red circled so that they would continue to receive the benefit of that error. This "concession" on the part of management was key to achieving trade union agreement, and to avoiding an industrial relations problem. Indeed trade union side did not agree that a "Concession" had in fact been made; they used the language of "breach of contract" to suggest that had a downgrading been imposed on those who were security guards that would have been in contravention of their legal rights.

24. It Is difficult to see how there can be any doubt that the agreement reached in 1998 continued in 2008 to be relevant and continued to explain the variation between the Claimant's pay and those at the SGB1 grade. Indeed it is the Respondents case that the agreement will continue to apply until the last SGB1 retires or leaves the service because SGB2 remains the appropriate grade for the job, and those who were initially employed at SGB1 had a demonstrable entitlement to remain at that grade.

25. Likewise, in the case of Mr. Topping there has been no challenge at all to the Respondent's contention that his personal circumstances were the sole genuine and material reason which explain (and continue to explain) why he was allowed to transfer to the security guards at SGB1 as an exception to the normal application of the 1998 agreement.

26. Counsel for the Claimant characterised the Respondents approach to Mr. Topping as having had the effect of destroying the red circle defence, but the opposite is of course true. The Respondent's handling of Mr. Mahoney's and Mr. McMillan's cases demonstrate that the Respondent wished to preserve and indeed did preserve the integrity of the red circle. It is not the case that Mr. Topping was admitted into the red circle, but rather that his personal circumstances dictated that he should be granted.

27.

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the benefit of a personally protected salary as an exception to the normal
rule.

28. Counsel for the Claimant went on to ask rhetorically (in his opening)
whether the Respondent would be in a position to demonstrate that it had made efforts to mitigate or eradicate the negative effect of the pay
differential over the course of the 10 years since the 1998 agreement took effect.

29. The Respondent makes no bones about it; there has been no attempt to mitigate or eradicate the negative effect of the pay differential, because as is palpably clear the reasons for the arrangement which is in dispute have not changed over time, viz, the necessity to achieve the proper grading for security guards going forward, and to afford salary protection to those employed at SGBI prior to February 1998.

30. Even if the reasons for the continued existence of the red circling are bad reasons this is nothing to the point. The point which must surely be important to the outcome of this case is whether in light of the Claimant's concession that the Respondent had an unimpeachable genuine material factor defence in, 1998 (had it been tested), that defence had somehow become tainted by sex discrimination by 2008.

31. In terms, this is the third of the questions highlighted by Lord Nicholls in his analysis of the law in Marshall Of course it is for the Respondent to rebut the presumption that the variation in pay has not been brought about as a result of sax discrimination, whether direct or indirect. However, the Claimant has been curiously silent about the issue of sex discrimination, whereas the question of whether there has been sex discrimination should be at the heart of the case.

32. It certainly hasn't been suggested that there is any evidence at direct sex discrimination. In any event it is asserted that any complaint of direct sex discrimination can be easily rebutted should it be raised; all external security guard appointments made since February 1998, male and female, have been to SGB2, subject to the "exceptions" all internal security guard appointments since February 1998 (eg Mahoney and McMillan) have been to SGB2, all of the four internal candidates recommended for appointment in January 1998 were appointed at SGB1, of which there were two males and two females; the circumstances of Mr. Topping are so different to that of the Claimant that no appropriate comparison can be made for the purposes of direct discrimination.

33. Nor has it been suggested that the variation in pay has had a disparately adverse effect on women so as to render the pay arrangements indirectly
discriminatory.


9

34. The ECJ in Enderby —v- Frenchay Health Authority [1994] ICR 112, and in R—v-Sec of State for Employment ex parts Seymour-Smith [1999] IRLA 253 held that it is for the national court to determine whether the statistics available are valid in the sense of whether they cover enough individuals, whether they illustrate purely fortuitous or short term phenomena, and whether generally, they appear to be of significance. In Tyne and Wear PTE —v- Best [200711CR 523 the EAT found that statistical arguments based on small numbers should not be taken as indicative of indirect sex discrimination.

35. The statistics which are available to the parties show that the security guard discipline is almost exclusively male. The evidence before the
Tribunal was that there have only ever been four female security guards in post since 1998 (two of whom were SGB1). When proceedings were
lodged in January 2008 there were 29 security staff, 26 men and 3
women. Of the 3 women, 2 (66.6%) were employed at the lower grade. On the male side 53.8% were employed at SGB2. Of course as more SGBIs leave the Service the proportion of males employed at SGB2 is likely to increase. By March 2009 some 13 (65%) of the 20 male security guards were employed at SGB2, although by that stage the sole remaining female security guard was the Claimant at SGB2.

36. These statistics demonstrate that proportionately more men have
benefited by belonging to the SGBI group. However, it is quite another matter altogether to suggest that such statistics provide cogent evidence of adverse impact It is submitted that where the female group is so small in numerical terms, and has always been so, the Tribunal cannot be
persuaded that the tact that proportionately more men occupy the SGB1 grading is indicative of a sex taint. There is no reliable evidence of
unequal treatment on grounds of gender.

37. Indeed, it is submitted that any analysis of the statistics which is
attempted cannot ignore the gender profile of those doing the security guard job. Based on this gender profile the perception of the security
guard job would be that while employment is open to everyone it is largely a male job. Viewed from this perspective the effect of the 1998 agreement might properly be regarded as having the unintentional effect of driving down the earning capacity of those employed in the security guards, the vast majority of whom have always been male.

38. Furthermore, it s not without significance that the Respondent's starting point in 1998 was to place the security guard discipline at its proper
grading of SGB2 following the 1988 restructuring . This must be regarded as a legitimate objective. It could hardly be suggested that the arrival at

10


SGB2 as the appropriate grading for security guards discriminated against women in circumstances where the job was almost exclusively male.

39. Conversely, it cannot be said that the effect of the Respondent's pay arrangements has been to restrict women from entering a higher earning bracket. This argument might have been available to the Claimant if large numbers of women had entered the security guards since 1998, so as to create a statistically significant anomaly in terms of gender between those in the SGB1 and those in the SGB2 grades. However, this has not happened and indeed the Claimant is now the only female security guard.

40. Finally, it the Tribunal is against the Respondent on these contentions and if the Respondent is called upon to objectively justify its approach, it will rely on the reasons (set out above) for creating the pay differential in the first place, both in the case of the greater number of SGB1s ("red circling") as well as in Mr. Topping's case ("personally protected salary').


Martin Wolfe
Bar Llbrary
18 April 2009


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