United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR A SHARMA (Representative) K M Legal Advisory Ltd Berkley Business Centre 246-250 Romford Road Forest Gate London E7 9HZ

SUMMARY

Equal Pay

Material factor defence

Although the Claimant had a reasonably arguable point that the Employment Tribunal erred in its approach to overall pay when if applied Degnan v Redcar CA and not Hayward v Cammell Laird HL, the finding for the employer on its material factor defence means that the appeal could not succeed on either approach.
 


HIS HONOUR JUDGE McMULLEN

1. This case is about equal pay. I will refer to Mr Symington as the Claimant and ISS as the Respondent.

Introduction

2. It is an appeal by the Claimant in those proceedings against a judgment of an Employment Tribunal chaired by Employment Judge Freer sitting at London South sent with reasons on 20 December 2007.
   
3. The Claimant was represented by Mr Malik who together with his colleague, Mr Sharma, who has appeared today, provide services for K M Legal Advisory Ltd. Mr Sharma is an advocate in India. He has presented careful arguments so that I can fully understand the nature of the appeal. The Respondent at the hearing was represented by counsel.
   
4. The Claimant's claim was for equal pay. It is unusual in the history of equal pay since the Equal Pay Act 1970 came into force in 1975 for claims to be brought by men but the principles are precisely the same. The law in Hayward v Cammell Laird Shipbuilders Ltd [1988] AC 894, HL applies equally in this case, although the Claimant in Hayward was female.
5. The Claimant contended that his pay of £6.50 an hour was less than the £7.60 an hour paid to the comparator in this exercise, Ms Ria Mitchell. Both are engaged as team leaders working at King's Cross Rail Station on behalf of a contractor engaged to prepare the trains for passengers. There is a shift system. So far as is relevant to the appeal, it is described as early and late. Early begins at 9.12am and goes to 5.00pm, late begins at 3.12pm and goes to 11.00pm. Ms Mitchell works late, the Claimant early. The Employment Tribunal decided that the Claimant was in fact paid more than the comparator. It did so by considering Hayward and also what apparently is a different approach given by the Court of Appeal and the EAT in Degnan v Redcar Borough Council [2005] IRLR 615, CA. The Employment Tribunal decided it would follow Degnan which could be described as the overall approach rather than the analytic approach which would yield a payment difference of £1.10 an hour in Ms Mitchell's favour. The Tribunal acknowledged that it was taking that approach rather than applying Hayward. On that basis, although the Claimant was doing like work, he was paid more than the comparator.
6. Lest it were wrong about that approach it looked at the material factor defence under the Equal Pay Act 1970 section 1(3) which provides as follows:

"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)(a) or (b) above, must be a material difference between the woman's case and the man's; and

(b) in the case of an equality clause falling within subsection (2)(c) above, may be such a material difference."

The Tribunal came to these conclusions:

"40. However, the Tribunal is entirely satisfied that this variation is genuinely due to a material factor, which is not the difference of sex and is a material difference between the Claimant's case and Ms Mitchell's case.

41. Ms Mitchell was recruited to work on the late shift. She worked very nearly exclusively on the late shift. Unsociable hours are paid at a higher rate by the Respondent. Those employees who were transferred from GNER, including the Claimant, are paid 1¼ rate for time worked after 9.00pm. The Claimant's contract specifically includes a 'night work allowance' of £1.60.

42. The occasions where Ms Mitchell worked a shift other than a late shift were rare and those times were worked on Ms Mitchell's day off and were not part of her normal working hours. The Claimant is paid 1¾ rate for working on an allotted rest day. Accordingly, the Tribunal is satisfied that the Claimant was paid an enhanced rate because of her late shift work and the overall conclusions are not affected by the extremely minimal circumstances that the Claimant worked on non-late shifts.

43. Therefore the Respondent has proved the factor or basis relied upon as the pay determining factor; that material factor existed throughout the relevant period; this material factor is causely relevant and truly explained and was responsible for the difference between the Claimant's rate of pay and that of Ms Mitchell; and is not itself founded upon or tainted by direct sex discrimination.

44. On this basis, the Tribunal concludes that the difference in pay was due to the Claimant working on the middle shift and the Ms Mitchell working exclusively on the late shift. This is a factor not referable to gender and following the ruling in Leverton, constitutes a material factor defence. Accordingly, even on the Hayward analysis, the Claimant's claim is not well-founded. "

And so the Claimant's claim was dismissed.

7. The Claimant lodged a Notice of Appeal. Elias P exercised his power under Rule 3(7). He concluded that the case disclosed no reasonable prospects for bringing the appeal:

"I would accept that there is a real issue as to whether Hayward v Cammell Laird required a simple comparison of basic pay to basic pay without taking account of the additional terms as to remuneration. However, the Tribunal's alternative ground was that there was a material difference other than sex justifying any difference in pay. I see no basis on which they can be said to have erred in their approach to that issue.

There is no lack of transparency here; it is quite plain why each party has received what it has. It is, as the Tribunal noted, commonplace to pay persons who are on late shifts an additional supplement, and it cannot be said that the sum here is disproportionate. Indeed, the claimant himself would earn more when doing the night shift. It is true that the difference of time is disregarded when determining whether a case is 'like work', but the Tribunal has found it is 'like work'. It does not mean that the time when work is done is to be disregarded for the purposes of the material factor defence."

8. Where no point of law is found, section 21 of the Employment Tribunals Act 1976 deprives the EAT of jurisdiction to hear the case. The Claimant was given the opportunity to have the case heard before a judge under Rule 3(10). He has provided written and oral submissions. I thus hear the case on more material than was available to the President and I form my own view of the appeal. The question for me is whether there are reasonable prospects of success in the appeal as a whole.

Submissions and conclusions

9. The Claimant being engaged upon like work, it is submitted that there should be no consideration of the time at which the work is done: Dugdale v Kraft Foods Ltd [1976] IRLR 368, EAT. I of course agree with that proposition. For the purposes of establishing whether like work is being performed by the Claimant and his comparator the time at which the work is done is not usually a relevant factor, unless there is something about the nature of the work which changes according to the time of day. In this case there is no dispute. The work was no different whether done early or late. The Claimant thus succeeded in establishing the primary ingredient for the claim of equal pay, which is that like work was being performed by him and the comparator. An equality clause existed in his contract of employment.
10. The next question was whether the Claimant was being paid less. As to this my task is easy, for the President has given his opinion that there is an issue. The Tribunal has taken an overall approach following Degnan rather than the analytic approach in Hayward. Thus far the wind is blowing in favour of the Claimant. However, the Tribunal acknowledged that it might be wrong in its approach and so made findings in respect of the material factor defence.
11. In doing so it had fully in mind the findings which it had made in respect of two male witnesses who appeared at the Tribunal pursuant to witness statements. They are Mr Hamilton and Mr Booth. They come from different backgrounds and it is acknowledged that Mr Hamilton received an unsocial hours payment. Mr Booth did not; he came from a different source, on a TUPE transfer. So when the Employment Tribunal considered the material factor defence it looked at the individual ingredients in forming Ms Mitchell's contract and set out the basis upon which the Respondent had proved to it that there was a reason different from gender for the difference in pay.
12. There can be no doubt that an employer is entitled to pay more to those who work in unsocial hours, to pay more to those who work during the night than those during the day. Mr Sharma argues with some force that because of the nature of the shift pattern it is possible to find Ms Mitchell and the Claimant working together between 3.12pm or 3.15pm and 5.00pm on any given day, and yet they are paid the rates of pay which differ as I have described. The Tribunal was alert to that for it was taking an approach which was based upon the whole of the shift. A decision as to whether an employer has proved a defence of a material factor is pre-eminently one of fact. To pay someone who starts work late in the afternoon and works until late at night more than a person who starts work at 9.00am is the kind of question which an Employment Tribunal is there to decide. It seems to me to be entirely commonsense as well. But that is not a matter which raises a question of law.
13. The other factor which was brought to bear and which the Claimant considers is unreasonable is that on the occasions when Ms Mitchell herself was deployed on the early shift she carried with her her rate of pay from the late shift. The Tribunal was alert to that too, for it regards as minimal the number of occasions when that occurred. That is a matter of degree to be determined by the Tribunal of fact. Again, with respect, it seems to me to be commonsense that a person who is engaged primarily on late shift and being paid at late shift rates who very rarely is put on to another shift should not lose pay for doing that. It is a temporary deployment to a different time but there seems to me to be no reason to reduce her pay. As I say, that is a matter for an Employment Tribunal and not for me, but the Tribunal's finding on it seems to be commonsense.
14. In those circumstances the determination by the Tribunal of the defence under section 1(3) is one which it has approached with care. It was alert to what might be described as anomalies through Messrs Booth and Mitchell, and yet its conclusion is robust. In my judgment there is no error of law in this part of its judgment. As I indicated to Mr Sharma, he needs to persuade me that there is a reasonable prospect of success in the appeal. He was two-thirds of the way there, but has not succeeded in showing that the Tribunal erred in its approach to the material factor defence so even if the Tribunal were wrong on the approach to Degnan and Hayward the appeal could not succeed.
15. On my indicating to Mr Sharma about how this case may be taken further he asked for permission to appeal to the Court of Appeal. The basis of the application was that a material factor defence under Section 1(3) should include only matters to do with skill and experience of the relevant workers. In my judgment that is unarguable. Far more things can be contained within a material factor defence than matters relating to skill and experience. If one looks at section 1(5), skill and experience form part of a job classification scheme. It is quite appropriate for an employer to rely upon the difference in hours and times of day when work is done when building a pay structure so as to pay workers who work later in the evening more than those during the day. Since the President and I have concluded that there is no reasonable prospect of success at the EAT the prospects cannot get better in the Court of Appeal when the employers will turn up no doubt instructing counsel as they did below. Nor is there a compelling reason for a permission to be given.
16. For those reasons I will dismiss the application. No further action will be taken on the appeal and it is in effect dismissed.