Equal pay – when can more onerous contractual requirements be a defence to a claim?

The legislation for equal pay is contained within the Equality Act 2010 (‘EQA’) and is designed to ensure that men and women in the same employment receive equal pay (and other contractual terms) for equal work. Section 64(1)(a) of the EQA confirms that the legislation applies where a person (A) is employed on work that is equal to the work that a comparator of the opposite sex (B) does.

For a typical equal pay claim, the Claimant must be able to point to an actual (as opposed to a hypothetical) comparator. This means that the comparator must be employed at the same time or prior to the Claimant, either at the same establishment, at different establishments where common terms apply, or where they have the same source of pay and conditions of work. Section 65 of the EQA clarifies that A’s work is equal to B’s work if it is either like B’s work, rated as equivalent to B’s work or of equal value to B’s work. A’s work is like B’s work if their work is the same or broadly similar and any differences in the work are not of practical importance in relation to the terms of their work.

Section 66 of the EQA states that, where an employment contract does not include a sex equality clause, it is to be treated as including one. This section implies an equality clause into an employment contract with the effect that a woman (or man) is entitled to be treated no less favourably in respect of their contractual terms than a man (or woman) in the same employment.

It is a defence under section 69 of the EQA to show that a difference in pay or other terms is due to a material factor which is not directly discriminatory on the grounds of sex or, if indirectly discriminatory on the grounds of sex, can be justified as a proportionate means of achieving a legitimate aim.

In the case of Barnard v Hampshire and Isle of Wight Fire and Rescue Authority, Ms Barnard brought an equal pay claim in the Employment Tribunal against her employer, the Authority. Ms Barnard was employed in an administrative non-operational role on nationally agreed ‘Green Book’ terms for local authority employees in such roles. In her claim, Ms Barnard compared herself to trained operational firefighters who had been seconded to non-operational roles similar to her own but who remained on their more favourable nationally agreed ‘Grey Book’ terms. The Grey Book employees received a higher rate of hourly pay and paid lunch breaks and had a higher annual leave entitlement.

Although the Tribunal found that Ms Barnard and the firefighters were carrying out ‘like work’ during the secondments, it rejected her claim. As the Grey Book employees could be called upon to carry out operational duties at any time, and it was expected that they would return to operational roles in due course, there was a requirement in their contracts for them to maintain their operational competence throughout the period for which they were seconded to a non-operational role. They were expected to attend training, maintain their fitness levels and be available for redeployment to a different location at any time at management’s discretion. Ms Barnard did not have such a requirement in her contract.

The Tribunal found that the more favourable terms in the firefighters’ contracts were a result of the more onerous requirement placed on them to maintain operational competence. This requirement was a material factor which did not involve direct sex discrimination, and while indirectly discriminatory could be objectively justified as a proportionate means of achieving a legitimate aim. Accordingly, the material factor defence applied.

Ms Barnard appealed to the Employment Appeal Tribunal (“EAT”), which upheld the Tribunal’s decision. The EAT agreed with the Tribunal that the contractual requirement to maintain operational competence was a genuine requirement in practice, and it supported the legitimate aim of the Authority to ensure that the Grey Book employees could return to operational roles if needed. The requirement was enough for the difference in terms to be objectively justified.

This case is a helpful reminder of the material factor defence and when this defence might be established, but it is important to note that it will not necessarily succeed in relation to all more onerous contractual requirements. The EAT commented that, if a contractual requirement was clearly a “dead letter”, it could not be a material factor. A Tribunal must therefore look at the factual evidence in each case to determine whether a contractual requirement is still complied with and enforced in practice, or whether it has been abandoned so as not to count as a material factor for differential terms

If you would like advice on bringing or defending an equal pay claim, on your contractual terms, or on the contractual terms of your employees and on ensuring that they are legally compliant with the equal pay provisions, please get in touch at [email protected].