Does the Right to Equal Pay really exist under the Equality Act 2010?

Bristol Law Review 2021-2022 Online Edition

Introduction

Fifty years after equal pay legislation was first passed in Britain, it should not be necessary for female claimants to establish that they are engaged in exactly the same type of work as a male comparator. However, they must. Even when a claimant has proved that their work is equal to that of their comparator, equal pay is not automatically awarded. The scope of this piece is to critically discuss why the right to equal pay remains so elusive under the Equality Act 2010 (‘EqA 2010’). This is namely due to the complex history of pay egalitarianism under UK statute and case law.[1]

The Law

To begin, it may be helpful to set out the law. Establishing a prima facie case under the EqA 2010 involves choosing one of three categories of equal work to claim under. These are (i) ‘like work’ under S65(2) and S65(3); (ii) ‘work rated as equivalent’ under S65(4) and S65(5) and (iii) ‘work of equal value’ under S65(6). Under the first category, ‘like’ work is where the work is broadly similar and there is no difference of practical importance between the men’s work and the women’s (Capper Pass v Lawton [1989]).[2] Claims under the second category (work rated as equivalent) are only available to employees whose jobs have been ranked into grades or bands following an independent Job Evaluation Study (JES) of their workplace. This tends to mean those in the public sector.[3] The third type of equal work is ‘work of equal value’, where an employment tribunal or independent expert ranks the men’s and women’s jobs by reference to effort, skill and decision-making.

Aequus

But what is the current legal definition of equality? The original Latin word for equality, aequus, means balancing one side ‘on a level with’ another in line with Aristotle’s maxim of treating ‘like cases as like’.[4] Aristotelian equality, also known as ‘formal equality’, has been absorbed into the rule of law as a systemic norm whereby rules must be enforced impartially against everyone.[5] Formal equality was initially welcomed by liberal feminists as a chance to disprove the myth of being the ‘weaker sex’. For example, in the Second World War, women were assimilated into the workforce to replace men in military service. However, women were paid less than men for carrying out ‘like for like’ work in what was, overtly, gender pay discrimination. Cultural norms dating back to the Industrial Revolution, such as the antiquated practice of paying men a ‘family salary’ (often twice as much as a woman’s), were too ingrained for the assimilation of women to bring about real structural change. In Britain, overt pay discrimination lasted far beyond 1945. This was until the social revolution of 1968 caused women in the factories of Acton and Dagenham to strike to be paid equally to male counterparts within their pay grades.[6] Finally, in 1970, Employment Minister Barbara Castle helped pass the myopic Equal Pay Act (the ‘1970 Act’) which cemented formal equality as the British legal definition we must still use today.[7] As John Stuart Mill wrote in ‘The Subjection of Women’ in 1869 (influenced by his wife Harriet), unequal gender laws simply codify existing relations between individuals. This is true of the one-dimensional 1970 Act which misses all but the most blatant ‘like for like’ cases and has failed to close the gender pay gap over 50 years on.

Substantive Equality

By contrast, egalitarians such as Ronald Dworkin have sought to redefine equality so as to acknowledge that achieving an equal result requires some background conception of the inequality of starting points (‘deep equality’). Dworkin’s deep equality is a sort of simultaneous equation which treats everyone’s fate with equal concern while respecting people’s sovereign responsibility to make their own decisions (‘equality of resources’ and ‘equality of capabilities’).[8] Meanwhile, Waldron, a fellow proponent of deep equality, sees people as simultaneously equal because they share the human condition, and unequal because of the categories they are placed into (male/female, black/white, rich/poor etc).[9] Unlike UK law, EU law has lent itself to a deeper interpretation of equality ever since the 1957 Treaty of Rome, now Article 157.[10] This interpretation extended Aristotle’s maxim of treating ‘like cases as like’ so as to allow cases which are not alike to be treated differently (treating people ‘as equals’ rather than ‘equally’).[11] Taking deep equality a step further is the multi-dimensional Canadian concept of ‘substantive equality’ from the 1990s. Substantive equality has recently regained traction as a modern definition of equality, although academic consensus has not yet been reached on what exactly this should look like.[12] The leading opinion is that of Oxford’s Professor Sandra Fredman, who describes substantive equality under Article 14 of the European Convention on Human Rights as four-dimensional: it should actively seek to redress disadvantage (redistribution), address prejudice (recognition), facilitate buy-in (participation) and effect structural change (transformation).[13] In practice, substantive equality actively seeks to root out and address indirect discrimination through controversial steps such as special measures, reasonable accommodation and ‘equal pay for work of equal value’. ‘Equal pay for work of equal value’ provisions, which will be dealt with next, are a form of substantive equality aimed at tackling poorly paid ‘women’s work’ by allowing non-identical comparisons where there is job segregation.[14]

Work of Equal Value

Unfortunately, although the 1970 Act recognised ‘like work’ and ‘work rated as equivalent’, it had no concept of ‘equal pay for work of equal value.’ To achieve equal pay, a woman needed to compare her work to the male norm (a ‘comparator’) doing the ‘same or broadly similar work, or work rated as equivalent’. However, in the five years before the 1970 Act came into force, employers had time to lift any such comparator out of reach. Using discriminatory criteria, many women were moved into new, female-only, pay grades which cemented gender segregation.[15] Thus, when the legislation came into force in 1975, winning an equal pay claim had, ironically, become infinitely harder because women were stuck with finding a ghost of a comparator who often did not exist.[16] This difficulty was not, however, recognised by British lawmakers of the 1970s who thought they led Europe when it came to equal pay law. Hence, Britain did not comply with what it saw as more Byzantine red tape from the EU under the 1975 Equal Pay Directive.[17]

Equal Work

As a result, the EU sued the UK in EC Commission v UK [1983],[18] and the 1970 Act was (grudgingly) amended to include equal work provisions through what Lord Denning called the ‘tortuous and complex’ Equal Pay (Amendment) Regulations 1983.[19] Tribunals buckled under the ‘almost religious mysteries of job evaluation,’ taking on average, 2½ years per case. [20] Eventually, the House of Lords set down the true construction of the 1970 Act in the landmark case of Hayward v Cammell Laird (No.2)[1988] as being one based on substantive equality. [21] Comparisons between such non-identical comparators as joiners, painters and insulation engineers are allowed, and claimants can cherry-pick elements of a comparator’s pay to create a better overall package. Codified as ‘equality of terms’ under S3(5) EqA 2010, the right sits alongside an implied two-part equality clause in all employment contracts under S66 EqA 2010. This section raises a woman’s contract to the standard of her comparator’s (but not beyond). As a result, (i) less favourable contractual terms are changed to align with terms ‘of a similar kind’ and (ii) a successful claimant’s contract is modified to include any beneficial term. However, the right to trigger this clause is not automatic: it must be achieved through a lengthy and bitterly adversarial court process waylaid with hurdles.

Comparators

The first threshold test is a spectre from the 1970 Act. Under S79(4) EqA 2010, a woman seeking equal pay must still measure herself against a real-life comparator of the opposite sex, ‘in the same employment’, doing equal work. A comparison can be made (i) where B is employed by A’s employer (or an associate thereof); and (ii) B works at another establishment but shares ‘common terms’. By contrast, in non-pay related sex discrimination cases, such as pregnancy or maternity discrimination, a hypothetical comparator is allowed. [22] This is because, quite logically, it was accepted early on that there is no comparable situation to pregnancy for males and therefore no possible comparator. Due to the separate histories of equal pay and sex discrimination, with discrimination law grounded in EU law and equal pay evolving from the outdated 1970 Act, equal pay law has remained attached to a real male comparator. Fortunately, discrimination law’s North hypothetical comparator is starting to be allowed in equal pay claims where common terms cannot be established with real comparators. The ‘North’ test is to ask whether a male comparator would continue to work on the same terms and conditions enjoyed by him presently if he were transplanted to the claimant’s place of work (North v Dumfries and Galloway Council [2013] (‘North’)[23] Of course, employers tried to argue that such an interpretation of ‘common terms’ was not allowed under statute, until recent dicta from the apex courts confirmed that it was.

Employers

Furthermore, the tendency of employers to try to thwart claims at every step has meant that only the strongest (or most ‘like for like’) cases have survived. This has made it very difficult for those seeking equal pay for work of equal value. Until two recent cases, the threshold tests described above under S.79 (proving a woman works at the same establishment as the comparator or that common terms apply) were regularly elevated into a major hurdle so as to throw out multi-million pound claims in limine. Change started with the European Court of Justice allowing claimants in K and others v Tesco Stores Ltd C-624/19 (‘Tesco’) to bypass the need to prove they were in the ‘same employment’ as their comparator, as they could demonstrate a ‘single source’ for their pay (the test under EU law).[24] Then, in Asda Stores Ltd v Brierley [2021] (‘Asda’), the Supreme Court held that (mainly female) store-based claimants were in the same employment as male comparators working in distribution sites.[25] Delivering the leading judgment in Asda, Arden LJ applied Lord Slynn’s simple test from North Yorkshire County Council v Ratcliffe and Others [1995] and British Coal v Smith [1996]: ‘Is this the very kind of discrimination equal pay legislation seeks to remove?’ [26] [27] Her Ladyship stated that the whole point is to allow comparisons between employees who could never work in the same workplace, not deny women’s claims unless there is complete uniformity with the comparator, (Asda, per Arden LJ at 72). Therefore, the current statement of the law is that threshold tests, such as ‘common terms’, should only be used to weed out unrealistic and unworkable comparators. Expediency is key: once the North test has been satisfied, equal pay claims should be moved quickly along from the ‘appetisers’ of S79 EqA 2010 onto the ‘main courses’ of comparing the work and applying the ‘material factor’ defence (Daphne Romney QC).[28]

Exceptions

Nevertheless, even when every step of a prima facie case has been established, doing work of equal value carries no automatic right to equal pay. Employers have another bite at the cherry with a (total) ‘material factor’ defence which stops S66 EqA 2010 from applying. This means an employer may pay a man more than a woman for doing equal work under S69(1)(3) if, on the balance of probabilities, this is due to a ‘material factor’ which is not directly or indirectly discriminatory. This includes past performance, length of service, differences in work or working hours, geographical or historical reasons, market forces, collective agreements and pay protection arrangements. For example, in Rainey v Greater Glasgow Health Board [1987], the House of Lords decided that the NHS’s pay protection policy constituted a material factor defence for paying male anaesthetists more.[29] If the employer’s business needs outweigh the discriminatory effect of its pay practices, and there is no less discriminatory way to achieve the same aim, the measure will be deemed proportionate under S69(1)(b) EqA 2010 (Barry v Midland Bank [1999]).[30]

Conclusion

The right to equal pay cannot be said to simply ‘exist’ under the EqA 2010: it is more of a privilege. A claim for equal pay must be brought, which is a privilege many cannot afford. Furthermore, employers will pick off all but those with the means and endurance to wait to pass the threshold: 35,000 employees waited seven years in Asda. Even then, only litigants who survive until the end earn the right to trigger their equality clause to receive arrears and possibly damages, but this helps no one else unless they bring their own claim. As Mummery J stated, ‘the courts may not be the best place to end the injustice of workplace discrimination’ (Haq v Audit Commission [2012]). [31] Indeed, with the gender pay gap still hovering at 15.4%, the injustice continues.[32]

Getting to the crux of the problem, Arden LJ stated in Asda that ‘the EqA 2010 is inconsistent with any notion that Parliament thought it was time to take its foot off the pedal.’[33] In other words, the necessary ingredients are already contained in the EqA 2010, but we must begin to implement them less cautiously. Such complacency from the Supreme Court is concerning given equal pay law’s history of going in circles since the 1970s. To illustrate this point, let us sum up the problem of pay inequality as being Britain’s ‘ineffective, time-consuming and cumbersome equal pay legislation.’ The problem is, this quotation is from the Equal Pay Task Force in 1999. The fact that little has changed implies that the promised golden bullet (the EqA 2010) has missed its mark. It has veered so far off course that it still requires women to be engaged in exactly the same type of work as a real male comparator. This is for ‘Byzantine’ reasons that the 1970 Act’s lawmakers themselves did not understand. Carrying over the heavy, unopened, baggage of a real comparator from the 1970 Act has forced women to assimilate, behave like, and even become men for cases to stand up in court. This does not seem like equality, but replacing formal equality with substantive equality and addressing the future applicability of EU law will require structural change by way of law reform. Although judge-led reform is inevitably backward-looking and reactive rather than proactive, Asda and Tesco will at least streamline future equal pay claims in terms of ‘comparators’, ‘common terms’ and ‘material differences’. [34]

[1] Equality Act 2010 c 15 [2] Capper Pass v Lawton [1977] 2 WLR 26 [3] Job evaluation: considerations and risks booklet (acas.org.uk) Accessed 20 March 2022 [4]equal | Search Online Etymology Dictionary (etymonline.com) Accessed 20 March 2022 [5] MacKinnon, Catherine A., Substantive Equality Revisited: A Reply to Sandra Fredman, International Journal of Constitutional Law, I.COM (2016), Vol. 14 No. 3, 739-746 [6] Leslie, Sara; Hastings, Sue; Morris, Jo Equal pay: a practical guide to the law, London, Law Society, 2003, p2 [7] Equal Pay Act 1970 c [8] Dworkin, Ronald, Sovereign Virtue Revisited, Ethics, Volume 113, no. 1, Symposium on Ronald Dworkin’s Sovereign Virtue (October 2002), p106-143 [9] Waldron, Jeremy, One Another’s Equals: The Basis of Human Equality, Harvard University Press, 2017, p57 [10] Article 119 EEC, then 141 EC, now Article 157 TFEU [11] 60 Years of Gender Equality in the EU – Feminist Reflections on the EU at 60 (wordpress.com) Accessed 20 March 2022 [12] MacKinnon, Catherine A., Substantive Equality Revisited: A Reply to Sandra Fredman, International Journal of Constitutional Law, I.COM (2016), Vol. 14 No. 3, 739-746 [13] Fredman, Sandra, Emerging from the Shadows: Substantive Equality and Article 14 of the European Convention on Human Rights (2016) 16 Hum Rts L Rev 273 [14] Emir, Astra, Selwyn's law of employment, 20th edition, Oxford, Oxford University Press, 2018, p167 [15] Smith, Ian; Wood, John C; Baker, Aaron Smith & Wood's employment law, 12th edition, Oxford, Oxford University Press, 2015, p314 [16] Leslie, Sara; Hastings, Sue; Morris, Jo Equal pay: a practical guide to the law, London, Law Society, 2003, p2 [17] Equal Pay Directive (75/117/EEC) Council Directive 75/117/EEC of 10 February 1975 [18] EC Commission v UK [1983] [19] Lord Denning’s comment was made in the Parliamentary debate on the Equal Pay (Amendment) Regulations 1983, SI 1983/1794 [20] Smith, Ian; Wood, John C; Baker, Aaron Smith & Wood's employment law, 12th edition, Oxford, Oxford University Press, 2015, p312 [21] Hayward v Cammell Laird (No.2)[1988] AC 894 [22] Fredman, Sandra, ‘Inching Forward: Preliminary Victory for Equal Value at Tesco and Asda’, Industrial Law Journal (London), 2021, https://academic-oup-com.ezproxy.tees.ac.uk/ilj/article/51/1/166/6444958 Accessed 20 March 2022 [23] North v Dumfries and Galloway Council [2013] ICR 99; [2013] IRLR 737 [24] K and others v Tesco Stores Ltd [2021] (Case C-624/19) [25] Asda Stores Ltd v Brierley [2021] UKSC 10 [26] North Yorkshire County Council v Ratcliffe and Others [1995] IRLR 439 [27] British Coal v Smith [1996] ICR 515 [1996] IRLR 399 [28] KEEPING IT SIMPLE... A blog by Daphne Romney QC on the Asda Stores v Brierley UKSC decision - Cloisters - Barristers Chambers Accessed 20 March 2022 [29] Rainey v Greater Glasgow Health Board [1987] IRLR 26 [30] Barry v Midland Bank Plc [1999] UKHL 38

[31] Haq & Ors v The Audit Commission [2012] EWCA Civ 1621 [32] Gender pay gap in the UK - Office for National Statistics (ons.gov.uk) Accessed 20 March 2022 [33] Asda Stores Ltd v Brierley [2021] UKSC 10 [34]L. Nandugga and E. Hughes, IWD22: Equality begins at home - working mothers and the gender pay gap (barcouncil.org.uk), accessed 20 March 2022