Appeal No. UKEAT/0454/03/LA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 7 & 8 October 2003
Judgment delivered on 16 December 2003

Before
HIS HONOUR JUDGE PROPHET
MS V BRANNEY
MR F MOTTURE

MR A CHARLES	APPELLANT

DEPARTMENT OF ENVIRONMENT 
TRANSPORT & REGIONS	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR MARK SUTTON
(of Counsel)
Instructed By:
Messrs Thompsons 
Solicitors
Congress House
Great Russell Street
London WC1B 3LW	
For the Respondent	MR NICHOLAS UNDERHILL QC
(of Counsel)
Instructed By:
The Treasury Solicitor
(Employment Team)
Queen Anne’s Chambers
28 Broadway
London SW1H 9JS	

HIS HONOUR JUDGE PROPHET:

1	This appeal by Mr Charles, who worked as an Administrative Officer (AO) in the Department, is in respect of a unanimous decision by an Employment Tribunal sitting at London South under the chairmanship of Professor Rideout with Mrs Aziz and Mrs Bamford as the lay members that Mr Charles’ claim of equal pay with his chosen comparator, Ms Sterno, who worked as a Senior Personal Secretary (SPS) in the Department failed and was accordingly dismissed.

2	The Employment Tribunal reached that decision after a hearing extending over four days in December 2002 and two further days in March 2003, the decision with written Extended Reasons being promulgated with commendable despatch on 1 April 2003.  The Employment Tribunal had the very considerable advantage of the respective parties being represented on behalf of Mr Charles by Mr Sutton of Counsel, and on behalf of the Respondent by Mr Underhill QC, assisted by Mr Gott of Counsel.  The same Counsel, supplemented on Mr Charles’ behalf by Ms Macro of Counsel, have provided this Tribunal, constituted to hear over two days the full hearing of this appeal, with submissions of a quality which any Appeal Tribunal would be privileged to receive, and we are much indebted to them.

3	It was accepted at the Employment Tribunal that, although Mr Charles originally included claims under Article 141 of the Treaty of Amsterdam and of sex discrimination, the case fell squarely to be decided under the Equal Pay Act 1970 (the Act).

4	It is common ground that, at the material times, there was a disparity between the lower pay of Mr Charles and the higher pay of Ms Sterno, notwithstanding as was duly conceded to the Employment Tribunal by the Department that they were employed on work rated as equivalent.  By virtue of section 1 of the Act, and in particular section 1(2)(b) that was, on the face of it, less favourable to Mr Charles.

5	The disparity arose mainly because Mr Charles as an AO, was in pay band 2 and Ms Sterno, as an SPS, was in the higher pay band 3, and partly because the performance related pay (PRP) of Ms Sterno was higher than that of Mr Charles because she had gained higher appraisal ratings than him.  The Employment Tribunal considered these separately and there is no criticism by Counsel of their having done so.

6	Having regard to the way that domestic equal pay legislation is framed, in order for the employer to avoid a finding that there was a breach of the Act, the Department had to produce a material factor defence.  For that defence to succeed the variation in pay had to be genuinely due to a material factor, and that factor had to be free of the taint of sex discrimination (see section 1(3) of the Act and the observations of Lord Nichols in Glasgow City Council v Marshall [2000] ICR 196.  Furthermore, the factor could not be ex post facto (Brunnhofer v Bank Der Österreichischen Postsparkasse AG [2001] IRLR 571).

7	So far as the different pay bands was concerned at the full Employment Tribunal hearing the defence duly relied on one factor, ie market forces.

8	At the beginning of the Employment Tribunal hearing Mr Underhill put forward written opening submissions.  Part of these were challenged by Mr Sutton as an attempt to introduce additional matters which Mr Sutton submitted required an amendment to the pleadings.  The Employment Tribunal agreed that they did, and then refused to amend accordingly.  That led to an appeal by the Department on that issue to the EAT.  The EAT, Judge Peter Clark presiding, turned down that appeal, leaving the Department restricted to a material factor defence based on market forces.  It is convenient at this stage to say that part of Mr Sutton’s submissions to us is that notwithstanding that restriction, the Employment Tribunal allowed itself to be influenced by Mr Underhill’s closing submission to them which touched on these other matters.  We are not able to accept that a reading of the Employment Tribunal’s Extended Reasons supports that submission.  It is hardly likely that the Employment Tribunal would reason contrary to its own ruling, and it has to be borne in mind that in the Reasons the Employment Tribunal had to deal with developments extending over several years.

9	Condensing extensive submissions is not easy, but a principal thrust of Mr Sutton’s argument to us is that in its overall reasons, the Employment Tribunal did not meet the test of “sufficiency of reasons” as required by the well known Meek case, supplemented by the observations of Sedley LJ in Tran v Greenwich Vietnam Community [2002] IRLR 735.  Mr Sutton says that the Employment Tribunal must give acceptable answers to the right questions and that they failed to do.  He submits that the Employment Tribunal failed to make adequate findings of fact as to the mechanism which brought about the disparity and that there was a lack of any structured consideration of the relevant evidence arising from the extensive documentation in this case.

10	We have considered these submissions carefully but have not been able to accept them.  There are times, as Mr Sutton has been able to point out by taking individual sentences in the Reasons, where it is not easy to follow precisely what the Employment Tribunal had in mind, but in our view, and taken as a whole, the fact finding and reasoning are sufficient to pass the Meek test.  The Employment Tribunal set out carefully, and were clearly mindful of, the historical background to the higher level of pay which senior personal secretaries had always enjoyed as compared with clerical employees and why, following the job evaluation exercise, the Department nevertheless decided to retain a higher level of pay for them.  The Employment Tribunal appear to us to have weighed up the relevant evidence and to have set out their findings in a way which is not open to Meek criticism.  

11	Nor do we think that the Employment Tribunal’s reasoning process can be faulted in deciding, as they did, that the cause of the disparity in pay arising from the different pay bands was market forces, ie the Department’s perceived and genuine need to ensure adequate recruitment and retention of persons to carry out the Department’s expectations of the kind of responsibilities resting on personal assistants to senior staff.  Consequently, within the pay system as it existed, the SPS’s were placed in the next pay band as compared with AO’s.

12	We were a little troubled by the Employment Tribunal’s reference to market forces being the “primary” causal factor (see eg paragraph 49 of the Employment Tribunal’s Extended Reasons).  The use of the word “primary” might imply that that were secondary factors, but since there is no suggestion in the Extended Reasons that any secondary factors were identified, we have not been able to accept Mr Sutton’s further submission based on Enderby v Frenchay Health Authority [1994] ICR 112 that the Employment Tribunal should have identified the extent of the proportion of the disparity due to market forces.  Reading the Extended Reasons as a whole, it seems to us that the Employment Tribunal was essentially concluding that SPS’s went into pay band 3 and thus had a higher level of pay wholly because of the market forces factor.

13	As we have observed in paragraph 6 above, the Employment Tribunal was called upon to decide if market forces as a material factor was free of the taint of sex discrimination when the groups were compared.  They found no such taint.  It was however put to the Employment Tribunal that, following the principles indicated in Enderby, there should be an inference drawn of disparate impact, which would then require objective justification.

14	It is helpful in considering Mr Sutton’s submission that the Employment Tribunal was wrong not to apply Enderby in that respect to bear in mind what emerges from the leading cases of Glasgow City Council v Marshall [2000] ICR 196 and the earlier important case of Strathclyde Regional Council v Wallace [1998] ICR 205.  By drawing upon the terms of the domestic equal pay legislation, where there is one group of lesser paid workers comprising both men and women, and another group of higher paid workers comprising both men and women, it is possible to invoke the legislation by selecting a woman from the lesser paid group and comparing her to a man in the higher paid group.  If that claim were to succeed it would be possible then to “ratchet up” to gain higher pay for all members of the lesser paid group.

15	The judicial bodies saw through that tactic, and emphasised that the equal pay legislation was not designed to establish fair wages but to tackle sex discrimination.  Although the legislation might in a particular situation protect the interests of men, it would be flying in the face of reality not to recognise that the principal objective was to tackle the considerable injustice arising from the mischief of paying women less than men for comparable work.

16	Thus in Enderby where there was a group predominantly of women being paid less than a group predominantly of men doing work assessed as equal, it was realistic to draw an inference of sex discrimination which, if it constituted indirect discrimination, would require justification (in domestic direct sex discrimination objective justification cannot be pleaded).  Such a situation, ie calling for an inference, would not so arise where both groups comprised men and women.  Mr Sutton relies on the SPS group being exclusively female in the Department (although there are no doubt male SPS’s in other Government Departments) and that the concentration on earlier cases has been on the disadvantaged group rather than the advantaged group.  That may be because it is a member of the disadvantaged group who makes the claim, but in our view that point has no real substance because making a comparison inevitably requires the position of both groups to be considered.  However, there are approximately equal numbers of men and women in the AO group in the Department, and Mr Charles was the selected male from that group.  The Employment Tribunal looked into that, and was not prepared to accept that that situation was similar to Enderby and therefore required an inference of sex discrimination against men to be drawn.  That was a matter for the judgment of the Employment Tribunal.  We can see no error of law in their decision in that respect which would justify an appeal being successful.

17	The types of statistical argument arising from such cases as Seymour-Smith, and now with Rutherford (EAT/1029/02) is not in our view really comparable to this situation.  In those cases comparison is needed as to the proportion of men and women affected by an otherwise gender neutral requirement or provision.

18	When we turn to the performance related pay aspect of this case, Mr Sutton has advanced an argument on a statistical basis that SPS’s gain higher appraisal ratings than AO’s, but it is apparent that there are no satisfactory conclusions which may be drawn from such or similar statistics which can throw up a presumption or inference of sex discrimination.  Here we agree with Mr Underhill that bearing in mind that the case raises comparison between two individuals, ie Mr Charles and Ms Sterno, the Employment Tribunal’s finding of fact that Ms Sterno’s appraisals were genuinely earned as an individual employee, and that no sex discrimination arose therefrom, causes that part of the appeal to fail at the first hurdle.

19	We conclude, therefore, unanimously that this appeal fails and is dismissed.