Gibson v Sheffield City Council
Forty years ago, Sheffield County Council introduced a bonus scheme to incentivise their street cleaners and gardeners in order to increase productivity. The bonus scheme worked, productivity increased and eventually the bonus was incorporated into the wages of the workers. At the same time carers and school supervisors were doing work that was considered to be of equal value but, because of the nature of their work, it was not possible to measure productivity and consequently, there was no bonus scheme for them.
As a result of the bonus scheme, the predominantly male gardeners and street cleaners have been earning up to 38% more than the predominantly female carers and school supervisors. A claim has been brought against the Council under the Equal Pay Act 1970 alleging that the reason for the disparity in pay between the two groups was related to the sex of the workers and was therefore illegal. This is the case of Gibson v Sheffield City Council which was heard by the Court of Appeal in April.
How do claims under the Equal Pay Act 1970 work?
1. Is there disparity in pay or in any other contractual term between a male and female worker?
2. If yes, are their jobs rated as either: like work, equivalent or of equal value?
- a. Like work – i.e. the work is the same or broadly similar.
- b. Equivalent – i.e. following a valid Job Evaluation Scheme (this is when all the different jobs in an organisation are systematically analysed and given a rating) the jobs have received the same rating.
- c. Equal value – i.e. the work is not like or equivalent but by reference to the demands made on the individual is of equal value.
3. If their jobs are rated as like work, equivalent or of equal value, can the employer show that the difference in pay is due to a genuine material factor and not simply the difference of sex?
The reason must be genuine, significant and in no way related to sex, for example: reasons such as seniority, past performance and market forces may be considered valid explanations but each case will turn on its own facts.
It's worth noting that the impact of the genuine material factor does not have to be direct, for example: a pay scheme that favours those who work longer, anti-social hours might be considered discriminatory because women would not fare well under this as they are traditionally responsible for childcare.
4. Can the employer objectively justify the difference in pay?
If the employer’s genuine material factor has led to indirect discrimination, then the difference in pay can still be validly explained if it can be objectively justified. The employer will have to show that the difference in pay corresponds to a real need of the employer, such as a response to genuine market factors, and that the difference was an appropriate and necessary means of addressing that need.
If Gibson is successful, it's likely that the matter will be referred back to the Employment Appeals Tribunal and Sheffield County Council will be given the opportunity to objectively justify the difference in pay. The Council may find this difficult given that the workers who were receiving the bonus thought that it was part of their pay and not in any way linked to their productivity.
Equal pay factors to consider
Gibson is likely to go to the Supreme Court, so it could be some time before we know the full implications of the case, but it does put employers on notice in relation to the following key issues:
Job Evaluation Schemes
This is a systematic analysis and grading of all jobs in an organisation or particular group. It can be beneficial to employers who wish to establish a more suitable grading system or improve efficiency for HR but it may lead to Equal Pay claims.
Equal Pay Questionnaires
If an employee thinks that they might have an equal pay claim, then they can submit an Equal Pay Questionnaire to their employer. The employer is not obliged to respond but negative inferences may be drawn by an employment tribunal if they do not.
Pay
Any employer looking to make changes to the way their employees are paid will need to consider those issues that Gibson raises in terms of how traditional gender roles have shaped their workforce.
Equality
One of the original aims of the Equal Pay Act 1970 was to help remove the historical devaluing of jobs that were traditionally considered ‘women’s work’.
Employers wishing to ensure that they are providing equal employment to both men and women will need to consider these historical gender factors when reviewing their workforce. This may be especially relevant in a large organisation that is segmented along traditional lines, e.g. a male dominated post room and a female dominated canteen staff.
For more information on any of the issues raised in this article and how the case of Gibson might affect your business, please contact Spring Law at info@springlaw.co.uk.