(1) MISS M A CHRISTIE 2) MISS S J MORAN (3) MRS M GARRATT v JOHN E HAITH LIMITED [2003] UKEAT 0793_02_2003

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2003] UKEAT 0793_02_2003

Case No Appeal No. EAT/0793/02

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

(1) MISS M A CHRISTIE 2) MISS S J MORAN (3) MRS M GARRATTAPPELLANTS

JOHN E HAITH LIMITEDRESPONDENT

Before

MR COMMISSIONER HOWELL QC

MR J R CROSBY

MISS G MILLS

Date 20 March 2003

[1]APPEARANCES For the Appellant MR COLIN BOURNE (of Counsel) Instructed by: Messrs Bridge McFarland Solicitors 19 South St Mary's Gate Grimsby DN31 1JE For the Respondent MR JOHN BOWERS QC (of Counsel) Instructed by: Messrs Wilkin Chapman Solicitors PO Box 16 New Oxford House Town Hall Square Grimsby DN31 1HE MR COMMISSIONER HOWELL QC In this appeal, on which limited issues are before us today for full hearing pursuant to the directions of the Appeal Tribunal given at the Preliminary Hearing on 1 November 2002 three ladies, Miss Margaret Anne Christie, Miss Susan Jane Moran and Mrs Marlene Garratt seek to have set aside the decision of the Hull Employment Tribunal, contained in Extended Reasons sent to the parties on 10 June 2002 after hearings in February, March and April 2002, on their claims under the Equal Pay Act 1970 against their employer, a firm called John E Haith Ltd (the Respondent before us).

[2]The claims were brought by them as three female employees of a seed-packing firm to equal pay on the two alternative grounds that either that their work was like work, or work of equal value, to that done by three male employees of the firm identified as potential comparators.

[3]The Employment Tribunal found, first that the Applicants and their comparators were all manual workers engaged in packing bird seed for supply by mail order, which was the business of the Respondent.

[4]Second, at all material times the Applicants worked in the part of the premises described as the "packing room" dealing with the lighter part of the product range, which involved filling packages with seed, the packages weighing typically between 2kg and 12kg (sometimes 18kg).

[5]Third, the male comparators worked in a different part of the premises known as the "bird house" where the heavier packages were dealt with, up to some 25kg or 30kg. The additional duties of employees working in that part of the premises involved loading and unloading delivery vehicles on a daily basis throughout the week. That was physically demanding work. They were also required to wheel and empty rubbish trolleys into a rubbish skip which involved some physical exertion.

[6]Fourth, the Tribunal found that the hourly rates of pay at the material time for the Applicants was lower, some £4.32 as against £4.58, although their pay was in fact increased to the same rate as their male comparators in November 2001 after agency workers had been employed to do the heavier work formerly done by the male comparators. That was part of an operation under which the work carried on in both the packing room and the bird house were integrated by the Respondents.

[7]Fifth, the Tribunal found that the Applicants and their comparators were not engaged on like work before that change in the company's operation. The work of loading and unloading deliveries was more arduous and unpleasant and that was, the Tribunal found, a genuine material difference accounting for the differential in pay between bird house employees and packing room employees, not being based on the sex of the employees concerned.

[8]Sixth, the Tribunal found that the claim for equal pay for like work therefore failed.

[9]Seventh, that the claim for equal pay on the basis of work of equal value also failed, since the Tribunal's finding that the physical effort and unpleasantness involved was a material factor also satisfied the less stringent test in section 1 (3) (b) of the Equal Pay Act 1970 , that a material factor to account for the difference in pay "may be" a material difference unrelated to the question of the sex of the employees involved.

[10]The Tribunal's findings on the equal value aspect of the claim were based on a fairly short paragraph in which it was agreed before us that the Tribunal were to be assumed to have accepted in principle that the work done by the Applicants and their comparators should be taken to have been of equal value, although we have to say that the paragraph in the Tribunal's Extended Reasons is certainly short on detailed findings to demonstrate the Tribunal's consideration of that. The fact that it had been agreed between the parties not to have that question referred to an expert, so far as the equal value claim was concerned, may be some explanation.

[11]The original Notice of Appeal on behalf of the Applicants sought to challenge the Tribunal's findings on both main aspects of the case, but all grounds in relation to the like work part of the claim were dismissed, (in particular the challenge to the Tribunal's finding that there had been a genuine material difference to account for the differential in pay and the genuine material difference between the work done by the Applicants and their comparators) were dismissed by the order made by the EAT on the Preliminary Hearing.

[12]Part of the grounds in relation to equal value and the alleged determination of the material distinction were also dismissed, for reasons explained by His Honour Judge Altman in the judgment on the Preliminary Hearing in paragraph 33 of his judgment, as follows: 33 "In relation to the grounds of appeal and the reasons on equal value under a contract the point is made that the Tribunal relied on the same factual distinctions in relation to both like work and work of equal value, and goes on…to incorporate the arguments on appeal. If that is so, we reject them for the same reasons as we have given in relation to the like work claim."

[13]What are referred to as two arguable grounds, but have in fact been argued before us as one combined ground, were, however, directed by the EAT on the Preliminary Hearing to come before us for full hearing and those are set out in the amended Notice of Appeal as follows.

[14]First, a contention under paragraph 8 of the amended Notice of Appeal, that despite it not being clear from the Extended Reasons given by the Tribunal whether there was an express finding that the Appellants had been employed in work of equal value, that was to be inferred from the fact that the Tribunal then went on to deal with whether the factors relied on by the Respondent amounted to a genuine material factor to establish a defence under section 1 (3) of the Equal Pay Act 1970 .

[15]Second, on that basis the Tribunal had misdirected themselves and erred in law "in accepting as genuine material factors justifying the difference in pay" for the purposes of the equal value claim, "the same criteria as relied on by the Respondent for the contention that the Appellants were not employed on like work or work of equal value".

[16]In substance, therefore, as developed by Mr Bourne in his Skeleton Argument and oral argument before us on behalf of the Appellants, that was a contention that the Tribunal had been wrong in determining as they did that the material factor which gave rise to the company's defence under section 1 (3) of the Equal Pay Act 1970 succeeding had been, as they explained: 35 "…the physical effort involved in loading and unloading vehicles in cold conditions is a material factor, which amounts to a material difference between the Applicants' case and their comparators."

[17]In deciding the equal value claim in the Respondent's favour on that basis, when it was to be assumed that that exact same factor had already been taken into account in accepting that the work done by the Applicants and their comparators was of equal value. Thus it had not been a factor that had been sufficient to make a difference in establishing that there was any justification on the basis of value for the differential in pay between the Applicants and the comparator group.

[18]That involves us in considering what is the proper scope of the employer's defence under section 1 (3) of the Equal Pay Act 1970 (as amended), which is a defence that may be relied on by an employer to establish justification for a differential in pay which would otherwise be unlawful, for work which is found to be of equal value under section 1 (2) (c) of the 1970 Act.

[19]Section 1 (2) (c) provides that an equality clause is to be included in a woman's contract "where [she] is employed on work which…is in terms of the demands made on her (for instance under such headings as effort, skill and decision), of equal value to that of a man in the same employment." That prima facie entitles the woman to have her pay brought up to equality with that of a suitable male comparator, but the employer may be able to rely on the defence under section 1 (3) which provides that: 1 (3) "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 [that is, like work and work rated as equivalent which is not relevant in this case] , 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)

[20]We were helpfully referred to authority demonstrating the wide scope to be accorded to the section 1 (3) defence and the factors that may be taken into account in assessing whether the employer has established the grounds for such a defence. In particular this was referred to by a division of the EAT with Mr Justice Wood presiding, in Davies v McCartneys

[1989] ICR 705

, where in relation to an equal value claim the EAT rejected an argument by Counsel on behalf of the Applicants that factors which could be relevant in determining whether the work of Applicants and comparator group was overall of equal value were not sufficient by themselves to constitute a defence under section 1 (3) at the later stage of the enquiry, the submission being that:

"…if a demand factor was utilised [a demand factor is a factor relevant to the evaluation part of the exercise] then there had to be something additional in order to justify a defence under section 1 (3)."

[21]The EAT then addressed the question whether there should be any limitation upon the factors relevant to a consideration of a section 1 (3) defence, referred to the genesis of the Equal Pay Act 1970 in Article 119 of the EEC Treaty (as it then was) and said this:

"By Community law the defence which is open to the employer is that such discrimination as existed was objectively justified. There is no limitation to those factors and reasons upon which that defence may be based and we see no reason why the factors should be limited in the defence under section 1 (3). The essential is that it should be based on a material factor which is genuine and the variation is genuinely due to that material factor which is not a difference of sex. The argument could also be supported by the difference in the wording in section 1 (3) (a) and section 1 (3) (b). In (a) there is a reference to "difference between the woman's case and the man's" – this indicates a direct comparison in the demands, and in paragraph (b) the words used are "may be" such a material difference and therefore indicates that it goes outside the immediate comparison between the woman's case and the man's case which is the distinction or the difference in comparison in demands."

[22]Mr Justice Wood's judgment was of course in terms of section 1 (3) of the Equal Pay Act 1970 in its amended form, as it stands before us.

[23]Davies v McCartneys , which Mr Bourne on behalf of the Appellants did not dispute as authority, therefore tells us that the mere fact that a particular factor may be relevant in the evaluation exercise to determine the question of equal value is no ground for excluding it as a defence which may be relied on by the employer under section 1 (3), and may be taken into account by the Tribunal in what is a general consideration of whether the employer's pay differential is justified or not on grounds other than of sex.

[24]Mr Bourne, while not disputing that as a basic proposition, argued that it should be limited to cases where, as in Davies v McCartneys itself, there had not actually been an evaluation exercise to determine the question of equality that had actually taken place before the question of the defence under section 1 (3) was addressed. In cases, such as he said this exemplified, where there had been a determination of equal value taking into account the factors in question, the effect of Davies v McCartneys should be limited so that a factor that had in fact been taken into account on the equal value comparison was excluded from being taken into account again in favour of the employer under the defence in section 1 (3). Otherwise, in Mr Bourne's submission that would involve an element of what he referred to as "double counting" and was therefore wrong in principle.

[25]We were not persuaded that there is any rational basis for limiting the plain words of section 1 (3) or of the principle laid down by the EAT in Davies v McCartneys . There is no suggestion either in Davies v McCartneys or in the opinions of the House of Lords in Glasgow City Council v Marshall

[2000] ICR 196

, to which we were also referred, that the section 1 (3) defence should be so limited.

[26]On the contrary, we accept Mr Bowers's submission on behalf of the Respondent that the principle of the act and the clear thrust of the authorities on this defence is that it should not be so limited in what we are bound to say we consider would be a very artificial way.

[27]In this case, the Tribunal have made a clear finding that there was a factor which they identified, which was a genuine material difference to explain the pay differential and that this was not based on the sex of the employees concerned. On that basis, it appears to us clear that the Tribunal were right to hold that the section 1 (3) defence had been made out and that on that basis an equal value claim could not succeed.

[28]For our part, we find it unclear whether the Tribunal were really expressing their own view on the equal value issue. What the Tribunal say in paragraph 33 of their Extended Reasons falls some way short of the detailed evaluation that we would have expected to see on a full determination of the equal value issue. But in the light of the Tribunal's finding that the section 1 (3) defence was in any event made out, that is not a point which we can see invalidates the Tribunal's overall decision in any way.

[29]For those reasons we have not been persuaded that Mr Bourne's arguments have demonstrated any error of law in the decision of the Tribunal on the equal value claim. The appeal has already been dismissed so far as the like work claim is concerned, and we accordingly dismiss the remaining grounds of appeal.