Use of red-circling is time limited The Northern Ireland Court of Appeal (NICA) has held that where a difference in pay is due to a red-circling arrangement, the employer cannot rely upon the reasons for introducing it indefinitely. It is necessary for the employer to justify the red-circling at the time it occurs and also to justify why the difference in pay has continued (Fearnon and Others v Smurfit Corrugated Cases Lurgan Limited).

Following an earlier TUPE transfer, a male employee's supervisory responsibility had been removed. However, his job title and salary had been protected by a red-circling arrangement. This arrangement had the effect of continuing a disparity in pay between the employee and three female employees, who claimed that they were entitled to the same level of pay as he was. The employer sought to rely on the red-circling arrangement as a genuine material factor defence to the female employees' equal pay claim.

The NICA held that it should not be assumed that just because it had been legitimate to introduce red-circling, it was legitimate to continue it indefinitely.

Red-circling or other pay protection arrangements are often put in place to cushion the blow on employees who would otherwise suffer a reduction in pay. Employers need to be aware that they should be able to justify the continued use of any such arrangements and should limit the duration of red-circling or other pay protection measures to the time necessary to phase out any differences in pay.

Meaning of "same employment" in equal pay claims

In Dumfries and Galloway Council v North and others, the EAT has held that if a claimant in an equal pay case wishes to rely on a comparator employed at a different workplace, there must be a real possibility of the comparator doing the same or a broadly similar job at the claimant's place of work as he does at his current workplace.

In cases where employees sought to compare themselves to employees at other workplaces, it was not sufficient to look at a purely hypothetical situation. A comparison must be based on facts that could actually occur. On the facts in this case, there was no possibility of the male comparators (including road workers, groundsmen and refuse collectors) working at the same establishments as the claimants (learning support and classroom assistants and nursery nurses). In any event, because of the differences in the contractual basis upon which the two groups of workers were employed, they were not engaged on broadly similar terms and conditions.

The scope of permissible comparators for the purposes of equal pay has become a difficult issue, in particular for the public sector where there has been historical job segregation and separate collective bargaining arrangements for male and female employees, who are spread over multiple locations. This claim has been remitted to the employment tribunal, who may now consider whether the claimants have a separate claim under Article 141 of the Equal Pay Directive, which provides that comparators must be employed in the same "service" as the claimants and/or on terms and conditions that are attributable to a single source.

Equal pay claims are notoriously difficult and time consuming and can result in years of complex litigation. It is to be hoped that the Equality Bill will provide an opportunity to simplify the legislation and address the differences between the comparator test under domestic legislation and the Equal Pay Directive.