Equal pay and "piggyback" claims
In McAvoy v South Tyneside Borough Council, female employees of three local councils who worked in predominantly female jobs brought equal pay claims under the Equal Pay Act 1970 (EqPA) arguing that their work was of equal value to men working in predominantly male jobs but who received extra bonuses.
The Equal Pay Act only allows claims to be brought by employees who can show that a comparator colleague of a different sex is receiving higher pay for like work, work of equal value or work rated as equivalent. Therefore, male employees of the councils working in the same jobs could not use the same comparators that the women were using.
Instead, the male employees lodged contingent claims on the basis that, if and to the extent that the female employees' claims succeeded, they would be entitled to equivalent payments using the successful women as comparators (so-called "piggyback" claims). The EAT had to decide whether this type of claim was valid and if so, its scope.
The EAT held that:
- female employees whose contractual terms have been modified by virtue of the EqPA can be used as comparators by male colleagues to bring claims for that same contractual term – it is irrelevant whether the term sought derives from an agreement between the parties or is inserted or modified by statute;
- piggyback claims are valid - the EqPA was intended to prevent men and women who do the same job from receiving different rates of pay. If such claims were not allowed, the aim of the EqPA would not succeed;
- the male employees were entitled to claim arrears of pay for the same period as their female comparators and were not restricted, as the councils argued, to arrears only from the date of the tribunal decision in the females' claims; and
- it was appropriate for the male employees to submit their claims at the same time as the female employees, even though they were contingent on the success of the female claimants.
Settlement offers and piggyback claims
An interesting twist in this case was that, after several claims by female employees' claims succeeded, South Tyneside Borough Council offered a settlement to the remaining female claimants. This offer was not extended to the male claimants on the grounds that their claims were, in the council's view, weaker.
The male claimants contended that this was discriminatory treatment under the Sex Discrimination Act 1975. The EAT agreed. It held that the offer to settle a claim was a benefit and withholding that benefit was a detriment. The council could not argue that the different treatment was on the basis that there were material differences between the claimants, i.e. that the male claimants had less chance of success.
Impact on employers
Employers should be alive to the fact that in relation to equal pay, male employees can piggyback onto female colleagues' claims and in dealing with those claims, employers must treat both groups equally.
The draft Equality Bill (currently under consultation) includes a power to require large employers (those with over 250 employees) to report on their gender pay gap.
Now is a good time for employers to carry out equal pay audits and address any pay discrepancies.