The Court of Appeal has given its decision in Redcar v Cleveland BC and Surtees v Middlesborough BC, agreeing with two employment tribunals that arrangements put in place to temporarily protect the pay of a disadvantaged (predominantly male) group of employees following job evaluation was indirectly discriminatory. Since 1988, manual (mainly male) workers employed by the councils had been regulated by ‘White Book’ terms and conditions and administrative and technical staff (mainly female) regulated by the ‘Purple Book’. To eradicate historical pay inequalities there was a national agreement between local authorities and trade unions (the Single Status Agreement) setting out new terms and conditions (the ‘Green Book’). Local authorities carried out job evaluation studies to grade all staff on a single pay structure. Some staff received a pay rise; some a pay cut. Consent to the pay cut was achieved through collective bargaining and councils agreed to pay protection arrangements to soften the impact for those receiving a pay cut. Claims were brought by women previously on Purple Book terms for equal pay with ex-White Book male comparators relating to periods before and after the new terms came into effect. The issue was whether the employer could rely on the genuine material factor defence under the Equal Pay Act. The Court held that the fact that separate collective bargaining had taken place for the groups of workers would not be a defence if there was a disparate unjustifiable impact on one sex. It was necessary to look at the underlying reason for the disparity in pay and if that reason was that the employees who did not benefit from pay protection did not have their pay reduced because they had been discriminated against under the previous pay arrangements, the new pay arrangements were tainted by sex.
The Court stated that pay protection schemes could be justified but this decision undoubtedly makes it difficult to do so. The reasons for any pay differential after a JES should be examined carefully and not be linked to any earlier disparity based on sex. It is also now clear that collective bargaining does not protect an employer against an equal pay claim.