Gibson and others v Sheffield City Council, is the latest case to consider whether or not it is necessary for an employer to objectively justify a differential in pay, regardless of whether or not that differential is 'tainted by sex'. The Court of Appeal held that the earlier case of Armstrong v Newcastle upon Tyne NHS Hospital Trust had been correctly decided and therefore, where there is a disparate impact which has an adverse effect on women, it remains open to the employer to prove that the differential was not tainted by sex and therefore does not need to be objectively justified.

The case concerned a group of female carers, who were being paid less than predominantly male groups of street cleaners and gardeners, whose work had been rated as equivalent to theirs. The difference in pay arose because the comparator groups had received productivity bonuses, but the carers had not. The Council maintained that the payment of these bonuses had been due to a genuine material factor which was not the difference in sex and this was upheld by both the tribunal and the EAT. The Court of Appeal disagreed, concluding that the productivity bonus was discriminatory and that a sexual taint was present. It accepted that it was genuinely impossible to apply the productivity bonus to the women's work, but this did not remove the sexual taint from the operation of the scheme. The employer would therefore have to objectively justify the pay disparity and the case has been remitted back to the tribunal to consider this point.

An important point considered by the Court of Appeal was whether or not the ruling in Armstrong was correct, namely that, even where there is disparate impact which has an adverse effect on women, it is still open to the employer to prove that the pay differential is not tainted by sex. The Court unanimously found in favour of employers on this point. If an employer can show that a pay differential is not tainted by sex, it will not require objective justification. However, the Court did recognise that this principle will have limited practical application.

Impact on employers

  • This case is helpful in that it confirms that an employer can avoid the need for objective justification if it can show that, despite statistical evidence demonstrating that a particular pay practice had an adverse impact on women, that pay practice is not sex tainted.
  • However, the Court of Appeal has suggested that such an outcome will be rare and, in the vast majority of cases where disparate impact is established, employers will still need to show objective justification to avoid liability.