Women employed by councils in the North East of England have won their long-running equal pay claims in the Court of Appeal.
This case will predominantly affect employers (and particularly those in the public sector) who have conducted job evaluation schemes in an attempt to correct historical pay differences between male and female employees. Where such employers have implemented "pay protection" arrangements for employees who would otherwise suffer a drop in pay (usually men) this may constitute sex discrimination where women are excluded from such protection (because they have not suffered a drop in pay).
However, such discrimination may be justified in limited circumstances, for example, where an employer was unaware of the past discriminatory nature of the pay disparity between men and women when it entered into the pay protection arrangement.
The cases heard in the Court of Appeal were Redcar and Cleveland Borough Council v Bainbridge and Surtees v Middlesborough Borough Council.
These cases were part of the ongoing equal pay litigation involving Councils in the North East of England.
The Councils had conducted job evaluation schemes which determined whether different jobs by predominantly men or predominantly women are "equivalent" and accordingly should receive the same rate of pay.
In these cases the jobs predominantly done by the women were rated equivalent to those predominantly done by the men. This led to the downgrading of some of the predominantly male posts. As a result the Council introduced "pay protection" for those posts, to avoid those (predominantly male) employees suffering an immediate drop in pay.
The female employees in the posts rated as equivalent, then brought claims that it was discriminatory to continue to pay the predominantly male employees more than them. They argued that had they been on the correct (higher) rate of pay in the first place they too would have had the benefit of pay protection. The Court of Appeal agreed that the pay protection was discriminatory and could not, in the circumstances of these cases, be justified.
The Court of Appeal agreed with the decision of the original employment tribunal which decided that whilst it was a "legitimate aim" to cushion staff from potentially drastic reductions in pay the means used to achieve this aim was not "proportionate" as it was effectively outweighed by the potential discriminatory effect of the pay protection scheme.
In addition, the Court of Appeal confirmed that job evaluation schemes do not have retrospective effect so employees can't automatically rely on them to obtain compensation in respect of the period before the date on which the scheme was implemented (although the scheme may be of assistance to an employee seeking compensation for that period in an "equal value" claim).