Jog Hundle and Charlotte Cooper look at some lessons for employers emerging from recent equal pay litigation.

Don’t blame the victims

Equal pay accounts for an increasing proportion of tribunal claims, particularly in the public sector where efforts to modernise pay structures have revealed significant historic inequalities. The cost of meeting these claims has put employers under considerable pressure to settle them if at all possible. But how much pressure is it legitimate to place on employees to bring them to the negotiating table?

In a case involving school dinner ladies which reached the House of Lords earlier this year, St Helens Borough Council had written to the 39 women involved two months before their case was due to be heard. The letter pointed out that by failing to agree the settlement which 470 of their colleagues had already accepted they were putting their jobs and those of their colleagues at risk. A letter in similar terms was also sent to all members of the catering department. The 39 women went on to win their case, and then brought separate proceedings claiming that the letters had amounted to unlawful victimisation.

The House of Lords ruled that these letters had crossed the line between legitimate litigation tactics and unlawful victimisation.

In Lady Justice Hale’s words, this was a classic case of blaming the victims. The discrimination legislation makes it clear that those bringing discrimination proceedings should not be pressurised into abandoning them by being subjected to a detriment, which in this case was caused by the intimidating tone of the letters. In retrospect it was probably unwise of the council to write direct to the employees, rather than deal with their representatives, to whom they might have been able to make the same points without it amounting to victimisation.

Can the unions still cut a deal?

Another recent case illustrates the difficulties the union side faces when negotiating settlements of equal pay claims. This case involved the GMB, who were involved in settling claims brought by female workers against local authorities in the Northeast

Their problem was to balance the interests of their members (predominantly female) who were entitled to be compensated for historic pay inequalities with those of their predominantly male members who stood to lose their jobs or take pay cuts to finance this compensation.

The employment tribunal ruled that the GMB had discriminated against its female members on grounds of their sex by settling claims on their behalf on unfavourable terms. The union has appealed to the Employment Appeal Tribunal, which is expected to announce its decision shortly. Whatever the outcome of the appeal, this case will make both employers and unions wary of settling equal pay claims unless they can be sure that all employees are genuinely behind the deal struck.

Cases in the pipeline

A second equal pay case is due to reach the House of Lords later this year, which concerns the pay structure in the Home Office. In that case women in a mixed gender group are comparing their pay and conditions with a predominantly male group of employees who enjoy better terms and conditions, though they perform work which has been rated equivalent under a prison service job evaluation scheme. The House of Lords will have to decide whether the presence of a significant body of men in the disadvantaged group will enable the prison service to defeat the claim.

Service related pay has also been in the news recently in the context of equal pay. Last year the European Court of Justice (ECJ) ruled in the Cadman litigation that in general service related pay did not need to be justified, even if it meant that because of their different working patterns male workers received significantly more pay than female workers for doing the same job. But the ECJ left open the possibility of an exception if the claimants could demonstrate serious doubts as to whether the pay structure was really about rewarding performance. The case will now return to the employment tribunal for a ruling on whether the exception applies. Until the outcome of this further hearing is known, it will be difficult to assess whether service related pay really is safe for employers.