Strathclyde Regional Council and Others v. Wallace and Others (Scotland)

The appellants, unpromoted women teachers, claimed equal pay under the Equal Pay Act 1970 on the basis that they performed "like work" to male principal teachers. The respondents conceded like work but relied on the defence in section 1(3) of the Equal Pay Act 1970 that the pay disparity was "genuinely due to a material factor which is not the difference of sex."

The House of Lords held that where a pay difference is explained by genuine, causally relevant factors that are not tainted by sex, the employer establishes the section 1(3) defence: there is no additional obligation to demonstrate that those non-discriminatory factors are objectively "justified" in the Bilka sense. Questions of justification under the Bilka/Rainey tests arise only where the factor relied on is sexually discriminatory (directly or indirectly), in which case the employer must show the measure can be objectively justified.

This appeal concerned equal pay claims by several unpromoted teachers who performed duties of principal teachers but were paid at a lower grade. The claimants selected male principal teachers as comparators. The industrial tribunal and Employment Appeal Tribunal found for the claimants; the Second Division of the Court of Session held for the employers. The House of Lords considered the path of appeal and the legal test in section 1(3) of the Equal Pay Act 1970.

Nature of the claim: applications for equal pay under the Equal Pay Act 1970, section 1(2)(a) ("like work"). The respondents conceded like work, so the central issue was whether they could rely on the defence in section 1(3) that the pay variation was "genuinely due to a material factor which is not the difference of sex."

Key facts:

• The educational staffing structure and promoted post rules (set by statutory codes and S.J.N.C. circulars) constrained appointments of promoted posts such as principal teacher;
• financial constraints, central and local funding arrangements, staffing circulars and a decline in pupil rolls meant many schools had teachers performing principal teacher duties without promoted appointment;
• an agreed fact: the disparity had nothing to do with sex—among 134 unpromoted teachers doing principal duties, 81 were men and 53 were women.

Issues framed: (i) the meaning of a "material factor which is not the difference of sex" in section 1(3); (ii) whether the respondents’ combination of structural, procedural and financial factors satisfied the section 1(3) defence; and (iii) whether the employers were required to "justify" non-sex-related factors in the Bilka sense.

Court’s reasoning: The House of Lords held that the words of section 1(3) require the employer to prove the factor relied on is genuine and causally relevant ("material") and that difference of sex is not the cause. Where no element of sex discrimination exists in the factor relied upon, there is no separate requirement to demonstrate objective justification: to impose such a burden would convert the Equal Pay Act into a "fair wages" statute contrary to its purpose. Only where the factor is sexually discriminatory (directly or indirectly) does the Bilka/Rainey objective justification test apply.

Disposition: the House of Lords dismissed the appeal, concluding that the respondents had established a valid section 1(3) defence because the pay disparity was genuinely due to material, non-sex-related factors.

Appeal dismissed. The House of Lords held that to succeed under section 1(3) of the Equal Pay Act 1970 an employer must prove a genuine, causally relevant (material) factor not related to sex; where the factor is not sexually discriminatory no further objective "justification" is required. Justification in the Bilka/Rainey sense arises only if the factor relied upon is tainted by sex discrimination.

Industrial Tribunal (claim succeeded); Employment Appeal Tribunal (claimants succeeded); Second Division, Court of Session (respondents succeeded) reported at 1997 S.L.T. 315; appealed to the House of Lords [1998] UKHL 4.