Nelson v Carillion Services Ltd.

In an equal pay claim based on indirect sex discrimination, the claimant bears the initial burden of proving disproportionate adverse impact. A credible suggestion that suitable statistics might reveal such an impact is insufficient.

The claimant must establish a prima facie case through valid and significant evidence. Statistical comparisons must cover an appropriate and sufficiently large pool and must not reflect chance or short-term phenomena. Only then must the employer objectively justify the pay difference. The same allocation of the burden applies whether the claim arises under the Equal Pay Act 1970, the Sex Discrimination Act 1975 or the Treaty right to equal pay.

The appellant performed the same work as a male comparator but received lower pay and benefits. The comparator had transferred to the respondent under the Transfer of Undertakings (Protection of Employment) Regulations 1981, which preserved his former terms. The appellant was recruited later on the respondent's standard terms.

The Central London Employment Tribunal dismissed her complaint under section 1 of the Equal Pay Act 1970. It found that statistics drawn from only eight stewards neither used an appropriate pool nor demonstrated a significant, rather than fortuitous, adverse impact on women. The Employment Appeal Tribunal upheld that decision.

The appellant argued in the Court of Appeal that a credible suggestion of indirect discrimination shifted the burden to the employer. The central issue was whether she first had to prove disproportionate adverse impact and thereby establish a prima facie case.

1. Appeal dismissed unanimously. Simon Brown LJ delivered the judgment. Dyson and Scott Baker LJJ agreed.

2. Section 1(3) of the Equal Pay Act 1970 required the employer to show that the pay variation was genuinely due to a material factor other than sex. The respondent's explanation was genuine and causative: the comparator's superior terms had been preserved following a transfer of the undertaking, whereas the appellant had subsequently joined on standard terms.

3. In an indirect discrimination case, the initial burden of proving disproportionate adverse impact rests on the claimant. The claimant must establish a prima facie case through valid and significant evidence. Merely advancing a credible suggestion that appropriate statistics might reveal such an impact neither satisfies that burden nor imposes a further explanatory burden on the employer.

4. The statistics must cover enough individuals, avoid purely fortuitous or short-term effects and appear significant. The tribunal was entitled to reject a comparison confined to eight stewards. The pool was highly artificial and too small to establish that the difference between the proportions of men and women was more than chance. London Underground Ltd v Edwards (No 2) [1998] IRLR 365 did not require a contrary conclusion.

5. Once a claimant proves a prima facie case, the burden shifts to the employer to show an objective justification unrelated to sex discrimination. The approach is the same whether the claim is brought under the equal-pay provisions of the Treaty, the Sex Discrimination Act 1975 or the Equal Pay Act 1970. Those sources form a coherent code governing unlawful sex discrimination.

6. Section 63A of the Sex Discrimination Act 1975 codified rather than altered the pre-existing burden. It still required the complainant to prove facts from which unlawful discrimination could be inferred in the absence of an adequate explanation.

7. The appellant failed to prove disproportionate adverse impact on the balance of probabilities. Her challenge concerning annual percentage pay increases was unavailable because it had not been raised before the Employment Appeal Tribunal. The appeal was dismissed, costs were awarded to the respondent's representatives and permission to appeal to the House of Lords was refused.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously. The court upheld the conclusion that the appellant bore the initial burden of proving disproportionate adverse impact and had failed to discharge it.

2. Employment Appeal Tribunal: On 26 June 2002 the tribunal dismissed the appellant's appeal. It held that the Employment Tribunal could treat the comparison based on eight employees as fortuitous and not generally significant.

3. Central London Employment Tribunal: Following a hearing on 26 and 27 March 2001, the tribunal dismissed the complaint under section 1 of the Equal Pay Act 1970 for extended reasons given on 21 May 2001.