Home Office v Bailey & Ors

A tribunal may use a proportional statistical comparison to determine whether an apparently gender-neutral pay practice has a disparately adverse impact on women. That approach is not confined to cases involving a formal requirement or condition.

Valid and significant statistics may establish prima facie indirect discrimination even where women are not a majority of the disadvantaged occupational group. No high threshold applies. Once the prima facie case is established, the employer must show that the pay difference results from objectively justified factors unrelated to sex.

Nearly 2,000 Prison Service employees brought equal-pay claims under the Equal Pay Act 1970. The two lead appellants were women in the Higher Executive Officer grade whose work had been rated as equivalent to that of predominantly male employees in better-paid grades.

The Employment Tribunal found that the statistics established prima facie indirect discrimination and required the Home Office objectively to justify the differences in pay and conditions. The Employment Appeal Tribunal, in EAT/0060/04/DA, reversed that decision. It held that the statistical method used was appropriate to a formal requirement or condition, but not to a pay disparity between occupational groups where the disadvantaged group contained approximately equal numbers of men and women.

The issue was whether those statistics could establish prima facie discrimination and place the burden of objective justification on the Home Office.

1. Appeal allowed unanimously. The order of the Employment Appeal Tribunal was set aside and the Employment Tribunal's decision was restored.

2. Per Peter Gibson LJ, the Employment Tribunal had erred by treating membership of the advantaged grades as a requirement or condition for obtaining their benefits. That reasoning was circular. No genuine requirement or condition applicable to those grades had been identified.

3. That error did not invalidate the Tribunal's statistical findings. No statutory provision prescribed a single method by which a tribunal must investigate whether prima facie sex discrimination exists. The tribunal of fact was responsible for assessing whether the available statistics were valid, sufficiently extensive, non-fortuitous and significant.

4. The proportional approach in R v Secretary of State for Employment, ex p Seymour-Smith [1999] ICR 447 and Barry v Midland Bank [1999] ICR 859 was not confined to cases involving a formal requirement or condition. Subject to the validity and suitability of the statistics, it could also be used to assess a pay disparity between occupational groups. Enderby v Frenchay Health Authority [1994] ICR 112 did not prescribe an exhaustive category of cases or preclude that approach.

5. The corrected figures showed that 51% of the women in the pool were disadvantaged, compared with 9.05% of the men. The resulting ratio of approximately six to one was plainly significant. It supported the Employment Tribunal's finding of prima facie indirect discrimination even though the disadvantaged grade contained approximately equal numbers of men and women.

6. No high threshold applies when deciding whether a pay disparity is prima facie attributable to sex. The presence of a significant number of men in the disadvantaged group does not prevent a finding of disparate impact upon women. The employer must then establish a genuine material factor unrelated to sex and, where the evidence discloses discriminatory impact, must objectively justify the difference.

7. Waller LJ agreed that the statistics placed the burden on the employer. He questioned why, under the language of section 1(3), the employees should initially bear the burden of proving disparate impact. The court was nevertheless bound by Nelson v Carillion Services Ltd [2002] ICR 1256, and the employees had accepted that burden. Sir Martin Nourse agreed with both judgments.

1. Court of Appeal (Civil Division): Allowed the employees' appeal unanimously, set aside the Employment Appeal Tribunal's order and restored the Employment Tribunal's decision: [2005] EWCA Civ 327.

2. Employment Appeal Tribunal: In EAT/0060/04/DA, allowed the Home Office's appeal and held that objective justification was not required on the preliminary issue.

3. Employment Tribunal: The London South tribunal held that the statistical evidence established prima facie indirect discrimination, requiring the Home Office objectively to justify the less favourable terms.