South Tyneside Metropolitan Borough Council v Anderson & Ors

Under section 1(6) of the Equal Pay Act 1970, “common terms and conditions” means terms sufficiently similar for a broad comparison. Employees of the same employer may be in the same employment despite working at different establishments, particularly where their terms derive from the same collective agreement. A hypothetical comparison is unnecessary merely because the comparator does not work at the claimant’s establishment.

Where such a hypothetical exercise is required, statutory governing-body discretions do not prevent a finding of broadly similar terms where the applicable pay scale fixes the relevant grade. Legitimate additional payments do not create unjustified pay differentials. Equivalent-rated work, same employment and unequal pay engage the equality clause.

South Tyneside Metropolitan Borough Council appealed from the Employment Appeal Tribunal, which had dismissed the authority’s appeal from findings of the Newcastle upon Tyne employment tribunal. Female school support staff employed in community schools compared themselves with male authority employees doing work rated as equivalent and paid under the White Book collective agreement, but receiving additional payments.

The employment tribunal found that the claimants and comparators were employed by the same employer at different establishments on common terms and conditions. The appeal concerned only claimants appointed on the recommendation of school governing bodies. The authority argued that governing-body powers over appointments and remuneration made common terms unprovable, or required a hypothetical comparison with a comparator employed at the school.

Appeal dismissed. Sedley LJ gave the judgment of the court. The employment tribunal had not erred in treating the relevant claimants and their male comparators as being in the same employment.

1. Section 1(6) of the Equal Pay Act 1970 requires the same employer, separate establishments in Great Britain, and common terms and conditions observed generally or for employees of the relevant classes. “Common” means sufficiently similar for a broad comparison. This is ordinarily a factual judgment for the employment tribunal, subject to correction for legal error.
2. The claimants and comparators were employed by the same local authority at different establishments on terms derived from the White Book. The approach in Leverton v Clwyd County Council [1989] ICR 33 supported treating common collective-agreement terms as sufficient, even though the comparators did not work at the claimant’s establishment. The hypothetical exercise discussed in British Coal Corporation v Smith [1996] ICR 515 was required in that case because the relevant groups were employed under different collective agreements. It did not govern the present facts.
3. Alternatively, if a hypothetical comparison were required, the claimants and a street cleaner would have had broadly similar terms because both would have been on the same White Book grade. Under regulations 11(1)(a) and 15(2), (3) and (5) of the School Staffing (England) Regulations 2003, the governing body’s powers did not make the applicable grade unknowable or permit an inappropriate appointment. Regulation 15(4) did not authorise spurious or unjustified pay differentials. Legitimate additional payments could exist without altering the common terms governing the jobs.
4. The accepted equivalent rating of the work, combined with same employment and unequal pay, meant that the implied equality clause was breached. The further questions treated as moot by the EAT, including the alternative argument under article 141 of the EEC Treaty, remained undetermined.

• Court of Appeal (Civil Division): dismissed South Tyneside Metropolitan Borough Council’s appeal. [2007] EWCA Civ 654
• Employment Appeal Tribunal: dismissed the authority’s appeal and the claimants’ contingent cross-appeal in case EAT0684/05/ZT.
• Newcastle upon Tyne Employment Tribunal: found that the relevant claimants and comparators were in the same employment and that the pay inequalities breached the equality clauses.