British Airways Plc v Grundy

In an indirect equal-pay claim, an employer must objectively justify a discriminatory pay structure by identifying a legitimate aim and showing that the chosen means are appropriate and reasonably necessary. Collective agreement, administrative convenience, employee loyalty, or the employee’s ability to transfer to another role cannot, by themselves, justify unequal pay. The seriousness of disparate impact concerns the personal contractual right infringed. Retrospective justification is permissible, but usually begins from a weaker evidential base where the discriminatory impact was not considered when the arrangement was adopted.

Mrs Grundy, a support cabin crew employee, claimed that British Airways had indirectly discriminated against her under the equality clause implied by section 1 of the Equal Pay Act 1970. She was paid less than an agreed male comparator doing like work because support cabin crew did not receive increments available to other cabin crew.

The employment tribunal found disparate impact and rejected British Airways’s objective-justification defence. The Employment Appeal Tribunal upheld that conclusion in case EAT/0676/04. In an earlier decision in the same litigation, reported at [2007] EWCA Civ 1020, this court restored the tribunal’s finding on disparate impact. The present appeal concerned whether the tribunal had misapplied or inadequately explained the justification test.

1. Appeal dismissed. The employment tribunal applied the correct objective-justification test and gave adequate reasons. The employer had to justify an otherwise unlawful pay structure by showing that its aim was legitimate and that the means chosen were appropriate and reasonably necessary, having regard to proportionality.
2. The tribunal was entitled to treat employment relations and business efficiency as legitimate general aims without treating the specific reduction of support cabin crew’s contractual entitlements as justified. Collective agreement could not itself justify a discriminatory differential. Negotiators must consider whether collectively agreed terms have a disparate gender impact.
3. The seriousness of disparate impact concerned the invasion of a personal contractual right. It was not reduced because relatively few employees were affected, the monetary difference was small, or the advantaged group was also predominantly female.
4. Administrative difficulty, avoidance of anomalies, loyalty, preferred staffing arrangements and the possibility of transferring to another role were insufficient, individually or cumulatively, on the tribunal’s findings. An employee could not be required to change jobs as the justification for unequal pay.
5. Retrospective justification was legally permissible, but where discriminatory impact had not been considered when the arrangement was introduced, the employer would usually begin from a weaker evidential base. The tribunal’s decision was therefore free from legal error.

• Court of Appeal (Civil Division): The court dismissed British Airways’s appeal on objective justification.
• Court of Appeal (Civil Division): In the earlier stage of the same litigation, the court restored the employment tribunal’s finding on disparate impact in [2007] EWCA Civ 1020 .
• Employment Appeal Tribunal: The EAT upheld the employment tribunal’s rejection of British Airways’s justification defence in EAT/0676/04.
• Employment tribunal: The tribunal found indirect discrimination arising from the absence of increments for support cabin crew and rejected the employer’s justification arguments.