Redcar & Cleveland Borough Council v Bainbridge & Ors ("Bainbridge 1")

A pay-protection arrangement introduced on a new job-evaluation scheme may perpetuate earlier unlawful indirect sex discrimination. A tribunal must identify the underlying reason for the differential, not merely the immediate condition for receiving protection. Where women would have received protection but for historic unequal pay, the employer must objectively justify their exclusion.

Temporary protection is not automatically unlawful. Its justification depends on the legitimate aim, the employer’s knowledge of discrimination, the steps taken to minimise its effects, and whether exclusion is proportionate. Separate collective bargaining is a genuine material factor only if it explains the differential without sex taint. A later job-evaluation study does not establish work rated as equivalent for an earlier period.

These consolidated appeals arose from equal-pay claims by female employees of Redcar and Cleveland Borough Council and Middlesbrough Borough Council. The claims concerned pay differentials under earlier collective agreements and after the authorities implemented the Green Book job-evaluation arrangements.

The appeals raised five principal issues: pay protection for employees whose pay fell on implementation; separate collective bargaining as a section 1(3) defence; whether prior work-rated-as-equivalent claims barred equal-value claims; whether a later job-evaluation scheme operated retrospectively; and an uplift for failure to follow statutory grievance procedures.

The court reviewed decisions of the Employment Appeal Tribunal in Redcar and Cleveland Borough Council v Bainbridge (No 1) [2007] IRLR 91, Middlesbrough Borough Council v Surtees (No 1) [2007] ICR 1644, and Redcar and Cleveland Borough Council v Bainbridge (No 2) [2007] IRLR 494.

1. Pay protection. Redcar’s appeal was dismissed and the Middlesbrough claimants’ appeal was allowed. The post-changeover differential was indirectly sex-tainted because the male comparators received protected pay for losing bonuses and allowances, while the women would have qualified for protection had their earlier unlawful underpayment been corrected. A tribunal may look behind the immediate criterion for protection to the historical reason why employees were respectively included and excluded.

   Pay protection can in principle be objectively justified where it is a proportionate means of securing a legitimate reorganisation. It is not automatically justified because it provides a soft landing. Relevant matters include the employer’s knowledge of the discriminatory effect, whether it considered and costed including the disadvantaged employees, and whether it took steps to reduce continuing discrimination. The Employment Appeal Tribunal had no proper basis to overturn Middlesbrough’s fact-sensitive tribunal evaluation.

2. Separate collective bargaining. Middlesbrough’s appeal was dismissed. Separate bargaining arrangements may in a suitable case explain unequal pay without reference to sex. On the evidence, however, the tribunal was entitled to infer sex taint from the payment of bonuses to predominantly male groups, their absence from predominantly female groups, and the earlier finding that the bonus arrangements lacked a productivity justification.

3. Res judicata and election. Redcar’s appeal was dismissed. Work-rated-as-equivalent and equal-value claims under the Equal Pay Act 1970 are distinct statutory causes of action. A final judgment on one does not bar the other for the same period. There can be no double recovery, and tribunals should use case-management powers to require parties to identify all intended comparators and bases of claim early.

4. Retroactivity and grievances. The claimants’ appeals were dismissed. A job-evaluation scheme cannot establish work rated as equivalent before the date on which the scheme took effect. The Employment Appeal Tribunal also correctly substituted no grievance uplift: although Redcar should have held meetings, the proposed meetings could not realistically have resolved the represented, complex equal-pay disputes.

• Court of Appeal (Civil Division): consolidated appeals determined in this judgment, [2008] EWCA Civ 885. The Middlesbrough claimants’ pay-protection appeal was allowed; the remaining substantive appeals were dismissed.
• Employment Appeal Tribunal: Redcar and Cleveland Borough Council v Bainbridge (No 1) [2007] IRLR 91. Redcar’s appeal concerning pay protection had been dismissed.
• Employment Appeal Tribunal: Middlesbrough Borough Council v Surtees (No 1) [2007] ICR 1644. The appeal on pay protection had been allowed and the appeal on separate collective bargaining dismissed; the Court of Appeal restored the Employment Tribunal’s pay-protection conclusion.
• Employment Appeal Tribunal: Redcar and Cleveland Borough Council v Bainbridge (No 2) [2007] IRLR 494. The Employment Appeal Tribunal upheld the rejection of res judicata and retroactive-effect arguments, and held that no grievance uplift should be awarded.