Cumbria County Council v Joss & Ors

For an equal pay claim, a genuine material factor defence requires proof that the pay difference is genuinely unrelated to sex. Where the alleged factor has an adverse disparate impact on women, the employer must justify the difference objectively. A purported productivity scheme will not establish the defence where there is no causative link between individual performance and the payments, so that they operate as automatic additions to basic pay.

The Council sought permission to appeal from the Employment Appeal Tribunal’s decision of 12 November 2007, reported at [2008] IRLR 91. The proceedings concerned equal pay claims by female carers, cleaners and cooks, who compared themselves with predominantly male road workers and maintenance operatives receiving productivity bonuses. The Employment Tribunal rejected the Council’s genuine material factor defence for cleaners and cooks but accepted it for carers. The EAT rejected the defence for all three groups. The central issue was whether the findings disclosed an arguable error of law warranting an appeal.

The Court of Appeal refused permission to appeal. The Council could not show a real prospect of success on a question of law, and there was no other compelling reason for the court to hear the proposed appeals.

1. The statistical evidence showed an indisputable adverse disparate impact between traditionally female jobs and traditionally male jobs for which higher bonus payments were made.

2. The Employment Tribunal had found that the bonuses were not true productivity benefits. There was no established causative link between individual performance and the level of payment. Improved productivity was attributable, at most, only tenuously to personal performance and was more likely explained by mechanisation and management efficiency. The bonuses had therefore become automatic uplifts in pay.

3. Those findings meant that the Council had not proved that the pay difference was unrelated to sex. Prima facie sex discrimination was established, and the difference had not been shown to be objectively justified.

4. The EAT correctly concluded that the factual findings could not conceivably be characterised as perverse and had accurately summarised the relevant principles governing the Equal Pay Act 1970 and the genuine material factor defence.

5. The detailed legal arguments did not need to be revisited because the relevant law had recently been reviewed in Middlesbrough BC v Surtees and Redcar & Cleveland BC v Bainbridge, [2008] EWCA Civ 885.

• Court of Appeal (Civil Division): refused permission to appeal.
• Employment Appeal Tribunal: dismissed the Council’s appeal and allowed the claimants’ appeal concerning the productivity bonus genuine material factor defence, holding that the defence failed for carers, cleaners and cooks. Other issues were remitted for reconsideration. Decision dated 12 November 2007, reported at [2008] IRLR 91.
• Employment Tribunal: rejected the Council’s defence for cleaners and cooks but accepted it for carers.