Newcastle Upon Tyne NHS Hospitals Trust v Armstrong & Ors

In equal pay proceedings, a statistical disparity between rates paid for work of comparable value does not, without more, establish that the difference is sex-tainted. The tribunal must examine why lower rates were paid to a predominantly female workforce, including whether the market regarded the work as women’s work. Where that inquiry establishes sex taint, an employer cannot rely merely on competitive tendering, market rates or commercial necessity. It must establish objective justification under the Equal Pay Act 1970. Permission was refused because the tribunals were entitled to find that the necessary sex-taint inquiry had been undertaken.

Female ancillary workers employed at four hospitals claimed bonus payments received by male comparators under the Equal Pay Act 1970. In earlier proceedings, the Court of Appeal remitted questions to the employment tribunal, including whether the decision to tender domestic services or discontinue the bonus scheme was gender discrimination: [2005] EWCA Civ 1608.

On remittal, the employment tribunal found the Trust in breach of the Act. The Employment Appeal Tribunal dismissed the Trust’s appeal on 22 January 2010. The Trust sought permission to appeal, arguing that the tribunals had failed to consider whether the withdrawal of the bonus resulted from competitive tendering and was unconnected with sex. The central issue was whether the tribunal had asked why lower market rates were paid to a predominantly female workforce.

1. Permission refused. Pill LJ, with whom Sullivan LJ agreed, held that there was no real prospect of showing that the Employment Appeal Tribunal had erred in upholding the employment tribunal’s decision.
2. The required inquiry. The Armstrong principle could, in some circumstances, permit an employer to show that a statistically demonstrated disparity was not sex-tainted. However, the statistical disparity and the fact that lower rates were paid to a predominantly female workforce were not, of themselves, sufficient. Sullivan LJ explained that the tribunal had to ask why those lower rates were paid and whether the market regarded the work as women’s work, giving rise to a Ratcliffe-type reason. The Employment Appeal Tribunal was entitled to read the employment tribunal’s reasons in a common-sense way and conclude that this further inquiry had been undertaken.
3. Objective justification. Pill LJ held that the circumstances requiring objective justification had arisen. The fact that competitive tendering made it commercially desirable to withdraw the bonus did not answer an equal pay claim or remove the sex taint. The reasoning in Enderby, concerning the insufficiency of a stronger union as an explanation for unequal rates, supported that conclusion. The Court also relied on Gibson, where a bonus distinction between caring work and work capable of being bonused was treated as justified without removing the sex taint. The commercial tendering explanation was similarly insufficient.
4. Final order. The alternative objective-justification ground had failed below and was not pursued further. The renewed application for permission to appeal was refused.

1. Court of Appeal (Civil Division): On 7 September 2010, refused the Trust’s renewed application for permission to appeal.
2. Employment Appeal Tribunal: On 22 January 2010, Underhill J dismissed the Trust’s appeal from the remittal decision and upheld the finding that the Trust was in breach of the Equal Pay Act 1970.
3. Employment Tribunal: On remittal, the tribunal found the Trust in breach of the Act. The remittal followed the Court of Appeal’s decision on 21 December 2005, which sent questions back to the tribunal, including whether tendering the domestic services or discontinuing the bonus scheme was gender discrimination: [2005] EWCA Civ 1608.