Gibson & Ors v Sheffield City Council

A substantial pay disparity between predominantly female and predominantly male groups performing work of equal value is indirectly discriminatory where compelling statistics and the history of the arrangements disclose a sex-based disadvantage. A genuine, gender-neutral explanation for introducing the higher payment does not itself remove that taint.

An employer may, in principle, prove that an apparent disparate impact is wholly unrelated to sex. Strong and longstanding statistical disparity, occupational segregation and stereotypical assumptions will usually make that difficult. If the employer cannot exclude sex discrimination, the disparity must be objectively justified under section 1(3) of the Equal Pay Act 1970.

Female carers, escorts and school supervisors employed by the Council performed work rated as equivalent to that of predominantly male street cleaners and gardeners. The men received consolidated productivity bonuses producing pay differentials of 33.3% or 38%. The Employment Tribunal accepted that the bonus schemes had genuinely been introduced to improve productivity and that comparable schemes were impracticable for care work. It therefore dismissed the appellants’ claims under section 1 of the Equal Pay Act 1970 without requiring objective justification.

The Employment Appeal Tribunal dismissed the appellants’ appeal on 17 February 2009. It held that the Council had negatived any sex taint by showing that the bonuses were genuinely related to measurable productivity and were inappropriate for the carers. The central issue before the Court of Appeal was whether that explanation removed the sex taint despite compelling evidence of disparate adverse impact, occupational segregation and stereotypical assumptions.

1. Appeal allowed unanimously. The finding that the pay differential was not tainted by sex could not stand. The case was remitted to the Employment Tribunal so that the Council could attempt to justify the disparity objectively.

2. Compelling statistics showed that the stabilised productivity bonuses had a longstanding, disparately adverse effect on women. The advantaged work was predominantly performed by men, while the disadvantaged care work was predominantly performed by women. The Employment Tribunal had also found that the occupations were historically perceived as men’s work and women’s work respectively. The resulting inference of indirect sex discrimination was not displaced merely because the original bonus schemes genuinely sought to improve productivity.

3. The fact that productivity could be measured in the male jobs but not in care work did not remove the sex taint. The women were already working efficiently, while the bonuses had been introduced to bring the men to an acceptable level of productivity. The inability to introduce the same type of bonus for the women therefore explained the structure of the scheme but did not establish that its adverse effect was wholly unrelated to gender.

4. Section 1(3) of the Equal Pay Act 1970 permits an employer, in principle, to show that an apparent disparate impact is wholly unrelated to sex. Smith LJ and Maurice Kay LJ regarded Armstrong v Newcastle upon Tyne Hospital NHS Trust [2006] IRLR 124 as correct on that point. Pill LJ held that Armstrong had no application to the compelling facts of this case. All three judges agreed that the Council had failed to discharge the burden.

5. Smith LJ explained that a non-discriminatory explanation must exclude indirect as well as direct discrimination. A tribunal must not treat an explanation which lacks direct discriminatory intent as sufficient. Where convincing statistics, historical occupational segregation and stereotypical assumptions coincide, it will be difficult to prove that the disparity has nothing to do with sex.

6. Smith LJ, with Maurice Kay LJ expressing the same caveat, corrected Armstrong’s step-by-step formulation. A woman triggers the section 1(3) defence by showing that she is paid less than an individual male comparator performing the relevant equivalent work. Group statistics are required where indirect discrimination is alleged, but they are not invariably required to bring the statutory claim into operation.

1. Court of Appeal (Civil Division): The appeal was allowed unanimously. The finding that the differential was free of sex taint was set aside, and the issue of objective justification was remitted to the Employment Tribunal.
2. Employment Appeal Tribunal: On 17 February 2009, His Honour Judge Peter Clark presiding, the EAT dismissed the appellants’ appeal. It held that the Council had shown that the productivity-related disparity was not tainted by sex and therefore required no objective justification.
3. Employment Tribunal: On 26 March 2008, the Tribunal dismissed the carers’, escorts’ and school supervisors’ claims under section 1 of the Equal Pay Act 1970. It upheld claims brought by cleaners, whose circumstances were materially different.