City of Edinburgh Council v Wilkinson & Ors

For equal-pay purposes, an establishment is not necessarily confined to a single workplace. The proper question is whether it is fair and reasonable to treat the relevant employees as a distinct unit with a clear identity, having regard to the purposive context of Article 141 and the protection of equal-pay rights.

Employees may also be in the same employment where different establishments observe common terms and conditions. Commonality does not require identical terms. A collective agreement may govern both groups even though transitional pay and grading arrangements remain in force pending job evaluation.

The statutory hypothetical may be used where comparators are unlikely to work at the claimant’s establishment, provided there is a factual basis and it is shown that the comparator group would always be employed on common terms.

The Council appealed against an Employment Tribunal decision concerning equal-pay claims by former APT&C employees comparing themselves with former Manual Workers. The Tribunal held that the claimants and comparators were in the same employment under section 1(6) of the Equal Pay Act 1970, alternatively because they worked in the same service or were subject to a single source of pay.

The claimants cross-appealed the Tribunal’s conclusion that they and their comparators were employed at different establishments. The appeal concerned the meaning of establishment, the effect of the Scottish local-government Red Book collective agreement before completion of job evaluation, the statutory hypothetical, and the Article 141 single-source and same-service concepts.

1. Cross-appeal allowed; employer’s appeal dismissed. The claims were remitted to the Employment Tribunal to proceed accordingly.
2. Under section 1(6) of the Equal Pay Act 1970, establishment is not restricted to the claimant’s physical workplace. A purposive construction is required so that the provision does not undermine the Article 141 equal-pay principle. The relevant unit must be a fair and reasonable grouping with a clear identity and common purpose.
3. The Council was prima facie a single establishment. Its corporate identity, mobility clauses, centrally directed services, changing departmental structure and overlapping functions did not demonstrate distinct establishments. The Employment Tribunal therefore erred in treating the various workplaces as separate establishments.
4. The claimants and comparators were also employed on common terms and conditions. The Red Book replaced the Blue Book and Green Book as the governing collective agreement from 1 July 1999. Transitional use of former pay and grading arrangements pending job evaluation did not prevent the Red Book from governing both groups.
5. The same-service finding was also upheld. The single-source requirement asks who was responsible for setting and perpetuating the relevant pay arrangements and who could rectify them. That was the Council, despite the involvement of COSLA and historical arrangements made by predecessor authorities.
6. The earlier approach in Dumfries and Galloway was revised. The statutory hypothetical requires a factual substratum, but claimants need not prove a real possibility that comparators would actually be transferred to their establishment. It is sufficient to show that comparator employees would wherever employed be subject to the same terms and conditions.

• Employment Appeal Tribunal: allowed the claimants’ cross-appeal, dismissed the Council’s appeal and remitted the claims to the Employment Tribunal.
• Employment Tribunal, Edinburgh: judgment registered on 1 October 2008. It held that the claimants and comparators were in the same employment under section 1(6) of the Equal Pay Act 1970, alternatively in the same service or subject to a single source of pay.