Brownbill v St Helens Hospitals NHS Trust

The Court of Appeal held that, for the purposes of section 1(2)(c)(i) of the Equal Pay Act 1970, discrete contractual provisions providing for enhanced pay for unsocial hours are terms capable of direct comparison with terms of a similar kind in the contracts of male comparators. The court applied the test in Hayward v Cammell Laird: a 'term' is a distinct provision with sufficient content to permit comparison. The Employment Tribunal had found such discrete terms existed but failed to compare them in accordance with Hayward; the Employment Appeal Tribunal was therefore correct to allow the claimants' appeal. The court distinguished Degnan on its particular factual features and emphasised the obligation, informed by Article 157 TFEU and related EU authority, to treat elements of remuneration component-wise to ensure transparency and effective review.

Background and parties: The appeal concerned five female employees (healthcare assistants and receptionists) of St Helens & Knowsley Hospitals NHS Trust who brought claims under the Equal Pay Act 1970 alleging that contractual terms for payment for unsocial hours were less favourable than terms in the contracts of male comparators (drivers, porter/drivers, theatre porter and car park attendants). The claims related to pay arrangements before Agenda for Change (pre-1 October 2004).

Procedural history: The Employment Tribunal decided a preliminary issue in favour of the Trust, holding that the unsocial-hours provisions formed part of basic pay and that the claimants could not rely on the comparators' formulae. Cox J in the Employment Appeal Tribunal allowed the claimants' appeal. The Trust appealed to the Court of Appeal.

Nature of the claim and relief sought: The claimants sought declaration and adjustment under section 1 of the Equal Pay Act 1970 that terms in their contracts relating to unsocial hours were less favourable than comparable terms in male comparators' contracts (a work of equal value claim under section 1(2)(c)(i)).

Issues framed:

• Whether the contractual provisions for unsocial hours in the claimants' and comparators' contracts constituted discrete, comparable 'terms' for the purposes of section 1(2)(c)(i).
• Whether, as a matter of law, the Employment Tribunal should have compared those discrete terms in accordance with the approach in Hayward v Cammell Laird rather than treating the unsocial-hours enhancements as necessarily part of a single basic-pay term (the approach in Degnan on its facts).

Court's reasoning: The court reviewed Hayward and related authority. It accepted the Employment Tribunal’s factual finding that the contracts contained discrete provisions capable of comparison. Applying the statutory language and the approach in Hayward, the court held that where a discrete term exists it must be compared with a term of a similar kind in the comparator’s contract; equality of total pay is not the proper focus. The court distinguished Degnan as depending on particular features that concealed the reality of the pay elements. It also relied on EU law (Article 157 TFEU and Directive 2006/54/EC) and Strasbourg jurisprudence emphasising transparency and the need to apply equal pay to each component of remuneration to permit effective review. Because the Employment Tribunal had not carried out the Hayward-style comparison, the Court of Appeal dismissed the Trust’s appeal and remitted the matters still outstanding (including appropriateness of comparators and the genuine material factor defence under section 1(3)) to the Employment Tribunal.

Other observations: The court noted there are many similar pending cases and expressed no view on the merits of the remaining factual issues.

The appeal by the Trust was dismissed. The Court of Appeal held that discrete contractual provisions for unsocial hours are terms capable of comparison under section 1(2)(c)(i) of the Equal Pay Act 1970 and that the Employment Tribunal should have carried out a Hayward-style comparison; the matter was remitted to the Employment Tribunal for further determination of outstanding factual and statutory defences.

Employment Tribunal (preliminary issue: found discrete terms but declined to transpose comparators' formulas); Employment Appeal Tribunal (Cox J) allowed the claimants' appeal (REF: UKEAT007410CEA); appeal to the Court of Appeal ([2011] EWCA Civ 903) which dismissed the employer's appeal and remitted outstanding issues to the Employment Tribunal.