Secretary of State for Justice (Sued as National Offenders Management Service) v Bowling

Under section 1(3) of the Equal Pay Act 1970, an employer may rely on a non-discriminatory material factor that explains a pay difference. Where a better-qualified recruit starts higher on an incremental salary scale, the original difference in skills and experience may continue to explain later pay differences because the scale perpetuates the starting-point differential. The fact that the lower-paid employee later acquires equivalent experience or achieves the same performance rating may affect justification, but does not necessarily remove the factor’s causative effect. An explanation is not displaced merely because it originated in the past. The case was distinguished from a time-limited explanation that ceased to operate.

The claimant and a male comparator performed like work in the Prison Service. She started at spinal point 1, while he started at spinal point 3 because of his substantially greater relevant skills and experience. Both employees subsequently progressed one point annually on the incremental scale.

The Employment Tribunal accepted the material factor defence for the first year but held that, from April 2009, the claimant’s experience and performance had caught up and the original explanation no longer explained the difference. The Secretary of State appealed, arguing that the higher starting point necessarily continued to produce the differential under the incremental scale.

1. Appeal allowed; claim dismissed. The Tribunal had accepted that the comparator’s higher starting salary was genuinely explained by his relevant skills and experience and was not tainted by sex.
2. That finding, coupled with the operation of the incremental scale, necessarily explained the continuing difference in later years. Calling the explanation historical was unhelpful. The relevant question was whether it continued to explain the differential at the time under consideration.
3. The claimant’s acquisition of experience and equal performance ratings might have undermined the justification for the differential, but they did not undermine the causative effect of the original material factor. The policy would have applied equally to a woman with the comparator’s skills and experience.
4. The reasoning was consistent with Glasgow City Council v Marshall [2000] ICR 196. The Tribunal had referred to that authority but had not given proper effect to it. The case was distinguishable from Bury Metropolitan Borough Council v Hamilton [2011] ICR 655, where bonus arrangements had changed in character over time.
5. Benveniste v University of Southampton [1989] ICR 617 was distinguishable. There, the explanation was financial stringency which was limited by conditions and had ceased to operate. Here, the higher starting point was not time-limited and necessarily affected subsequent years.
6. The issue was not what the employer could theoretically have done by disrupting the established incremental arrangements. The issue was the actual explanation for the continuing differential. Since that explanation had nothing to do with gender, the section 1(3) defence succeeded.

• Employment Appeal Tribunal: allowed the Secretary of State’s appeal from the Employment Tribunal’s decision, and dismissed the equal pay claim.
• Employment Tribunal: accepted the section 1(3) defence up to April 2009 but upheld the claim from that date onwards. Its reasons were sent to the parties on 24 March 2011.