Court of Appeal decision referenced regarding Haq

The appellants, nine women who became Inspection Support Officers (ISOs) on 1 October 2007, brought equal pay claims under the Equal Pay Act 1970. The principal legal issues were (1) whether there was a prima facie case of indirect sex discrimination (s.1 read with s.1(3) of the 1970 Act) arising from the amalgamation of Inspection and Information Officer (IIO) and Senior Inspection and Information Officer (SIIO) roles and the respondent's pay protection practice, and (2) whether any prima facie discrimination was objectively justified as pursuing a legitimate aim by proportionate means.

The Employment Tribunal found a prima facie case of indirect sex discrimination and that the employer had not shown objective justification. The Employment Appeal Tribunal allowed the employer's appeal. The Court of Appeal, by majority, dismissed the appellants' appeal. The majority concluded that the Employment Tribunal erred in its analysis of objective justification and that the respondent's pay protection (a grandfather/ pay-protection arrangement) could amount to a legitimate aim and be proportionate in the circumstances.

Key legal principles applied include the operation of the GMF (genuine material factor) defence under s.1(3) of the Equal Pay Act 1970, the need to identify any causative link between gender and pay disparity, and the structured proportionality inquiry for objective justification (legitimate aim and proportionate means).

Background and procedural posture.

• The claimants were nine female former IIOs who applied, together with two male former SIIOs, for 11 newly created ISO posts on 1 October 2007. The new posts were on the same grade as the old posts and the employer maintained employees' existing pay points as a pay-protection practice.
• The claimants lodged equal pay claims under the Equal Pay Act 1970, limited to the post-1 October 2007 period. The Employment Tribunal found indirect sex discrimination and rejected objective justification. The Employment Appeal Tribunal (Underhill P) allowed the employer's appeal and dismissed the claims. Permission to appeal to the Court of Appeal was granted; the Court heard the case on 5–6 December 2011, delivering judgment on 6 December 2012.

Nature of the claim and issues.

• (i) Relief sought: equal pay remedies under the Equal Pay Act 1970 for pay disparity flowing from the amalgamation and subsequent pay protection arrangements.
• (ii) Issues framed by the courts: whether the pay disparity gave rise to a prima facie case of indirect sex discrimination (requiring the employer to show a genuine material factor not tainted by sex under s.1(3)), and if so, whether the employer had objectively justified the disparity by showing a legitimate aim pursued by proportionate means.

Court of Appeal reasoning (summary).

• Majority view (Lewison LJ, Sir Mark Waller): The Employment Tribunal erred in law in its treatment of objective justification. Protecting pay on restructuring (a grandfather/pay-protection clause) can be a legitimate aim; the tribunal should focus on whether the means are proportionate and whether less discriminatory alternatives would have been effective in achieving the employer's legitimate aims. The Employment Appeal Tribunal was entitled to set aside the ET on that ground and to conclude that the employer's position could be objectively justified.
• Dissenting view (Mummery LJ): The ET was entitled on the facts to find a prima facie case of indirect sex discrimination because of the stark gendered composition of the pre-amalgamation roles and the disparate adverse impact after amalgamation. On justification, he considered the ET had not been shown to have erred on the point of showing sex-taint and would have remitted the justification issue to the ET for reconsideration in a structured way.

Wider context and implications. The judgment applies and reiterates principles on the GMF defence under the Equal Pay Act 1970, the need to examine causative links and statistics in indirect discrimination claims, and confirms that objective justification requires a structured proportionality analysis. The panel was split as to the proper disposal of the case on justification; the majority concluded the employer’s pay-protection policy could be legitimate and proportionate.

Appeal dismissed. By majority the Court of Appeal concluded that the Employment Tribunal had erred in law in its approach to objective justification; the Employment Appeal Tribunal was entitled to treat the respondent's pay protection (grandfather) arrangement as capable of being a legitimate aim and, on the material before it, to consider that the means adopted could be proportionate. The majority therefore upheld the EAT and dismissed the appellants' appeal. One judge (Mummery LJ) dissented on disposition, would have allowed the appeal on the indirect discrimination issue and remitted objective justification to the ET for reconsideration.

On appeal from the Employment Appeal Tribunal (Underhill P), UKEAT/0123/10/LA. The EAT allowed the Audit Commission's appeal by order dated 18 March 2011. Permission to appeal to the Court of Appeal was granted by the EAT on 11 April 2011. The Court of Appeal delivered judgment on 6 December 2012 ([2012] EWCA Civ 1621).