Council of the City of Sunderland v Brennan & Ors

For an equal-pay claim based on work rated as equivalent, an employer relying on a genuine material factor must show that the factor is not sex-tainted and is a material difference between the cases. Objective justification arises only where the factor is attributable to sex discrimination. A bonus scheme originally linked to productivity may cease to provide a genuine explanation where it has become a fixed part of salary. An appellate court will disturb factual conclusions for perversity only where no reasonable tribunal could have reached them.

Female employees of the Council brought equal-pay claims against male comparators whose jobs were rated as equivalent. The claims concerned bonus payments historically paid to predominantly male groups, including gardeners, refuse collectors and road sweepers, while predominantly female groups did not receive equivalent payments.

The Employment Tribunal rejected the Council’s genuine material factor defence, save for leisure centre attendants, finding that the bonus schemes had ceased to be productivity-based during the relevant period. The Employment Appeal Tribunal, in UKEAT/0241/09/CEA, dismissed the Council’s appeal and granted permission to appeal. The Council argued that the EAT had misunderstood the structured approach to the defence and that the ET’s central factual findings were perverse.

1. Appeal dismissed. The Employment Tribunal’s conclusion that the bonus schemes for gardeners, refuse collectors and road sweepers had long ceased to relate to productivity was a permissible inference from the evidence. The evidence was uncontradicted only in the sense that the claimants called no contrary witnesses; it was tested in cross-examination. The ET was entitled to evaluate it and rely on the absence of monitoring or remeasurement, the rarity of withheld or reduced bonuses, task-and-finish arrangements, early finishing, and the absence of any reduction in performance when the schemes were withdrawn.
2. The ET’s treatment of Mr Charlton’s Winter Gardens role was, at most, an error concerning one item of evidence. It did not undermine the ultimate conclusion, which rested on the wider factual findings.
3. The applicable perversity threshold, stated in Yeboah v Crofton [2002] EWCA Civ 794, was not met. An appeal on a question of law must not become a rehearing of parts of the evidence.
4. The Court rejected the argument that the EAT had omitted a necessary stage in the genuine material factor analysis. Glasgow City Council v Marshall [2000] ICR 196 required the employer to establish that the factor was genuine, causative, material, unrelated to sex and a material difference between the cases. Armstrong v Newcastle upon Tyne NHS Hospital Trust [2005] EWCA Civ 1608 [2006] 1 IRLR 124 restated that approach.
5. Once the preserved finding was that productivity no longer explained the differentials, the Council’s pleaded explanation failed. The resulting Enderby-type indirect sex discrimination required objective justification. The EAT had identified whether the explanation was sex-tainted and had correctly proceeded to objective justification. The additional payments could not be justified as rewards for work exceeding the basic work expected during the relevant period.

Lord Justice Rimer and Lord Justice Tomlinson agreed with Lord Justice Maurice Kay.

• Court of Appeal (Civil Division) [2012] EWCA Civ 413: dismissed the Council’s appeal.
• Employment Appeal Tribunal UKEAT/0241/09/CEA: dismissed the Council’s appeal from the Employment Tribunal and granted permission to appeal.
• Employment Tribunal: rejected the genuine material factor defence except for leisure centre attendants.