Reading Borough Council v James

Under the Equal Pay Act 1970, once the statutory conditions for an equality clause are met and no material-factor defence succeeds, the less favourable term in the woman's contract is automatically modified. The resulting contractual right to the comparator's more favourable pay crystallises at that point.

The right continues unless the woman's contract is lawfully varied or terminated. It does not end because the chosen comparator later changes role, leaves the relevant employment, or has his pay reduced. The presence of other, lower-paid male comparators does not itself produce a further statutory modification or permit levelling down.

Female employees claimed equal pay arrears from 2002 after the Employment Tribunal found that their work was of equal value to that of their chosen male comparators, Mr Coleman and, for two claimants, Mr Peever. No material-factor defence had been established.

Mr Coleman was promoted in 2006. Mr Peever was moved in 2011 onto a single-status scheme at lower pay. Other male highways operatives remained employed at rates below Mr Coleman's. The Council contended that those events limited the claimants' arrears.

The Employment Tribunal rejected that contention in a judgment promulgated on 15 July 2017. The Council appealed on the temporal scope of the equality clause and the effect of continuing alternative comparators.

1. Appeal dismissed. The Employment Tribunal correctly held that the claimants' equal-pay rights, measured by their chosen comparators' pay when the statutory conditions were fulfilled, continued after the relevant changes affecting those comparators.

2. Section 1 of the Equal Pay Act 1970 operates contractually and automatically. Where the woman and her selected actual comparator perform work of equal value, a term in her contract is less favourable, and no material-factor defence is proved, an equality clause modifies her contract without awaiting a tribunal order. A later award declares and quantifies that pre-existing statutory modification.

3. The comparator is necessary to establish the discriminatory differential and the enhanced contractual term. Once that term has crystallised, however, common employment with that comparator is unnecessary to maintain it. The term remains until the woman's contract is validly terminated or varied.

4. The claimants were entitled to select Mr Coleman and Mr Peever as individual comparators. The Council could not substitute a supposedly more appropriate or representative male comparator. The continued employment of other male highways operatives at lower rates neither undermined the original comparison nor effected a further statutory modification of the claimants' contracts.

5. Mr Coleman's promotion did not alter the claimants' accrued contractual right to his higher rate. Similarly, Mr Peever's assimilation to the single-status scheme did not vary the contracts of the two claimants who neither agreed to a variation nor entered that scheme. The legislation contains no basis for reducing an equality-clause benefit merely because the comparator's circumstances subsequently change.

6. The appeal was therefore dismissed. The claimants' arrears remained assessable by reference to the crystallised equalised terms.

• Employment Appeal Tribunal: dismissed the Council's appeal: UKEAT/222/17.
• Employment Tribunal: judgment promulgated on 15 July 2017. It held that the claimants' equal-pay terms based on Mr Coleman and Mr Peever had crystallised and continued despite the later changes affecting them.