Case law: defending equal-pay claims

Businesses taken to employment tribunal for paying men and women unequally will find it easier to justify the difference in pay following a recent Court of Appeal case - unless the reason for the difference amounts to sex discrimination.

Under the Equal Pay Act 1970, men and women are entitled to receive equal pay to that of a comparator of the opposite sex for like work. However, if an employer can show that the difference in pay is because of a "genuine material factor" that is not difference in sex, they are entitled to pay a man and a woman different rates.

Until recently, if the material factor relied upon amounted to sex discrimination, employers would also have to "objectively justify" the inequality in pay. This objective justification would require the employer to prove that the difference in pay between a man and a woman was:

• because of a real need on the part of the employer
• appropriate to achieve the objective and
• necessary to achieve that objective

A decision of the Employment Appeal Tribunal, reported here in December, cast doubt on this by holding that objective justification was required in all equal pay cases, regardless of whether they concerned sex discrimination, thereby making it more difficult for employers to raise a defence to equal-pay claims.

However, the Court of Appeal (in its decision in Armstrong v Newcastle Upon Tyne Hospital Trust [2005] EWCA Civ 1608) has re-established that there is no need for an employer to objectively justify a difference in pay unless the reason for the difference (ie the genuine material factor) amounts to sex discrimination.

Immediate

See the full transcript of the Armstrong judgment at www.bailii.org/ew/cases/EWCA/Civ/2005/1608.html