Court of appeal finds that productivity bonuses “Tainted by sexism” must be objectively justified

15 February 2010

In Gibson & Others v Sheffield City Council, the Court of Appeal has held that, where there is an appreciable difference in pay between two jobs of equal value, one of which is carried out primarily by women and the other largely by men, the employer must show that the pay difference is based on objectively justified factors unrelated to sex. If it is not possible to show that any such objective justification exists, the difference in pay will amount to sex discrimination and will breach the Equal Pay Act 1970.

Facts

A bonus scheme, introduced in the 1960s, gave Sheffield City Council's manual workers extra pay to reward their productivity. No such bonuses were paid to carers and others doing traditionally female jobs. This productivity bonus created a disparity between the pay of men and women such that men employed by the Council were paid significantly more than women performing roles with equivalent job ratings.

In light of this, a group of female carers (led by Mrs Gibson) and a group of female cleaners (led by Mrs Crosby) brought Employment Tribunal claims against their employer, Sheffield City Council, under the Equal Pay Act 1970.

Case History

At the Employment Tribunal, the carers' claim was dismissed. This decision was based on the Council’s defence that the pay disparity was not based on gender but on the practical difficulties in applying bonus schemes to care work. The Tribunal agreed with this argument and held that the failure to pay a bonus to the carers was not tainted by sex and that, as a result, no objective justification for the difference in pay was required. By contrast, the cleaners won their claim as the Tribunal held that the productivity of cleaners could be measured and that the Council’s defence did not apply.

The Council appealed against the decision of the Employment Tribunal in relation to the cleaners but the Employment Appeal Tribunal upheld the earlier decision.

However, the carers (led by Mrs Gibson) also appealed and the Court of Appeal took a different view from that adopted by the Employment Tribunal.

Court of Appeal Judgment

The carers argued, in the Court of Appeal, that the Council had not proved the absence of sex discrimination under the Equal Pay Act 1970. In particular, they claimed that the Employment Tribunal had failed to appreciate that the case was one of indirect sex discrimination and that they should win their claim unless the Council provided an objective justification for the disparate treatment.

The Court of Appeal agreed with the Claimants and held that, on the facts, "the effect of the productivity bonus ... is discriminatory. A sexual taint is present. The impossibility of applying the productivity bonus to women's work, carefully reasoned by the Tribunal, is genuine enough but that does not remove the sexual taint from the operation of the scheme". The Court of Appeal went on to make clear that, as the bonus scheme had a disparately adverse effect on women's work compared with men's work, the Tribunal should have required the Council to show that there was an objectively justified factor unrelated to sex for the disparity.

On that basis, the Court of Appeal decided that the case would be remitted to the Employment Tribunal for arguments on justification to be considered. These arguments are yet to be heard.

Comment

This case highlights that, where there is an appreciable difference in pay between two jobs of equal value, one of which is carried out primarily by women and the other predominantly by men, the onus will be on the employer to prove that the pay differences are based on objectively justified factors unrelated to sex. Otherwise, employers are at risk of being found guilty of sex discrimination. Employers should bear this in mind when examining and seeking ways to eradicate historic bonus schemes.