Two important public sector equal pay cases

16 July 2009

We report on two important recent cases involving equal pay in the public sector, both of which reached the Court of Appeal.
 

Case one

In Hovell v Ashford and St Peter’s Hospital NHS Trust the Court held that a determination that two jobs were rated as equivalent under a job evaluation scheme (albeit with different points) does not itself necessarily mean they are of equal value. This has very significant implications for equal pay litigation generally and specifically in the NHS. To that end the detail is important.

Background
In this case, the claimant sought to compare herself with three male comparators who received a slightly higher score under the Job Evaluation Scheme (JES) than her, but were placed on the same band following the implementation of Agenda for Change (AfC), on 1 October 2004. Relying on her scores, the claimant argued that her job was of equal value to that of her male comparators for the period prior to the implementation of AfC, or alternatively that the difference in points was so slight that such a conclusion could be drawn. Importantly the claimant also maintained that a report from an Independent Expert (IE) was not needed.

Tribunal decisions
Both the Employment Tribunal (ET) and the Employment Appeal Tribunal (EAT) rejected the claimant’s argument concluding it was not appropriate to withdraw the requirement for an IE’s report (for the period prior to implementation of the JES) where the comparator’s job scored higher under the JES. It also held that it would be an error in law to classify two jobs of equal value on the basis that there was only a slight difference in points between them under the JES.

Court of Appeal
The Court of Appeal held that the ET and EAT had been wrong to imply that the ET could not find the work of a claimant and comparator to be of equal value without the assistance of an IE report. In accordance with the Employment Tribunals (Constitution and Rules of procedure) Regulations 2004 the Court of Appeal highlighted the role of the IE as restricted to that which, in the opinion of the tribunal, is reasonably necessary.

However, the Court of Appeal confirmed that to rely on the JES alone to show the work was of equal value was incorrect. The claimant must set out the difference in points (under the JES) and provide reasons as to why the difference should be ignored. It further confirmed the ET decision that a small difference in points was not of itself capable of establishing that jobs were of equal value.

Comment
The claimant had sought to have the IE removed from equal pay cases from the outset arguing that where two employees are rated as equivalent under a JES (graded the same under AfC or Single Status) their jobs are automatically of equal value for the period prior to the implementation of the JES. The Court of Appeal’s decision is therefore welcome in confirming that simply because two jobs are rated as equivalent under a JES does not automatically determine whether they were of equal value prior to its implementation. It is now clear that the decision on whether to use an IE’s report is one for the tribunal to make, using its own discretion.
 

Case two

TUPE and Equal Pay liabilities – Gutridge and ors v (1) Sodexo and (2) North Tees & Hartlepool NHS Trust

Background
In this case the claimants were employed by North Tees & Hartlepool NHS Trust (the Trust) until 1 July 2001 when under TUPE their employment transferred to Sodexo, as part of the transfer of the Trust’s domestic services to Sodexo. On 28 December 2006 the claimants issued equal pay claims for the period of their employment with both the Trust and Sodexo, naming as comparators maintenance assistants at the Trust who had not transferred to Sodexo.

The employers argued that the claims were out of time and should have been brought within six months of the transfer, as required by section 2ZA of the Equal Pay Act 1970.

Employment Tribunal decision
The Tribunal held in favour of the claimants concluding that the effect of TUPE was to transfer to Sodexo the Trust’s liability to pay women at the same rate as her male comparators. The effect of TUPE was also to deem that the women had always been employed by Sodexo. So as they were still employed by Sodexo at the time when they initiated their claims, time had not begun to run against them.

The Employment Appeal Tribunal (EAT) decision
The EAT upheld the tribunal decision in respect of the post transfer period. However it held that liability for acts done (or not done) by the transferor (the Trust) during the employment with it transferred to the transferee (Sodexo) at the time of transfer but that the time for enforcing those rights was limited to six months after the transfer.

The Court of Appeal
Upholding the EAT decision the Court of Appeal held by a majority that any entitlement to equal pay under the Equal Pay Act 1970 takes effect immediately upon the conditions for it being met, even though not enforced through the tribunals and recognised at the time. Therefore on a TUPE transfer, if there are inequalities in pay, transferring employees transfer on the pay they should have been paid in compliance with the Equal Pay Act and the transferred employee is able to claim that higher rate of pay, using a comparator in the previous employment.

However, the six month time limit for bringing an equal pay claim in respect of the period of employment with the transferor employer runs from the date of the TUPE transfer. This means that, so far as the claim for back pay is concerned, a claimant who issues a claim later than 6 months after a transfer can only go back as far as the date of transfer, even if that is less than the usual 6 years which claimants in equal pay claims seek.

Comment
This case is of potential importance in existing cases within the NHS, where it is at least arguable that mergers and reconfigurations of NHS Trusts are akin to TUPE transfers. It may limit the extent of back pay a claimant in that situation can claim. The equal pay team at Hill Dickinson are actively involved in cases which address this issue, and will keep you posted of further developments.