Armstrong and Others v Newcastle-upon-Tyne NHS Hospital Trust

These are two appeals against the order of The Employment Appeal Tribunal (HHJ Ansell, I. Ezekiel and PRA Jacques) ("the EAT") dated 22 November 2004. The proceedings concern claims to equal pay, and these appeals arise from the determination by the Employment Tribunal of preliminary issues. The appellants are domestic ancillary workers. The respondent ("NHT") is a hospital trust. In the first appeal (the "wrong comparator" appeal") , Mrs Armstrong and her co-appellants contend that the EAT wrongly held that female ancillary workers at NHT hospitals, other than the Royal Victoria Infirmary ("RVI") , could not use, as comparators for equal pay purposes, male ancillary workers at the RVI. In the second appeal (the "genuine material factor" appeal) , NHT challenges the rejection by the EAT of its defence that there was no genuine material factor justifying discrimination between male and female ancillary workers at the RVI.

The appellants can be divided into two groups: those employed at one of the four hospitals other than the RVI, who are known as the non-RVI claimants, and those employed at the RVI, who are known as the RVI claimants. The first group cannot treat the RVI porters as comparators for the purposes of article 141 unless NHT is a "single source" for the purposes of that article.

The equal pay claim covers the first and third periods set out below. NHT has not been the employer throughout those periods. NHT only came into existence on 1 April 1998 and represents the merger of two hospital trusts, whom I can call simply the Freeman trust and the RVI trust. These two trusts had come into existence as a result of the National Health Service and Community Care Act 1990. Starting in April 1991, the trusts each took over two of the four hospitals previously run by the Newcastle Health Authority ("NHA") . The precise mechanics and timing do not matter. For the purposes of this appeal, the period of time from 1988 to date can be divided into the following periods:

a) the period up to 1991, when the claimants and the male comparators were all employed by the NHA;

b) the period between 1 April 1991 to 1 April 1998, when the two trusts were in operation and the non-RVI claimants and the male comparators were employed by different trusts;

c) the period from 1 April 1998 when the trusts were merged so that the claimants and the comparators were all employed by the same employer again, namely NHT.

The equal pay claim relates to bonus payments, to which the domestic ancillary staff were entitled until the work was contracted out to private contractors. The appellants say that their work is of equal value to that of the porters at the RVI. The porters at the RVI were also entitled to these bonus payments. The tendering process was known as compulsory competitive tendering or "CCT". In 1985, NHA decided to put the domestic work out to tender and an in-house tender was accepted as a result of which the domestic staff, who were predominantly female, lost their right to bonuses. The portering work, on the other hand, was not put out to tender and as a result the porters, mostly men, retained their right to bonuses. NHT does not accept that the porters at the RVI can be taken as comparators by the non-RVI claimants ("the wrong comparator defence") . In addition, by its genuine material factor defence, it contends that there was a good reason for the distinction found by the Tribunal between the RVI claimants and the male porters at the RVI. I will need to examine both defences below. The Tribunal found against NHT on the genuine material factor issue as it held that some differences in the pattern of bonus payments had not arisen from material factors other than sex.

Legislative Framework

Section 1 of the Equal Pay Act 1970 ("the 1970 Act") provides:-

"(1) If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include (directly or by reference to a collective agreement or otherwise) an equality clause they shall be deemed to include one.

(2) An equality clause is a provision which relates to terms (whether concerned with pay or not) of a contract under which a woman is employed (the "woman's contract") , and has the effect that –

(a) where the woman is employed on like work with a man in the same employment –

(i) if (apart from the equality clause) any term of the woman's contract is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and

(ii) if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed, the woman's contract shall be treated as including such a term;

(b) where the woman is employed on work rated as equivalent with that of a man in the same employment –

(i) if (apart from the equality clause) any term of the woman's contract determined by the rating of the work is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and

(ii) if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed and determined by the rating of the work, the woman's contract shall be treated as including such a term

(c) where a woman is employed on work which, not being work in relation to which paragraph (a) or (b) above applies, is in terms of the demands made on her (for instance under which headings as effort, skill and decision) , of equal value to that of a man in the same employment –

(i) if (apart from the equality clause) any term of the woman's contract is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and

(ii) if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed, the woman's contract shall be treated as including such a term.

(3) An equality clause shall not operate in relation to a variation between the woman's contract and the man's contract if the employer proves that the variation is genuinely due to a material factor which is not the difference of sex and that factor –

(a) in the case of an equality clause falling within subsection (2) (a) or (b) above, must be a material difference between the woman's case and the man's and

(b) in the case of an equality clause falling within subsection (2) (c) above, may be such a material difference.

(4) A woman is to be regarded as employed on like work with men if, but only if, her work and theirs is of the same or a broadly similar nature, and the differences (if any) between the things she does and the things they do are not of practical importance in relation to terms and conditions of employment; and accordingly in comparing her work with theirs regard shall be had to the frequency or otherwise with which any such differences occur in practice as well as to the nature and extent of the differences.

(5) A woman is to be regarded as employed on work rated as equivalent with that of any men if, but only if, her job and their job have been given an equal value, in terms of the demand made on a worker under various headings (for instance effort, skill, decision) , on a study undertaken with a view to evaluating in those terms the jobs to be done by all or any of the employees in an undertaking or group of undertakings, or would have been given an equal value but for the evaluation being made on a system setting different values for men and women on the same demand under any heading.

(6) Subject to the following subsections, for purposes of this section –

(a) "employed" means employed under a contract of service or of apprenticeship or a contract personally to execute any work or labour, and related expressions shall be construed accordingly;

(b) …

(c) two employers are to be treated as associated if one is a company of which the other (directly or indirectly) has control or if both are companies of which a third person (directly or indirectly) has control.

and men shall be treated as in the same employment with a woman if they are men employed by her employer or any associated employer at the same establishment or at establishments in Great Britain which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes."

So the equality clause implied by section 1(1) of the 1970 Act only operates where employees are "in the same employment", and that expression is defined by section 1(6) .

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