Gibson and Others v Sheffield City Council

JurisdictionEngland & Wales
JudgeLord Justice Pill,Lady Justice Smith,Lord Justice Maurice Kay
Judgment Date10 February 2010
Neutral Citation[2010] EWCA Civ 63
Docket NumberCase No: A2/2009/0949
CourtCourt of Appeal (Civil Division)
Date10 February 2010

[2010] EWCA Civ 63

IN COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL

His Honour Judge Peter Clark

Before: Lord Justice Pill

Lady Justice Smith

and

Lord Justice Maurice Kay

Case No: A2/2009/0949

Between
Gibson & Ors
Appellants
and
Sheffield City Council
Respondent

Mr Thomas Linden QC and Ms Anya Palmer (instructed by Thompson Solicitors, Unison Legal Services) for the Appellants

Miss Beverley Lang QC and Mr Dominic Bayne (instructed by Sheffield City Council Legal Services) for the Respondent

Hearing dates: 1 & 2 December 2009

Lord Justice Pill

Lord Justice Pill:

1

This is an appeal against a decision of the Employment Appeal Tribunal (“EAT”), His Honour Judge Peter Clark presiding, dated 17 February 2009. The EAT dismissed an appeal by Mrs Lynn Gibson and others (“the appellants”) against a decision dated 26 March 2008 of an Employment Tribunal (“the Tribunal”) held at Sheffield, dismissing their claim against Sheffield City Council (“the Council”) under Section 1 of the Equal Pay Act 1970 (“the 1970 Act”). The Tribunal upheld the claim of other female employees against the Council and the Council's appeal against that decision was dismissed by the EAT.

2

The appellants are employed by the Council as carers, a term which includes escorts, those assisting special needs children from home to school, care workers and school supervisors (formerly “dinner ladies”). The successful employees were cleaners. The Council have throughout accepted that the female claimants in these groups performed work rated as equivalent to that of their male comparators for the purposes of Section 1(2)(b) of the 1970 Act, a rating based on job ratings contained in the 1987 “White Book” in manual grades 1 to 5. The comparators were male street cleaning workers and male gardeners whose basic pay was 33.3% and 38% respectively higher than that of the women.

3

The issue was whether the Council had proved the absence of sex discrimination under section 1(3) of the 1970 Act. That issue has been determined in the Council's favour without the Council being obliged to justify objectively the pay disparity. The Tribunal concluded that the pay differential was not 'tainted by sex', the expression used in Armstrong v Newcastle upon Tyne Hospital NHS Trust [2006] IRLR 124, to which reference will be made.

The Tribunal's findings

4

The pay differential has its origins in a bonus scheme for manual workers devised by the City Council in the 1960s. Following Government guidance that pay rises be related to increases in productivity, the Council employed management consultants to consider the operation of the City Engineers Department and report on “the different types of work and the types of bonus that could be introduced as well as the potential savings to be made by increases in productivity and the consequential reorganisation or reduction in staff” (Tribunal decision, paragraph 3.13). The consultants recommended (paragraph 3.17) that savings could be achieved “by providing productivity payments and thereby reducing labour, machinery and associated costs”. The Tribunal accepted (paragraph 3.23) that the introduction of bonus schemes for the comparator groups was “a true attempt to relate wages to productivity”. “Genuine schemes were introduced by which productivity at agreed levels produced entitlement to an agreed level of productivity bonus” (paragraph 3.35). “The aim was to improve productivity, recruitment, retention and increase pay without additional costs” (paragraph 3.37). “Productivity was measured against work study models and if 100 performance was achieved 33.3% bonus paid, for 110 performance 38%. Productivity was monitored by foreman and supervisors, bonus and timesheets completed and checked by pay clerks” (paragraph 3.38).

5

In the 1980s, the Council conducted a procedure described as “stabilisation” of the bonus scheme. The Tribunal referred (paragraph 3.42) to an agreement in relation to the mechanical sweeper operators made in February 1987. “The terms of this include a movement to flexible working including Saturdays and Sundays and a 39 hour week. All overtime was to be eliminated and the aim was to avoid fluctuation in wages by shift scheduling and an agreed target. There is an expectation of a high degree of flexibility in working practices and as a result the employees will have the benefit of stable and predictable wages”. The agreements reflect “a continuing element of an operational efficiency payment in return for 100 productivity, the payment being 33.3%”. The Tribunal concluded that “on balance … these agreements reflected agreement as to achieved productivity as an average for which, in addition to other agreements as to flexibility etc., the respondent agreed to maintain an average bonus of 33.3%, i.e. 100 performance” (paragraph 3.49).

6

The Tribunal noted (paragraph 3.53) that “there is no provision for reduction of operational efficiency payments in the event of a group failure to meet targets and therefore the only sanctions available are monitoring of the performance together with disciplinary action for failure to comply with required standards” (3.53). “It was part and parcel of the stabilisation and the balancing of the payments means that there is effectively no reduction or increase in pay … After some 10 years or so of the bonus schemes productivity levels had moved up to levels reflecting standard (100) performance or better and therefore this was reflected by giving an average of 100 performance for the street cleaning employees and 110 performance for grounds maintenance based on average productivity” (paragraph 3.55). “We were told that the bonus in relation to the gardening workers at 38% was based on average productivity levels achieved over a previous period of 2–3 years. We find this to be the case”. “We find that 110 performance had been identified as being achieved and therefore they received 38% bonus” (paragraphs 3.57–3.58).

7

The Tribunal heard evidence from some of the male comparators. It found that written terms and conditions of employment did not identify the productivity element of the wage as a separate figure and that there was no identification of any bonus element of pay in the payslips (paragraph 3.71 and 3.73).

8

No attempt was made to identify for new starters that they had pay entitlement based on a bonus. There were set targets for them to achieve but no expectation to show increases in productivity (paragraph 3.75). None of the comparators believed that their pay would be affected by a failure to meet targets (paragraph 3.78). The Tribunal found that very little qualitative assessment was required to determine whether work had been performed at levels required to meet the level of pay given (paragraph 3.79). The bonus had been introduced to increase productivity and thereafter preserve it. The level of productivity was maintained and the bonus preserved (paragraph 3.80).

9

The Tribunal noted that a job evaluation was conducted in 1987/88. As appears from a National Joint Council (“NJC”) for Local Authority Services (Manual Workers) report the assessment which led to the work of the appellants being assessed as of equal value to those of employees receiving these substantial bonuses was detailed and systematic. The Tribunal found that there was no indication that productivity was factored into job evaluations (paragraph 3.83). Having referred to a 1998 report of the Bonus Technical Working Group of NJC, the Tribunal stated, at paragraph 3.87:

“The key objective of single status is set out as to provide a fast and non-discriminatory pay and grading structure at local level for all employees. There is an expectation on Councils and trade unions to check that bonus arrangements remain appropriate, non-discriminatory and effective. At page 676 is stated, 'A key element in such an exercise will be to ensure that each bonus pay scheme is applied in a manner that complies with equal pay and sex discrimination legislation'. There are statistics at page 677 indicating the majority of the manual workforce is female (515,202 of 651,669), 57.3% of full-time men received bonus compared to 6.9% of full-time women and road worker groups followed by gardeners and drivers were the top 3 in a 'bonus league' and all are said to be male dominated groups.”

10

The Tribunal noted, at 3.90, a statement in the report:

“There is a further statement that if female groups are not given access to productivity bonus because they are already fully productive the employer is unlikely to be able to justify male groups receiving bonus irrespective of productivity levels or not giving female workers the same bonus for doing work of equal value at equivalent levels of productivity. This is effectively a warning from the National negotiating body as to the equal pay challenge inherent in the single status agreement.”

The employers were thus on notice of the potentially discriminatory effect of bonus schemes and that the schemes are the subject of “continuing negotiations between the management and trade union side” (paragraph 3.103).

11

Under the heading “Statistics”, the Tribunal stated that “it is clear that of the workers engaged by the [council] the vast majority in receipt of bonus payments are male. This is true no matter what analysis is made of whichever pool and whichever of the 3 dates of statistics are chosen”:

“3.114 From these can be seen that the vast majority of employees in the claimant group jobs are female. The figures vary from 84.7% to 100% but 10 out of the 14 are above 95%. Of the comparator jobs...

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