Appeal By Glasgow City Council Against (first) Unison Claimants; (second) Hbj Claimants (formerly "fox Cross"); And (third) Gmb Claimants
| Jurisdiction | Scotland |
| Judge | Lord Menzies,Lady Paton,Lord Justice Clerk |
| Judgment Date | 30 May 2017 |
| Neutral Citation | [2017] CSIH 34 |
| Docket Number | XA61/16 |
| Published date | 30 May 2017 |
| Court | Court of Session |
| Date | 30 May 2017 |
SECOND DIVISION, INNER HOUSE, COURT OF SESSION
[2017] CSIH 34
XA61/16
Lord Justice Clerk
Lady Paton
Lord Menzies
OPINION OF THE COURT
delivered by LADY DORRIAN the LORD JUSTICE CLERK
in the Appeal by
GLASGOW CITY COUNCIL
Appellant
against
(FIRST) UNISON CLAIMANTS; (SECOND) HBJ CLAIMANTS (FORMERLY “FOX CROSS”); AND (THIRD) GMB CLAIMANTS
Respondents
against
a decision of The Employment Appeal Tribunal dated 15 March 2016
Appellant: Napier QC, Miller (sol adv); Clyde & Co LLP
First Respondents: Dalgleish; Unison
Second Respondents: J J Mitchell QC; HBJ Gateley
Third Respondents: MacNeill QC, Parratt; GMB, Thompsons
30 May 2017
Introduction
[1] The issues in this appeal arise out of the delayed implementation of a national agreement, dated 1999, to bring about a move to single status for local authority employees. To effect the move the appellant conducted a Workforce Pay and Benefits Review (WPBR). The Review involved bringing staff and manual workers together under one pay scheme and extended to around 30,000 employees with 3,000 different jobs. Whereas prior to the Review the appellant operated separate pay agreements for APT&C (Administrative, Professional, Technical and Clerical) staff and manual workers, the Review involved bringing all APT&C staff and manual workers together under one pay scheme.
[2] To achieve this, a job evaluation scheme (“JES”) required to be carried out in order that the local authority could introduce a new, unified pay and grading structure. That process involved creating job “families”, developing role profiles, evaluating role profiles, and allocating role profiles to job families. That process enabled each job to be given a grade score. The appellant then assessed Work Context Demand (WCD) and each job was also given a score under that heading.
[3] It is recognised that when a JES of the kind described is carried out, some jobs might reduce in value with the result that the individuals in those jobs would be subject to a reduction in pay. Such employees are described as being “in detriment”. It is common practice to take steps by means of a Pay Protection Scheme (“PPS”) to protect the pay of such employees on a time limited basis, in the anticipation that any detriment would by the end of that period be ironed out by cost of living increases and the like. In the present case, a PPS was applied to employees in detriment for a period of three years.
[4] Three groups of the appellant’s employees brought claims under the Equal Pay Act 1970 (“EQP”). For convenience, they are referred to as the Unison, GMB or HBJ claimants. The fact that the methodology of the JES generated two different scoring mechanisms was an issue before the ET and EAT, and is the subject of a separate appeal. The employees also challenged pay protection provisions employed by the council, and it is the decision of the EAT in that regard with which this appeal is concerned.
[5] The ET found that the pay protection provisions used by the appelant were “tainted for sex” but that the arrangements were objectively justified. The claimants appealed to the EAT, which found that the ET had erred in law in its decision in relation to the pay protection provisions.
[6] In light of the decisions of the ET and EAT, the issues before this court are restricted to those elements of the PPS which related to transitional payments and assimilation. However, senior counsel for the appellant agreed with the EAT that these issues went together so he advanced no specific arguments in relation to the latter.
The Pay Protection Scheme
[7] Under the scheme, the relevant comparison was between pre-WPBR contractual earnings as at 1 April 2006 and WPBR earnings, the latter of which included grade pay, WCD pay and NSWP (non-standard working pattern) pay. The pre-WPBR contractual pay arrangements had included provision for various additional payments and allowances, including certain bonuses. Taken into account as part of the pre-WPBR earnings therefore were bonus payments, contractual overtime, contractual allowances and conditional overtime. Casual or irregular overtime and other payments were excluded.
[8] The issue arising in these appeals relates to the question of the pre WPBR bonus elements of pay earned by certain manual, mostly male, workers. These bonuses were lost as a result of the JES, with the consequence that the employees so affected were treated as “in detriment” and given the benefit of pay protection. They are referred to as being “red circled”. The appellant’s PPS consisted of three elements: transitional protection payments; assimilation, whereby a worker in detriment would be assimilated to a new pay grade that would at least match the pre-WPBR reckonable earnings and thus minimise his notional reduction in pay; and third, steps whereby employees would be assisted by the appellant to increase their skills and move up the grades using Employee Development Commitment (EDC). The latter is designed to allow “maintenance of their earnings in the long-term”. Employees who have been assessed, under the JES, as doing equivalent work as the “red circled” ones, but to whom the benefit of the PPS has not been extended are described as “green circled”.
[9] The adoption of such a PPS involving these three elements was not per se objected to. An argument relating to alleged discrimination in the application of the EDC is not repeated in the present appeal. The remaining arguments related to the issues of transitional payments and assimilation.
The decision of the ET
[10] The ET found that the payment of pre-WPBR bonuses gave rise to discrimination and that, in the case of those who received such bonuses, the loss of bonus led to pay protection.
[11] The findings made by the ET included the following:
“861. The [appellant] has made concessions in relation to the payment of bonus. We concluded that we cannot go behind those concessions, and therefore proceeded on the basis that the [appellant] has no defence in justification to the pre-WPBR bonus payments. … ..
862. The Tribunal concluded that some employees fell into protection by reason of the withdrawal of unjustified and discriminatory bonus payments. Some employees fell into pay protection for unidentified reasons that were not connected with bonus or any other reason shown to be tainted by discrimination. Not less than two-thirds of all those who fell into pay protection … were in the latter category.
...
881. On the facts found, the payment of an unjustified bonus was the reason why some employees received transitional payment. The majority – at least two to one – fell into protection for some reason other than the payment of bonus and the ground has not been laid for a finding that the reason for others falling into protection was tainted by sex”.
[12] The ET found at paragraph 883 that the appellant’s payment of bonus pre-WPBR gave rise to discrimination and at paragraph 885 that the appellant was fixed with constructive knowledge that its bonus schemes could not be justified at the time it took its decision on pay protection. It considered whether the payment of pay protection could be justified and found at paragraph 895 that:
“There is nothing to suggest that the [appellant’s] thinking in 2006 went beyond offering pay protection to the pre WPBR earnings of those who would otherwise have suffered an immediate loss of income. The [appellant] did not consider for a moment offering anything by way of pay protection to those employees who would not suffer an immediate drop in earnings. ... To put it simply, the [appellant] was interested in protecting the pay of the “losers”, that is those who would otherwise see an immediate cash reduction in their pay packets, and not add to the pay of those perceived as ‘gainers’.”
Having made that finding the ET then considered whether the appellant’s actions were objectively justified. An attempt to justify on the basis of cost was rejected by the ET (para 897):
“The [appellant] is in some difficulty in seeking to justify its position on cost grounds as the Tribunal has not been shown any evidence as to even an approximate cost of extending transitional payments or the cost of extending transitional payments on a range of possible premises and, of equal importance, the resources that might have been made available to meet those costs. As much as the Tribunal has heard is that the costs would have been ‘enormous’. That really is not sufficient to mount an attempt at justification based on cost.”
The ET then found at paragraph 900, as follows:
“Recognising that the [appellant] continued the discriminatory effect of the former bonus payments by the use of the transitional payment (sic). The Tribunal concluded that the [appellant’s] actions to meet their legitimate objectives pass the test of proportionality for these reasons.”
The reasons were first, the effect of the WPBR. The ET stated that the effect of the WPBR (para 901):
“... was to put in place pay arrangements that resulted in only some of those who previously were paid bonus falling into pay protection. .”
On this basis the Tribunal concluded that the consequence of the WPBR had been immediately to reduce the discriminatory effect of the former bonus arrangements.
[13] Second, in respect of proportionality, at least two-thirds of those who fell into protection were from the APT&C sector, where bonus was not an issue. Protection of former discriminatory bonus payments was probably an issue in less than a third of all cases of pay protection. The Tribunal balanced that “against the advantage of a rule that treated alike all of those whose reckonable pre WPBR earnings exceeded reckonable WPBR earning”(para 902)- meaning, in other words, irrespective of whether bonus had been a component in placing them in detriment. This was a proportionate response.
[14] The third reason was the transitional nature of pay protection, which was limited...
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(first) Julie Armstrong And Others ("the Hbj Claimants) Against Glasgow City Council And (second) Jennifer Mcdonald And Others ("the Unison Claimants") Against Glasgow City Council
...the same factual background as that discussed in the earlier decision of this court in Glasgow City Council v Unison Claimants and Others [2017] CSIH 34. That appeal concerned the respondent’s pay protection provisions, whereas these appeals are concerned with the validity of the respondent......