Grundy v British Airways Plc
| Jurisdiction | England & Wales |
| Judge | Lord Justice Sedley,Lord Justice Carnwath,Lord Justice Waller |
| Judgment Date | 23 October 2007 |
| Neutral Citation | [2007] EWCA Civ 1020 |
| Docket Number | Case No: A2/2005/1949 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 October 2007 |
[2007] EWCA Civ 1020
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Waller
Lord Justice Sedley and
Lord Justice Carnwath
Case No: A2/2005/1949
EAT/0676/04/RN
Ms J McNeill QC and Mr M Ford (instructed by Messrs Simpson Millar) for the Appellant
Mr C Jeans QC and Mr A Short (instructed by British Airways Legal Department) for the Respondent
Hearing date: Monday 26 February 2007
Mrs Grundy is a long-serving member of British Airways' cabin crew (CC). She was initially employed full-time, but in 1987 she took employment as support cabin crew (SCC). This was a new class of contract, set up under a collective agreement known as the Burford Bridge Agreement, between British Airways (BA) and what was then the single staff union. It provided for those cabin crew who elected to become SCC to nominate between 15 and 20 days in each 28-day period on which they wished to work. They were paid a daily rate for those of the nominated days on which BA offered them work. The arrangement thus had benefits of flexibility for both parties, but particularly for women like Mrs Grundy who, in the course of time, had childcare responsibilities. Until 1994 this was the only way in which cabin crew could work part-time. From 1994 recruitment of SCC was halted and crew were offered the option of fixed percentage hours equating to a third, a half or three quarters of full-time work. When employment as SCC was abolished in 2002, Mrs Grundy opted for a 75% CC contract.
While full-time and post-1994 part-time cabin crew were on an incremental pay scale which gave them annual increases, support cabin crew had no such increments (and initially no pension, paid holiday or sick pay). As a result, by the time these proceedings under the Equal Pay Act 1970 were heard, Mrs Grundy's pay was £13,589 as against the £17,499 paid to a man – Mr Wynne – who it was accepted was doing like work (also at 75% of full time) but had benefited as cabin crew from annual increments to which Mrs Grundy had not been entitled.
Hence the claim under the Equal Pay Act 1970. A concomitant claim under the Sex Discrimination Act 1975 was withdrawn at first instance. The Equal Pay Act as amended makes the following material provisions:
1(1) If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include …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
……………..
(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) …… must be a material difference between the woman's case and the man's;
……………….
The effect of these provisions can be summarised as follows: every woman's contract of employment includes an equality clause which entitles her to terms no less favourable than those of a man who does like work for the same employer, unless she has less favourable terms which are genuinely due to a material difference, other than the difference of sex, between her case and the man's. The self-evident purpose is to invite a case-specific inquiry which may become general only at the point where less favourable contractual terms for like work have been established and the employer is seeking to establish reasons unrelated to gender for the difference.
Because it required radical adjustments to pay schemes, the Equal Pay Act 1970 did not come into effect until 29 December 197On the same date the principal provisions of the Sex Discrimination Act 1975 were also brought into effect, dealing with the non-contractual treatment of women and doing so by means of structured concepts of direct and indirect discrimination quite different from the mechanism of the Equal Pay Act. As the EAT in the present case pointed out, the two statutes are mutually exclusive. The Equal Pay Act nowhere calls in terms for a collective assessment of disparate impact: it requires only a comparison between the woman's case and the man's.
How then does it come about that this case has been argued at each instance entirely in terms of disparate impact and justification? The explanation is to be found in the decision of the House of Lords in Glasgow City Council v Marshall [2000] ICR 19 This followed the House's decision in Strathclyde Regional Council v Wallace [1998] ICR 205, in which Lord Browne-Wilkinson reviewed the cases and concluded:
“…. [T]he Equal Pay Act 1970 has to be construed so far as possible to work harmoniously both with the Sex Discrimination Act 1975 and article 119. All three sources of law are part of a code dealing with unlawful sex discrimination … It follows that the words “not the difference of sex” where they appear in s.1(3) of the Equal Pay Act 1970 must be construed so as to accord with the Sex Discrimination Act 1975 and article 119 of the Treaty, i.e. an employer will not be able to demonstrate that a factor is “not the difference of sex” if the factor relied upon is sexually discriminatory whether directly or indirectly. Further, a sexually discriminatory practice will not be fatal to a subsection (3) defence if the employer can “justify” it …”
It is not necessary here to set out the facts of Marshall, save that they had produced a decision at first instance in the applicants' favour by a literal application of s.1(2) and 1(3) of the Equal Pay Act. Lord Nicholls, in the single reasoned speech, held that this was not the right approach. In order to advance a defence that the difference in pay was not due to the difference in sex, the employer
“must prove the absence of sex discrimination, direct or indirect. If there is any evidence of sex discrimination, such as evidence that the difference in pay has a disparately adverse impact on women, the employer will be called upon to satisfy the tribunal that the difference in pay is objectively justifiable. But if the employer proves the absence of sex discrimination he is not obliged to justify the pay disparity.”
At least three material points emerge from Lord Browne-Wilkinson's and Lord Nicholls' reasoning. First, sex discrimination enters the s.1(3) defence as an aspect of the onus resting on the employer: it has to be disproved, not proved. Secondly, if he can disprove discrimination, the argument is concluded in his favour; if not, he must go on to show objective justification. Thirdly, and importantly, Lord Nicholls holds:
“Whether a pay disparity has a disparately adverse impact on women is primarily a question of fact.”
The Watford employment tribunal (Mr Adamson, Mr Pepper and Mrs Scott) found in Mrs Grundy's favour and directed that her pay, adjusted to 75%, be brought with retrospective effect to the top of the cabin crew pay scale. There is no issue about the appropriateness of this relief. In arriving at it, however, the tribunal first considered whether Mrs Grundy's employment history, “with the failure of the Respondent to provide her with increments each year, was indirectly discriminatory on the ground of sex and unlawful”. They held the pay differential to be a “policy, criterion or practice of not paying increments to support cabin crew”, which “was to the detriment of a considerably larger proportion of women than men”. They went on to hold that it was not justified. The first of these findings must have been intended to reflect s.1(2)(b)(i) of the Sex Discrimination Act 1975 (as amended with effect from 12 October 2001), which, however, speaks of a “provision, criterion or practice”; but whichever of these elements the tribunal took to be at issue, what was in fact at issue was a contractual term, namely the provision for Mrs Grundy's pay, which was less favourable than Mr Wynne's notwithstanding that they were doing the same work. The second finding, on justification, reflected s.1(2)(b)(ii) of the Sex Discrimination Act.
On appeal to the EAT (Judge McMullen QC, Dr Fitzgerald and Ms Switzer), the same approach was adopted by the parties and (with an introductory explanation reflecting an understandable unease at the assimilation of the two statutes) by the appeal tribunal. The EAT declined to interfere with the ET's decision on justification but overset it on the issue of disparate impact. They held that the ET had erred in law in focusing on the small, disadvantaged, SCC group rather than on the larger, advantaged, CC group. They went on to hold that only the latter was permissible in law and, since it was common ground that this produced a nugatory difference, substituted a finding that there...
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