Methven v Cow Industrial Polymers Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STEPHENSON,LORD JUSTICE DUNN,SIR STANLEY REES |
| Judgment Date | 15 April 1980 |
| Judgment citation (vLex) | [1980] EWCA Civ J0415-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 April 1980 |
[1980] EWCA Civ J0415-1
In The Supreme Court of Judicature
Court of Appeal
On Appeal from the Employment Appeal Tribunal
Lord Justice Stephenson Lord Justice Dunn and
Sir Stanley Rees
MR. JOHN HENDY (instructed by Messrs. Robin Thompson & Partners) appeared on behalf of the Appellants (Applicants).
MR. ALEXANDER IRVINE Q. C. and MR. A. BLAIR (instructed by Messrs. D. J. Freeman & Co.) appeared on behalf of the Respondents (Respondents).
I will ask Lord Justice Dunn to give the first judgment.
This is an appeal with leave of the Employment Appeal Tribunal from an Order of that Tribunal dated 14th March 1979 confirming in effect a decision of an Industrial Tribunal dated 6th June 1978, refusing the appellants a declaration that they were entitled to equal pay with a Mr. Munn, with whom they claimed they were employed by the Respondents on like work within the meaning of section 1 of the Equal Pay Act 1970 as amended by section 8 of the Sex Discrimination Act 1975. The Respondents admitted that the Appellants were employed on like work with Mr. Munn, so that by reason of Section 1(1) and (2) of the Equal Pay Act as amended an equality clause was deemed to be included in their contracts of employment, having the effect prima facie of entitling them to equal pay with Mr. Munn. But the Respondents relied on Section 1(3) of the Equal Pay Act which is in the following terms:
"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 difference (other than the difference of sex) between her case and his."
It was accepted in this court that the onus of proving that the equality clause did not operate lay on the respondents on a balance of probabilities (see National Vulcan Engineering Insurance Group Ltd. v. Wade 1978 ICR per Lord Denning, M. R. at p 808; and Shields v. E. Coomes (Holdings) Ltd. 1978 ICR per Lord Denning, M. R. at p 1171).
The facts of the instant case may be shortly stated. Both appellants and Mr. Munn were employed as clerks in the Production Department of the respondents. That department was divided into three: the mill, the press shop, and the trimming shop. Mrs. Methven and Mrs. Musiolik were the only clerks respectively in the mill and the trimming shop. Mr. Munn was the only clerk in the press shop. With one exception their terms and conditions of employment were identical. They were all three members of "staff" and eligible to join ASTMS, and they all three had certain entitlements as to sick pay, holidays, and flexibility of hours not enjoyed by "Non-staff". The exception was their rate of wages. Mr. Munn was on Grade C.2. The appellants were on a lower grade. The result was that he was paid £1.20 per hour whereas the appellants were paid 87p per hour and 89p per hour respectively. What was the reason for this inequality of wages? The evidence and findings of the Industrial Tribunal showed that for the past 25 years the job of press shop clerk had always been held by a male employee of long service with the respondents, who had been transferred to that work because of age and infirmity. The first was a Mr. Davies who was after many years transferred through age and ill-health from his job of press shop foreman to press shop clerk. A Mr. Lee was again through ill-health transferred from press shop foreman to press shop clerk in succession to Mr. Davies. Both Mr. Davies and Mr. Lee continued to be paid their foreman's wages. On Mr. Lee's death in 1963 while still employed by the respondents, a Mr. Harfield became press shop clerk. Mr. Harfield had already been transferred from theshop floor in the mill department to a half shop-floor and half clerical job in the press shop because of ill-health. Mr. Harfield had not been a foreman, but on becoming press shop clerk he too was paid the wages he had previously enjoyed. He was given a Grade 'C' grading and was put on the staff. These arrangements were all agreed by the Union. In 1974 Mr. Harfield died and was replaced by Mr. Munn as press shop clerk. Like Mr. Harfield, Mr. Munn had not been a foreman. He had been a manual worker. Because of age and ill-health he too had followed Mr. Harfield into the half shop-floor and half clerical job. When Mr. Munn became press shop clerk he was paid the same wages as Mr. Harfield, which were about £1 per week less than he had previously been paid in the half shop-floor and half clerical job. But he received the benefits of staff status and, as a result of a pay rise shortly after his transfer, he was paid more than he had previously been paid.
The Union objected to Mr. Munn's transfer and supported the appellants in their claim for equal pay. It was conceded on their behalf in this court that Mr. Munn, like his three predecessors, had been transferred to the job of press shop clerk because of old-age and infirmity. But it was said that the only variation between his contract of employment and those of the appellants was the rate of wages, and that that was due not to any personal characteristics of Mr. Munn but quite simply because it was the rate for the job which had been fixed by reference to the rate paid to Mr. Harfield. Reliance in support of this basic submission was placed on the cases of Snoxell v. Vauxhall Motors Ltd. 1977 ICR 700;Outlook SuppliesLtd. v. Parry 1978 IRLR 12;United Biscuits Ltd. v. Young 1978 IRLR 15;Shields v. Coomes (Holdings) Ltd. 1978 ICR 1151; and Clay Cross (Quarry Services) Ltd. v. Fletcher 1979 ICR 1 per Lord Denning, M. R. at p 5:
"The issue depends on whether there is a material difference (other than sex) between her case and his. Take heed to the words, "between her case and his." They show that the tribunal is to have regard to her and to him - to the personal equation of the woman as compared to that of the man - irrespective of any extrinsic forces which led to the variation in pay. As I said in Shields v. E. Coomes (Holdings) Ltd. [1978] ICR. 1159… section 1(3) applies when "the personal equation of the man is such that he deserves to be paid at a higher rate than the woman." Thus the personal equation of the man may warrant a wage differential if he has much longer length of service, or has superior skill or qualifications; or gives bigger output or productivity; or has been placed, owing to down-grading, in a protected pay category, vividly described as "red-circled"; or to other circumstances personal to him in doing his job."
Counsel for the appellants before us submitted that it was not Mr. Munn's wages that had been protected or "red-circled", but the wages for the job of press shop clerk which had been fixed without reference to the personal equation of Mr. Munn as compared with the appellants, but by reference to extrinsic forces, namely the rate that had been paid to Mr. Harfield.
Counsel submitted that the Industrial Tribunal had misunderstood the evidence of Mr. French the manufacturing manager of the respondents who had said: "I determined what Mr. Munn's salary should be. I decided it should be the same as Mr. Harfield's. He was paid that rate because it was the rate paid to the previous man". Accordingly, said Counsel, no reasonable tribunal could on the evidence have reached the conclusion that the respondents had brought themselves within section 1(3) of the Equal Pay Act, because the tribunalhad confused the reason transferring Mr. Munn to the job of press shop clerk with the reason for the variation of his pay with the pay of the appellants.
Counsel submitted the judgment of the Employment Appeal Tribunal showed that they too fell into the same error as the Industrial Tribunal. He referred in particular to the judgment at page 7 to F:
"But we do not accept the argument that there has to be an exact equation of the man's former pay conditions in his new job with what he had before. Here it seems to us that when he got this job because he was sick, he got the staff status which the woman also enjoyed. In that respect there was no difference between them. It does not seem to us that the fact that when he began initially he got less than he had received in his former employment prevents that from being a material difference. It would be absurd if he could be validly transferred on identical pay with what he got before but cannot be transferred with a slightly lower rate of pay so long as the reason for the transfer can be said genuinely to be a material difference. Nor does it seem to us of itself to prevent this from being a genuine, material difference that no reduction is made from his pay for the equivalent value of staff status and conditions or that on transfer he was given the same wage but refused the staff status which the women enjoyed. These may be factors to be taken into account but do not mean that the employer cannot succeed in establishing the material difference referred to in section 1(3)."
Finally counsel submitted that although the wages of a particular employee in a particular job might initially be protected or "red-circled", yet with the passage of time that protection could be eroded or the "red-circle" become blurred so that the variation in wages was no longer due to a "material difference" (other than sex) between the case of the woman and the case of the man as provided by section 1(3). In support of that submission counsel relied on the remarks of Mr. Justice Phillips in Outlook Supplies Ltd. v. Parry supra at p 14 para 11:
"The decision of an Industrial Tribunal under s.1(3) is one of fact, to be based on all the relevant circumstances. It may well be that in Snoxell & Davies v. Vauxhall Motors Ltd. we tended to...
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