Employment law Case Update: Reading Borough Council v James and others
Ms James brought a claim under the Equal Pay Act 1970 (the Act) for arrears in pay dating back to 2002 when her employment began with Reading Borough Council (the Council). Section 1 of the Act provides that, if a term of a woman’s contract is less favourable than a term of a man’s, and they are employed on work of equal value and there is no material factor to explain the difference, then an equality clause is automatically implied to equalise the less favourable term in the woman’s contract to bring it in line with the more favourable term in the comparator man’s contract. The comparator under the Act must be an actual person rather than a hypothetical one. Although these parts of the Act are no longer in force, similar laws have been brought in since.
Ms James used two male colleagues as her basis for comparison; Mr Coleman, a highways operative, and Mr Peever, a tractor driver.
Mr Coleman was paid higher than all other highways operatives who were employed at the Council when Ms James began her employment. In 2006 he was promoted to a senior highways operative. Mr Peever was also used as a comparator because, like Mr Coleman, he too performed work of equal value to Ms James. In 2011, Mr Peever’s job was assimilated into a Single Status Scheme and his pay was decreased. Ms James was made redundant in 2011. She then brought her claim to the Employment Tribunal and the case subsequently proceeded the Employment Appeal Tribunal (EAT).
The Council argued that due to the changes in Mr Coleman’s and Mr Peever’s roles and pay, neither was a valid comparator for Ms James’ claim. The EAT rejected this argument, claiming that the changes in pay were irrelevant to this case. Once the equal pay rights were formed in 2002 in comparison to Mr Coleman and Mr Peever, those rights continued until they were lawfully varied (perhaps by renegotiation) or terminated. The Council could not rely on the fact that their pay had changed.
The Judge stated that he could ‘see no ground for denying them compensation on this basis, even if the quantification of their arrears claims is made more difficult in practice because Mr Coleman's pay fluctuated’. The Appeal was therefore dismissed.
It’s important for employers to be aware of historical pay anomalies. Getting your pay structures right now doesn’t remove the risk of a historical claim. You should make sure any differences in pay between members or staff can be evidenced and justified.
This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.