Equal pay

Barton v Investec Henderson Crosthwaite Securities Ltd [2003] IRLR 332

This case of alleged sexism in the City concerned an equal pay (and sex discrimination) claim brought by a highly paid research director.

In 2001, she was awarded a bonus of 300,000 whereas a male research director was awarded a bonus of 1 million.

A tribunal found that the employer had made out a genuine material factor defence to the equal pay claim based on its concern about the male colleague being head-hunted.

The tribunal noted that the bonus policy was 'non-transparent' and that the employer had failed to comply with the statutory questionnaire procedure, but took into account that 'it is a vital component of the City bonus culture that bonuses are discretionary, scheme rules are unwritten and individuals' bonuses are not revealed.' This was because 'invidious comparisons would become inevitable.

If such comparisons were generally possible the bonus system would collapse'.

The tribunal took the view that the differentials in bonus were not 'consciously or subconsciously motivated or permeated by discrimination'.

In an important ruling on the burden of proof, the Employment Appeal Tribunal (EAT) upheld Ms Barton's appeal.

The employer had to prove that there were objective reasons for the differential that were unrelated to sex; corresponding to a real need on the part of the undertaking; appropriate to achieving the objective perceived; and that it was necessary to that end; that the difference conformed to the principle of proportionality; and that this was the case throughout the period during which the differentials existed.

No tribunal should be seen to condone a bonus culture involving secrecy and/or lack of transparency because of the potentially large amounts involved as a reason for avoiding equal pay obligations.

The EAT observed that the correct approach to the burden of proof in sex discrimination cases, in the light of section 63A of the Sex Discrimination Act 1975 (implementing the European directive on the burden of proof), is:

- It is for the applicant to prove, on the balance of probabilities, facts from which the tribunal could conclude, in the absence of an adequate explanation, that the respondent has committed an unlawful act of discrimination;

- If the applicant does not prove such facts, the case will fail;

- It is important to bear in mind that it is unusual to find direct evidence of sex discrimination.

Sometimes, the discrimination will not be intentional but, rather, based on the assumption that 'he or she would not have fitted in';

- It is also important to remember that the outcome at this stage of the analysis will usually depend on what inferences it is proper to draw from the primary facts found by the tribunal;

- At this stage, the tribunal does not have to reach a definitive determination that such facts would lead it to the conclusion that there was an act of unlawful discrimination.

The tribunal is looking at the primary facts proved by the applicant to see what inferences of secondary fact can be drawn from them;

- These inferences can include, in appropriate cases, any inferences that it is just and equitable to draw from an evasive or equivocal reply to a questionnaire;

- The tribunal must also decide whether any provision of any relevant code of practice is applicable and, if so, take it into account;

- Where the applicant has proved facts from which inferences could be drawn that the respondent has treated the applicant less favourably on the ground of sex, the burden of proof shifts to the respondent;

- It is then for the respondent to prove that there was no discrimination;

- To discharge that burden, it is necessary for the respondent to prove, on the balance of probabilities, that the treatment was in no sense whatsoever on the ground of sex;

- This requires a tribunal to assess not merely whether the respondent has provided an explanation for the facts from which such inferences can be drawn, but further that it is adequate to discharge the burden of proof;

- Since the facts necessary to prove an explanation would normally be in the respondent's possession, a tribunal would normally expect cogent evidence to discharge that burden.

In particular, the tribunal will need to examine carefully explanations for a failure to deal with the questionnaire procedure and/or code of practice.

Tribunal procedures

Jiminez v London Borough of Southwark [2003] IRLR 477

During the course of tribunal proceedings, a tribunal expressed its preliminary view that the employer had treated the employee appallingly.

It encouraged the parties to enter into discussions with a view to settlement.

There was no settlement and the tribunal ultimately ruled in favour of the employee.

The EAT allowed an appeal, finding that there was a real possibility of bias on the part of the tribunal.

The Court of Appeal restored the employment tribunal's decision.

The EAT was wrong to conclude that the preliminary views expressed by the tribunal displayed apparent bias without first obtaining the comments of the tribunal chairman on those matters.

Although the premature expression of a concluded view may amount to the appearance of bias, there is no reason why a strongly expressed view cannot be provisional, leaving it open to the party criticised to persuade the tribunal as to why that view was wrong and why the party's conduct was justified.

However, the more trenchant the view, the more the attachment of the label 'preliminary' may need to be scrutinised to see whether the view was truly preliminary and not concluded.

Nor does the encouragement of a settlement show that the tribunal's views were fixed.

Lord Justice Peter Gibson said: 'There is no impropriety in a tribunal encouraging the settlement of proceedings.' He added: 'A word of caution for tribunals who choose to indicate their thinking before the hearing is concluded.

As can be seen from this case, it is easy for this to be misunderstood, particularly if the views are expressed trenchantly.

It is always good practice to leave the parties in no doubt that such expressions of view are only provisional and that the tribunal remains open to persuasion.'

Unfair dismissal and bankruptcy

Grady v HM Prison Service [2003] IRLR 474

The Court of Appeal has decided that a bankrupt applicant can pursue a complaint of unfair dismissal.

Such a claim is personal to the applicant and is not a 'thing in action' which vests in the trustee in bankruptcy.

In essence, a claim for which the principal remedy is reinstatement is personal, rather than proprietary.

According to the Court of Appeal, the claim is of a unique kind which offers the restoration to the claimant of something which only the claimant can do.

To vest it in the trustee in bankruptcy would be of no appreciable benefit to the creditors, except to the extent that it might produce a money settlement and 'the creditors will probably be better served if the bankrupt can get her job back or a similar job in its place'.

Holiday pay

MPB Structure Ltd v Munroe [2003] IRLR 350

The Court of Session held that a term in an employee's contract which provided for holiday pay to be 'rolled-up' so as to form part of ordinary wages paid throughout the working year did not meet the employee's entitlement under regulation 16(1) of the Working Time Regulations 1998.

This addresses an issue left open in Blackburn v Gridquest Ltd [2002] IRLR 604.

By Martin Edwards, Mace & Jones, Liverpool