The hot topic which employment lawyers are talking about is equal pay. There is an air of expectancy in employment law circles. Current statistics indicate that whilst only 8,229 equal pay claims were brought in 2004/2005, this increased to 17,268 in 2005/2006 and to a massive 44,013 in 2006/2007. Many are forecasting that the number of claims will continue to rise.

In short, this is an area where all employers should be alive to the issues, both because the elimination of discrimination is important on economic and moral grounds, as well as a perception that public awareness of equal pay litigation is on the increase, making it all the more likely that an employer will face a claim. To date, equal pay litigation has been dominated by claims in the public sector, where trade unions are prominent. However, with the increase in representation of claimants by no-win no-fee solicitors, it is quite possible that equal pay litigation could move into the private sector, as well as areas of the country which have so far seen relatively few claims.

Despite the high numbers of equal pay claims accepted by the Employment Tribunals, there have not been a significant number of reported decisions during the last year. This is partially due to the length of time it takes for often complex equal pay cases to proceed to a substantive hearing. This article seeks to provide the reader with a round up of some of the recent case-law in the area, rather than summarise the basic legal principles, which have been covered in earlier articles in this publication.

Unlike a claim under the Sex Discrimination Act 1975, a claim under the Equal Pay Act 1970 ("EPA") will normally require an actual, rather than a hypothetical comparator. A claimant (who is usually female) must therefore identify a member of the opposite sex who either performs "like work", "work rated as equivalent" or "work of equal value" who is better remunerated than she is.

The decision of the Court of Appeal in Redcar arose from claims brought by women employed in manual jobs such as caterers and care workers seeking parity with male comparators such as road sweepers, gardeners and refuse collectors. The terms and conditions of employment for both groups were set out in a document called the White Book in 1988, which resulted from a nationally agreed job evaluation scheme ("JES") which followed negotiations between local authorities and relevant trade unions. In some cases, the female claimants sought to refer to comparators who were graded lower in the JES (i.e. their comparators’ roles were of less, rather than equal, value according to the JES). The Council argued that the women could not compare themselves with someone rated lower in the JES, as they did not perform "work rated as equivalent".

In a short and robust decision, the Court of Appeal adopted a purposive construction to its interpretation of the language of the EPA to make clear that a woman could compare herself to a man whose work is of less value than her own according to the JES.

This is a sensible conclusion, given the purpose of the equal pay legislation. To have decided otherwise could have led to a bizarre situation where an employer could demand more of a woman (resulting in a higher grading in a JES) and, in doing so, avoid a successful equal pay claim as her only comparator (who is paid more than she is) has a less demanding role.

The decision also highlights one shortcoming in the equal pay regime if its purpose is to secure fair pay for women compared with men. If a woman can only find a comparator whose job is of less value than her own, then she can only claim equal pay to her male comparator, rather than higher pay, which, according to the JES, is what her job is actually worth. This contrasts with a claim under the Sex Discrimination Act under which an employee can bring a discrimination claim in respect of non-contractual benefits by comparing herself with a hypothetical comparator.

In this case female police officers challenged the legality of "special priority payments" made to police officers to reward night-working. The claimants were not eligible for these bonus payments because they were unable to work throughout the night due to childcare commitments.

At first instance the Employment Tribunal held that although rewarding anti-social hours was a legitimate aim, it had not been carried out in a proportionate or reasonably necessary way. Instead the Tribunal found that the claimants could have been paid the bonus that they would have received had they worked the night-time hours.

The Employment Appeal Tribunal ("EAT") overturned this decision and held that the legitimate aim of the bonus scheme was to reward those officers working nights. That aim could not be achieved if those officers who did not work nights were paid the same amount.

This does seem to be a common-sense decision. Nevertheless employers should be mindful of the risks of introducing bonus schemes for which a smaller proportion of women than men are likely to be eligible without considering whether the scheme has a legitimate aim, and whether there are less discriminatory ways of achieving that aim.

We await the decision of the Court of Appeal in the Surtees case, concerning the legality of a pay protection scheme following the introduction of a JES designed to eliminate discrimination in the future.

The purpose of the pay protection scheme was to protect the salary stream of those who lost out under a JES. After the introduction of the JES, a number of women were successful in establishing that they were entitled to equal pay to those (predominantly male) employees covered by the pay protection scheme prior to its introduction. Nevertheless, they were not retrospectively entitled to the benefit of the pay protection scheme. The EAT held that the Council’s use of the pay protection scheme in this way was justified based on the need to cushion employees from the effects of a sudden drop in pay.

On the face of it, this decision does seem to exacerbate existing discrimination, at least for the duration of the pay protection scheme, when some employees will still be receiving higher pay than those women who have established that they have a right to equal pay. It will be interesting to see whether the Court of Appeal agrees with the EAT that that this type of scheme can be objectively justified.

Following the eagerly awaited decision of the EAT in the GMB case, many trade unions surely breathed a sigh of relief. That relief may be short-lived, however, as the decision has been appealed to the Court of Appeal and it is understood that it will be heard in May 2008.

At first instance the Employment Tribunal in this case found that the trade union had indirectly discriminated against its members who brought equal pay claims against Middlesbrough Metropolitan Borough Council. The basis of the finding of indirect discrimination was that the trade union had sought pay protection for predominantly male groups whose wages were to be reduced as part of a new pay and grading structure, in priority to obtaining good back pay deals for female groups who had equal pay claims.

The EAT overturned the Tribunal’s finding. In particular, it held that the union’s policy of placing as much emphasis as possible on the interests of those who lost out under the JES was a legitimate aim and "that it was difficult to see how it could be alleged that the means were inappropriate".

This is an important decision. The courts’ assessment of the extent to which a trade union can prioritise the interests of some of its members over others might ultimately affect the way in which trade unions approach negotiations over pay deals in the future. The Court of Appeal’s decision in this case is definitely one to watch.

One can see from this case-law round up that the latest decisions all relate to the public sector. However, there is no reason in principle why the same issues could not arise in the private sector, particularly where organisations are introducing new pay and benefits schemes. All employers need to be thinking about whether their pay structures are fair, and, if not, about the best means of eliminating any discrimination.