| DISCRIMINATION —Sex — Equal pay — Indirect discrimination — Union negotiating deal on terms and conditions of employment — Union prioritising future pay protection over claims for past unequal pay — Whether steps taken by union to persuade members to accept deal constituting means proportionate to legitimate aim of protecting future interests of whole membership — Whether deal indirectly discriminatory against members suffering past pay inequalities — Sex Discrimination Act 1975, ss 1(2)(b), 12(3) (as amended by Sex Discrimination (Indirect Discrimination and Burden of Proof) Regulations 2001)
Allen and others v GMB [2008] EWCA Civ 810; [2008] WLR (D) 243
CA: Tuckey, Smith and Maurice Kay LJJ: 16 July 2008
The striking of a deal by a trade union with a local authority as to terms and conditions of employment pursuant to a national collective agreement establishing a “single status” common pay and grading structure for all local authorities, which deal attempted to achieve compensation for some union members for past pay inequality as well as ongoing pay and employment protection for all members, was indirectly discriminatory since it constituted the application of a provision, criterion or practice which applied equally to men but was to the detriment of a considerably larger proportion of women than of men and since the means adopted by the union to persuade members to accept the deal, including mis-selling and manipulation, were not proportionate to the union’s legitimate aim of achieving single status with the minimum of losers.
The Court of Appeal so held when allowing the appeal of the claimants, Sheila Allen and 25 others, against the decision of the Employment Appeal Tribunal on 31 July 2007 whereby it (i) upheld the decision of an employment tribunal sitting at Newcastle upon Tyne on 6 June 2006, that the respondent trade union, GMB, had indirectly discriminated against the claimants within ss 1(2)(b) and 12(3) of the Sex Discrimination Act 1975, as in force at the relevant time, but (ii) allowed the union’s appeal from the tribunal’s decision on the basis that the union’s conduct had been justifiable within s 1(2)(b)(ii) of the Act.
Prior to 1997 gender-based pay inequalities were allowed to develop among local authority employees who were subject to varying terms and conditions of employment according to a system of categorisation of types of employment. In 1997 a national collective agreement was negotiated between trade unions and local authorities intended to bring all employees under a new system with a common pay and grading structure. The structure of the new “single status” system having been put in place at national level, actual pay scales and pay rates were to be dealt with in local agreements further to local job evaluation studies designed to eradicate historical inequalities. Such a study was carried out in Middlesborough and new terms and conditions were brought into effect on 1 April 2005 in the form of an agreement negotiated between unions, including the GMB, and Middlesborough Borough Council. The GMB gave priority to those of its members needing pay protection and to achieving equality and better pay for the future rather than to maximising claims for past unequal pay. The deal provided some women with compensation for historical inequalities in the region of 25% of the full value of successful equal pay claims and some women with none at all. The women claimed that the union’s prioritisation of pay protection and future pay over compensation for past inequalities was discriminatory, either directly or indirectly or by way of victimisation. The employment tribunal rejected the claim for direct discrimination and allowed the claims of indirect discrimination and victimisation. The tribunal found that the deal, having been potentially indirectly discriminatory in that the group disadvantaged by it were predominantly women, was not justified because of matters of concern regarding the union’s approach to the deal, including its failure to give the claimants a fully informed choice, its having manipulated them into accepting the deal by threatening job losses and its having failed to make plain to the claimants that they were being required to make some sacrifice in the interests of other members. The union successfully appealed the tribunal’s findings of victimisation and indirect discrimination to the Employment Appeal Tribunal where it was found that the indirect discrimination in the form of the deal struck was justified. Permission was granted to appeal that issue to the Court of Appeal.
MAURICE KAY LJ said that indirect discrimination arose under s 1(2)(b) of the 1975 Act, as in force at the relevant time, when a person applied to a woman a “provision, criterion or practice” (“PCP”) which he applied or would apply equally to a man but which was such that it would be to the detriment of a considerably larger proportion of women than of men. The woman’s claim then succeeded if the person could not show the PCP to be justifiable irrespective of the sex of the person to whom it was applied and she established that it was to her detriment. In the present case it was important to identify what was the PCP the application of which was said to have given rise to the indirect discrimination, because it was the PCP itself which must be shown to be justifiable if a finding of indirect discrimination was to be avoided. In this case the PCP was the deal made between the union and the council as a result of the union’s policy to achieve single status with the minimum of losers. Having established that the PCP had a legitimate aim, it fell to the union to justify it. It was common ground that the test for whether the indirect discrimination was justified was whether the means adopted by the union were proportionate to the attainment of a legitimate aim. The central question then became whether the mis-selling and manipulation, as found by the employment tribunal to have been carried out by the union in order to persuade members to accept the deal, could be characterised as the means to the attainment of the unions’s admittedly legitimate aim of achieving single status with the minimum of losers. The adoption of the PCP must have assumed that steps would have to be taken to persuade disadvantaged women to accept sacrifices, including forbearance from litigation to enforce perceived statutory rights, and such steps were therefore to be regarded as part of the means by which the achievement of the aim was to be pursued. To identify the means as the balance struck in the deal, as the Employment Appeal Tribunal had done, was too narrow a view of the concept of means, which concept was not inherently narrow. A number of different actions might each be part, and a necessary but not equal part, of the means of achieving the aim. The employment tribunal concluded that the PCP “involved persuading” the claimants and others in a similar position to make sacrifices. In other words, such persuasion and the form it took were part of the means. That was the correct approach to have taken and the employment tribunal did not fall into any material error when, on the basis of the facts found, it concluded that the means were disproportionate to the overall aim or aims. In this unusual case the employment tribunal had not erred in its approach to justification, and the Employment Appeal Tribunal had been wrong to allow the union’s appeal on that central issue. The appeal would be allowed, the decision of the employment tribunal on indirect discrimination reinstated and the matter remitted to the employment tribunal for a remedies hearing.
TUCKEY LJ and SMITH LJ agreed.
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