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Employment Law

Legal guidance - compliance - software

06 FEB 2013

Haq and Others v The Audit Commission [2012] EWCA Civ 1621; (2013) EMPLR 010

Equal pay - pay protection policies


6 December 2011

Court of Appeal

Mummery, Lewison LJJ and Sir Mark Waller

The Court of Appeal upholds the EAT's conclusion that a pay protection policy which continued a pay disparity after two jobs of different seniority merged was a material factor justifying the difference in pay.

Posts of Inspection and Information Officers (IIOs - all women) were amalgamated with senior positions (SIIOs, a mix and men and women), creating 11 new posts. Two of those positions went to male former SIIOs. Those two males were paid more than the Claimants (all women) because the pay protection policy kept them on their previous pay band. The Claimants' pay was similarly protected and, in some cases, increased but not to the level of the former SIIOs.

The employment tribunal concluded that the pay protection policy was a material factor which explained the pay differential. So the outcome of the claim depended on whether that material factor (the pay protection policy) was discriminatory. The fact that the former IIOs were all women established a prima facie case of indirect sex discrimination, unless the policy could be justified on grounds unconnected with sex.

The tribunal concluded that the aims of the policy could have been achieved in a less discriminatory way by only appointing the ISOs to the new position and making the SIIOs redundant; or ‘freezing' their pay until the Claimants' pay caught up with them.

The EAT disagreed. Whether the pay protection policy was justified did not depend on whether the tribunal could think of a different way to avoid the pay disparity. The policy benefited the Claimants as well; and freezing the SIIOs' pay would not have helped because some Claimants' pay would then also have been frozen. Excluding the SIIOs would have prevented the Commission from appointing the highest caliber people and could have constituted unlawful discrimination against the SIIOs.

The Court of Appeal, by a majority, agreed.

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