Landmark equal pay ruling

A £2bn landmark appeal court judgment on equal pay raises as many questions as it answers, lawyers claim.

Redcar & Cleveland Borough Council v Bainbridge; Surtees v Middlesbrough Borough Council concerned “pay protection” measures adopted by local authorities to provide employees, whose pay was to be reduced under a new job evaluation scheme, with a soft landing where the decrease in pay would be brought in gradually. The Court of Appeal held that the pay protection arrangements in these cases—which favoured male employees and on the face of it therefore, indirectly discriminated against female employees—could not be justified. Sian Keall, a lawyer at Travers Smith, says the law remains complex after the ruling. “The case decided that the structure set up to ease overpaid employees (predominantly male) onto lower wages was itself discriminatory. The question for an employer who uncovers an equal pay problem in their organisation is to what extent they can avoid the solution itself being tainted by discrimination.”

The easiest solution is simply to pay the underpaid employees more, she says, but that may not be commercially possible. Keal adds: “The other option is to reduce the pay of the over paid group—but this is difficult and can trigger consultation rights. In this case, the employer tried to smooth the transition to a lower pay rate over a period of time and has paid the price for this. The court did not conclude that this sort of smoothing is impossible but it will be difficult to achieve.”