Equal pay: the “genuine material factor” defence

Case 3: The facts

The claimants made equal pay claims, comparing themselves with men doing work of equal value or rated as equivalent. The reason for the pay differential was that the men were paid a variety of bonuses. At a preliminary hearing, decided on the assumption that the claimants’ work was of equal value, the tribunal found the employers’ defence failed because the bonus schemes were a sham and not genuine. They were negotiated by powerful trade union-supported male groups as a way round the government pay freezes in the 1970s and had been left in place. They did not truly measure productivity but rather were tailored towards work carried out in any event.

The ruling

The Employment Appeal Tribunal upheld the tribunal finding that the bonus schemes were a sham and could not be used as a genuine material factor defence to the equal pay claims. The employers’ appeal on this matter was therefore rejected.

The EAT did uphold the appeal on one other aspect of the case, namely whether the absence of a bonus scheme had an adverse impact on women in one of the work groups compared.