Job evaluation fails to stop equal pay claims

Ms Russell and others v South Lanarkshire Council [ET S/107667/2005] [2012]

In this article, Laura Hutchison Senior Enforcement Officer in the EHRC Scotland legal team reviews the Tribunal’s judgment in what we believe is the first decision in Scotland involving a legal challenge to the new pay and grading arrangements introduced by individual local authorities as part of the national Single Status Agreement. In this case the Tribunal found that that respondent’s own job evaluation scheme (JES) could not be used to successfully defend the equal pay claims.

As many readers will be aware, the Single Status Agreement was the agreement between local government employers and trade unions to bring together the negotiation arrangements for local government manual workers and Administrative, Professional, Technical and Clerical (APT&C) workers. To fulfil the equalities provisions of the Single Status Agreement, it was recognised that fair and non-discriminatory grading structures needed to be introduced by each Council and that jobs should be moved into the new unified grading structure using job evaluation. A Scottish Councils’ job evaluation scheme was developed and was adopted by most local authorities. However, a number of Councils developed and implemented their own scheme, including the respondent in this case. 

The claimant’s position
The claimants, Ms Russell and over one and a half thousand women, are employed by South Lanarkshire Council (SLC) in a range of female dominated jobs in catering, cleaning, home care services and classroom or school support roles. They claim SLC is in breach of the ‘equality clause’ in their contracts because they are paid less than comparators in male dominated jobs like refuse collection, land services and street cleaning and who they allege do work which is rated as equivalent or is work of equal value.

The respondent’s position
The respondent resisted the claims on the basis that the female and male jobs had been evaluated using a 'valid' JES under s.1(5) of the Equal Pay Act 1970 (EPA). They argued that the outcome of the evaluation was that the work of the claimants and their comparators was not equivalent and the male jobs were more demanding than the claimants’ jobs, thus explaining the difference in pay.

Tribunal procedure
Where a respondent defends an equal value claim on the basis that they have carried out a valid JES in terms of s.1(5) (now s. 80 (5) of the Equality Act 2010) the onus is on the respondent to satisfy the tribunal that their scheme meets the requirements of s.1(5). In particular, they need to show that the jobs of the claimant and her comparator have been given a value by a study that evaluates the demands of the jobs done by all or any of the employees under various headings, such as effort, skill and decision making.

If the tribunal is satisfied the scheme is a valid study, and the study has found the comparator job is of greater value than the claimant’s job, then the tribunal must find the jobs in question are not of equal value. However, the employer will lose this defence if the tribunal has reasonable grounds to suspect the evaluation is based on a JES that discriminates on grounds of sex or is otherwise unsuitable to be relied upon (s.2A(2A) of the EPA and now s.131 (6) of the EA 2010).

Decision - Is the ‘555 scheme’ a valid JES?
The SLC JES (known as the '555 scheme') takes a different approach from conventional JES and is based on analysing the tasks that are required to undertake the work, rather than analysing the demands of the job. The Tribunal agreed that just because there is a lack of evidence critically examining JES based on task analysis, this does not mean it is inevitable that the 555 scheme is not a valid JES. It was for the Tribunal to examine whether the 555 scheme is valid in terms of s.1(5).

The Tribunal applied the test set out by LJ Phillips in Eaton Ltd v Nuttall 1977 ICR 272 that a study must be “thorough in analysis and capable of impartial application.’ They also considered  Bromley & ors v HJ Quick Ltd 1988 ICR 623, and took the approach that a valid JES is required to be 'analytical in the sense that it values jobs in terms of the demands made on the claimant and her comparators under various headings' (p. 224).

The Tribunal was not satisfied that the 555 scheme is a valid JES for a number of reasons. First, it found that the 555 scheme did not measure all of the tasks that the claimants carried out. Second, it agreed with the view of two of the expert witnesses that the scheme was not capable of taking into account the demands placed on workers when they have to carry out more than one task at a time. Third, the scheme did not take into account all of the evaluated tasks to determine the grade for the job, only the top third.

The Tribunal also questioned whether the 555 scheme was sufficiently analytical. It found that the scheme was analytical to the extent that it analyses tasks. However, because the scheme is ‘restricted to the evaluation of tasks rather than the job as a whole’ (p.232) and doesn’t take into account all the tasks that make up the job, the Tribunal was not satisfied that the 555 scheme had measured and compared the demands of the claimant and comparator jobs in the way required by s.1(5). 

In response to the respondent’s position that the trade unions had agreed to the use of the 555 scheme and that the Equal Opportunities Commission (EOC) had not disapproved of the scheme, the Tribunal clarified that even if the scheme had been endorsed by either the trade unions or the EOC this would not be sufficient to establish the validity of the scheme.

In the event that they were wrong in their approach to the validity of the scheme, the Tribunal then went on to consider whether there was evidence to reasonably suspect that the evaluation of the claimant and comparator jobs was made on a system that discriminates on grounds of sex (s.2A(2A)(a)) or was otherwise unsuitable to be relied upon (s.2A(2A)(b)).

Were the evaluations based on a discriminatory JES?
In deciding whether there was a reasonable suspicion that the scheme discriminates on grounds of sex, the Tribunal accepted the respondent’s position that their consideration should be  limited to whether the factors in the scheme that are used to evaluate tasks discriminate on the basis of sex. In the Tribunal’s view this narrow interpretation of s. 2A(2A) (a) is compatible with Article 4 of the Equal Treatment Directive 06/54/EC, consistent with the EOC Code of Practice on Equal Pay 2003 and the approach of the European Court of Justice in Rummler v Dato-Druck GMBH 1987 ICR 774.

The Tribunal was not satisfied that the evidence, put forward by the claimants and their experts, created a reasonable suspicion that the scheme was based on a system that discriminated on grounds of sex. In particular, it found that omissions that were identified in the scheme applied to all jobs and there was no evidence that these had a particularly discriminatory effect.

Were the evaluations otherwise unsuitable to be relied upon?
In deciding whether the evaluations made under the 555 scheme were otherwise unsuitable to be relied upon, the Tribunal followed the approach taken in Surtees & Others v Middlesbrough Council ET 250139/03 that s.2A(2A)(b) ‘would encompass a situation where the Tribunal has reasonable grounds to suspect that the evaluation was inaccurate for any reason or combination of reasons.’

The Tribunal was satisfied that there were reasonable grounds to suspect the evaluations under the 555 scheme were ‘otherwise unsuitable to be relied upon’ for a number of reasons. First, it found that the scheme is not sufficiently transparent to allow an understanding of how the jobs of the claimants and their comparators were given a value. Second, the Tribunal, based on its assessment of the validity of the 555 scheme, was not satisfied that the respondents’ use of tasks analysis was ‘sufficiently thorough to produce reliable evaluations for comparative purposes.’ Finally, the Tribunal had ‘specific reservations’ about the reliability of the evaluations of comparator jobs in the Land Services Department. These jobs are placed on a pay point above their grade because they are required to undertake additional tasks. However, the Tribunal was not satisfied these tasks were actually being undertaken by employees in these jobs or that these additional tasks had been evaluated under the scheme.

This case is of particular interest because Scottish cases looking at the s.1(5) defence are rare and this appears to be the first case where a JES based on task analysis has been put to the test.

In its judgment, the Tribunal is careful to avoid suggesting that task analysis is not a valid approach to JES. However, in our view, the judgment indicates that employers adopting this approach may find it more difficult to convince tribunals that their JES meets the requirements of s.1(5), than may be the case if they adopted a more conventional approach.

The judgment is useful in reaffirming some of the steps employers are expected to take in the design, application and implementation of their JES. The judgment refers throughout to the EOC Equal Pay Code of Practice, guidance and checklists and the EHRC has reviewed and updated these resources to reflect developments in UK and European equal pay law. These are published on our website and include a series of equal pay checklists for employers and trade unions

Unless this decision is appealed to the EAT, the Tribunal will now go on to decide whether the claimant and comparator jobs are of equal value. In the meantime, it will be interesting to see whether the respondent will appeal the finding regarding the validity of the 555 scheme and if so whether the claimants would then challenge the decision to restrict the question of discrimination to the design of the factor plan and in doing so exclude other aspects of the scheme design, implementation and application from consideration.

Last Updated: 10 Jul 2014