Judgment in Bury Equal Pay case

An Employment Tribunal has ruled that bonuses paid to male workers were not based on productivity from at least 2001, removing the one defence in an equal pay claim available to Bury Metropolitan Borough Council (“Bury MBC”). The hearing, which took place over twenty three days in February and March 2009, was solely to decide whether Bury MBC had a defence to any equal pay claims.

GMF Defence

Bury MBC were relying on a genuine material factor, or “GMF”, defence. This means that although Bury MBC accepted that those in predominantly “male” jobs did get paid more than those in “female” jobs, they claimed that this difference was not due to sex, but was due to something else – in this case, increase productivity in male dominated jobs. Bury MBC had to show that productivity was “genuine” and  “material”, and also that it was not discriminatory on grounds of sex . Genuine means it has to be the real reason Bury relied upon when deciding to give bonuses. Material means that the reason has to be substantial, it cannot be trivial or insignificant.

Bonuses

Bonuses were initially genuinely linked to productivity, but gradually that link became a sham; the bonus payments simply became part of the pay for the job.

The following groups of workers received bonuses:

-          Grounds Maintenance (33% initially, raised to 40%)

-          Highways and Engineering (up to 50%)

-          Refuse and Street Cleaning (33%)

-          Markets (33%)

-          Transport (33%)

Different schemes applied to each job, but the Employment Tribunal found the broad position to be as follows.

When the bonuses were first introduced, the amount and standard of work was regularly checked to ensure that bonuses were only being paid if the work was done to a certain standard. However, gradually the work was not checked, and instead it was assumed that the work was done at a level where the highest bonus would be achieved.

Over time, bonuses became almost guaranteed, and in some cases were consolidated into ordinary pay. Many witnesses said that although they remembered a bonus being withheld at some stage, this had not happened since the 1980s.

Another factor that the Tribunal took into account was that the bonuses were not reassessed when the work became easier due to mechanisation. This should have changed how productivity was measured, but no such change took place. In addition, the bonuses were paid when the workers were on holiday or off sick. This was another indication that they were not actually linked to productivity.

Pay Protection

There were two systems relating to pay that Bury MBC were trying to defend: bonuses, and pay protection. The latter is where a worker’s pay (typically a man’s or someone in a “male” job) is not decreased for a certain period of time after a pay review.

The Tribunal considered that the pay protection scheme was implemented because of a real need (to abolish the payment of bonuses and introduce single status) and it was also proportionate (as it only took place over three years, and was tapered). The Tribunal therefore concluded that pay protection was not unlawful.

The Tribunal found that Bury MBC had no GMF defence in relation to bonuses, but that they did have a GMF defence in relation to pay protection. Although this scheme was indirect discrimination on grounds of sex, it was justified.