EAT Examines Material Factor Defence in Scottish Water v Lynne Edgar Equal Pay Case

Introduction

The Employment Appeal Tribunal’s judgment in Scottish Water v Lynne Edgar is a pivotal case examining the intricacies of equal pay claims within the context of the Equality Act 2010. The Honourable Lord Fairley has dissected several key topics within the realm of equal pay, focusing explicitly on the material factor defence and the consideration of bias in tribunal proceedings. This article delves into the critical aspects of the case, linking the legal principles directly to the relevant parts of the summary.

Key Facts

In Scottish Water v Lynne Edgar, the claimant, Ms. Edgar, brought forth an equal pay claim, juxtaposing her salary with a male comparator, Mr. B. Both individuals were employed as Corporate Affairs Officers with the respondent, Scottish Water, yet compensated differently within the same pay band. The crux of the case revolved around the material factor defence posited by Scottish Water, suggesting the pay discrepancy was due to Mr. B’s superior skills, experience, and potential, independent of sex discrimination.

An Employment Tribunal had initially directed itself to identify the decision-maker who determined Mr. B’s salary and concluded that Scottish Water failed to establish the material factor defence due to a lack of evidence. This decision was appealed by Scottish Water on the grounds of misdirection in law and alleged bias.

Legal Principles

Material Factor Defence under the Equality Act 2010

The case hinges on the interpretation of the material factor defence under Section 69 of the Equality Act 2010. This provision allows an employer to justify a pay difference between a male and female employee if attributable to a significant and relevant factor unrelated to the sex of the individuals concerned.

Objective Causation

Drawing upon Glasgow City Council v Marshall [2000] IRLR 272, the tribunal reiterates that causation for the purposes of the material factor defence is assessed objectively. The reasoning must not solely rely on the intent or recognition of a decision-maker at a specific moment but should establish a causal link between the alleged material factor and the pay disparity. Skills Development Scotland Co Ltd v Buchanan UKEATS/0042/10/BI is referenced to underscore that causation is an objective matter and not dependent on the current mindset of the employer regarding a disparity’s origin.

Requirement of Decision-Maker Identification

In analyzing the initial tribunal’s approach, the EAT critiques its fixation on identifying a specific decision-maker and temporal aspects while sidelining the fundamental query of why the pay difference exists. Invoking Benveniste v University of Southampton [1989] ICR 617, Lord Fairley indicates that an explanation for a pay discrepancy may not necessarily be reliant on a time-limited event.

Relevance of Post-Appointment Performance

The EAT also corrects the initial tribunal’s rejection of evidence pertaining to the comparative post-appointment performance of the claimant and Mr. B. The tribunal’s original stance deemed such evidence irrelevant; however, Lord Fairley clarifies that it is pertinent both for the cause of the initial salary decision and its continual justification, citing Bury Metropolitan Borough Council v. Hamilton and others [2011] ICR 655.

Outcomes

The EAT deems the tribunal’s pursuits for a decision-maker’s identity as legally superfluous, setting aside its judgment. An inevitable remit to a differently constituted Tribunal for a re-evaluation of the material factor defence follows. Interestingly, the EAT dissolves the need to address the bias allegations by simply setting the original judgment aside, as it becomes unnecessary to the decided case’s merits.

Conclusion

Scottish Water v Lynne Edgar underscores the necessity to strictly adhere to established legal principles when adjudicating equal pay claims. Lord Fairley’s analysis exemplifies the objective nature of causation in material factor defences and reorientates the focus towards the underlying cause for pay differences, rather than procedural formality surrounding decision-makers. The case also clarifies the relevance of post-appointment performance evidence in substantiating ongoing pay disparities. This decision serves as pivotal guidance for future tribunals and legal professionals navigating equal pay disputes under the auspices of the Equality Act 2010.