EAT Upholds Decision in Barnard Equal Pay Case: Examining Indirect Discrimination and Material Factor Defence

Citation: [2024] EAT 12
Judgment on

Introduction

The Employment Appeal Tribunal (EAT) case of Barnard v Hampshire and Isle of Wight Fire and Rescue Authority deals with complex issues surrounding equal pay claims and indirect discrimination within the context of employment law. It examines the application of the Equality Act 2010 to disputes concerning terms and conditions of employment when comparing workers on different contractual terms, and the proportionality of such differences in terms of achieving legitimate business aims. This case also touches upon the concept of like work and the relevance of maintaining operation competencies as a material factor in justification of pay disparities.

Key Facts

In the case at hand, Ms. V Barnard, who was not a trained firefighter and was therefore on “Green Book” terms, challenged the more favorable “Grey Book” terms enjoyed by her trained firefighter comparators while they were seconded to non-operational roles. Barnard claimed these terms should also apply to her since she was engaged in like work during the comparators’ secondment periods. When her internal grievance and subsequent appeal were rejected, Barnard resigned and pursued claims for equal pay and constructive unfair dismissal.

The tribunal initially found that while Barnard did like work with her comparators, the pay differences were justified by material factors that did not involve direct sex discrimination. It also held that the respondent’s reliance on these factors was indirectly discriminatory but was a proportionate means of achieving legitimate aims.

The legal principles at stake in this case revolve around the interpretation and application of the Equality Act 2010:

  1. Like Work (Section 65): The tribunal indeed found the appellant was doing like work with her comparators, fulfilling the requirements of like work under Section 65 of the Equality Act 2010.

  2. Sex Equality Clause (Section 66): The application of a sex equality clause would have been triggered if a term of the appellant’s contract was less favorable than her comparators (Section 66(1)).

  3. Material Factor Defence (Section 69): The central legal question was whether the differences in terms were because of material factors (Section 69(1)). The tribunal concluded that the disparities were due to the Green Book / Grey Book distinctions, which were material differences.

  4. Justification for Indirect Discrimination: The tribunal’s acceptance of indirect discrimination led to the application of a justification defence under Section 69(1)(b). For this, the tribunal must assess the proportionality of the material factors in light of legitimate aims.

  5. Constructive Unfair Dismissal: The tribunal also had to consider whether the lack of an equality clause constituted a fundamental breach of contract to support a claim of constructive unfair dismissal.

The EAT’s judgment heavily relied on established case law such as Paterson v London Borough of Islington, Beal v Avery Homes (Nelson) Limited, Bilka-Kaufhaus GmbH v Weber Von Hartz, and Bank Mellat v HM Treasury (No 2) to delineate principles of the material factor defence and proportionality test for indirect discrimination.

Outcomes

The tribunal’s decision was upheld on all counts by the EAT.

  1. Material Factor Defence: The requirement for operational competence, even when not in operational roles, was held as a valid material factor, even if there was evidence that the comparators might not be fully compliant.

  2. Justification of Indirect Discrimination: The tribunal was not convinced that the HOST exercise—which temporarily aligned Green Book and Grey Book HOST staff—undermined the necessity of maintaining separate terms for Grey Book employees.

  3. Constructive Unfair Dismissal: Since the tribunal found no error in the equal pay claim analysis, it automatically ruled out the breach of an implied equality clause, thus dismissing the constructive unfair dismissal claim.

Conclusion

The Barnard v Hampshire and Isle of Wight Fire and Rescue Authority case underscores the complexity of equal pay disputes and the rigours of establishing a justification defence for indirect discrimination under the Equality Act 2010. The EAT’s decision affirms the Tribunal’s broad discretion in applying the proportionality test to the justification of indirectly discriminatory wage disparities. Furthermore, it elucidates that operational competence requirements, enshrined in national agreements, can constitute a material factor justifying pay differences, even where day-to-day roles may appear alike. The case also reaffirms that the mere potential to level up terms does not compel an employer to do so if it genuinely threatens the proportionality of legitimate aims.

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