Strathclyde Regional Council v Wallace: HL 1988

Female teachers carried out the work of principal teachers but had not been appointed to the promoted post and were paid less than they would have received had they been so appointed. They claimed equal pay with male comparators who were appointed principal teachers. Like work was established and it was agreed that disparity in pay between the women and their male comparators was not based on sex. The tribunal had said that there was insufficient evidence to found a material factor defence in circumstances where there were a variety of reasons including financial restraints, administrative practices advanced by way of explanation for the failure to appoint, none of which were sex based.
Held: There was no need for objective justification which only arose when the employer was relying on a factor that was gender discriminatory – something that was not an issue in that case. The Equal Pay Act was not concerned with fair wages but only with sex related pay discrimination whereas the objective sought by the applicants had been to achieve equal pay for like work regardless of sex and not to eliminate any inequalities due to sex discrimination. Lord Browne-Wilkinson: ‘To my mind it would be very surprising if a differential pay structure which had no disparate effect or impact as between the sexes should prove to be unlawful under the Equal Pay Act 1970. The long title to that act describes its purpose as being:
‘An Act to prevent discrimination, as regards terms and conditions of employment, between men and women.” and
‘The cases establish that the Equal Pay Act 1970 has to be construed so far as possible to work harmoniously both with the Sex Discrimination Act 1975 and article 119. All three sources of law are part of a code dealing with unlawful sex discrimination: see Shields v. E. Coomes (Holdings) Ltd. [1978] I.C.R. 1159 and Garland v. British Rail Engineering Ltd. [1982] I.C.R. 420. It follows that the words ‘not the difference of sex’ where they appear in section 1(3) of the Equal Pay Act 1970 must be construed so as to accord with the Sex Discrimination Act 1975 and article 119 of the E.C. Treaty, i.e. an employer will not be able to demonstrate that a factor is ‘not the difference of sex’ if the factor relied upon is sexually discriminatory whether directly or indirectly. Further a sexually discriminatory practice will not be fatal to a subsection (3) defence if the employer can ‘justify’ it applying the test in the Bilka-Kauj/C/us case [1987] I.C.R. 11O.
In North Yorkshire County Council v. Ratcliffe [1995] I.C.R. 833, 839, this House expressed the view, obiter, that the Equal Pay Act 1970 has to be interpreted without introducing the distinction between direct and indirect discrimination drawn by section I of the Sex Discrimination Act 1975. That dictum must not be carried too far.
Whilst there is no need to apply to the Equal Pay Act 1970 the hard and fast statutory distinction between the two types of discrimination drawn in the Sex Discrimination Act 1975, this House did not intend, and had no power, to sweep away all the law on equal pay under article 119 laid down by the European Court of Justice, including the concept of justifying, on Bilka grounds, practices which have a discriminatory effect on pay and conditions of service. The law on article 119, whilst recognising that in many cases there is a de facto distinction between direct and indirect discrimination, does not draw the same firm legal demarcation between the two as does the Sex Discrimination Act 1975 which permits justification of indirect discrimination but not of direct discrimination. The correct position under section l(3) of the Equal Pay Act 1970 is that, even where the variation is genuinely due to a factor which involves the difference of sex, the employer can still establish a valid defence under subsection (3) if he can justify such differentiation on the grounds of sex, whether the differentiation is direct or indirect. I am not aware as yet of any case in which the European Court of Justice has held that a directly discriminatory practice can be justified in the Bilka sense. However, such a position cannot be ruled out since, in the United States, experience has shown that the hard and fast demarcation between direct and indirect discrimination is difficult to maintain.
From what I have said, it is apparent that, in considering section 1(3) of the Equal Pay Act 1970, the only circumstances in which questions of ‘justification’ can arise are those in which the employer is relying on a factor which is sexually discriminatory. There is no question ‘of the employer having to ‘justify’ (in the Bilka sense) all disparities of pay. Provided that there is no element of sexual discrimination, the employer establishes a subsection (3) defence by identifying the factors which he alleges have caused the disparity, proving that those factors are genuine and proving further that they were causally relevant to the’ disparity in pay complained of.’

and: ‘In my judgment the law was correctly stated by Mummery J. giving the judgment of the Employment Appeal Tribunal in Tyldesley v. T. M. L. Plastics Ltd. [1996] I.C.R. 356, in which he followed and applied the earlier appeal tribunal decisions in Calder v. Rowntree Mackintosh Confectionery Ltd. [1992] I.C.R. 372 and Yorkshire Blood Transfusion Service v. Plaskitt [1994] I.C.R. 74. The purpose of section I of the Equal Pay Act 1970 is to eliminate sex discrimination in pay not to achieve fair wages. Therefore, if a difference in pay is explained by genuine factors not tainted by discrimination that is sufficient to raise a valid defence under subsection (3): in such a case there is no further burden on the employer to ‘justify’ anything. However if the factor explaining the disparity in pay is tainted by sex discrimination (whether direct or indirect) that will be fatal to a defence under subsection (3) unless such discrimination can be objectively justified in accordance with the tests laid down in the Bilka [1987] I.C.R. 110 and Rainey [1987] I.C.R. 129 cases.’


Lord Browne-Wilkinson


[1988] IRLR 146


England and Wales

Cited by:

CitedSharp v Caledonia Group Services Ltd EAT 1-Nov-2005
EAT Equal Pay Act – Material factor defence – In an equal pay claim involving a presumption of direct discrimination the genuine material factor defence requires justification by objective criteria.
The . .
Lists of cited by and citing cases may be incomplete.

Discrimination, Employment

Updated: 07 May 2022; Ref: scu.235012