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Equal Pay and the Law by Aileen McColgan

The Equal Pay Act [EqPA] was passed in 1970 in anticipation of Britain's impending membership of the (then) European Economic Community. It gave a right to equal pay where work was broadly similar or had been rated as equivalent by a job evaluation system (if an employer had chosen to conduct job evaluation), in each case subject to a "genuine material factor" defence if the employer could prove the pay difference was based on factors "not the difference of sex". Barbara Castle (then first Secretary of State for Employment and Productivity) declared the implementation of equal pay "a basic act of justice . . . another historical advance in our struggle against discrimination"[1].

The TUC, like the International Labour Organisation [ILO], had argued that women should be paid the same for work of equal value but Barbara Castle took the view that this approach was not required by Article 119 of the Treaty of Rome (now Article 141) and that in any event it was "far from satisfactory", "too abstract a concept to embody in legislation"[2]. According to Barbara Castle, the aim of the EqPA was to "eradicate discrimination in pay in specific identifiable situations by prescribing equally specific remedies"[3]. This, she said, would do "all that can be done in legislation, and goes far beyond anything in the law of other major countries". It was aimed at producing the same result as that mandated by ILO Convention No. 100: "remuneration established without discrimination based on sex"[4] and would, as a result, allow the U.K. to ratify that convention (some 20 years after its adoption by the ILO).

'Equal pay' was not a new issue in 1970. In the 1850s, the more radical sections of the press had carried articles condemning women's underpayment and equal pay had been discussed by the TUC as early as 1875 and was the subject of a unanimous resolution in 1888. Women's underpayment was, however, seen primarily, as men's problem - while women were available at rates of pay lower than those which a man would receive, men were always vulnerable to displacement. In the USA, Henry Ford's male workers downed tools during the second world war on discovering that women were being paid 50 cents to their 85 cents per hour. According to Nash P. and Gottheil L: "Ford eventually conceded the equal pay principle, but did not hire another women until the 1970s"[5].

The EqPA did not come into force until 29th December 1975, its implementation delayed to give employers the opportunity to prepare for the extra costs (estimated to be as much as 18% of the [then] annual wage bill in the clothing sector, and up to 32% in individual firms). Very importantly, in addition to the individual claims it provided in respect of like work and work rated as equivalent, the EqPA also provided that women were entitled not to suffer discrimination on the basis of sex "where their terms and conditions of employment are laid down in collective agreements, statutory wages orders or employers' wage structures" (i.e., 'men's rates' and 'women's rates'). This provision was to prove very significant but was limited in the end by its application only to overt sex discrimination and was removed by the Conservative government in 1986.

Between 1970 and 1975 Agricultural Wages Boards and Wages Councils eradicated 'male' and 'female' rates and full-time women workers' average hourly rates, relative to those of men, increased from 63% to 71%. Progress slowed almost at once, however, this figure peaking at 74% in 1977 and never increasing beyond 73% between then and 1984. In 1979, Incomes Data Services claimed that "women's first response [to the Equal Pay Act and the Sex Discrimination Act 1975] has modulated over four years from hope to something near disenchantment" and reported disillusionment with and within the Equal Opportunities Commission [EOC][6]. The EOC's Annual Reports drew attention to the lack of progress and in 1982 the ILO's Women at Work claimed that women in the U.K. were "gradually losing their fight for equal pay"[7]. 1983 ILO figures showed that, while British women fared better (relative to their men) than women in the Republic of Korea, Ireland, Luxembourg and Switzerland (and, in 1981, than women in Greece or Kenya), they did less well, in both years, than women in Belgium, Finland, France, West Germany, the Netherlands, New Zealand and substantially worse (relative to men) than women in Australia, Denmark, Norway, Burma, Sri Lanka, El Salvador and Sweden.[8]

Article 119 referred not to "work of equal value", but rather to the apparently narrower "equal work" and, more conservatively still, to "the same work", "the same job". As early as 1961, the Member States began to consider Article 119's "equal pay" increasingly as referring to "work of equal value" and, though their agreement of December 1961 to achieve pay equality by the end of 1965 ended in failure, Council Directive 75/117 defined "the principle of equal pay for men and women outlined in Article 119 . . . [as], for the same work or for work to which equal value is attributed, the elimination of all discrimination on grounds of sex with regard to all aspects and conditions of remuneration" (emphasis added). The UK Government made no attempt to amend the EqPA to take account of the Equal Pay Directive, but in 1982 the European Court of Justice [ECJ] ruled in favour of the European Commission in proceedings against the UK for failure to give effect to the obligation imposed upon it by the Directive to secure equal pay for work of equal value. The UK was obliged to amend the EqPA to include an equal value claim and did so, albeit with poor grace, the amending Regulations being steered through the House of Commons by a drunk and derisive Alan Clark.[9]

Even before the amendment of the EqPA to allow claims in respect of work of equal value, British women had begun to benefit directly under EC law. In Defrenne v Sabena (No. 2) (1976) the European Court of Justice had accepted that Article 119 had both vertical and horizontal direct effect - that it gave rise to individual rights which were enforceable, in the courts of the Member States, against both private individuals and the Member States themselves.[10] Later decisions, in particular that in the Bilka-Kaufhaus case, allowed pay challenges based on indirect, as well as direct, discrimination.[11] This influenced the interpretation of the material factor defence established by the EqPA: where the factor relied upon by the employer was one which impacted disparately upon men and women, it would not be a factor "not the difference of sex" unless reliance upon it was objectively justified in line with the test adopted by the ECJ in Bilka-Kaufhaus and subsequent cases.

In Barber v Guardian Royal Exchange Assurance Group the Court applied Article 119 to pensions.[12] This had a huge impact on UK pension provision. More recently much of the litigation has concerned the extent, to any, to which women can challenge pay discrimination in the absence of a male comparator employed by the same employer on like work, work rated as equivalent, or work of equal value. Such challenges are fundamental to tackling the part of the gender pay gap whish is associated with the segregation of women workers into low paying, predominantly part-time workplaces in which there are few if any potential male comparators. Attempts were made in the Lawrence v Regent Office Care and Allonby v Accrington and Rossendale College, to convince the ECJ that contracted-out women workers should be permitted to compare themselves with men employed by their previous (public sector) employers whose work had been rated as equivalent before contracting-out. The ECJ did not accept that Article 141 (the successor to Article 119) applied in such cases but did, in Allonby, accept that equal pay claims could be made without reference to an actual comparator where the discrimination complained of (direct or indirect) was found in generally applicable statutory provisions. It is to be hoped that the inclusion of pay within the amended Equal Treatment Directive, which clearly provides that discrimination can be established by reference to a hypothetical comparator, will result in a change of approach by the European Court.

[1] 795 H.C. Debs (9 February 1970) col. 914.

[2] Ibid., cols. 915-916.

[3] Ibid., col. 917.

[4] Ibid., cols. 915-6. The UK was the 72nd state to ratify (in 1971, with Chile and the Netherlands).

[5 ] Nash P. and Gottheil L, Employment Equity: a Union Perspective, 2 Canadian Labor Law Journal 49, p.50

[6] The statutory body, set up under the Sex Discrimination Act 1975, which was responsible for promoting sex equality. It has now been absorbed into the Equality and Human Rights Commission.

[7] ILO (1982)(2) Women at Work, p.6.

[8] ILO (1983)(1) Women at Work, p.6.

[9] Clare Short MP suggested that he was drunk but was obliged to withdraw the allegation which she did so on the basis that 'the house understands that I meant what I said' (46 H.C. Debs (20 July 1983), col. 483). In his diaries [Clark A., Diaries (London: Weidenfeld & Nicholson, 1993) p.30 ff.], Clark admits to having attended a wine tasting which he left, at 9.40pm, with a 'muzzy' head and with only 20 minutes in which to come to grips with the 'virtually unmarked and unexcised' text of the regulations which he was to introduce to the House. Despite his assertion that the Government was 'committed to the full implementation of the [equal pay] directive, his tone gave rise to opposition claims that he was less than enthusiastic (46 H.C. Debs (20 July 1983), cols. 479-80). His response was to admit that 'a certain separation between express and implied beliefs is endemic among those who hold office' (Ibid., col. 481). No such shackles bound Tony Marlow M.P. who protested that the Equal Pay Act, as amended, stood as "an open invitation to any feminist, and harridan or any rattle-headed female with a chip on her bra strap to take action against her employer…. This is a charter for petticoat lawyers" (Ibid., col . 491).

[10] [1976] ECR 455.

[11] Case C-170/84 [1986] ECR 1607.

[12] Case C-262/88 [1990] ECR I-1889.

[13] Respectively Case C-320/00 [2002] ECR I-7325 and Case C-256/01 [2004] ECR I-873.

Aileen McColgan, King's College London and Matrix Chambers.

For further details of this area of law see McColgan, Just Wages for Women (OUP: 1997) for an historical and comparative analysis of equal pay law and McColgan Discrimination Law: Text, Cases and Materials (Hart: 2005, 2nd ed) for a relative up-to-date account.