Piggy in the middle

The recent ruling in McAvoy and others v Tyneside Borough Council (UKEAT 0006/08) has clarified an issue that has been unresolved for nearly 40 years and confirmed that 'piggyback' claims can be brought under the Equal Pay Act 1970.

Employment practitioners as well as employers will now wait anxiously to see whether the decision is appealed to the Court of Appeal as a number of uncertainties still remain in respect of such claims.

The case concerned multiple equal pay claims brought by a group of women, in predominantly female jobs against three borough councils in the North East. The claims related to bonus schemes paid to men, in predominantly male jobs. The women's equal pay claims were successful and they were awarded arrears of pay. A small group of men, who worked alongside the female claimants, brought contingent equal pay claims (also known as 'piggyback' claims) at the same time as the women. The men argued that they should be entitled to equivalent payments, relying on the successful women as comparators.

The central question in this case was whether a man, carrying out the same work as a woman who had brought a successful equal pay claim, could bring his own claim under the Equal Pay Act 1970 on the back of the woman's claim. The case considered whether a tribunal in an equal pay claim needs to take into account how the comparator in question (the successful woman) has acquired the benefit of the contractual term relied on by the claimant to establish his claim. Put another way, does the Equal Pay Act distinguish between terms deriving from agreement and terms inserted or amended by statute as a result of a successful claim?

The EAT were also asked to decide on the procedural point of whether or not the claims made by the men were premature. The councils argued that until the tribunal had made a decision in favour of the female employees, the men would not be able to bring their 'piggyback' claims because their claims only arose when the tribunal made an award in favour of the female comparators.

The EAT dismissed the councils' arguments and held that the 'piggyback' claims were valid.

While the EAT acknowledged that there is no direct authority in the Equal Pay Act 1970 on the question of whether 'piggyback' claims can be brought, it considered it unlikely that the legislation prevented such claims.

The Equal Pay Act was intended to prevent situations where men and women do the same work but receive different rates of pay, so it would clearly have been unsatisfactory on policy grounds if the men had been left without a remedy and in a worse financial position than the (now better paid) women.

The EAT also decided that the piggyback claims had not been brought prematurely and said that the men did not have to wait until their female comparators were granted a remedy before bringing their own claims. In addition, the period for which the men could claim arrears of pay should be the same as that claimed by the female comparators.

Ambiguity

Although the McAvoy decision answers the important question of whether contingent claims can be brought, it leaves numerous uncertainties.

The Equal Pay Act was introduced as an act to prevent discrimination between men and women. It was not intended to interfere with disparate treatment between individuals of the same sex. The bizarre effect of this recent ruling is that it allows a man to use equal pay laws to increase the level of his pay to that of another man. In future, provided this decision is not overturned, other low paid employees will also be able to 'piggyback' on the successful equal pay claims of their colleagues in order to level up their pay.

One uncertainty surrounding the ruling is at what stage a 'piggyback' claim can be brought. The McAvoy ruling appears to open the door to the possibility of employees bringing such claims in tandem with their female (or male) comparator's claims.

The EAT clearly stated that low paid male employees should not have to wait until their female colleague's claims have been determined before starting their own claims, as to do so would amount to a real prejudice in relation to back pay.

Yet the EAT's stance is somewhat illogical as in reality no discrimination takes place against the male employee until the female comparator is paid an award in respect of her claim. It is only at the point of award that the male employee suffers any prejudice and yet this ruling allows claims to be brought prematurely, before a cause of action has arisen.

This sits uneasily with the tendency for tribunals to approach equal pay claims by looking at whether or not the claimant has been a victim of sex discrimination.

A further uncertainty exists in that the ruling allows male claimants to benefit from contractual terms enjoyed by female comparators, even though their comparators have only acquired the benefit of those terms as a result of successful equal pay claims. It is unclear whether this will preclude tribunals from taking full account of how beneficial terms have been acquired in future litigation.

It is also unclear to what extent settlement negotiations involving groups of men and women will be open to challenge in the future, although the ruling does make it clear that withholding favourable settlement terms from one group could amount to a detriment within the scope of sex discrimination legislation. Any employers involved in settling potential equal pay claims should probably err on the side of caution and ensure that the same settlement terms are offered to employees doing similar work.

While this is a landmark ruling, the law surrounding 'piggyback' claims is far from clear and the uncertainties will undoubtedly result in further litigation. The councils have now been granted permission to appeal to the Court of Appeal, a step which if taken will be welcomed by many employers who potentially face millions of pounds of costs if similar cases in the system are successful.