Appeal Nos. UKEAT/0684/05/ZT
& UKEAT/0525/06/ZT

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 1 and 2 March 2007
Judgment handed down on 26 March 2007

Before
THE HONOURABLE MR JUSTICE WILKIE
MR B BEYNON
MR D G SMITH

SOUTH TYNESIDE METROPOLITAN BOROUGH COUNCIL	APPELLANT

MS A ANDERSON AND OTHERS	RESPONDENTS

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR J BOWERS 
(One of Her Majesty’s Counsel)
South Tyneside Metropolitan Borough Council
Legal Services
Town Hall & Civic Offices
Westoe Road
South Shields
Tyne & Wear
NE33 2LR	
For the Respondents	MR P ENGELMAN
(of Counsel)
Messrs Stefan Cross Solicitors
Buddle House
Buddle Road
Newcastle upon Tyne
NE4 8AW	

SUMMARY
Equal Pay Act – Equal value
Employment Tribunal finding that Genuine Material Factor defence in equal pay claim did not run upheld by the EAT

THE HONOURABLE MR JUSTICE WILKIE

Introduction

1.	These two appeals are brought by the Appellant, South Tyneside Metropolitan Borough Council, against decisions of the Employment Tribunal sitting at Newcastle upon Tyne respectively on 18 October 2005 (the genuine material factor decision) and 20 July 2006 (the remedies decision).

2.	These appeals form part of litigation comprising an equal pay claim initially brought by over 700 female employees of the Appellant.   The genuine material factor hearing (the GMF hearing) comprised a series of test cases to resolve issues, most relevantly, of the Council’s GMF defence in connection with one series of multiple claims.   In addition, a series of further multiple claims have been launched by female employees of the Council acting through the same solicitors, and the Council has agreed that all of those cases are on all fours with those from which this appeal is brought.   Accordingly no further Tribunal hearings will be necessary save as to time limit and remedies.

3.	 The claims fall within two categories.   Some fall within section 1(2)(b) of the Equal Pay Act 1970 where the applicant is employed on work rated as equivalent under a job evaluation scheme. The remainder fall under section 1(2)(c), where it is said that the Claimant is employed on work of equal value to a male comparator.   The GMF hearing proceeded on the assumption that each Claimant either had a valid job evaluation under a job evaluation scheme or had a valid equal value claim against at least one comparator.   Subsequently, the issue of equal value has been referred to independent experts who have yet to report.

4.	The focus of the GMF hearing was the fact that the difference in pay between the applicants and the comparators was the availability to each comparator of a bonus scheme.   The Appellant’s case is that this constitutes a genuine material factor defence to the equal pay claims.   The Tribunal looked at each of the schemes said to be genuinely productivity related.   Of a number of them it concluded that the schemes were shams and so could not give rise to a genuine material factor defence.   This conclusion, save in respect of one scheme, is not contested in this appeal.   The main issue before us concerns the conclusion of the Tribunal that, in relation to those comparators, whose applicable bonus schemes it concluded were genuine, there was, nonetheless, no genuine material factor defence.   It is this conclusion which is the subject of the first appeal.

The law
5.	The Tribunal set out its understanding of the law in paragraphs 7 to 10.5 of the decision.   Save for two subsequent decisions of the Employment Appeal Tribunal, it has identified the statutory provisions and the relevant case law and has accurately summarised the effect of these legal sources.   

6. 	Statutory provisions: the Equal Pay Act 1970.  Section 1 provides:
“1 (1) 	If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include (directly or by reference to a collective agreement or otherwise) an equality clause they shall be deemed to include one.

(2)  	An equality clause is a provision which relates to terms (whether concerned with pay or not) of a contract under which a woman is employed (“the woman’s contract”), and has the effect that—

…

(b)  	where the woman is employed on work rated as equivalent with that of a man in the same employment—
 
(i)	if (apart from the equality clause) any term of the woman’s contract determined by the rating of the work is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman’s contract shall be treated as so modified as not to be less favourable, and

(ii) 	if (apart from the equality clause) at any time the woman’s contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed and determined by the rating of the work, the woman’s contract shall be treated as including such a term;

(c) 	where a woman is employed on work which, not being work in relation to which (a) or (b) above applies, is, in terms of the demands made on her (for instance under such headings as effort, skill and decision), of equal value to that of a man in the same employment— 

(i) 	if (apart from the equality clause) any term of the woman’s contract is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman’s contract shall be treated as so modified as not to be less favourable, and

(ii)	if (apart from the equality clause) at any time the woman’s contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed, the women’s contract shall be treated as including such a term;
…

(3)  	An equality clause… shall not operate in relation to a variation between the woman’s contract and the man’s contract if the employer proves that the variation is genuinely due to a material factor which is not the difference of sex and that factor— 

(a) 	in the case of an equality clause falling within sub-section 2(a) or (b) above, must be a material difference between the woman’s case and the man’s; and

 (b) 	in the case of an equality clause falling within sub-section 2(c) above, may be such a material difference.”

The European legislation
7.	Article 141 of the Treaty of Rome provides:

 “Each member state shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.”

The Equal Pay Directive (75/117/EEC) provides:
“Article 1
 
The principle for equal pay for men and women outlined in Article 119 of the Treaty… means, 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.   

In particular, where a job classification system is used for determining pay, it must be based on the same criteria for both men and woman and so drawn up as to exclude any discrimination on grounds of sex.”

8.	The Tribunal, in paragraph 8 of its decision, dealt with the burden of proof.   It recorded that there was no dispute that the burden of proving a defence under section 1(3) of the Act lay upon the Respondent.   It also stated that the Equal Pay Act must be read so as to comply with the principles laid down in European Court of Justice authorities in Article 119 (now Article 141) and the Directives on equal treatment.   It cited Lord Browne-Wilkinson in Strathclyde Regional Council v Wallace [1998] IRLR page 146 as follows:

“The Equal Pay Act has to be construed as far as possible to work harmoniously both with the Sex Discrimination Act 1975 and Article 119.”

The Tribunal then stated that the European cases imposed an obligation upon the employer to justify indirect sex discrimination in pay or pay arrangements between men and women giving rise to two questions:

(1) 	What does the woman have to prove, and in what circumstances, to establish a prima facie case of sex discrimination in pay arrangements? and 

(2) 	What does the employer have to prove to establish justification?  

The Tribunal then referred to authorities cited by the parties.   Before doing so it identified in paragraph 10 what it described as “the general and important issue” namely:

 “…whether, even if the payment of bonus was not a sham, nonetheless the employer is required to justify the payment of productivity related bonuses to male dominated work groups but not to women in work areas where there was a preponderance of women but whose work was rated the same as men.”   

It then said as follows:
“This required us to consider:

(i)	statistical evidence relating to the payment of bonuses broken down between work groups with a different gender balance;

(ii) 	the reasons why productivity related schemes are paid to the male dominated groups; and 

(iii) 	applying the test set out in particular in Glasgow City Council v Marshall [2000] IRLR 272 whether the evidence satisfied the tribunal that there was a genuine material factor defence untainted by sex discrimination, or if the pay difference was discriminatory whether it was justified.   We also found considerable assistance, in particular on the impact of European Community Law contained in article 141 from the judgment of Lord Justice Peter Gibson in Bailey and others v the Home Office [2005] IRLR page 369.”

9.   At paragraph 10.1 of its decision the Tribunal referred to Glasgow City Council v Marshall [2002] IRLR 272.   It pointed out that in that case it was not challenged that the reason put forward for the difference in pay was not tainted by sex discrimination.   It then quoted in full paragraphs 18, 19 and 20 from the speech of Lord Nicholls in the House of Lords which was the sole substantive judgment in the case.   In particular we highlight the following passages:

“18. 	…The scheme of the Act is that a rebuttable presumption of sex discrimination arises once the gender-based comparison shows that a woman, doing like work or work rated as equivalent or work of equal value to that of a man is being paid or treated less favourably than the man.   The variation between her contract and the man’s contract is presumed to be difference of sex.   The burden passes to the employer to show that the explanation for the variation is not tainted with sex.   In order to discharge this burden the employer must satisfy the tribunal on several matters.   First, that the proffered explanation or reason, is genuine, and not a sham or pretence.   Second, that the less favourable treatment is due to this reason.   The factor relied upon must be the cause of the disparity.   In this regard, and in this sense, the factor must be a ‘material’ factor, that is, a significant and relevant factor.   Third, that the reason is not the ‘difference of sex’.   This phrase is apt to embrace any form of sex discrimination whether direct or indirect…

19.  	When s1 is thus analysed, it is apparent that an employer who satisfies the third of these requirements is under no obligation to prove a ‘good’ reason for the pay disparity.   In order to fulfil the third requirement he must prove the absence of sex discrimination, direct or indirect.   If there is any evidence of sex discrimination, such as evidence that the difference in pay has a disparately adverse impact on women, the employer will be called upon to satisfy the tribunal that the difference in pay is objectively justifiable.    But if the employer proves the absence of sex discrimination he is not obliged to justify the pay disparity.
20.	…the accepted synonym for ‘material’ is ‘significant and relevant’.    This leaves open the question of what is the yardstick to be used in measuring materiality or significance and relevance.   One possibility is that the factor must be material in a causative sense...   Another possibility is that the factor must be material in a justificatory sense…  I prefer the former of these two interpretations… when sex discrimination is not under consideration.  Then the distinction may be of crucial importance… The industrial tribunal, in the course of its self-direction on the applicable law, held that a purely historic explanation of the pay difference between sexes is insufficient.   That is correct, when justification is in point.   It is not correct when, as in the present case, the absence of sex discrimination was not in issue.”     

It is of significance that on the facts of Glasgow City Council v Marshall there was no evidence whatever of the difference in pay having a disparate impact on one or other gender.   Accordingly, it was common ground at every level of the case up to the House of Lords that there was no question but that the reason was “not the difference of sex”.   

10.   In paragraph 10.2 the Tribunal considered Bailey v the Home Office.   It recorded that in that case the Employment Tribunal had taken the view that there was a prima facie case of indirect discrimination because there was a “requirement or condition” to obtain the advantages enjoyed by the comparator group, namely, that one had to be a member of that comparator group.   The EAT rejected that approach, describing its reasoning as circular.   In the Court of Appeal, Peter Gibson LJ had similarly concluded.  At paragraph 19 he said:

“19.	…That is unsustainable in logic and in law.   In truth no requirement or condition applicable to the comparator grades has been identified and, in my judgment, the EAT was quite right to reject that part of the ET’s reasoning as wrong in law.”

11.   In Bailey the ET had considered the statistical material in accordance with the judgment of the European Court in Seymour Smith, as applied by the House of Lords in Barry v Midland Bank plc. It focused on the proportions respectively of male and female in the disadvantaged groups.   The EAT had overturned that approach.   It had concluded that where a disparity of pay had arisen between two work groups by reason of the history of different arrangements for collective bargaining, a prima facie case of sex discrimination would be established if the advantaged group were predominately male and the disadvantaged group were predominately female, but, where the disadvantaged group was neutral in gender terms, the situation was not prima facie discriminatory on grounds of sex.   The Court of Appeal rejected that conclusion of the EAT.   In paragraph 20 of his judgment Lord Justice Peter Gibson said amongst other things as follows:

“20.	 …It is not in dispute that there is no statutory provision prescribing how an ET should investigate whether a prima facie case of sex discrimination has arisen.   Nor is it in dispute that, when indirect discrimination is relied on, statistics of gender- composition of the relevant groups need to be examined.   It is for the tribunal of fact, the ET, to make the relevant assessment...”

12.   Peter Gibson LJ had then cited certain passages from the European Court of Justice Judgment in the Enderby case.   In particular, he cited paragraph 19 of the ECJ judgment which said:

“19.	In these circumstances, the answer to the first question is that, where significant statistics disclose an appreciable difference in pay between two jobs of equal value, one of which is carried out almost exclusively by women and the other predominately by men, article 119 of the Treaty requires the employer to show that that difference is based on objectively justified factors unrelated to any discrimination on grounds of sex.”

At paragraphs 30 and of his judgment Lord Justice Peter Gibson then continued:

“30.	I can see no justification for the imposition of a high threshold for satisfying the test of prima facie discrimination.   Where, as here, there is one group of employees of an employer which contains a significant number, even though not a clear majority, of female workers whose work is evaluated as equal to that of another group of employees of the employer who are predominately male and who receive greater pay, it would be very surprising if an ET were to be precluded by the presence in the disadvantaged group of a significant number of men from holding that that disparity in favour of men required justification by the employer.   In the present case it may well be that, as the Home Office suggests, there is a genuine material factor which is not the difference of sex and which justifies that disparity.     Whether there is such a factor is for further determination.   

31.	For these reasons and principally because the ET has found from the statistics that there is a prima facie case of discrimination and has not been shown to be materially wrong in so doing, I would allow the appeal, set aside the order of the EAT and restore the decision of the ET.”   

13.   The ET then cited two further EAT authorities, Paterson v London Borough of Islington (EAT 0347/03) and Ministry of Defence v Armstrong [2004] IRLR 672.    At paragraph 67 of the EAT decision they said as follows:

“…We consider that the broader underlying principle of Enderby must be, and is, that there will be cases in which, having regard to the relative sizes of the proportions of women in the disadvantaged group and men in the advantaged group, a prima facie case of direct sex discrimination in relation to pay will be regarded as arising and that is sufficient to cast on to the employer the burden of proving that the pay difference is objectively justifiable…”

In paragraph 68 of that decision the EAT had said as follows:

“…the employment tribunal accepted… submission that the Enderby principle applied only to cases in which the disadvantaged group was ‘almost exclusively’ comprised of women… For the reasons given, we consider that the tribunal was in error in its summary rejection of the applicants’ submission with regard to these two groups, namely that a consideration of the statistics… raised a prima facie case of discrimination… sufficient to require Islington to provide objective of the pay difference.”

In that case the disadvantaged groups contained only 67.7% of women.   

14.   	The Tribunal then cited various passages from the decision of the EAT in the Ministry of Defence and Armstrong as follows:

“34. 	In determining whether sex-related pay discrimination exists in any particular case it is important to bear in mind that, whilst the Equal Pay Act 1970 focuses on the contracts of each individual applicant and her named comparator, pay discrimination is frequently systemic in character, arising as a result of gender job segregation or from discrimination in pay structures and grading systems, rather than from the terms of individuals’ contracts of employment.    It is important therefore to understand how domestic and European equal pay law knits together so as to prohibit pay description of this kind… 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 s.1(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 justify a valid defence under subsection (3) if he can justify such a differentiation on the grounds of sex whether differentiation is direct or indirect…”

At paragraph 35:

“35.	An example of a situation where the distinction between direct and indirect discrimination may not always be clear arises in cases where there is job segregation.   Men and women may send to be segregated into different jobs… because of direct discrimination arising from stereotypical and traditional attitudes to men’s and women’s work; yet a pay practice may have a disparate impact on the predominately female group and therefore be indirectly discriminatory.”

The EAT then quoted from Enderby and, at paragraph 39 of the judgment, Mrs Justice Cox quoted from paragraph 102 of the judgment of Lord Justice Kerr in British Road Services Ltd v Loughran [1997] IRLR 92:

“102.	…Firstly, as I have pointed out, it was the applicant in Enderby [1993] IRLR 591 who first used the expression ‘almost exclusively’ to refer to the female group.   I consider that the Court of Justice was merely reflecting the factual situation which obtained in that case in so stating its conclusion.   Secondly, and more importantly, the relevance of the number of females in the group is an indicator of it being traditionally a less well paid group on account of its being composed mainly of women.   Logically a group comprising 75% females and 25% males has the capacity to provide such an indication.   Whether it does in fact is a matter for the tribunal to decide…”

At paragraph 46 of the EAT judgment in MOD v Armstrong Mrs Justice Cox said as follows:

“46.	In conclusion therefore the principles to be applied in determining the s.1(3) defence, in our judgment, involve the tribunal focusing on substance rather than form and on the result, rather than on the route taken to arrive at it.   We agree with Mr Linden’s submission that, in approaching these issues, technicalities should be eschewed.   The fundamental question for the tribunal is whether there is a causative link between the applicant’s sex and the fact that she is paid less than the true value of her job as reflected in the pay of her named comparator.   This link may be established in a variety of different ways, depending on the facts of the case.   It may arise, for example, as a result of job segregation or from pay structures or pay practices which disadvantage women because they are likely to have shorter service or to work less hours than men, due to historical discrimination or disadvantage or because of the traditional role of women and their family responsibilities.”

15.   	Since this decision of the ET there have been a number of relevant authorities which were cited to us in argument.   The first in time is Armstrong and others v Newcastle upon Tyne NHS Hospital Trust [2005] EWCA Civ 1608, decided by the Court of Appeal on 21 December 2005.   Reliance is placed by the Appellant upon two passages, one each from the judgments of Lady Justice Arden and Buxton LJ, with whose judgments Latham LJ expressed agreement.  Lady Justice Arden said, at paragraphs 32-34:

“32.   The genuine material factor issue.   

I have set out in paragraph 17 above the well-known passage from the speech of Lord Nicholls in the Marshall case…  That passage sets out a step by step guide to proving a genuine material factor defence.   For the purposes of this appeal, the steps can be summarised as follows:

(1)  The complainant must produce a gender-based comparison showing that women doing like work, or work rated as equivalent or work of equal value to that of men, are being paid or treated less favourably than men.   If the complainant can produce a gender based comparison of this kind, a rebuttable presumption of sex discrimination arises.   

(2)   The employer must then show that the variation between the woman’s contract and the man’s contract is not tainted with sex, that is, that it is genuinely due to a material factor which is not the difference of sex.   To do this, the employer must show each of the following matters:

(a)   the explanation for the variation is genuine,
(b)   that the more favourable treatment of the man is due to that reason, and
(c)   that the reason is not the difference of sex.

(3)   If, but only if, the employer cannot show that the reason was not due to the difference of sex, he must show objective justification for the disparity between the woman’s contract and the man’s contract.   

33.   It follows from the Marshall case that there is no need for an employer to provide justification for a disparity unless the disparity is due to discrimination…

34.   In the Marshall case, Lord Nicholls used the words ‘disparately adverse effect’.   He held that evidence that a difference in pay had such an effect on women could be evidence of sex discrimination.   He did not, however, hold that the mere fact that there was a disparately adverse effect was in itself sex discrimination.    In the Marshall case, Lord Nicholls used the phrase ‘disparately adverse effect’, to denote the trigger at which the rebuttable presumption of sex discrimination would arise under step one mentioned above.”

And in Buxton LJ’s judgment, at paragraph 110, he said:

“110 	A material factor which is not the difference of sex:  the structure of the argument

As Lord Nicholls said at the end of the passage from Glasgow City Council v Marshall cited in paragraph 101 above, if the employer proves the absence of sex discrimination he is not obliged to justify the pay disparity.   That is the basis of the step by step approach explained by Arden LJ in her paragraph 32 above.   Once disparate adverse impact has been established, the burden passes to the employer in respect of two issues.   First, that the difference between the man’s and the woman’s contract is not discriminatory, in the sense of being attributable to difference of gender.   Second, if the employer cannot show that the difference in treatment was not attributable to a difference in gender he must then demonstrate that there was nonetheless an objective justification for the difference between the woman’s and the man’s contract.”

16.   	The second of the subsequent authorities is the decision of the EAT in Villalba v Merrill Lynch and Co Inc [2006] IRLR 437, decided on 31 March 2006.   In particular, the Respondent relies upon the following passage in the judgment of the EAT at paragraphs 113 to 117:
“113.	In effect therefore Enderby establishes that statistics alone may in a sufficiently powerful case create an irrebuttable presumption of prima facie indirect sex discrimination.   Once there is statistically relevant and material evidence to demonstrate that a group is in fact being adversely affected on sex grounds, which will oblige the employer to justify the pay arrangements.   It is not enough in those circumstances for the employer to demonstrate that the arrangements have resulted without any direct sex discrimination being practised of any kind.   In effect the Court is holding that there must somewhere have been some element of indirect discrimination – in other words there is an assumed indirect discrimination.   The statistics demonstrate a sufficiently marked adverse impact to constitute a prima facie case requiring not merely an explanation that the difference is not caused directly by sex, but in addition an objective justification.   The statistics must at least show that it is reasonable to infer that the treatment of the disadvantaged group must have resulted from some factor or combination of factors which impinge adversely on women because of their sex, even though no obvious feature causing this disparate treatment can be identified and indeed even though the employer has apparently demonstrated to the contrary.

114.  Following Enderby therefore there are three different circumstances in which pay arrangements may, to use an expression frequently found in the cases, be ‘tainted by sex’.   

115.   First, there may be a difference in treatment which is specifically on sex grounds.   A woman is paid less simply because she is a woman.   That is the classic form of direct discrimination.

116.   Second, there may be a difference in treatment in which, whilst not specifically on grounds of sex, results from the adoption of a criterion or practice which adversely impacts on women because they are women.   Typically this may be because the social role which women habitually form makes it more difficult for them to place themselves in the category of the worker attracting the higher pay.   Treating part timers less favourably is the classic example.

117.   Third, where cogent, relevant and sufficiently compelling statistics demonstrate that women suffer a disparate impact when compared with men, there is an irrebuttable presumption that sex has indirectly tainted the arrangements even though it may not be possible to identify how that has occurred and the differential needs to be objectively justified.”

Insofar as this passage is intended to replicate what was said by the Court of Appeal in Armstrong v Newcastle upon Tyne, we agree with it; insofar as, in the Respondent’s contention, it appears to say that the inference of sex taint may be irrebuttable whatever good evidence the employer may have that it is not, it does appear to overstate the position. In our judgment, the ET in this case did not, as appears below, adopt that approach but approached the issue in the way indicated by the other authorities cited. 

17.   The third subsequently decided authority is Redcar and Cleveland Borough Council v Bainbridge [2007] IRLR 91.   In that case, at paragraph 5(5), passing reference was made to the analysis of the EAT in Villalba already referred to.   In that case the argument before the EAT focused on the “justification” stage.   The ET had concluded that the Appellant Council was prevented from demonstrating that the difference was objectively justified because it had failed to implement a different scheme for the disadvantaged group in circumstances where a bonus scheme, such as was in place for the comparator group, could not be introduced for the Claimant group on the basis of saving money or being self financing.   The Council had contended that it was an error for the Tribunal to speculate as to what different schemes might have been put in place for the disadvantaged work groups.   At paragraph 57 the EAT said as follows:

“57.	We accept that in assessing the issue of proportionality it may be necessary to focus on the disadvantaged as well as the advantaged group and to ask why the disadvantaged group were not given the same benefits, or opportunities to benefit, as the advantaged group.   The Council has implicitly accepted as much by conceding that their GMF defence will not succeed if a similar productivity scheme could have been implemented for these claimants.  Here, however, there was an obvious and vital difference between the situation of the claimants and their chosen comparators.   The refuse collectors were employed in work which enabled a productivity scheme to be adopted and which, as a consequence, brought savings and greater efficiency to the work being carried out for the council.   That opportunity did not exist in relation to these particular claimants.   The comparators were fortuitously in posts where they could largely pay for their own bonuses by productivity improvements.   These particular claimants could not…”   

And at paragraph 62:

“62.	It is of course true that the employer must objectively justify the difference in pay, and to a relatively high standard and as part of that he must show that it has remained objectively justified throughout the relevant period.   But it does not mean that the employer who meets this standard should be obliged to remove or mitigate the effects of any GMF simply because the disparity has continued for some time…   Where the GMF applies there is no discrimination on grounds of sex – by definition the difference has been justified on non sex grounds – and therefore the principle of no discrimination in relation to pay… is fully respected…  The question remains whether the disparity in pay is objectively justified.

63.   We agree with Mr Cavanagh that the tribunal was essentially concluding that it was unfair for the comparators to be entitled to have this advantage for so long, and that in fairness some way of mitigating the difference should have been developed.   That is the wrong approach.

64.   It follows that in our judgment the tribunal made an error which goes to the heart of its finding on this matter.   Once the tribunal had concluded that the higher bonus paid to the refuse workers was justified because of the arrangement they made they ought not, in our judgment, to have found that the material factor defence was not made out because of the failure to apply a wholly different kind of scheme for the benefit of those comparator groups.   As the tribunal accepted, no such scheme could finance itself or indeed involve any savings to the council.   We conclude that the council has objectively justified the difference in pay, and we quash that part of the tribunal’s decision...”

Mr Bowers contends that the ET in this case erred by imposing a liability on the Appellant to demonstrate that it had considered a productivity for the work groups which were almost or exclusively female and so fell into a similar error to that identified by the EAT in Bainbridge.   

The Structure of the decision
The statistical evidence
18.   	Having summarised the law in paragraphs 10.1 to 10.5, the ET in 10.6 considered the statistical evidence relating to the payment of bonuses.   They considered it in two parts. First, the evidence related specifically to the Appellant local authority. Second the national statistical evidence deriving from the joint working group set up under the collective bargaining arrangements in 1997.   They first considered the manual worker groups covered by the White Book collective bargaining arrangements.   Of the comparator work groups which received bonuses, 100% were male.   No woman had ever been employed in any of those groups.   There was a work group however which was male dominated which did not receive a bonus - caretakers - where the substantial majority, but not 100%, were male.   Of the Claimant groups only four women, doing cleaning work of the 500 within the Claimant groups, did receive a bonus.

19.   	Of the Red Book groups, which applied to craft workers, there were no figures for the male/female breakdown of the workforce group.   The ET concluded that, of the comparator groups, the significant majority were men. They did so having examined the jobs done by the comparator group and using the collective general knowledge of the ET as an industrial jury.   

20.   	They also took into account statistical data provided from a broader earnings survey which were consistent with the local statistics already referred to.

21.  	 In paragraph 10.7 of the decision the Tribunal said as follows:

“10.7.	Taking these findings into account, there is in our view clear evidence in the present case at least of indirect sex discrimination which requires justification.   The comparators were doing jobs traditionally done by men namely work mainly outside requiring a degree of physical strength.   The claimant groups were doing jobs traditionally done by women, namely related to domestic work typically done in the home and dealing with the day to day needs of others.   The observations of Mrs Justice Cox in Armstrong about “women’s work”… and the historical role of women were particularly apposite to this case.”    

The Tribunal then went on in paragraph 10.8 to say as follows:
“10.8	On the basis of the cited authorities, the Tribunal proposes to apply the following sequence of tests:-

(i)  	Was the work of the test claimants and comparators rated as equivalent under a JES, or in cases where the test claimants rely upon comparators whose jobs have not been rated as equivalent under a JES, are they to be treated at this stage as of equal value (although no independent expert has yet so found)?   At the present stage of these proceedings these questions are to be answered in the affirmative.   

(ii)  	Was the respondent’s explanation for the difference in pay (in this case an incentive bonus rewarding enhanced productivity) genuine and not a sham?   Was it originally, when such schemes were introduced, and did it remain so? 
  
(iii) 	Is the explanation for the differences in pay due to that reason?   

(iv)	Was the reason for the difference “significant and relevant”?

(v)	Was the reason for the difference unrelated to sex, direct or indirect?   In paragraph 10.7 we have already set out reasons for concluding that the payment of bonus was prima facie discriminatory, but we return to this issue later in this judgment.

(vi) 	Accordingly, the Tribunal had next to consider whether the respondent could prove that the reason was unrelated to sex, or if it was, whether the respondent could justify the payment applying the Bilka test.”

Genuine/sham

22.   	The ET then turned to the issue of the validity of the bonuses which they identified as the first issue identified by Lord Nicholls in Glasgow v Marshall, namely whether the proffered explanation was genuine and not a sham.   In the succeeding paragraphs from 12 to 17 they considered the issue of genuineness or sham in relation to each of the relevant work groups, came to their respective conclusions, and, as we have indicated, it is only in respect of one category that there is an appeal.   

23.	In paragraph 18 the Tribunal began to consider the GMF defences in relation to those comparators whose bonus was found to be genuine.   They concluded that on the balance of probabilities the bonus schemes principally emanated from the late 1960s or early 1970s, when the government’s Prices and Incomes policy was in force.   Increases in pay could only be justified in return for productivity.   They went on, however, to accept that the genuine schemes for these comparators were, and remained, genuinely productivity related and self financing.

Discriminatory effect
24.	The ET then summarised the main submissions of the Appellant.   The Appellant had submitted that the only basis for alleged discrimination was statistical, which was sufficient only to establish a prima facie case.  Where, as here, the Appellant argued there was a historical reason which evidenced the absence of any taint of sex, that was sufficient to defeat an equal pay claim. In addition, the Appellant relied upon as evidence of no sex taint that the male-dominated caretakers did not receive a bonus and that four women building cleaners did. The bonus could not, it was argued, have been paid for sex related reasons.   Accordingly, there was no requirement for the Appellant to put forward an objective justification. The claim ended there.   

25.	The Appellant then contended that if, contrary to the main submission, justification were required, the test of necessity in Bilka did not mean that the employer must show that the measure complained of was necessary in the sense of being the only course open to him.   The proper test was one of reasonable necessity.  

26.	 The Appellant further submitted that there was no burden upon it to show that a bonus scheme could not be introduced for the women Claimants working groups.   Accordingly, applying the Bilka test, it was argued that on the evidence there was objective justification by virtue of the continuing need to provide value for money by exposure to competitive processes and that it was appropriate to choose financial reward to encourage and maintain productivity levels.   Removal would have had an adverse effect on productivity and morale. The means chosen were reasonably necessary.

27. 	 In paragraph 19 the Tribunal set out its conclusions.   In paragraph 19.2 they accepted the following submissions of law from the Appellant:

“(a)  That no question of justification arises unless and until the respondent fails to prove that the reason for the difference of pay was not a reason related to sex or sex tainted.   This is clearly demonstrated by the many authorities that had been cited from Marshall onwards.

(b)  As to justification, the test is whether it was reasonably necessary.   It need not be the only means by which the objective can be achieved.   The reason need not be a reason which was consciously in the mind of the employer at the time when the pay scheme was introduced.”

28.	In paragraphs 19.3 to 19.5 the Tribunal considered the discrimination issue.   We highlight the following passages from their reasons.

“19.3	…Our starting point is that we accept that there was a good and valid reason for the introduction of productivity related schemes which were, historically, based upon the Government’s prices and incomes policy of the 1960s and 1970s.   However there were two matters which have caused us concern.   First, no evidence has been called before the Tribunal by the respondent to show that any consideration whatsoever was given as to whether such schemes could be introduced into any of what may conveniently be described as the women’s jobs.   Secondly, and allied to that, the historical basis for the introduction of productivity pay increases largely ceased in the 1980s.   It is of course correct that compulsory competitive tendering and best value have continued to provide a competitive reason for monitoring performance, but the bar upon payment of increased pay based solely upon incentive productivity schemes is no longer present...”

29.	The Tribunal then referred to a principle set out in the Court of Appeal decision in Benveniste v the University of Southampton [1989] IRLR 122, where the Court of Appeal had concluded that the material difference had evaporated when certain financial constraints were removed which had applied at the time of appointment.   The ET go on then to say:

“A historical reason may be a genuine material factor reason for a difference in pay but it must remain a good reason.   The reason, so far as it relates to a government pay freeze, no longer exists.”

The Tribunal then goes on to say as follows in paragraph 19.4:

“19.4	In order to prove that the reason for payment to the predominately male work groups was not discriminatory, in our view, there was a burden upon the respondent to show:-

(i)  that consideration was given whether such schemes could be introduced for the female dominated groups and

(ii)  to show that these work groups were not amenable to bonus at least of the same type as those paid to the men that is to say productivity related bonus schemes.”

The ET  went on to indicate that no such evidence had been called by the Council on these issues and that such evidence as there was, arising out of cross-examination of individual Claimants, did not establish to the ET’s satisfaction that increased productivity and efficiency could not be achieved in any of the Claimant work groups.   

30.	They then dealt with the point made by the Appellant in relation to the existence of a male-dominated group, the caretakers, whom no bonus was payable, and rejected the contention that that fact demonstrated that the pay system was non-discriminatory.   In dealing with that issue the Tribunal commented that, although no evidence had been called on the point, they thought it likely that bonus schemes had been introduced across most, but not all, the male work dominated groups because of trade union bargaining pressure which had not been applied for the female work groups nor in this local authority for caretakers.

31.	In paragraph 19.5 the Tribunal dealt with a point which they said was also relevant to the justification issue namely whether an employer is required to show a reason why a pay scheme should not benefit the disadvantaged group in a case of disparate impact.   They were satisfied that, in appropriate circumstances, the employer may be required so to prove.   They said that it could not be right that an employer could introduce a pay system which benefited a sector of the work force which particularly attracts members of one sex without considering, on an ongoing basis, whether it could be introduced across the whole work force.

32.	They then concluded that:

 “The respondent has failed to prove that this pay system is free of sex discrimination.   We find that it is indirectly discriminatory and requires justification.”

   
Justification
33.	The justification issue was dealt with in paragraph 20.   In paragraph 20.1 the ET identified the points of principle established in the case law, particularly Bilka.   No criticism is made of their setting out of these points.   They then concluded in paragraph 20.2 that the payment of a bonus corresponded to a real need on the part of the Respondent to maintain productivity and competitiveness.   They were not, however, satisfied that the introduction and maintenance of such schemes for such long periods of time were reasonably necessary in order to achieve that objective.   They noted that, in other local authorities where a single status agreement had been introduced, bonuses of that type had been abolished.   The desired level of productivity had been achieved by closer monitoring of performance.   Furthermore, within the Appellant authority, a scheme known as “Blitzit” had been introduced for street sweepers without any need for a bonus payment.   Accordingly, they concluded that payment of a bonus was not reasonably necessary.   They had regard to the very considerable disparate impact arising from the fact that male dominated work groups were in receipt of an almost invariable uplift in basic pay of the order of 1/3, in circumstances where those jobs had been treated as of equal value as jobs occupied mainly by women.   There were very large numbers employed in the Claimants’ work groups. Thus, it was not a case where the employer had sought to employ as few people in the disadvantaged group as possible, such as had been the case in Bilka, where the justification was to discourage part time workers.   The ET concluded that the disparate impact had been shown to be very high and, in their view, outweighed the justificatory need of the Respondent for productivity schemes of that kind.

The Grounds of Appeal
34.	The Appellant focuses its main criticisms on paragraphs 19.3 to 19.5.   They say that the Tribunal failed properly to address “the rebuttal” issue and proceeded directly to the justification stage, not explaining how and why it had found discrimination.   It identified three central vices in paragraph 19.3.   First, that there was no need for the Tribunal to find that there was a “good and valid reason” for the introduction of productivity related schemes.   All that was required was a reason which constituted a genuine material factor which, once established, required no justification.   They say this error was compounded by the statement of the Tribunal that “A historical reason may be a genuine material factor reason for a difference in pay but it must remain a good reason”.

35.	Second, it is said that the ET erred in law in relying, by way of analogy, on the Court of Appeal conclusion in Benveniste v the University of Southampton.   It is said that this was erroneous both in fact (the reason for the bonus scheme did not evaporate at the end of the prices and incomes policy) and in law, in that it replicates the first error that the ET concluded that there must have been a good reason which continued throughout the period. 

36.	Third, it is said that the contention that the original basis for the schemes largely ceased in the 1980s was irrelevant under the Marshall approach and also inconsistent with the conclusion in paragraph 18 that the bonus schemes had continued to be genuinely productivity related and self financing.

37.	The Appellant also criticised the Tribunal in paragraph 19.4 for imposing a burden upon the Respondent to show that consideration was given to whether such schemes could be introduced for female-dominated groups both initially and subsequently and to show that those work groups were not amenable to bonus at least of the same type as those paid to the men, that is to say, productivity related bonus schemes.   They say that this offends the principle in Marshall that, if a non sex tainted scheme is established as a matter of historical fact, no justification for its continuation is required as the GMF defence has been established.   It also is said to offend, in the context of discrimination, in the same way as the EAT concluded in the Bainbridge case that the ET had erred in connection with the justification stage.

38.	The Appellant also contends that the ET had failed to grapple with its arguments on rebuttal namely:

(a) 	that there was a genuine reason for the payments to comparator groups;

(b)  	the fact that some male workers did not receive bonuses and had been refused such a scheme; and

(c) 	that some, albeit few, female mobile cleaners did earn a bonus.   

It is said that, in paragraph 19.4, the Tribunal failed to articulate why it was that they rejected the rebuttal evidence and acted in a procedurally improper way by taking into account its speculation on the reason for certain groups not having the benefit of a bonus scheme - the lack of trade union pressure.   Finally, in this context, the Appellant criticises the Tribunal for the way in which it has expressed itself in paragraphs 10.6 and 10.7.   It says that their conclusion that there was “at least indirect sex discrimination” is opaque and that they proceeded from an analysis of general statistics about bonus schemes within local authorities throughout the country.  It is said that the ET adopted a too broad brush and vague approach and conclusion.

Our conclusions on this point
39.	In our judgment, upon a proper reading of its decision, the ET did not confuse or conflate the various steps in the process, through which it had carefully directed itself.   It was very clear, and accepted the Appellant’s submission in paragraph 19.2, that no question of justification arose unless or until the Respondent failed to prove that the reason for the difference of pay was not a reason related to sex or sex tainted.   Paragraphs 19.3 to 5 deal with the discrimination point and conclude with a decision upon it.

40.	We do not accept the criticism of paragraphs 10.6 or 10.7.    In our judgment, the ET was entitled to conclude, as a matter both of fact and judgment that - having considered the statistics emanating from within the Appellant authority more broadly, and using the experience of its members as an industrial jury - as between the comparator groups and the Claimant groups, there was such a disparity of impact in relation to the availability or not of the bonus schemes that a prima facie case of sex discrimination had been raised.   In concluding that the evidence established a prima facie case of “at least of indirect discrimination” the ET was, in our judgment, doing no more than reflecting the developing approach as evidenced by the Paterson and MOD v Armstrong cases, which do not regard the difference between direct or indirect discrimination as necessarily determinative or, in certain cases, entirely clear.   We agree that, in paragraph 10.7, by saying that it “requires justification” the Tribunal did not express itself happily.   However, it is perfectly clear from paragraphs 19.2, 19.3 and following that all that the ET meant in paragraph 10.7 was that, in a prima facie case of sex discrimination, having been established by the statistical analysis, they looked to the Appellant for evidence or argument upon which that inference of sex discrimination may be rebutted.

41.	In our judgment, whilst the phrasing of paragraphs 19.3 to 19.5 could have been clearer or more structurally organised, these sub-paragraphs have to be viewed within the context of the decision as a whole.   The ET recognised that the Appellant’s case was that it could rebut any inference of sex discrimination which derived from the statistics by three rebuttal arguments.   The first was the genuineness of the bonus schemes, introduced historically in connection with the then Government’s Prices and Incomes policy.   The second was the fact that there was a significant group of male-dominated workers – the caretakers – who did not have the benefit of a bonus scheme; and the third was the fact that there were some, albeit few, female workers – certain cleaners – who did.    These three factors, whether taken individually or in combination were, the Appellant contended, sufficient to demonstrate that the bonus schemes, when introduced, were not tainted by sex.   If that were the case, that would be an end of the matter.   

42.	At paragraphs 19.3−19.5, the Tribunal acknowledged that the introduction of the bonus scheme in the 1960s and 1970s was genuine.   The choice of the phrase “good and valid reason” does no more than reflect that.   In considering whether that finding, of itself, was sufficient to rebut the inference of sex discrimination arising from the statistics, the ET was entitled, in our judgment, to look to see whether its introduction for certain groups and not for certain other groups could be shown by the Appellant not to be on grounds of sex.   They were entitled, in our judgment, in considering this issue, to take into account (as they did in paragraphs 19.3−19.5) the fact that, at the time of being introduced, no consideration was apparently given to introducing such schemes for the predominately female work groups and that subsequently, there was no evidence that any consideration had been given on these issues when the reason for the bonus scheme changed from being a statutory requirement to being a desirable “value for money” practice.   In our judgment, the Tribunal was entitled to regard the absence of evidence of any such consideration as damaging to the assertion by the Appellant that the introduction of the schemes in the 1960s and 1970s was not tainted by sex. The reference in paragraph 19.3 to Benveniste and for the need for a historical factor reason to remain a good reason was, we agree, an unwise analogy for the ET to have drawn, and if it had been all that was said may have indicated an erroneous approach. It was not, however, all that was said. 

43.	The ET had placed great emphasis on the approach set down in Marshall including paragraph 20 of the speech of Lord Nicholls. It is clear from reading the decision as a whole that what the ET was considering was whether the Appellant had produced any evidence sufficient to rebut the inference to be drawn from the statistical analysis. It concluded that it had not and it was entitled to draw this conclusion from the lack of any evidence that the Appellant had given any thought to applying the bonus schemes to the female work groups, whether at the outset or thereafter.   

44.	As for the caretakers, the ET recognised that it was a plank of the Appellant’s argument that the bonus schemes introduction was not tainted with sex.   It was, in our judgment, as a matter of fact entitled to conclude, as it did, that the mere existence of a particular group of predominately male workers for whom the bonus scheme was not introduced was insufficient, on its own or in combination with the other matters, to discharge the onus upon the Appellant of rebutting the inference of sex discrimination which arose from the disparate impact of the bonus scheme upon male and female groups of workers.   Similarly, the ET was, in our judgment, entitled so to regard the presence of an extremely small number of female cleaners for whom the bonus scheme did apply.   Whilst we agree that the speculation about possible reasons was not based on any evidence and was not raised with the parties for comment, this was very much an aside and not central to the Tribunal’s analysis.

45.	It follows, therefore, that, if read in the context of the decision as a whole, we do not accept that that the ET, in paragraphs 19.3 to 19.5, conflated or confused the issue they were addressing.   Rather they were considering and, in turn, rejecting, the three bases upon which the Appellant was claiming to have rebutted the inference properly to be drawn from the statistics of a prima facie case of sex discrimination.   Those were matters of fact and judgment for the Tribunal, having received an enormous amount of evidence and extensive argument and having identified properly for themselves the steps which they were taking and the order in which they were to take them.

Justification
46.	In our judgment, there is nothing in paragraph 20 which demonstrates that, in addressing the justification issue, the ET has failed to recognise or apply the correct principles.   In our judgment it was entitled to have regard to practice, elsewhere and in the Appellant authority, in respect of bonus schemes where a single status agreement has been introduced or where the question of sustaining or improving productivity levels has been considered by means other than a bonus scheme.   It properly had regard to the fact that the disparate impact was both large and far reaching.    It was aware of the argument that to remove the bonus schemes would have an adverse effect on productivity and morale.   It had recorded this contention in paragraph 18.1(viii).   This is not a case, such as the Bainbridge case, where it was requiring the Appellant to invent a wholly different type of scheme for the benefit of groups who could not themselves benefit from a properly constructed bonus scheme.    Indeed it had, in paragraph 19.4, made a finding of fact that it was not prepared to accept that increased productivity and efficiency savings could not be achieved in any of the Claimant work groups.

47.	Accordingly, in our judgment, the conclusions of the ET on justification were open to it as a matter of fact and judgment and its articulation of its decision in paragraph 20 does not disclose any error of law.   

48.	It follows from the foregoing that we reject the appeal in respect of the GMF decision.

The street lighting labourer bonus scheme

49.	There is a discrete ground of appeal against the finding of the ET that this particular scheme was a sham.   The reasons for the Tribunal’s conclusions are set out in paragraph 14.4(v).   In the course of their decision on this point the Tribunal said as follows:

“14.4(v)	…No documentation other than pay slips have been produced in his case.   No price work schedule valuing his work has been produced, nor any work sheet or time sheet…”

The Tribunal then went on to deal with the point in the light of pay slips and certain discrepancies in the evidence of Mr Barlow (called for the Respondent) between his witness statements and his evidence at the Tribunal.   

50.	 It is pointed out by the Appellant that the Tribunal was mistaken in saying that no price work schedule valuing his work had been produced as there was in evidence a schedule of those items.   On the face of it this seems to be a good point.   Mr Bowers, for the Appellant, however, recognises realistically that if he were to fail in the GMF appeal relating to genuine schemes, the question whether the street lighting labourer scheme was or was not genuine is neither here nor there.   Accordingly, and on this basis, we dismiss this appeal.   Had we been persuaded to the contrary that the appeal in respect of the GMF decision should be upheld and the matter remitted to the Tribunal for further consideration and termination, we would similarly have remitted this discrete issue for them to consider it in the light of the documentation which was before them and which they, apparently erroneously, thought was not before them.

The remedies appeal
51.	On 5 – 9 June 2006 there was a remedies hearing which resulted in a decision of the ET of 20 July 2006.   At that hearing the Appellant sought to raise an issue that each Claimant, in respect of whose comparators the Tribunal found the bonus scheme to be genuine, would still have to establish details of how such a term could apply to her and that she would have achieved the necessary targets under such a scheme so as to entitle her to a bonus:  

“6.2 	…in our view, we are entitled to assume that if an equivalent bonus scheme had been devised for the claimants the claimants would have earned the same as the comparators earned, since the claimant would or should have the same opportunity to earn it.   In addition, the actual bonus paid to the comparators was constant and it is the recollection of the tribunal that there was little, if any, evidence of a variation on a week o week basis.”

52.	Mr Bowers says that there is a clear distinction between, on the one hand, raising - on the question of liability - the argument that no equivalent bonus scheme could be devised for the Claimant group and, on the other hand, saying that, for the purposes of remedies, the Tribunal should be invited to identify the nature of the bonus scheme and to give consideration on an individual basis whether, on the balance of probabilities and if so to what extent, the Claimant would have earned bonus under such a scheme where, as here, the bonus schemes were said to be genuine.   

53.	Mr Engelman, for the Respondents, says that this issue was indeed before the Tribunal on the main GMF decision hearing.   He points to a passage in the written submissions submitted by the Appellant at the close of the hearing and, in particular, to paragraph 59 which reads:

“Further, the incoherence of the exercise suggested by the claimant is demonstrated by the fact that the Act provides for the ET to award arrears of remuneration or damages where an equality clause is infringed section 2(1).   How is it to be determined what the claimant would have earned for the period to which the claim relates under a wholly different presumed scheme to be devised by the ET which was not in operation during that period?”

54.	Mr Engelman says that the ET was entitled to take the view that this was a classic case of abuse of process or res judicata (an attempt to raise at a subsequent hearing a matter which was properly within the compass of what had been decided already at an earlier hearing) and accordingly, it was entitled to disallow argument on this issue.   Furthermore, Mr Engelman argues that the point sought to be raised by the Appellant is so self-evidently wrong that the Tribunal was correct in paragraph 6.2 to have found that it was entitled to assume an equivalent bonus scheme which would have enabled the Claimants to have earned the average earnings of their comparators, without hearing argument on the issue of principle.   

55.   In our judgment, the Appellant is right on this particular aspect of the appeal; there is a clear difference between raising, at the liability stage, an argument that no equivalent scheme could be devised, or pointing to the difficulties which might arise at the remedy stage; of inviting the ET to devise an equivalent scheme and, on the other hand, once liability has been established, raising an argument that the Tribunal has to make a declaration as to the nature of the term involved and make a calculation of the arrears of remuneration by reference to monies which would, on the balance of probabilities, have been earned under such an equivalent scheme.   We by no means agree that the point would necessarily turn out to be a good one.   Indeed its unattractiveness is rather driven home by what the Appellant said in the course of its written submissions to the Tribunal at the conclusion of the main hearing.   Nonetheless, in our judgment it was not an argument which could and should have been raised at the liability stage.   It is an argument which goes to remedy.   The Tribunal was wrong to exclude it and could not take a valid decision on the substance, as it purported to do, without having received argument on it.

56.   Accordingly, and contrary to the contention of the Respondent, we uphold this appeal and remit this aspect of the matter to the same Tribunal.   This Tribunal has been involved in this issue throughout.   It is deeply immersed in the facts and in the arguments and is by far and away the best Tribunal to deal with remedies.

Caretakers

57.	The Appellant launched an appeal in respect of the findings of the Tribunal that there was no GMF defence in relation to caretakers.   Essentially this was on the basis that there was no statistical basis upon which it could be said that there was any disparate impact on grounds of sex in relation to caretakers.   Although resisted initially, the Respondent to the appeal now accepts that the ET was wrong in this respect and that the appeal should succeed.   It may be an academic issue because we are told that, as things presently stand, it is believed that all of the Claimants falling within the caretaker category have withdrawn their claims.   Therefore for the purposes of this decision we simply note that, if it were necessary, we would uphold the Appellant’s appeal in relation to the GMF decision in relation to the caretaker issue.

ECJ reference
58.   	The Appellant urges us to make a reference to the European Court of Justice on the following issue:
1.   Whether indirect sex discrimination is established where: 
(a)  statistics demonstrate that one set of jobs (the Claimants jobs) is predominately by women and another set of jobs (the comparator jobs) is done predominately by men;

(b)  the Claimant jobs and the comparator jobs are of equal value;

(c)  the comparator jobs attract a bonus payment and the Claimants jobs do not; and

(d)  the evidence reveals that the bonus payments are genuinely due to enhanced output productivity as opposed to being in return for non enhanced productivity output.

2.   Whether when seeking to justify differentials in pay arising out of application of bonus schemes it is an appropriate requisite for consideration to be given to whether such bonus schemes could be introduced for the female dominated groups.   

It is said that none of these issues has yet been determined by the ECJ.
59.	We decline to make the reference.   The points sought to be raised are points of nuance in areas which are by now clear and it is unnecessary to seek guidance from the ECJ.    

Wasted costs
60.	As we have indicated, there was a ground of appeal in relation to the caretakers.   This was conceded at a very late stage by the Respondent to the appeal.   Wasted costs in respect of this issue are sought by the Appellant.   It is argued that the Respondent’s solicitor acted unreasonably in failing to withdraw resistance to that aspect of the appeal until virtually the last minute and that, as a result, the Appellant has sustained the costs of preparing a skeleton argument for this appeal to take account of this issue, as well as preparing a witness statement which would have sought to introduce new evidence on this issue.

61.	Whilst we can see that the Respondent’s solicitor is open to criticism for failing to notify the Appellant of the intention to give way on the caretakers argument in our judgment, in a complex and multi-handed piece of litigation such as this it is by no means unusual for decisions of some significance to be taken at the last minute or in the course of a hearing.   It would be quite wrong for such flexibility routinely to be the subject of wasted costs orders, as that would simply encourage entrenched views and a want of sensible appraisal of the prospects on particular aspects of the case.   

62.	On any view the caretakers issue was a very small part of the appeal and probably would not have taken the Tribunal much into a second day of hearing if at all.   It is to be observed that the Appellant had already been refused by HHJ McMullen QC its request to be allowed to tender further evidence on this issue, which is a significant aspect of the costs claimed.   In our judgment, this is not a case where it is reasonable to expect the Respondent’s solicitor to pay the costs said to have been wasted as a result of the late concession on the part of his clients.

63.	Accordingly, we refuse the Appellant’s application in respect of wasted costs.