The material factor must be genuine

An employer must be able to produce evidence to show that the explanation offered is the real reason for the difference.

If an employer argues that it was necessary to pay the comparator more because of a skill shortage, they must provide evidence of actual difficulties recruiting and retaining people to do the job being done by the higher paid man. The employer will also need to monitor the discrepancy on an ongoing basis to make sure it remains justified.

The employer needs to produce evidence showing both why the comparator is paid as he is and why the claimant is paid as she is. Just explaining the pay of the comparator is not enough (Calmac Ferries Limited v Wallace [2013] UKEAT 0014/13/2210).

In Dolphin v Hartlepool Borough Council and Housing Hartlepool Ltd [2008] AER 73, bonus schemes supposedly designed to encourage productivity were attached to jobs that were predominantly carried out by men. A tribunal found that the bonus payments were in fact extra payments for completing work individuals were already paid to do and were a sham. As a result, the employer’s defence that the bonus payments were genuinely intended to encourage productivity failed.

In Bury Metropolitan Borough Council v Hamilton [2011] ICR 655, the EAT confirmed that there is no need to go as far as to prove that an employer’s reason for paying men more is a “sham” i.e. something deliberately intended to mislead. In this case, which concerned bonus payments to male employees, a finding by the tribunal that the bonus payments were not in fact linked to productivity as argued by the employer was enough to show that the reason offered to explain the pay difference was not genuine.