The ‘genuine material factor’ defence 





An equal pay claim will fail if the employer can show that the difference in pay is due to a genuine material factor unrelated to sex (section 69, EA 10). The material factor must be significant, it must be the real reason for the difference and it must not involve either direct or indirect sex discrimination.





For example, it can be lawful to pay different rates to reflect different qualifications, experience, or years of service, even if the original justification for the difference has disappeared over time because a worker who started off less experienced or skilled has caught up (Secretary of State for Justice v Bowling [2011] UKEAT/0297/11/SM). Employees can also be paid differently because of job performance, as long as it is actual work and not work potential that is assessed (Brunnhofer v Bank der Österreichischen Postsparkasse [2001] IRLR 571). 




Different or extra tasks can also justify pay differences. In Christie and others v John E Haith [2003] IRLR 670, a requirement for male employees to lift heavy loads could justify a pay difference. 


A historical pay difference that results from a TUPE transfer can be justified under equal pay law (Skills Development Limited v Buchanan [2011] UKEATS/0042/10/BI). So can pay protection under an internal compulsory redeployment policy (Haq v the Audit Commission [2012] EWCA Civ 1621). 





Other genuine material factors include location, where one location has a higher cost of living (for example, London weighting), unsocial hours, regular night work or rotating shifts.





If the material factor accounts for some but not all of the pay difference, the claimant is entitled to a pay increase to reflect the part that cannot be explained by the material factor (Enderby v Frenchay Health Authority [1993] IRLR 591).





The employer must prove that the genuine material factor really does justify the difference in pay (Calmac Ferries Limited v Wallace [2013] UKEAT 0014/13/2210), with supporting evidence. For example, if an employer argues that the comparator had to be paid more because of a skills shortage, they should produce evidence of genuine difficulties experienced when recruiting and retaining people to do the job being done by the higher paid man. The employer should monitor the discrepancy on an ongoing basis, to ensure it remains justified. 



Similarly, if the employer claims that men deserve a bonus because of productivity, there must be hard evidence of the link between payments and ongoing productivity improvements. In Dolphin v Hartlepool Borough Council and Housing Hartlepool Ltd [2008] AER 73, bonuses supposedly designed to reward productivity were paid for jobs mainly done by men. A tribunal found that the bonuses were really extra payments for completing work that the men were already paid to do and were a sham, so the employer’s defence failed. In Bury Metropolitan Borough Council v Hamilton [2011] ICR 655, the EAT confirmed that it is not necessary to go as far as to prove that the reason is a “sham”, in the sense of a deliberate plan to mislead. It was enough to show, for example, that the bonus payments were not in fact linked to productivity.



The employer’s reason for paying the men more must not be based on a discriminatory practice. For example, in Redcar & Cleveland Borough Council v Bainbridge; Surtees v Middlesbrough Borough Council [2009] ICR 133, councils tried to justify a four-year pay protection scheme on the basis that it was designed to correct past pay inequalities gradually over time. However, the pay protection scheme could not be a genuine material factor in this case because it was “irredeemably tainted by sex discrimination”, as it perpetuated the benefits of past sex discrimination. (See also discriminatory Job Evaluation Studies and the important equal pay victory against Glasgow City Council, summarised on pages 260-261).