The ‘genuine material factor’ defence 




An equal pay claim will fail if the employer can show that the difference in pay is genuinely due to a material factor unrelated to sex (section 69, EA 10). The material factor:



• must be significant and relevant, a cause of, and real reason for, the difference; and 




• must not involve either direct or indirect sex discrimination. In other words, it must not be “tainted by sex”.




For example, it can be lawful to pay workers different rates to reflect different qualifications, experience, or years of service, even where, over time, the original justification for the difference has disappeared because the worker who started off less experienced or skilled has caught up (Secretary of State for Justice v Bowling [2011] UKEAT/0297/11/SM). They can also be paid differently because of their 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 justify pay differences. In Christie and others v John E Haith [2003] IRLR 670, the EAT held that a requirement for male employees to lift heavy loads could justify a pay difference. A 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 justifies the difference in pay (Calmac Ferries Limited v Wallace [2013] UKEAT 0014/13/2210). The employer should produce evidence showing that the explanation offered is the genuine reason for the difference. 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 (that is, “tainted by sex”). 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 Schemes, page 249).