The ‘genuine material factor’ defence 



A claim for equal pay will not succeed if the employer can show that the difference in pay is genuinely due to a material factor unrelated to sex. The material factor must be:



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



• must not itself 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 being 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 their actual work and not their 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 resulting from pay protection after 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 justifiable factors could 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 difference in pay, the claimant is entitled to have her pay increased to reflect the part that cannot be explained by the material factor (Enderby v Frenchay Health Authority [1993] IRLR 591).



It is the employer’s responsibility to prove the existence of the genuine material factor justifying the difference in pay (Calmac Ferries Limited v Wallace [2013] UKEAT 0014/13/2210). 



The employer must be able to produce evidence to show that the explanation offered is the real reason for the difference. For example, if an employer argues that it was necessary to pay the comparator more because of a skill shortage, they should 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 that 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.



The employer’s reason for paying the men more must not be based on a discriminatory practice (i.e. “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 benefit of past sex discrimination.