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Equal pay and productivity bonuses: Court of Appeal upholds EAT decision in Sunderland litigation

11 April 2012 #Employment

In Sunderland v Brennan and another the Court of Appeal held that the EAT had correctly ruled on the question of whether the employer had established a "genuine material factor" (GMF) defence, in the Sunderland equal pay litigation.

In this case a group of female employers made a claim for equal pay in relation to productivity bonuses against their employer, Sunderland Council.  The EAT accepted the tribunal’s decision that it was clear the Council had no GMF defence to the claims made by the female employees that they were entitled to a productivity bonus paid to a predominantly male group.

The EAT stated that when considering an employer’s GMF defence, in cases where a factor relied on by an employer is indirectly discriminatory, a tribunal must consider whether the employer can objectively justify the pay differential.  The explanation given by the employer as to whether the difference in treatment is “genuine” in the sense of “not a shame”, should not concern the tribunal.  It was noted that in this particular case, the fact that the bonuses were no longer linked to productivity meant they could not be justified.

The Council appealed to the Court of Appeal stating that it was unfair for the EAT to consider objective justification when they had failed to consider whether the Council had established a non-sex discriminatory reason for the pay differential.  Also the Council objected to the findings of the employment tribunal that the bonus schemes were not actually linked to productivity.

The court dismissed the appeal.  The Council had not succeeded in proving the tribunal had wrongly found that the bonus schemes were not linked to productivity.  It also did not satisfy the court that the EAT had adopted the wrong approach to establishing the reason for the pay differential.

This decision brought an end the claims by the female employees against Sunderland Council
relating to the non-payment of bonuses between 1997 and 2004.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
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