Case - Gibson and others v. Sheffield City Council

[2010] IRLR 277, [2010] EWCA Civ 63, Court of Appeal - Anya Palmer

Anya Palmer was junior counsel for the claimants, led by Tom Linden QC, in Gibson v. Sheffield City Council who have won their appeal in the Court of Appeal against a tribunal’s decision that the council did not have to show objective justification for a bonus which was predominantly paid to male manual workers over a 40 year period.

The claimants were carers, in female dominated job roles, and their work was rated as equivalent to that of their comparators, street cleaners and gardeners, almost exclusively male job roles. Yet the comparators were paid up to 38% more than the claimants.

The council contended that the reason for the difference in pay was historical: a genuine productivity bonus introduced some 40 years ago, and that the reason the women had not received a similar bonus because their work was not capable of incentivisation in the same way.

The tribunal accepted that the reason for the bonus was nothing to do with sex, therefore concluded the council did not need to show objective justification. However the tribunal accepted that there was significant evidence of disparate impact as the bonus was given to predominantly male workers throughout the 40 year period. It also noted that the men were doing stereotypically male work and the women were doing stereotypically female work.

The claimants appealed, contending that given the evidence of significant disparate impact, the burden should have passed to the employer to show objective justification for the bonus, and that the tribunal was confusing direct discrimination (in which the issue is the reason for the difference in treatment) with indirect discrimination (in which the issue is the fact that an ostensibly gender neutral practice does have a disparate adverse impact on one sex in particular – so the issue is the effect of the bonus rather than the cause).

The council relied on an earlier decision of the Court of Appeal, Armstrong v Newcastle upon Tyne NHS Hospital Trust [2006] IRLR 124, as authority that once they had shown a gender free reason for the bonus they did not need to show objective justification. The claimants contended that Armstrong was wrongly decided and in any event subsequent decisions of the Court of Appeal dealing with Armstrong mean that even if Armstrong was not wrongly decided, it does not apply where the claimants can show significant evidence of disparate impact on women.

The claimants relied on the much earlier decision of the European Court of Justice in Enderby v Frenchay Health Authority [1993] IRLR 591 stating that once this kind of disparate impact has been shown, the burden passes to the employer to show objective justification.

The Court of Appeal declined to go so far as to say that Armstrong was wrongly decided, but Lord Justice Pill giving the leading judgment stated that he found it difficult to reconcile with Enderby.

In any case the Court held unanimously that the burden did shift to the employer on the facts of this case and accordingly the case is to be remitted to the tribunal for the tribunal to consider whether the bonus can be objectively justified. In that case the council will face a very difficult hurdle because the obvious reason for not paying the women the bonus is cost, but there is European case law that government bodies (including local government) cannot rely on cost as a justification for discrimination.

Sheffield will now seek permission to appeal to the Supreme Court. The cost to Sheffield if it loses will run to millions of pounds.

The decision will be of significance to women claiming equal pay against other local authorities, because up until now employers have all been relying on Armstrong as a defence. Many of these cases involve similar evidence of disparate impact.

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