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Case Law: Gender Pay Gap Data must be published by law
Published 22 May 2017
After the introduction of the gender pay gap regulations (1) recently, the government has launched a gender pay gap “viewing service (2)” giving the public access to the information that companies publish.
The regulations (1), which apply only to private and public sector employers with at least 250 employees, require those affected to publish the following information by April 2018:
the difference between the mean hourly rate of pay of male and female employees
the difference between the median hourly rate of pay of male and female employees
the difference between the mean bonus pay paid to male employees and that paid to female employees
the difference between the median bonus pay paid to male employees and that paid to female employees
the proportions of male and female employees who were paid bonus pay
the proportions of male and female full-pay employees in the lower, lower middle, upper middle and upper quartile pay bands.
This information has to be published within 12 months beginning with a defined pay date of 5 April (31 March for public sector employers) referred to as the “snapshot date”.
Employers are also encouraged to publish their action plan alongside the figures on their website, demonstrating the steps they will take to close the gender pay gap within their organisation.
RESOURCE ALLOCATION
The Equality Act (3) does allow employers to discriminate against their employees as long as they can objectively justify it. In the recent Court of Appeal (CA) case,Chief Constable of West Midlands Police and ors v Harrod and ors (4), the CA held that the role of tribunals was not to challenge an employer's legitimate decision about how they allocate resources and whether they represent a genuine "need"; but rather to balance it against the impact that was complained of.
BASIC FACTS of the case
The Five forces made some significant budget cuts and as a result, decided to reduce their staff numbers by using the power provided under Regulation A19 of the Police Pension Regulations 1987 (5) which allowed them in the “general interests of efficiency” to retire officers who qualified for two thirds of their pension. As officers had to have served for 30 years to qualify and the minimum entry age was 18, this regulation disadvantaged anyone over 48. A number of officers claimed indirect discrimination on the basis of age under section 19 of the Equality Act 2010 (6).
RELEVANT LAW
Section 19 of the Equality Act states that there is indirect discrimination if an employer applies a “provision, criterion or practice” (PCP) to a relevant characteristic which puts workers who share that characteristic at a particular disadvantage compared with those who do not and it cannot be shown that it is a “proportionate means of achieving a legitimate aim”.
TRIBUNAL AND EAT DECISIONS
Even though increasing efficiency was a legitimate aim, the tribunal held that the five police forces could have found alternative ways of achieving their aim rather than relying entirely on Regulation A19. For instance, by offering part-time working and/or career breaks. The tribunal held that their failure to consider the alternatives meant that the defence of justification failed.
The Employment Appeal Tribunal (7) overturned the tribunal decision on the basis that the use of A19 was appropriate and reasonably necessary in the circumstances.
The COURT OF APPEAL decision
Acknowledging that the selection process undoubtedly gave rise to prima facie discrimination on the ground of age, the Court of Appeal (8) held that was inevitably the effect of applying the criteria in Regulation A19. Under the Regulations no one else was eligible to be dismissed as part of a cost saving measure apart from the officers selected. The question was whether applying Regulation 19 was a proportionate means of achieving a legitimate aim in the circumstances.
The Court of Appeal held, “the right way to characterise the forces' aim is that they wished to achieve the maximum practicable reduction in the numbers of their officers. That is unquestionably a legitimate aim”. As the power available under Regulation A19 was the only way to achieve that aim, its use could not be said to be disproportionate, although it involved the application of an age-discriminatory criterion.
Even if the forces could have afforded to take a different approach which had less impact on their officers, the test to be applied by tribunals was not one of “absolute necessity” but rather what was “reasonably necessary”. As such, the job of the tribunal was not to challenge the employer's legitimate decision about how they allocate resources and whether they represent a genuine "need"; but rather to balance it against the impact complained of. As with a redundancy situation, the decision to reduce the officer headcount to the fullest extent available was taken in the interests of achieving certainty of costs reduction and it was not for the tribunal to devise an alternative scheme involving the loss of fewer posts.
Finally the Court held that the decision to confine dismissals to officers with more than 30 years' service should not be criticised either, because no other method of selection was lawful under the Regulations. The only possible conclusion was that the actions of the five forces were justified and the claims for age discrimination should therefore be rejected.
SECOND Early CONCILIATION CERTIFICATE
The law provides that where a claimant contacts ACAS and enters early conciliation (EC) during the limitation period, the period of EC stops the clock when calculating the time limit for registering the employment tribunal claim. In The Commissioners for HMRC v Garau(9), the Employment Appeal Tribunal (EAT) held that as the regulations only allow for one certificate, a second certificate could not extend the time period for bringing a claim.
BASIC FACTS of the case
Mr Garau was given notice of termination of his employment on 1 October 2015 with the last date of his employment being 30 December. On 12 October, he contacted ACAS under the mandatory early conciliation (10) procedure; and on 4 November, ACAS issued an early conciliation certificate.
On 28 March 2016 the day before the normal three-month limitation period for submitting a claim for unfair dismissal would have expired, he contacted ACAS (11) for a second time. It issued a second certificate on 25 April and a month later on 25 May, Mr Garau lodged a claim for disability discrimination and unfair dismissal at the tribunal.
HMRC argued that as the legislation only requires a claimant to obtain one EC certificate, the period for submitting his claims expired on 29 March. As such, his claims were outside the time limit in section 207B of the Employment Rights Act (ERA).
RELEVANT LAW
Section 207B states that, when working out the time limit for presenting a claim, the period beginning with the day after the claim is submitted to ACAS (Day A) and ending with the day when the complainant receives their certificate (Day B) is not to be counted.
Employment TRIBUNAL DECISION
Noting the “unusual circumstances” in which Mr Garau had been issued with two certificates by ACAS (one before the limitation period had commenced; and a second during the limitation period after he had been dismissed), the employment judge held that the second certificate “stopped the clock” during the second EC period. His claim for disability discrimination and unfair dismissal was therefore in time. HMRC appealed to the EAT.
EAT DECISION
The EAT allowed the appeal, holding that only one certificate was required in respect of any matter for which a tribunal claim may be brought under the regulations. The second certificate was therefore irrelevant and did not trigger the modified limitation regime in section 207B. Time was not therefore extended.
The EAT considered the second certificate was voluntary and while voluntary conciliation under the auspices of ACAS is useful and to be encouraged, it does not, of itself, modify time limits. Voluntary conciliation may influence tribunals which have to decide whether to allow amendments, grant extensions of time, or make other case management decisions.
The EAT also confirmed that the decision in the case of Tanveer v East London Bus and Coach Co Ltd (12) did not mean that the amount of time spent on early conciliation would not count in calculating the date of expiry of the time limit. That was a misunderstanding. In particular, in Tanveer limitation had already started to run when the claimant contacted ACAS to start EC.
That was not the case for Mr Garau as he had contacted ACAS before the limitation period had started and so the limitation clock could not stop under the first certificate, because it had never started. As the second certificate did not fall within the statutory EC scheme and was a purely voluntary exercise it had no impact on the time limit.
References
1. The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 [Internet]. [cited 2017 May 20]. Available from: http://www.legislation.gov.uk/ukdsi/2017/9780111152010
2. Gender pay gap - GOV.UK [Internet]. [cited 2017 May 20]. Available from: https://gender-pay-gap.service.gov.uk/Viewing/search-results
3. Participation E. Equality Act 2010 [Internet]. [cited 2017 May 20]. Available from: http://www.legislation.gov.uk/ukpga/2010/15/section/19
4. Harrod & Ors v Chief Constable of West Midlands Police & Ors [2017] EWCA Civ 191 [Internet]. [cited 2017 May 20]. Available from: https://www.employmentcasesupdate.co.uk/site.aspx?i=ed35287
5. The Police Pensions Regulations 1987 [Internet]. [cited 2017 May 20]. Available from: http://www.legislation.gov.uk/uksi/1987/257/made
6. Participation E. Equality Act 2010 [Internet]. [cited 2017 May 20]. Available from: http://www.legislation.gov.uk/ukpga/2010/15/section/19
7. Employment Appeal Tribunal - GOV.UK [Internet]. [cited 2017 May 20]. Available from: https://www.gov.uk/courts-tribunals/employment-appeal-tribunal
8. The Court of Appeal [Internet]. [cited 2017 May 20]. Available from: https://www.judiciary.gov.uk/you-and-the-judiciary/going-to-court/court-of-appeal-home/
9. The Commissioners for HM Revenue & Customs v Serra Garau UKEAT/0348/16/LA [Internet]. [cited 2017 May 20]. Available from: https://www.employmentcasesupdate.co.uk/site.aspx?i=ed35317
10. Home - Early Conciliation Notification Form [Internet]. [cited 2017 May 20]. Available from: https://ec.acas.org.uk/
11. Acas | free and impartial information and advice on all aspects of workplace relations and employment law [Internet]. 2017 [cited 2017 May 20]. Available from: http://www.acas.org.uk/index.aspx?articleid=1461
12. Tanveer v East London Bus & Coach Company Ltd UKEAT/0022/16/RN [Internet]. [cited 2017 May 20]. Available from: https://www.employmentcasesupdate.co.uk/site.aspx?i=ed30942
