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Equal Pay - Genuine Material Factor Defence

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The EAT has handed down an important equal pay decision, holding that the genuine material factor defence requires justification by objective criteria.

There has, for a little while, been tension between domestic and ECJ authorities in this area. The European approach requires that a difference in pay has to be objectively justified whereas the domestic approach is simply to require the employer to be able to account for the difference by reference to a factor which is material but is not the sex of the employee unless the factor relied upon by the employer is one which may itself indirectly discriminate against female employees, in which case the factor has to be objectively justified.

In a new decision, Sharp v Caledonia Group Services Ltd. (HHJ Ansell presiding), the EAT has departed from the traditional domestic approach and adopted the European approach of requiring objective justification.

In so doing, the EAT declined to follow its previous 2004 decision in Parliamentary Commissioner for Administration v Fernandez, which held that a genuine material factor for a reason not related to sex is sufficient, and objective justification is not required.

Instead, it relied on the earlier 2001 ECJ authority of Brunhoffer Brunhoffer v Bank Der Osterrichischen Postparkasse AG, which had held that objective justification is required. The EAT has given permission to appeal to the Court of Appeal.

Sharp v Caledonia Group Services Ltd.

Thanks to Russell Jones & Walker, who successfully represented the Claimant, and to the EOC (who funded the appeal), both of whom notified me of this decision