If you’re going through an equal pay claim and you have a comparator that doesn’t work for the same establishment you work in but for an associated employer don’t lose hope as you could still potentially be successful in your claim. The are three main tests with regards to linking the two establishments within an equal pay claim and they are to do with common terms and they will be described below.
Example of an associated employer
An example of an associated employer would be if you work for parent company X but the comparator works for subsidiary company Y. Because the subsidiary is related to the parent company it will be viewed as an associated employer.
Equal Pay Claims: Common Terms between the Claimant and Comparator
The case of Leverton v Clywd Council [1989] IRLR 28[1] is one of the principle cases when linked with the Equal Pay Act 1970 (EqPA 1970)[2] in explaining the best example of common terms is when the Claimant and the Comparator despite working in different establishments had their terms and conditions set under some form of collective agreement and so there were common terms between them. Although this case was during the time of the EqPA 1970 it is still relevant in the modern era and will remain applicable under the Equality Act 2010 (EqA 2010)[3]
Equal Pay Claim: Common Terms observed generally
If there are no directly common terms between the claimant and the comparator the tribunal could still find in your favour if there are common terms which are observed “generally” between the Claimant’s and the Comparator’s workplace. The term generally was interpreted in the case of British Coal v Smith [1996] ICR 1515[4] to mean “for all or for perhaps most workers”.
The terms and conditions between the Claimant’s and Comparator’s establishment do not all have to be completely harmonised for this argument to be successful. As long as the majority of the terms and conditions are harmonised then it can be argued that they have been observed generally. This has been interpreted this way as otherwise all an employer would need to do is have some employees on slightly different terms and conditions to completely upset the apple cart so to speak and prevent this equal pay legislation being enacted how it was meant to be.
Equal Pay Claim: Common Terms between the relevant classes
If the first two options are not looking like they will be successful do not give up just yet as there is still an argument that there could be common terms. For this to happen there needs to be a comparison between the two establishments relating to the relevant classes.
In other words men of the same class of the comparator in the claimant’s company must have their terms and conditions compared with those of the comparator (if there are no men in the Claimant’s company then they need to show if there were men there they would be on similar terms ). If after the comparison it appears that they are on similar terms then it is possible that a link can be established between the Claimant’s company and the Comparators for the purpose of the equal pay claim with regard to a commonality of terms.
Example of Relevant Classes
The Comparator is classed as a grade 4 manager whilst the Claimant is ranked as a grade 3 manager. They do not have common terms directly between them, nor are there general terms across both establishments. However if a grade 4 manager from the Claimant’s establishment has his terms and conditions checked against the terms and conditions of the comparator and they are broadly similar then it can be argued that there are common terms between the Claimant and the Comparator.
It does not matter that the terms and conditions are different between the grade 4 manager in the Claimant’s establishment and the Claimant as long as the relevant class in the other establishment are on the same terms.
Equal Pay Claim: Effect of the Equality Act on the relevant classes test
Within the EqA 2010, the wording is changed from the EqPA 1970 to state that the Claimant can only rely on common terms if they are applied generally between the establishments or directly between the Claimant and Comparator. If a strict interpretation is given then this would therefore exclude the relevant classes test that was in the EqPA 1970.
However one needs to look at the notes attached to the EqA 2010 to see that one would hope a more relaxed approach is taken. The notes state that s.79 EqA “generally reflects the effect of provisions in the EqPA 1970″. This is then further supported by the EHRC Equal Pay Code which makes it clear that all the relevant case law from the EqPA 1970 applies to the EqA 2010, with the code explicitly stating:
“A women can also compare herself with a comparator working at a different establishment if she can show that, had he been employed at the same establishment as her, he would have been working under the same common terms and conditions as those he and others in the comparator group are currently working under. The woman does not have to be working to the same common terms as him, and does not have to show that the comparator ever would, in reality, be employed at the same establishment as her”
This should hopefully mean that the relevant classes test from the EqPA 1970 and the precedent that was established in British Coal should still be applicable in light of the EqA 2010 and would still work when argued at tribunal. Interestingly this has yet to be done and as such there is no case law to back it up as of yet.
What Next?
If you are considering making an equal pay claim but worried about who your comparator is, don’t hesitate to contact us on [phonenumber] where we will be able to assess whether your do have a case and whether action can be taken.