The female claimants were employed by the NHS which required them, as part of their normal working week, to work unsocial hours including weekends, Bank holidays and nights. They were paid a basic hourly pay for any work undertaken outside the unsocial hours, with uplifts applied to their basic pay for work during unsocial hours. Their claim for equal pay was based upon comparisons with male employees who were paid a higher percentage uplift for working unsocial hours. At the Employment Tribunal, the respondent produced a spreadsheet which showed that, if the basic pay and enhanced pay were aggregated to create a single hourly pay, the claimants actually earned more per hour than the comparators. The Employment Judge accepted that the uplift in the claimants’ and comparators’ terms and conditions were different, but did not accept that it was permissible for the formula of the comparator’s uplift be transposed to the claimants. This would mean that the difference between the claimants’ pay and the comparators’ pay would be even greater. He did accept that each of the terms of both the claimants’ and comparators’ contracts were distinct provisions with sufficient content to make it possible to make comparisons but concluded that the uplifts formed part of their normal working hours and were part of their basic pay as the EAT and Court of Appeal had decided in Degnan v Redcar and Cleveland BC [2009]. Thus, their claims failed because, if the terms of the contracts were taken as a whole, the claimants’ basic pay was higher than that of the comparators.

At the EAT, the case of Hayward v Cammell Laird Shipbuilders Ltd [1988] 1AC 894 which was decided in the House of Lords, was considered. In this case, as with the present one, the issue was whether to look at distinct terms of the contract to make comparisons, or the contract as a whole. The Judge considered that discrete components of remuneration should be compared as opposed to an aggregate pay comparison to avoid the risk of gender discrimination being obscured. He decided that the Employment Judge had erred in applying the wrong legal tests and to have concluded as a result that the claimants could not show any less favourable contractual term: he should have looked at the distinct terms of the contracts to consider whether the women had been discriminated against in respect of any element of their remuneration.

___________________

Appeal No. UKEAT/0074/10/CEA

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 19 May 2010

Judgment handed down on 6 August 2010

Before

THE HONOURABLE MRS JUSTICE COX

(SITTING ALONE)

MRS S BROWNBILL & OTHERS (APPELLANTS)

ST HELENS & KNOWSLEY HOSPITAL NHS TRUST (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant MS KARON MONAGHAN QC & MR RICHARD STUBBS (of Counsel)
Instructed by:
Messrs Thompsons Solicitors
23 Princess Street
Manchester
M2 4ER

For the Respondent MR JOHN BOWERS QC & MR SEAMUS SWEENEY (of Counsel)
Instructed by:
Messrs Mace & Jones Solicitors
Drury House
19 Water Street
Liverpool
L2 ORP

EQUAL PAY ACT – Case management

This appeal by some of the Claimants in a multiple equal pay claim, from a judgment on a PHR, raised the important question of the meaning of section 1(2) of the Equal Pay Act, as interpreted by the House of Lords in Hayward v Cammell Laird Shipbuilders Ltd [1988], and the nature of the "term" of the contracts of both the Claimants and comparators to be compared. The issues also concerned the effect of the CA's decision in Degnan v Redcar and Cleveland BC [2009] and whether this is consistent with Hayward. The term under consideration related to enhanced rates of pay contingent upon the working of unsocial hours during normal working hours. Domestic and European law considered.

The Employment Judge was found to have erroneously conflated terms of the contract relating to pay for normal working hours, which he had already found to be distinct terms which were capable of comparison, and to have erred in concluding as a result that the Claimants could not show any less favourable contractual term.

The appeal was allowed and the correct decision substituted. The matter was remitted for consideration on the other issues raised.

1. The context for this appeal is the pursuit of claims for equal pay, brought by large numbers of NHS employees working in jobs which are being carried out predominantly by women. The claims followed the implementation, in October 2004, of the new pay structure introduced as a result of the Agenda For Change job evaluation. The Claimants all seek equal pay for work rated as equivalent or work of equal value, pursuant to section 1(2)(b) and (c) of the Equal Pay Act 1970 (the Act), naming as their comparators male employees working in NHS jobs occupied predominantly by men.

1. Before October 2004 NHS employees were employed on a variety of different terms and conditions of employment, which were either collectively agreed by one of the former "Whitley Councils" or were local terms and conditions under the Whitley Council terms, as varied locally. Upon implementation of Agenda For Change employees were assimilated on to the new pay structure, in accordance with what were considered to be their appropriate pay bands.

1. This appeal is brought by five of the women pursuing claims in the current proceedings. Their case, essentially, is that, for the period prior to 1 October 2004, there were terms in their contracts of employment with the Respondent Trust (the Trust) which were less favourable than similar terms in the contracts of their male comparators. The terms in question relate to payments made for working unsocial hours during their normal contractual hours (that is, not overtime payments). The Claimants therefore contend that the terms of their contracts are to be modified, having regard to the equality clause implied by section 1(2) of the Act.

1. In a judgment dated 24 November 2009, following a pre-hearing review, the Newcastle Employment Tribunal (the Employment Judge sitting alone) ruled against the Claimants, deciding that:

"The term in the claimants' and comparators' contracts of employment for unsocial hours is a term relating to their respective basic pay allowing an increase in basic pay if each qualifies for an unsocial hours payment. The claimants are not able to rely on the comparators' formula for increase of basic pay for unsocial hours."

1. The disparate nature of the terms and conditions of NHS employees prior to 1 October 2004 is not relevant in this appeal. The sole issue before me is whether there was a term of the Claimants' contracts, relating to unsocial hours, which was less favourable than a similar term in the comparators' contracts; and therefore whether the Employment Judge erred in concluding that the Claimants could not rely on the comparators' formula for increasing the basic rates of pay.

1. Whilst only five of the Claimants in the current proceedings are affected by this issue, I am told that it is an issue of general application, capable of affecting many hundreds of equal pay claims currently before Employment Tribunals. It is therefore a matter of some importance.

1. As the Employment Judge pointed out, an NHS hospital is staffed for 24 hours a day, 365 days a year. Employees, whilst working in accordance with weekly contracted hours, are required to work shift patterns, which enable sufficient cover to be provided at all times by the particular groups of employees. Usually, employees are rostered to work on a three-shift system, involving early, late and night shifts.

1. The Whitley Council pay schemes introduced payments for hospital employees to be paid a basic salary at a particular scale for working during normal work time periods. However, since employees also have to work at nights and during weekends and Bank Holidays, they received enhanced payments for working their normal contracted hours during those "unsocial" periods. These enhanced payments were also incorporated into the various Whitley Council terms and conditions.

1. (a) Mrs Logan and Mrs Reece are Band 2 health care assistants, testing contractual terms relating to Saturday, Sunday and Bank Holiday working for Band 2 workers.

(b) Mrs Brownbill and Mrs Southern are Band 2 receptionists, testing terms relating to unsocial hours and night working for Band 2 workers.

The Band 2 comparators are men employed as drivers, porter/drivers and parking attendants.

(c) Mrs Hughes is a Band 3 senior health care assistant, testing terms relating to Saturday, Sunday and Bank Holiday working for Band 3 workers.

The Band 3 comparators are men working as theatre porters.

1. (a) The relevant contractual term for Mrs Logan and Mrs Reece derives from the Whitley Nursing and Midwifery terms and conditions. Pursuant to section 5, dealing with special duty payments, clause 5.9 provides that:

"Staff … who are entitled to special duty payments when required to work on a Sunday or public holiday (midnight to midnight) shall be paid at the rate of time and two-thirds of their basic hourly pay for the hours worked during those periods, exclusive of mealtimes. The enhanced rate of time and one-third will be paid for all other special duty worked on a Saturday, (midnight to midnight) or on other days between 8pm and 6am."

This contractual term (and this applies to the relevant terms for all the Claimants and comparators) therefore entitles them to an uplift, or an enhancement to their basic pay, which is contingent upon them working their normal contracted hours on Saturdays, Sundays or Bank Holidays. If, during their normal working hours, they worked on a Saturday they received time and a third – 133 per cent of basic hourly rate. If they worked their normal hours on a Sunday or a Bank Holiday they received time and two-thirds – 166 per cent of basic rate.

The material contractual term is clause 4.1 of part A of section II, which provides:

"WEEKEND WORK

Full-time staff shall be paid for weekend work within the standard working week as follows:

(i) Saturday : Plain time plus one half

(ii) Sunday : Double plain time

(Defined as the period between midnight and midnight)"

For working on Saturdays within the standard working week these male comparators were therefore entitled to time and a half of basic rate – 150 per cent. For working on Sundays and, as is agreed, Bank Holidays, they were entitled to double-time – 200 per cent.

The material contractual term is clause 163 of part B, which is worded in the same way as clause 4.1, and thus entitled these comparators to the same enhanced rates of basic pay as the drivers/porters, contingent upon them working the same unsocial hours.

(b) The relevant contractual term for Mrs Brownbill and Mrs Southern is clause 747 (Whitley Administrative and Clerical Staffs Council), providing as follows:

"747. Night allowance for staff not on a shift rosta

a. Staff not on a shift rosta who work between the hours of 8pm and 6am will be paid a night allowance per hour:

i. For hours worked between 8pm and 11pm – 15 per cent

ii. For hours worked between 11pm and 6am – 25 per cent

Periods of less than half an hour at night will not reckon for payment."

Thus, for working unsocial hours (between 8pm and 11pm) during their normal working hours they were entitled to 115 per cent of their basic hourly rate. For working night hours (between 11pm and 6am) they were entitled to 125 per cent of the hourly rate.

The material contractual term for the male drivers and porter/drivers is clause 6.1 (nights) and clause 10 (unsocial hours) as follows:

"6 Night Duty Allowance

For all hours worked between 10pm and 6am a night duty allowance shall be paid at the rate of one-third plain time provided that payment shall be made for a whole shift worked between 8pm and 8am.

To be calculated on a basic pay."

"10 Unsocial Hours

All staff (except rotary and alternating shift workers and those in receipt of night duty allowance) who work between the hours of 8pm and 6am Monday to Friday within the standard working week shall be paid in addition of one-fifth plain time for all such hours worked."

Thus, for working additional/unsocial hours the drivers and porter/drivers received time and one-fifth – 120 per cent. For working night hours they received time and one-third – 133 per cent.

Again, the terms relating to the male parking attendants (clause 169 – nights and clause 173 – unsocial hours) made exactly the same provisions as to enhanced payments as for the other comparators.

(c) Mrs Hughes (Band 3) is, like Mrs Logan and Mrs Reece, also covered by clause 5.9 (see (a) above) and was therefore entitled to the same enhanced rates. Her Band 3 comparators (the male theatre porters) are also covered by clause 4.1 and receive the same enhanced rates as the drivers and porter/drivers.

1. These, then, were the relevant contractual terms. At the pre-hearing review the Employment Judge had before him an agreed bundle of documents and a schedule of facts, agreed between the parties save for a few, insignificant differences. He heard oral evidence from only one witness, namely the Trust's workforce planning manager John Foo. It appears that his evidence was that, in some cases at least, the contractual position for Claimants and comparators did not in fact reflect their working patterns and the hours they actually worked. According to Mr Foo none of the drivers actually worked unsocial hours or nights as part of his normal working hours; and although the parking attendants did work unsocial hours they did not work nights.

1. However the Employment Judge held, correctly, that that was irrelevant to the issue before him which, for the purposes of the equal pay claims, had to focus on the terms of the contracts of employment of both the Claimants and their male comparators. Mr Bowers QC, for the Trust, does not dispute this.

1. Amongst the documents in the agreed bundle were spreadsheets prepared by the Trust. These showed, in the case of each Claimant and comparator, (i) in the upper box, the position as it currently is, amalgamating the unsocial hours enhanced rates in accordance with their respective, individual contractual terms; and (ii) in the lower box, the position as it would be for each of them if amalgamating the enhanced rates contractually payable to the comparators.

1. The Employment Judge, referring to these spreadsheets, observed that:

"The spreadsheets showing the individual terms and conditions of enhanced pay show that the claimants earn more per hour than the comparators. The amount is increased in favour of the claimants on the application of the comparators' terms and conditions for unsocial hours payments. That is, applying the terms and conditions, the claimants earn more per hour at the enhanced rates than the comparators do when applying the comparators enhanced rates to their basic pay."

1. In fact, it is not in dispute that Mrs Hughes is currently worse off in certain respects than her comparators, although this is not material to the issue arising in this appeal. But the submission made by Ms Monaghan QC for the Claimants is that this is nothing to the point, at least at this stage of the proceedings. Notwithstanding the fact that the Claimants may receive more than their comparators, as a result of amalgamating the relevant benefits, the law does not permit that approach to deciding questions of equal pay. Pursuant to the provisions of the Equal Pay Act, and the decision of the House of Lords in Hayward v Cammell Laird Shipbuilders Ltd [1988] AC 894, it is the contractual term chosen by the Claimants that is material to the determination of their claims. I shall return to that matter later on.

1. At paragraphs 11-23 of his judgment the Employment Judge summarised, without comment, counsels' respective submissions. At paragraphs 24-33 he set out in considerable detail the legislation and case law, both domestic and European, to which he was referred.

1. It is apparent from these paragraphs that there is no analysis undertaken of the law, and no assessment of the competing submissions upon it. This is unfortunate. Apart from a lengthy recital of the relevant statutory provisions and various passages from the case law referred to by counsel, the Judge gave no indication as to the legal principles to be derived from them, and which then had to be applied by him to the facts found.

1. His conclusions, after a brief summary of the factual background at paragraph 34, were shortly stated, as follows:

"35……Each of the claimants and the comparators has a clause entitling them, when certain conditions are triggered, to an enhanced payment expressed either as a fraction of basic pay or time and a half or double time. The claimants get enhanced rates within "the standard working week" as set out at page 58. Drivers and Driver/Porters are paid enhanced payments for unsocial hours (weekend work). The enhancement payment is paid if weekend work is "within the standard working week", page 63. Accordingly, there is a term in the claimants' and the comparators' contracts of employment which can be compared. Each of the terms are distinct provisions with sufficient content to make it possible to compare it with those of others so that the benefits that are conferred by the provision can be contrasted. The provisions in the claimants' contracts and those in the comparators' contracts provide for an increase in hourly pay based on the day or time of day worked. As stated by the EAT in Degnan most contracts of employment, as indeed these contracts under consideration, contain mutual obligations. First is that employees attend work where they are required and carry out work there. The employer is under an obligation to make monetary payment in return for the employees complying with the obligations to attend and to work. As in Degnan, the contracts of the claimants and the comparators oblige employers to pay an hourly rate. That hourly rate is uplifted under certain conditions, that is when the employee works unsocial hours.

36 I am satisfied that the provision of the unsocial hours terms, both in the claimants' and the comparators' contracts, are provisions for monetary payment for the performance of the contract by employee during normal working hours. There is no distinction, certainly none has been shown by the claimants, of normal hours only covering a certain period, say from 9 until 5pm. The claimants' and comparators' work shifts which must be construed as their normal hours. Sometimes those shifts do not include working during unsocial hours. Sometimes they do. When they do both the claimants and the comparators are entitled to an uplift.

37 I accept that the uplift in the claimants' and the comparators' terms and conditions are of a different percentage or fraction. When the spreadsheets are looked at it is clear that the claimants on the application of their unsocial hours uplifts receive higher pay than their comparators. I do not accept that it is permissible for the formula of the comparator's uplift be transposed to the claimants. It would of course increase the difference between their pay and the comparators' pay even more. The terms for the payment of remuneration for both claimants and comparators, under certain conditions, have a trigger which enables them to claim enhanced pay over basic pay. Thus enhancements form part of their normal working hours and are part of their basic pay as the EAT and the Court of Appeal decided in Degnan."

1. Ms Monaghan submits that, in so deciding, the Employment Judge applied the wrong legal test. It is clear from the relevant contractual terms that there is an obvious differential between the Claimants and their comparators, in relation to the same subject matter. Indeed, this is what the Employment Judge found at paragraph 35. Each of the Claimants and comparators was found to have a discrete, contractual term of some substance conferring benefits, namely enhanced payments, which were contingent upon them working on Saturdays, Sundays and Bank Holidays or unsocial or night hours during their normal working hours, that is, within the standard working week.

1. The Employment Judge found, correctly, that there was accordingly a term in the Claimants' and their comparators' contracts of employment which could be compared. He found expressly that "each of the terms are distinct provisions with sufficient content to make it possible to compare it with those of others so that the benefits that are conferred by the provision can be contrasted." He was then required, pursuant to the provisions of the Act, to undertake a comparison between these contractual terms, in order to determine whether the term in the Claimants' contracts was less favourable than the similar term in the contracts of their comparators.

1. However, the Employment Judge did not undertake the task required of him. Instead, he appears to have found that the contractual terms were not discrete and comparable and that the decision in Degnan v Redcar and Cleveland Borough Council [2005] IRLR 615 applied to this case. He concluded that the provision of the unsocial hours terms was provision for monetary payment for the performance of the contract by the employees during normal working hours; and therefore that the enhancements formed part of their normal working hours and part of basic pay; and that there was therefore no less favourable term.

1. In so finding Ms Monaghan submits that he was in error, in that he failed correctly to apply the provisions of the Act, as interpreted by the House of Lords in a clear and long-standing authority. He was, in any event, in conflict with his own factual findings and his earlier self-direction, as expressed in paragraph 35. In paragraphs 36-37 he appears to have adopted a results-based analysis to this case, erroneously conflating what were discrete, contractual terms as to enhanced payments with basic pay entitlement, in order to produce an aggregate sum. He therefore applied the wrong legal test.

1. Mr Bowers submits that the Employment Judge was correct in concluding as he did. These Claimants were effectively seeking not the equalisation of their pay term with that of their comparators, but the application of a formula used for the purposes of calculating the rate of pay due to them.

1. The contractual term which should properly form the basis of a comparison is the pay due to the employees for the work they performed in normal working hours. The Claimants accepted that the hours worked, to which they sought to have the comparators' formula applied, were normal working hours. It is a significant feature of this case that the various, inconvenient hours supplements were paid for normal working.

1. The Claimants' pay term was accordingly no less favourable than the pay term of their comparators, and the Employment Judge was correct in considering pay for the normal working week as a distinct term under section 1 of the Act. The Employment Judge correctly applied the legal principles enunciated by the House of Lords in Hayward, which were considered and applied by the Court of Appeal in Degnan, and he did not err in law.

1. The starting point is the legislation. The Equal Pay Act clearly focuses on contractual terms and on the implicit inclusion of an equality clause as the model for achieving equal pay for men and women at work.

1. Section 1 provides, so far as is relevant, as follows:

"1 Requirement of equal treatment for men and women in same employment

(1) If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include (directly or by reference to a collective agreement or otherwise) an equality clause they shall be deemed to include one.

(2) An equality clause is a provision which relates to terms (whether concerned with pay or not) of a contract under which a woman is employed (the 'woman's contract'), and has the effect that-

…

(b) where the woman is employed on work rated as equivalent with that of a man in the same employment-

(i) if (apart from the equality clause) any term of the woman's contract determined by the rating of the work is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable and

(ii) if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed and determined by the rating of the work, the woman's contract shall be treated as including such a term;"

Like provision is made, at sub-paragraph (c), as in sub-paragraph (b) (i) and (ii), in relation to women employed on work of equal value.

1. This statutory model, providing for formal equality in the contractual terms of men and women, has been the subject of increasing criticism over the years. However, notwithstanding the amendment of some of the Act's provisions since its implementation in 1975, this has remained the model provided by Parliament for achieving pay equity in this country.

1. It has also been emphasised in the case law, on a number of occasions, that the Act is not a fair wages statute. As Ms Monaghan correctly observes, the Act is not concerned with whether the outcome in any particular case is fair and equitable. The only question under section 2(b)(i) or (c)(i) is whether "any term" of the Claimant's contract is less favourable than a term of a similar kind in the contract of her comparator.

1. European legislation emphasises the fundamental nature of the principle of equality. The "principle of equal pay", contained originally in Article 119 of the Treaty of Rome (and subsequently in Article 141 of the Treaty establishing the European Community) means "for the same work or for work to which equal value is attributed, the elimination of all discrimination on grounds of sex with regard to all aspects and conditions of remuneration" (Article 1, Council Directive 75/117/EEC – the Equal Pay Directive).

1. Article 2 requires member states to introduce into their national legal systems such measures as are necessary to enable employees to pursue their equal pay claims by judicial process.

1. These rights are now consolidated in Directive 2006/54/EC, providing for equal opportunities and equal treatment of men and women at work, where equality between men and women is recognised as "a fundamental principle of Community law, requiring effective implementation by appropriate procedures for enforcement" (Preamble, paragraphs 28 and 29.)

1. Article 4 now provides that:

"For the same work or for work to which equal value is attributed, direct and indirect discrimination on grounds of sex with regard to all aspects and conditions of remuneration shall be eliminated."

1. Article 141 is now Article 157 of the Treaty on the Functioning of the European Union, and requires member states to "ensure that the principle of equal pay for equal work or work of equal value is applied." For the purposes of Article 157 pay is very broadly defined as:

"The ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer."

1. The meaning of section 1(2) of the Equal Pay Act was considered by the House of Lords in Hayward v Cammell Laird Shipbuilders Ltd [1988] 1AC 894. There was no previous case in which this section had been fully considered, and their decision, as to the correct construction of these provisions, has remained the law since 1988. In view of its importance in this appeal, it is necessary to refer to it in some detail.

1. The facts of the case are well known and can be shortly stated. Julie Hayward worked as a cook at a shipyard canteen and was classified as an unskilled worker. She claimed that she was doing work of equal value to male shipyard workers who were paid at the higher, "skilled worker" rate.

1. The Tribunal held that her work was of equal value, following an evaluation by an independent expert. However, they rejected her case that, in considering whether her contract of employment should be modified, it was sufficient to compare her basic pay and overtime rates with those paid to her comparators. The respondents argued that, looking at the contracts as a whole, including provision for sickness benefits and meal breaks, she was as favourably treated as the men. The Tribunal agreed, holding that it was necessary to look at all the terms and conditions of the contracts in order to decide whether, on a comparison of all the contractual terms, she was entitled to the higher rate of pay.

1. Ms Hayward was unsuccessful in appeals to the Employment Appeal Tribunal and the Court of Appeal. However, the House of Lords allowed her appeal. Lord MacKay identified the issue arising as follows at page 900 E-F:

"The issue is whether in terms of the Equal Pay Act 1970, as amended, the woman who can point to a term of her contract which is less favourable than a term of a similar kind in the man's contract is entitled to have that term made not less favourable irrespective of whether she is as favourably treated as the man when the whole of her contract and the whole of his contract are considered, as the appellant submits, or whether, although she shows that a particular term of her contract is less favourable to her than a term of a similar kind in the man's contract, her claim can nevertheless be defeated if it is shown that the terms of her contract considered as a whole are not less favourable to her than the terms of the man's contract considered as a whole, as the respondents submit."

1. Observing that the word "term" is not defined in the Act, Lord MacKay continued:

"In that situation I am of the opinion that the natural meaning of the word 'term' in this context is a distinct provision or part of the contract which has sufficient content to make it possible to compare it from the point of view of the benefits it confers with similar provision or part in another contract …"

1. Pausing there, it appears to me that the Employment Judge in the present case found exactly this at paragraph 35, in finding that the relevant terms of the Claimants' contracts were distinct provisions with sufficient content to make it possible to compare them with those of the comparators.

1. It is also worth noting that, in the letter sent to Ms Hayward setting out her normal hours of work, there was a formula providing that "overtime payment shall be plain time rate plus a third (two-thirds on Sat and Sun)". In the men's contracts the corresponding provisions, with regard to both basic pay and determination of overtime payments, were less specific, referring to a national agreement from which both wage rates and overtime payments were to be determined. Nevertheless, Lord MacKay, with whom all the other members of the appellate committee agreed, considered it appropriate to draw apart the discrete terms addressing benefits, in order to compare the "terms" relating to basic pay. He said this at page 901 B-C:

"It appears to me that it would be natural to compare the appellant's basic salary as set out in her contract with the basic salary determined under the men's contract. I think it would be natural to treat the provision relating to basic pay as a term of each of the contracts.

However, one has to take account of the hours to be worked in order to earn this money and I think this consideration points to the importance of the provision in question being one which is capable of being compared from the point of view of the benefit it confers with a corresponding provision in another contract to see whether or not it is more beneficial than that provision. Accordingly, I am of opinion that the natural application of the word 'term' to this contract is that it applies for example, to the basic pay, and that the appropriate comparison is with the hourly rate of basic pay."

1. Whilst, given this conclusion, it was not strictly necessary to consider EC law, Lord MacKay concluded that nothing in the European legislation detracted from this construction of the domestic legislation, saying at page 903 G:

"In my opinion the terms of Article 1 [of the Equal Pay Directive] are consistent with the appellant's submission. When elimination of all discrimination on grounds of sex is to be applied to all aspects and conditions of remuneration I consider this requires each of these aspects to be considered and discrimination existing in any aspect to be eliminated irrespective of the other aspects. It does not appear to me to be a natural reading of Article 1 to say that if the remuneration as a whole provides the same result for a man and a woman it does not matter that some aspects of the remuneration discriminate in favour of the woman so long as there are corresponding discriminations in other aspects in favour of the man."

1. Lord Goff approached the matter by recognising that section 1(2)(b) makes provision for two alternative situations, (i) the presence of a less favourable term in the woman's contract, and (ii) the absence from her contract of a term in the comparator's which benefits him. At pages 906-907 he said:

"In considering the question of construction, it is plain that we have to consider it in relation both to the case of the less favourable term, and the case of the absent term, for the same policy considerations must underlie each. Furthermore, I find it easier to approach the problem by considering first the case of the absent term, because the provisions of sub-paragraph (ii) of each paragraph are in simpler terms than those of sub-paragraph (i), and are therefore easier to construe.

What does sub-paragraph (ii) in each case provide? It provides that if the woman's contract does not include a term corresponding to a term benefiting the male comparator included in his contract, her contract shall be treated as including such a term. Next, what does such a provision mean? If I look at the words used, and give them their natural and ordinary meaning, they mean quite simply that one looks at the man's contract and at the woman's contract, and if one finds in the man's contract a term benefiting him which is not included in the woman's contract, then that term is treated as included in hers. On this simple and literal approach, the words 'benefiting that man' mean precisely what they say - that the term must be one which is beneficial to him, as opposed to being burdensome. So if, for example, the man's contract contains a term that he is to be provided with the use of a car, and the woman's contract does not include such a term, then her contract is to be treated as including such a term."

1. This approach, he held:

"… does not require, or indeed permit, the court to look at the overall contractual position of each party, or even to look at their overall position as regards one particular matter, for example, 'pay' in the wide sense adopted by the Court of Appeal. To achieve that result, it would be necessary, in sub-paragraph (ii), to construe the word 'term' as referring to the totality of the relevant contractual provisions relating to a particular subject matter, for example, 'pay;' or alternatively to construe the words 'benefiting that man' as importing the necessity of a comparison in relation to the totality of the relevant contractual provisions concerning a particular subject matter and then for a conclusion to be reached that, on balance, the man is thereby benefited. The latter construction I find impossible to derive from the words of the statute … But what of the former? … Again, I find myself unable to accept it. First, it would mean that the situation of the absent term must be confined only to those cases where there was no provision relating, for example, to pay - or, I suppose, to overtime, or to some other wholly distinct topic. I cannot think that that was the intention of the legislature. In common sense terms, it means that sub-paragraph (ii) would hardly ever be relevant at all; certainly, since every contract of employment makes some provision for 'pay' in the broad sense adopted by the Court of Appeal, sub-paragraph (ii) would never be relevant in relation to pay or any other form of remuneration in cash or in kind or in the form of other benefits. I find this proposition to be startling. Second, it imposes upon the word 'term' a meaning which I myself do not regard as its natural or ordinary meaning. If a contract contains provisions relating to (1) basic pay, (2) benefits in kind such a the use of a car, (3) cash bonuses, and (4) sickness benefits, it would never occur to me to lump all these together as one 'term' of the contract, simply because they can all together be considered as providing for the total 'remuneration' for the services to be performed under the contract. In truth, these would include a number of different terms; and in my opinion it does unacceptable violence to the words of the statute to construe the word 'term' in sub-paragraph (ii) as embracing collectively all these different terms."

1. Ms Monaghan submits, in my view correctly, that contingent benefits of the kind under consideration in this case would be included within the contractual provisions Lord Goff had in mind in this passage.

1. It would therefore follow that the fact that both elements in issue here concern "pay", namely basic rates of pay and enhanced rates of pay, contingent upon normal hours being worked at weekends or other unsociable hours, does not prevent them from being considered and compared separately, as distinct terms conferring benefits which are capable of comparison. It seems clear to me that if, in this case, the Claimants' contracts did not contain any term providing for enhanced rates of pay for working unsociable hours, they would be able to ask for their contracts to be treated as including such a term, there being a term providing for such enhanced rates benefiting the male comparators.

1. Against the background of his reasoning in relation to the case of the absent term, Lord Goff then turned to sub-paragraph (i). The Court of Appeal had considered that the words "a term of a similar kind" in the man's contract referred necessarily to a term relating to the same overall subject matter, in particular pay; and that the question whether the relevant term in the woman's contract was less favourable than that in the man's could only sensibly be considered by comparing all the provisions relating to this subject matter in the contracts of each, thereby giving a broad meaning to the word "term".

1. In rejecting this approach Lord Goff said that these words mean precisely what they say. At page 908 A-C he said:

"You look at the two contracts: you ask yourself the common sense question - is there in each contract a term of a similar kind, i.e. a term making a comparable provision for the same subject matter; if there is, then you compare the two, and if, on that comparison, the term of the woman's contract proves to be less favourable than the term of the man's contract, then the term in the woman's contract is to be treated as modified so as to make it not less favourable. I am, of course, much fortified in this approach in that it appears to me to be consistent with the only construction of sub-paragraph (ii), concerned with the case of the absent term, which I find to be acceptable. But, in addition, I feel that the Court of Appeal's attempt to introduce the element of overall comparison placed them firmly, or rather infirmly, upon a slippery slope; because, once they departed from the natural meaning of the word 'term,' they in reality found it impossible to control the ambit of the comparison which they considered to be required. For almost any, indeed perhaps any, benefit will fall within 'pay' in the very wide sense favoured by them, in which event it is difficult to segregate any sensible meaning of the word 'term.'"

1. He recognised that this construction would always lead to enhancement of the relevant term in the woman's contract or, in the converse case, to enhancement of the relevant term in the man's contract. Since some reliance is placed in the present case upon the consequences which he referred to in Hayward, I include them here. At page 908 D-F he said as follows:

"This appears to me to be the effect of the philosophy underlying the subsection. I also appreciate that this may, in some cases, lead to what has been called mutual enhancement or leap-frogging, as terms of the woman's contract and the man's contract are both, so to speak, upgraded to bring them into line with each other. It is this effect which was found to be so offensive by both the Employment Appeal Tribunal and the Court of Appeal. They viewed with dismay the possibility of equality being achieved only by mutual enhancement, and not by an overall consideration of the respective contractual terms of both the man and the woman, at least in relation to a particular subject matter such as overall remuneration, considering that mutual enhancement transcended the underlying philosophy of the Equal Pay Act 1970 and that it could have a profoundly inflationary effect."

1. However, Lord Goff observed that there were two answers to these concerns. Firstly, section 1(3) of the Act enables an employer to avoid the operation of the equality clause in an appropriate case, where a variation between the relevant contracts is shown to be "genuinely due to a material factor which is not the difference of sex".

1. Secondly, he pointed out that if the construction of section 1(2) which he preferred did not accord with the true intention of Parliament, then the appropriate course was for Parliament to amend the legislation. In fact, although the Act has subsequently been amended in a number of respects, there have been no amendments to this section since the decision in Hayward was handed down.

1. I note, finally, the warning Lord Goff gave at page 909 E:

"In the meanwhile, however, the decision of your Lordships' House may have the salutary effect of drawing to the attention of employers and trade unions the absolute need for ensuring that the pay structures for various groups of employees do not contain any element of sex discrimination, direct or indirect, because otherwise section 1(3) will not be available to mitigate the effects which section 1(2), in its present form, is capable of producing on its own."

1. Whilst it has taken some time to emerge, some may consider that our Courts and Tribunals are now experiencing the full force of disputed discrimination issues arising from historic pay structures, to which Lord Goff drew attention over 20 years ago.

1. In my judgment, the European case law is entirely consistent with the approach adopted by the House of Lords in Hayward.

1. In Barber v Guardian Royal Exchange Assurance Group [1990] ICR 616, one of the questions the Court of Appeal referred to the European Court of Justice was whether equal pay between men and women must be ensured at the level of each element of remuneration or only on the basis of a comprehensive assessment of the consideration paid to workers.

1. The ECJ pointed out the broad scope of Article 119, which "prohibits any discrimination with regard to pay as between men and women, whatever the system which gives rise to such inequality". Referring to earlier judgments where the Court had emphasised "the fundamental importance of transparency" and of the possibility of review by the national courts to prevent or eliminate any discrimination based on sex, the Court held at paragraph 34:

"34 With regard to the means of verifying compliance with the principle of equal pay, it must be stated that if the national courts were under an obligation to make an assessment and a comparison of all the various types of consideration granted, according to the circumstances, to men and women, judicial review would be difficult and the effectiveness of article 119 would be diminished as a result. It follows that genuine transparency, permitting an effective review, is assured only if the principle of equal pay applies to each of the elements of remuneration granted to men or women."

1. In so deciding the Court agreed with Advocate General Van Gerven on this point. At paragraph 46 he had expressed the following opinion:

"… the question raises an additional problem, in so far as it suggests that, in the event of article 119 being applicable, the principle of equal pay contained therein is not infringed provided that the total value of the benefits is the same, even though it is made up of components which differ according to sex but are mutually compensating.

In my view the principle of equal pay implies equality at the level of each component of remuneration. If it were otherwise, the enforceability of that principle by the courts would be seriously jeopardized. The courts would then have to evaluate and compare the most diverse advantages which employers confer on their employees. That may call for a complex factual analysis which would not guarantee the equality of total pay as effectively as the equality of each component separately, which is easier to verify.10"

In the footnote there marked the Advocate General referred to the approach of the British Courts as being the same and cited the Hayward case.

1. These passages all draw attention to the high risk that, in comparing remuneration on a global or aggregate basis, gender discrimination may be obscured, and that therefore enforcement of the fundamental principle of equal pay may be jeopardized.

1. In the present case there is no information before me as to why, as the spreadsheets indicate, these Claimants receive more by way of basic pay than their comparators. There may be historic or other reasons for this, but the risks of gender discrimination being obscured by an aggregated pay comparison are avoided by a comparison of the discrete components of remuneration, as I consider is required by both domestic and European authority.

1. The decision in Jämställdhetsombudsmannen v ?rebro Läns Landsting [2001] ICR 249 is also of relevance in this case. The claimants were midwives working on a shift system and at weekends and unsocial hours during their normal working hours at a hospital in Sweden. They worked under a collective agreement which covered both the midwives and the male technician comparators. The midwives had a 38 or 34-hour week rather than a 40-hour working week, and they were entitled to an inconvenient hours supplement in addition to their basic pay. The supplement was a fixed hourly amount, independent of their other remuneration, but it varied according to the inconvenient hours worked. The comparators, who worked normal working hours from Monday to Friday, had a 40-hour working week and no pay supplement.

1. On the basis that their work was of equal value to their comparators the midwives complained of discrimination, since they received a lower rate of basic pay than their male comparators. One of the issues raised was whether, for the purposes of Article 119 and the Equal Pay Directive, in comparing the pay of the two different groups, an inconvenient hours supplement received by only one of the groups and the value of a relatively reduced working week worked by that group should be taken into account. The employers argued that they should be.

1. The questions referred by the national court seem to me to involve, essentially, the same issue as that posed in the present appeal, namely "whether the inconvenient hours supplement must be taken into consideration in calculating the salary used as the basis for a pay comparison for the purposes of Article 119 of the Treaty and Directive 75-117."

1. In rejecting the employers' arguments the clear and principled approach to be adopted was set out by the Court at paragraphs 36-44 as follows:

"36 It should be recalled at the outset that article 119 of the Treaty lays down the principle that men and women should receive equal pay for the same work or for work deemed to be of equal value. Thus, the same work or work deemed to be of equal value must be remunerated in the same way whether it is performed by a man or a woman. As the court has already held in Defrenne v Sabena (Case 43/75) [1976] ICR 547,566, para 12, that principle is one of the foundations of the Community.

37 Furthermore, the court has also held that article i of Directive 75/117, which is essentially designed to facilitate the practical application of the principle of equal pay outlined in article 119 of the Treaty, in no way alters the scope or content of that principle as defined in article 119: Jenkins v Kingsgate Clothing Productions Ltd (Case 96/80) [1981] ICR 592.

38 In order to give a helpful reply to the national court, it must first of all be established whether the inconvenient hours supplements awarded to workers under the Allmänna Bestämmelser 95 collective agreement fall under article 119 of the Treaty and therefore under Directive 75/117.

39 In that connection, the concept of pay, within the meaning of the second paragraph of article 119 of the Treaty, covers any other consideration, in cash or in kind, present or future, provided that the worker receives it, even indirectly, in respect of his employment from his employer: see Barber v Guardian Royal Exchange Assurance Group (Case C-262/88) [1990] ICR 616, 668, para 12.

40 The supplement at issue in the main proceedings constitutes a form of pay to which the worker is entitled in respect of his employment. The supplement is paid to the worker for performing duties at inconvenient hours and to compensate him for the resultant disruption and inconvenience.

41 As to the manner in which salaries are negotiated at the level of the Landsting, it is common ground that, by reason of its mandatory character, article 119 of the Treaty falls to be applied not only to provisions of law and regulations but also to collective agreements and individual contracts of employment: Stadt Lengerich v Helmig (Cases C-399, 409 and 425/92, C-34, 50 and 78/93) [1996] ICR 35.48, para 18.

42 Accordingly, since the inconvenient hours supplement falls within the concept of pay for the purposes of article 119 of the Treaty, it must be ascertained whether it has to be taken into account in comparing midwives' pay with that of clinical technicians.

43 With regard to the method to be adopted, in making such a comparison, for verifying compliance with the principle of equal pay, the Court of Justice has already held that if the national courts were under an obligation to make an assessment and a comparison of all the various types of consideration granted, according to the circumstances, to men and women, judicial review would be difficult and the effectiveness of article 119 would be diminished as a result. It follows that genuine transparency, permitting effective review, is assured only if the principle of equal pay applies to each of the elements of remuneration granted to men or women: Barber [1990] ICR 616, 671, para 34.

44 In this case, therefore, in order to ensure greater transparency and guarantee compliance with the requirement of effectiveness underlying Directive 75/117, the midwives' monthly basic salary should be compared with the like salary of clinical technicians."

1. Advocate General Jacobs had pointed out in his opinion (paragraph 39) that:

"… where the pay structure is such that it is in principle possible to extract and compare individual strands, that is what should be done, with the employer preserving the possibility of disproving that inequality on that basis is due to sex. Where however the pay structure is less penetrable, the global assessment will be all that is possible. It is for the national court to determine whether it is possible in a given case to make an item-for-item comparison or whether a global assessment is all that is feasible."

1. In the present case the Employment Judge clearly determined, for the reasons he gave, that it was possible to compare the distinct terms providing for enhanced rates for both the Claimants and the comparators. However, he did not then proceed to compare them.

1. In submitting that he was right not to do so, Mr Bowers places reliance, as did the Employment Judge, on the recent decisions of the Employment Appeal Tribunal and Court of Appeal in Degnan and Others v Redcar and Cleveland Borough Council [2005] IRLR 615.

1. Most of the facts in this case were agreed, and they appear from paragraphs 3-7 of the Employment Appeal Tribunal's judgment, which was upheld in the Court of Appeal.

1. The female claimants (cleaners or supervisory assistants (home help)) were employed in work which had been rated as equivalent with that of other groups of predominantly male workers. The gardeners were paid the same basic hourly rate as the claimants but received in addition a fixed bonus of 40 per cent. The refuse workers and drivers also received the same hourly rate, but received in addition a fixed bonus of 36 per cent and an attendance allowance of between £33.81 and £34.88 per week, dependent on grade. The road workers again received the same hourly rate as the women, but received in addition a fixed bonus of 33 per cent and an attendance allowance of between £13.91 and £14.61 per week, dependent on grade.

1. So far as the bonus was concerned the Employment Tribunal concluded that the bonus payments made to the men were fixed and were, in effect, part of the standard rate of pay for basic hours, so that there was no distinction to be drawn between the hourly rate and the fixed bonus added to it. The basic pay and the bonus were based on the fact that the comparators worked throughout the shift and to the end of each shift. Importantly, it appears from paragraph 6 of the Employment Appeal Tribunal's judgment that the claimants' representative conceded that that was a correct conclusion on the facts. Although he initially submitted that it might amount to a separate term of the contract and should not be lumped together with the hourly rate he did not ultimately pursue that submission or rely upon it.

1. In relation to the attendance allowances the Employment Tribunal found on the evidence they heard that they were paid weekly and that, in order to qualify, the worker merely had to attend work, but not necessarily to remain at work throughout his normal shift times or for any particular number of hours. Attendance allowance was also payable during holidays, as if the worker had properly attended work. If he failed to attend work one day through notified sickness he would lose his attendance allowance for that day, that is one-fifth of the weekly allowances paid for the five day week. However, if there was unauthorised absence for any one day during the week, the allowance was lost for the whole week.

1. The attendance allowance therefore only required the worker to turn up for work and he was paid even if he did not stay until the end of the shift. It was therefore not calculated on an hourly rate.

1. The Tribunal concluded on the facts that, applying the "same subject matter" test in Hayward, the contractual terms relating to basic pay and to the bonus payments related to the same subject matter, but that the terms of the attendance allowance did not. Each claimant was held to be entitled to compare herself with the relevant male comparator most advantageous to her, both for the purposes of the bonus element of his pay and for the purposes of the attendance allowance element.

1. On the Council's appeal to the Employment Appeal Tribunal, on the question whether the attendance allowances also formed part of the same subject matter as the hourly rate and the bonus, the Employment Appeal Tribunal held, essentially, that a term of the contract, for the purpose of an equal pay comparison, can be defined as the monetary payment an employee receives for the performance of the contract during normal working hours. All the monetary payments received by male comparators for normal working hours should be aggregated and divided by the number of hours in the working week, to give an hourly rate. That hourly rate should be compared with the woman's hourly rate. If it is greater her hourly rate should be increased to eliminate the difference. On that basis, therefore, the attendance allowance related to the same subject matter as basic hourly pay; and a fixed bonus was "an element of a distinct part of the contract and not itself a distinct part." It was part of the monetary payment for performance of the contract, by attending at work and working during normal working hours.

1. The Court of Appeal upheld this reasoning as correct. They rejected the Claimant's submission that the Employment Appeal Tribunal's approach was inconsistent with Hayward, Maurice Kay LJ stating at paragraph 12:

"The Employment Appeal Tribunal did not (to use Lord Goff's words) 'lump together' or engage in 'overall comparison' of different terms. Rather it applied its collective mind to the reality of the contractual provisions in the circumstances of the particular case and analysed them. I do not understand Lord Goff to have considered that, for example, basic pay and cash bonuses are always and forever dissimilar provisions. Indeed, it is common ground in the present case that the bonus payments are to be treated as part of basic pay. What the Employment Appeal Tribunal decided was that the employment tribunal had fallen into error when finding functional and conceptual differences between basic pay and the attendance allowance. As I have indicated, I am at one with the Employment Appeal Tribunal on this issue. Secondly, Miss Gill submits that the reasoning of the Employment Appeal Tribunal is flawed because it is founded upon a 'manufactured' classification, namely 'provision for monetary payment for the performance of the contract by employers during normal working hours'. However, s.1 of the Act and Hayward v Cammell Laird necessitate classification. If the submission is that the classification deployed by the Employment Appeal Tribunal is 'manufactured' in the sense of 'artificial', I disagree. In my judgment it is a realistic classification based on careful analysis. Thirdly, it is suggested that the council has chosen to fight the wrong battle. Instead of engaging in a dispute of this kind, it ought to have conceded the differences and sought to justify them under s.1(3). However, whether or not differences would be so justifiable, the structure of s.1 requires the prior process of analysis and classification of the respective contractual provisions."

1. The key to this decision seems to me to be that it turned on its own particular facts. It must be that which enabled the Court of Appeal to conclude that the Employment Appeal Tribunal had applied its mind to "the reality of the contractual provisions in the circumstances of the particular case" and to hold that this was not inconsistent with Hayward.

1. The particular facts included (a) the Claimants' concession (which could not be disturbed) that the fixed bonus was part of basic pay; and (b) the finding that the attendance allowance was a benefit paid merely for turning up to work, and was therefore part of the basic pay received for doing simply what was contractually required.

1. Analysed in this way, Degnan seems to me to be distinguishable from the present case, which concerned contractual terms providing for the payment of enhanced rates contingent upon work being done at unsocial times, which were found expressly to be distinct terms of the contract with sufficient content to make it possible to compare them with those of the comparators, so that the benefits conferred could be contrasted.

1. I therefore reject Mr Bowers' submission that the decision in Degnan applies to this case, or that the Court of Appeal were there laying down, as a matter of general principle, a broader, overall approach to comparison of remuneration terms to be applied in all cases. Reading paragraph 12 of the Court's judgment it appears to me that they may themselves have regarded their conclusion in that case as an exception, rather than as laying down any general principle. The latter would in any event appear to be wholly inconsistent with the clear wording of the Act and the construction of section 1(2)(b) by the House of Lords in Hayward, which is binding upon this Appeal Tribunal.

1. What then does the Trust contend in resisting this appeal?

1. The Trust's case is, and has always been, that the pay for weekend working or for working unsociable hours relates to the same subject matter as pay for any other hours worked; that, for the purposes of an equal pay claim, the correct approach is to aggregate the payments, when it can then be seen whether the Claimants receive more or less pay in respect of the same subject matter, namely pay for normal working hours. Mr Bowers suggests that this approach is more realistic, and that it has the advantage of ensuring that the focus in an equal pay claim will be on the product of the formula, as opposed to the formula itself. Focusing on the formula could lead to what he refers to as undesirable or absurd outcomes.

1. He therefore contends that the Employment Judge was correct in considering pay for normal working hours in this case as a distinct "term" under section 1 of the Act, or as a "separate component of pay" as described in the European authorities. The factual matrix, he says, is very important. Here, the "normal" working hours of both Claimants and comparators are contractually defined in the context of historic collective agreements. The relevant NHS staff have to work unsociable days and hours as part of their "normal" contracted hours, or as the Employment Judge described it, as part of the "standard working week".

1. In finding, at paragraph 35, that "Accordingly, there is a term in the Claimants' and the comparators' contracts of employment which can be compared", the Judge's finding was that there was "a term" which, in the factual context of this case, meant that there was "a term" for monetary payment for normal working hours. Mr Bowers emphasises the use of the indefinite article in this sentence. The realistic approach in this case, he submits, as in Degnan, is to aggregate all the elements of pay received by the Claimants and comparators for their normal working hours and not to consider them separately. This was the issue to be decided, set out at paragraph 2(a) of the judgment and this is what the Judge found.

1. It was therefore open to the Judge to find on the evidence that there was a single term for pay for normal working hours and not a discrete term of the contract relating to unsociable hours payments. This was a matter of fact and his decision on this issue can therefore only be interfered with if shown to be perverse or arrived at as a result of an error of law.

1. I have considered these submissions carefully, but I cannot accept them. The sentence in paragraph 35, which Mr Bowers relies upon, cannot be read in isolation. As the previous two sentences make clear, the Judge found that each of the Claimants and comparators has a clause entitling them "when certain conditions are triggered" to an enhanced payment for unsociable hours work, which is paid if such work is "within the standard working week". Read correctly the Employment Judge was clearly finding that it was this, discrete term in each of the contracts which was capable of being compared.

1. In my judgment therefore he did err in law in finding as he did in paragraph 36, and in failing to proceed to compare these discrete terms, as required by the Act and the decision in Hayward. Alternatively, and Ms Monaghan relies upon perversity in the alternative, if it were necessary for her to do so, I conclude that it was perverse, having found as he did in paragraph 35, then to rule against the Claimants for the reasons he gave in the subsequent paragraphs. Ms Monaghan did not in the event pursue her third ground of appeal, relating to the provision of inadequate reasons for his conclusion.

1. In his skeleton argument Mr Bowers places considerable emphasis on the fact that, as the spreadsheets show, each of the Claimants' basic rate of pay is greater than that of her comparators; and that whenever the Claimants (save for Mrs Hughes) worked weekends or unsociable hours it would result in them increasing their pay still further above that of their comparators. He seeks to emphasise this point by the use of some hypothetical examples, which indicate what he submits are absurd results which would flow as a result of the arguments advanced by the Claimants in this appeal. He submits that there is no policy underpinning either the Equal Pay Act or European equal pay law which would permit such consequences.

1. It is unnecessary for me to refer to these examples however because, in my view, Mr Bowers' submissions are based on a misconception. It is not in dispute that some of the Claimants in these cases, including the Claimants concerned in the present appeal, may be paid more, globally, than their chosen comparators. The reasons for this are presently unknown. It may be that their higher basic rate of pay is due to long service awards or to some other factor, yet to be considered as part of the factual inquiry before the Tribunal, in considering the substance of the claims and any material factor defence raised under section 1(3).

1. In my view, and with some forensic experience to call upon in this field, it is a common misunderstanding of our equal pay legislation that a female worker is not entitled to equal pay if she appears better paid than her comparator when aggregating discrete elements of remuneration. However, as the House of Lords recognised in Hayward, and as the European case law emphasises, amalgamating discrete components of remuneration tends to obscure historic discrimination. The policy of the Act and indeed of European legislation is clear, as the House of Lords observed, namely to ensure transparency in pay structures and effective redress for women who consider that they are being discriminated against in respect of any element of their remuneration.

1. Since the Equal Pay Act is not a fair wages statute, it is impermissible for the Tribunal to select the terms as to pay to be compared, for the purposes of achieving a broadly equitable outcome. This, as it seems to me, is what lay behind the warning issued by Lord Goff in 1988. What is important is to ensure transparency and the provision of non-discriminatory pay structures, not to seek to amalgamate distinct components of remuneration in order to see whether, viewed in this way, any particular Claimant is as well paid or better paid than her chosen comparator. That, as I understand it, is the clear policy of both our own Equal Pay Act and European equal pay law.

1. In the present case the alleged discrimination is said to be demonstrated on the face of the spreadsheets to which I was referred. Although the figures show that the Claimants were globally better paid than their male comparators, the upper box on page 79, for example, reveals at a glance the information that, for working unsociable hours, the male comparator receives basic rate plus 50 per cent and the female Claimant receives only basic rate plus one-third. There may, of course, be a valid, non-discriminatory reason for such a differential, but this, in my judgment, requires consideration by the Employment Tribunal on the evidence in the usual way.

1. For all these reasons, I find that the Employment Judge erred, in applying the wrong legal test. This appeal must therefore be allowed. Both counsel submitted that, if this were my conclusion, I should substitute my decision for that of the Tribunal. I therefore do so. The term of the contracts of these Claimants and their comparators, providing for payment of enhanced rates if unsociable hours are worked during normal hours, is a discrete term of the contract and is capable of being compared for the purposes of section 1 of the Act. On that basis these cases are now remitted to the Employment Tribunal for further determination on this and any other issues arising.