on appeal

Who is the comparator in a claim under the Equal Pay Act 1970?

South Ayrshire Council v Morton, 2002, IRLR 256

n In the case of South Ayrshire Council v Morton, the Court of Session considered the issue of who could be named as a comparator in a claim under the Equal Pay Act 1970 (EPA).

Primary school headteachers had brought applications for equal pay with secondary school headteachers, some of whom were not employed by the same local authority. Section 1 (6) of the EPA provides that in order to succeed with an equal pay claim, a woman must identify a male comparator in “the same employment” as her.

This is defined as a man “employed by her employer or any associated employer at the same establishment or at establishments within Great Britain which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes”.

The teachers conceded that the two local authorities were not associated as the definition of that term within the EPA required that one company be under the control of the other or that both be under the control of a third party.

Because the claim could not be brought under domestic legislation, the teachers had to rely upon European legislation providing for men and women to have equal pay for equal work.

In the case of Defrenne v Sabena (No2) 1976 ECR 455, the European Court of Justice (ECJ) held that the principle of equal pay in the European Treaty allows an employee to nominate a comparator empl-oyed by a different employer if both are employed “in the same establishment or service”.

The Employment Tribunal and the Employment Appeal Tribunal found that the education authorities were part of the same service and so found in favour of the teachers. The employers appealed to the Court of Session.

The Court of Session held that all pay arrangements were governed by the Scottish Joint Negotiating Committee. Irrespective of the fact that the various education authorities decided employees’ actual wages, there was in force a form of “collective agreement” that applied to employees in both authorities. The teachers could therefore compare their salary with that of teachers in the other authority due to the fact that any discrimination had its origin in an agreement that applied equally to both authorities. It was unnecessary to consider whether employees of the two authorities were within the “same service”.

The effect of the decision is particularly important to all employees subject to national collective agreements and for employers following a transfer where the contracts of employment incorporate a collective agreement.

Foreseeable stress in the workplace

Sutherland v Hatton, Somerset County Council v Barber and Baker Refractories Ltd v Bishop, 2002, IRLR 263

n Stress claims have resulted in headline compensation figures – and a twelve-fold increase in the number of claims against employers in the last year may have caused many employers to suffer stress of their own. But now the Court of Appeal has signalled that the tide may have turned against employees wishing to recover damages from their employers in such circumstances.

In the cases of Sutherland v Hatton, Somerset County Council v Barber and Baker Refractories Ltd v Bishop, the Court of Appeal allowed appeals by employers against earlier awards for stress-related complaints of nearly £200,000.

The legal position is that for an employer to be liable there needs to be a duty of care and a breach by the employer of that duty which causes damage to be suffered. Most importantly, it must be shown that it is reasonably foreseeable that the breach will cause harm.

The Court of Appeal’s guidance on “foreseeability” identifies the key issue as what the employer knows or ought to know about the employee. Relevant factors in assessing that question include the nature and extent of the work done by the employee. Has the employee made it known that there is a risk to his health?

Essentially, the Court decided that the onus was to some extent upon the employee to raise their concerns – if they did not, the employer was entitled in most cases to take that silence as tacit acceptance that there were no problems. This is good news for employers in relation to stress claims, but care should be taken that obligations under Health and Safety legislation and the Disability Discrimination Act are not ignored.

The importance of clear covenants

Ward Evans Financial Services Ltd v Fox & Anor 2002 IRLR 120

n An employee acting in competition with their employer when still employed is generally going to be in breach of the implied term in their contract regarding trust and confidence. The employee who does not compete but makes preparations to compete at a future date may not necessarily fall foul of that term and employers will have to include express terms to deal with such situations.

In the case of Ward Evans Financial Services Ltd v Fox & Anor, 2002 IRLR 120, two employees had bought an off-the-shelf company during their employment, had then resigned and subsequently taken over the work of a client who had been with their original employer.

The contracts of employment had contained a provision preventing them from holding any interests that might impair their ability to act at all times in the best interests of the company.

A further clause prevented them from inducing a customer from leaving the firm by revealing confidential business information.

The Court of Appeal agreed with the High Court’s decision that although one of the employees had told the customer he was leaving, this did not amount to inducement by way of revealing confidential information.

However, it allowed the employer’s appeal in relation to the claim that the employees, by setting up a company, had placed themselves in a position that impaired their ability to act in the best interests of the employer. The fact that the company did not trade during their employment did not mean that their ability to act in the best interests of their employer was not affected.

It was found that it clearly had as the employees had failed to bring in business in the period since the setting up of the other company. This case is a reminder to employers of the importance of clear covenants preventing competition.

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