UK: Take Your Time – Material Factor Defence Operative Until Subsequent Decision

An employer can defeat an equal pay claim if it can show that the reason for a pay differential between a woman and her comparator is a material factor that does not involve treating the claimant less favourably because of her sex. The question for the EAT in Co-operative Group Ltd v Walker was whether a material factor could continue to operate after a job evaluation study revealed that an employee was engaged on work rated as equivalent with her comparators. The EAT found that it could.

Mrs Walker was appointed to the role of Chief Human Resources Officer in early 2014 and formed part of the respondent's Executive Committee. However, she was paid less than other (male) members of the Committee. Almost exactly a year later, a job evaluation study was carried out, which rated the claimant's role as equivalent to other roles on the Committee. Mrs Walker subsequently brought an equal pay claim, which the employment tribunal upheld.

It accepted that when Mrs Walker was appointed there were material factors that were not the difference of sex that explained the difference between her pay and that of her comparators. Broadly, she had been appointed at a time of financial crisis. Her comparators formed part of the core team that was vital to the survival of the business, they had more experience than she did and they presented a flight risk. However, the tribunal found that "at some stage between February 2014 and February 2015" those factors were no longer material.

The EAT upheld the employer's appeal. Having accepted that there were non-discriminatory reasons for the pay differential in 2014, the tribunal could not find that they no longer justified that differential in the intervening period unless it had a basis for doing so. The material factor defence would continue to be made out until the employer had taken a further pay-related decision, or had omitted to do so once it was aware of the pay anomaly. It was not open to the tribunal to find that the material factor defence was no longer operative simply because of the subsequent result of the job evaluation study. The job evaluation brought the disparity to the employer's attention but did not justify a conclusion that the original material factors had ceased to apply.

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