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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Nelson v Carillion Services Ltd. [2003] EWCA Civ 544 (15 April 2003) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2003/544.html Cite as: [2003] ICR 1256, [2003] EWCA Civ 544, [2003] IRLR 428

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

		Royal Courts of Justice Strand, London, WC2A 2LL
		15th April 2003

Lord Justice Simon Brown:

1. This is a female employee's appeal, brought by permission of Sedley LJ, against the decision of the Employment Appeal Tribunal ("EAT") (presided over by His Honour Judge Peter Clark) on 26 June 2002 dismissing her appeal from the Central London Employment Tribunal which, following a hearing on 26 and 27 March 2001, dismissed, for extended reasons given on 21 May 2001, her complaint brought under s1 of the Equal Pay Act 1970 ("the Act").
2. The purpose of s1 of the Act is to eliminate sex discrimination in pay. It has never been disputed in these proceedings that the appellant was at the material time being paid less than an identified male employee doing the same job, Mr Peter d'Silva. She was, therefore, rebuttably presumed entitled under a deemed equality clause in her contract (see s1(1) of the Act) to benefit from his better rates of pay (see s1(2) of the Act). The question raised in these proceedings was whether the respondents could defeat that entitlement by reliance upon what is known as the s1(3) defence. Section 1(3) of the Act provides:

"An equality clause shall not operate in relation to a variation between the woman's contract and the man's contract if the employer proves that the variation is genuinely due to a material factor which not the difference of sex …"

3. Before describing more particularly the point now arising for decision, let me first sketch in as briefly as possible the essential facts of the case.
4. On 1 April 1997 the respondents took over from Initial Healthcare Services ("Initial") an existing contract to provide services at the Chelsea and Westminster Hospital. The Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE") applied to the transfer so that the respondents were obliged to maintain the existing pay scales and conditions of those employees who were transferred, some 300 in all. Included amongst them were six whose employment was as stewards in the hospital's Chelsea Wing, a wing largely devoted to private patients. Their job was to serve the patients with food prepared by a chef within the wing, and then to collect and wash up the used dishes and utensils. The group of six comprised four men and two women, the four men including Mr Rasmussen, shortly to become the functions steward, who was paid £6.83 per hour - in contrast to the other five who were each paid £5.78 per hour - and Mr d'Silva.
5. On 22 June 1998, ie some fifteen months after the transfer of the undertaking, by when Mr d'Silva's rate of pay had increased through routine annual pay increases to £6.11 per hour, the appellant herself became employed by the respondents as a steward on the Chelsea Wing. Her pay was £5.00 per hour, that being the rate payable in accordance with the respondents' standard terms and conditions. The following month, on 31 July 1998, Mr Sinarda also became employed as a steward on the wing, his terms and conditions being identical to the appellant's. The group of six, besides being paid at a higher rate than the appellant and Mr Sinarda, also received a food allowance of £2.50 and double time if they worked on bank holidays, benefits carried over from their earlier employment with Initial.
6. On 1 April every year the respondents increased the rate of pay for all their staff (except those Initial employees, not relevant for present purposes, who had retained their Whitley Council scales of pay from a yet earlier time when they had been employed directly by the Health Authority). The same percentage increase (2.4% in 1999 and 2% in 2000) was applied to all. On 1 April 2000 this took the appellant to £5.22 per hour, Mr d'Silva to £6.38 per hour.
7. By the date of the appellant's complaint to the Employment Tribunal, both the women and one of the men who had been transferred from Initial had left the respondents' employment; another of the men had been promoted to restaurant manager on the respondents' standard terms and conditions. Only Mr d'Silva, therefore, of the Initial employees, remained as a continuing comparator.
8. So much for the facts.
9. So far as the law is concerned a useful starting point is Lord Nicholls' speech in Glasgow Corporation -v- Marshall [2000] ICR 196, 202-203:

"… the scheme of the Act is that a rebuttable presumption of sex discrimination arises once the gender-based comparison shows that a woman, doing like work or work rated as equivalent or work of equal value to that of a man, is being paid or treated less favourably than the man. The variation between her contract and the man's contract is presumed to be due to the difference of sex. The burden passes to the employer to show that the explanation for the variation is not tainted with sex. In order to discharge this burden the employer must satisfy the tribunal on several matters. First, that the proffered explanation, or reason, is genuine, and not a sham or pretence. Second, that the less favourable treatment is due to this reason. The factor relied upon must be the cause of the disparity. In this regard, and in this sense, the factor must be a 'material' factor, that is, a significant and relevant factor. Third, that the reason is not 'the difference of sex'. This phrase is apt to embrace any form of sex discrimination, whether direct or indirect. Fourth, that the factor relied upon is or, in a case within section 1(2(c) [not this case], may be a 'material' difference, that is, a significant and relevant difference, between the woman's case and the man's case.

When section 1 is thus analysed, it is apparent that an employer who satisfies the third of these requirements is under no obligation to prove a 'good' reason for the pay disparity. In order to fulfil the third requirement he must prove the absence of sex discrimination, direct or indirect. If there is any evidence of sex discrimination, such as evidence that the difference in pay has a disparately adverse impact on women, the employer will be called upon to satisfy the tribunal that the difference in pay is objectively justifiable. But if the employer proves the absence of sex discrimination, he is not obliged to justify the pay disparity."

10. The variation here between the appellant's contract and that of Mr d'Silva, the comparator, is not in doubt: for the same work he was paid over £1 per hour more (a difference increasing annually through the percentage increases), and he received, as she did not, a £2.50 per day meal allowance and double time for bank holiday work.
11. That variation was presumed to be due to the difference in sex so that the burden lay on the respondent employers to show that its explanation was not tainted by sex. The respondents' explanation, namely that they were required by TUPE to continue to honour the terms and conditions under which those transferred from Initial (including Mr d'Silva) had been employed whereas the appellant was recruited later on the respondents' standard terms and conditions, was plainly "genuine and not a sham or pretence". Equally plainly the appellant's less favourable treatment was "due to" that reason which was "a significant and relevant factor". Critically, therefore, turning to the third matter of which, on Lord Nicholls' analysis, the employers had to satisfy the tribunal, they had to prove "that the reason is not 'the difference of sex'" - or, as he put it in the second of the two quoted paragraphs, "the absence of sex discrimination, direct or indirect".
12. It is convenient at this stage to see how the issue was dealt with by the respective tribunals below.

The Employment Tribunal

13. At page six of their decision the Employment Tribunal cited from Lord Browne-Wilkinson's speech in Strathclyde Regional Council -v- Wallace [1998] ICR 205, passages which foreshadowed what Lord Nicholls was later to say in Glasgow Corporation -v- Marshall and which I need not repeat, and continued:

"8. … In this case Mr Draycott [a lawyer who represented the appellant before both lower tribunals] suggests that the Respondent's arrangements are indirectly discriminatory against women. He points out that 80% of the men who have remained employed since 1 April 1997 have got protection under TUPE whereas only 66.66 of the women have. He suggests that this difference in percentages is sufficient to justify indirect discrimination, referring us to the approaches adopted in London Underground Ltd -v- Edwards (No 2) [1998] ARLR 365 and R -v- Secretary of State for Employment ex parte Seymour-Smith and Perez (No 2) [2000] IRLR 263.

9 On the basis of those figures, Mr Draycott has a reasonable argument. However, the Tribunal is not confident that he is using the correct pool of employees upon which to base his statistics. In the ECJ decision in Enderby -v- Frenchay Health Authority and Secretary of State for Health [1993] IRLR the Court stated that:

'It is for the national court to assess whether it may take into account those statistics, that is to say, whether they cover enough individuals, whether they illustrate purely fortuitous or short-term phenomena, and whether, in general, they appear to be significant.'

The Tribunal also referred itself to the decision in Specialarbejderforbundet I Danmark -v- Dansk Industry ]1996] ICR 51 (The Royal Copenhagen Case). Whilst this case related to piece work, it suggests that, in order to compare the pay of two groups of workers, the national court must satisfy itself that the comparison covered a relatively large number of workers in order to ensure that the differences found are not due to purely fortuitous or short-term factors or to differences in the individual output of the workers concerned.

10. The Tribunal's concern is whether the appropriate pool for comparison is the stewards working in the Chelsea Wing or whether it should be a wider slice of the Respondent's employees, say those involved in catering, or alternatively the whole of the employees transferred to them and subsequently employed. We only heard evidence of the breakdown of the stewards employed on the Chelsea Wing and were provided with no other details at all. Mr Draycott suggested that this was entirely appropriate because his client claims equal pay and must be judged against other stewards. The Tribunal find that this is not the right approach. We are here dealing with discrimination as defined in the Sex Discrimination Act 1975 and not equal pay. Enderby makes that clear. Further, the ruling in the Royal Copenhagen Case also related to equal pay. In the Tribunal's view, it is inappropriate to consider whether there has been indirect discrimination by taking into account only those stewards in the Chelsea Wing. The balance of the sexes over the whole hospital might be considerably different. The Tribunal do not believe it is appropriate to make such statistical comparisons based on only eight employees. One employee makes a considerable difference to the statistical analysis in these circumstances. It is for the Applicant in these circumstances to show, on the balance of probabilities, that there has been indirect discrimination. The Tribunal find that no sufficient or appropriate evidence has been produced to show this. In the Tribunal's opinion therefore this pay differential was not due to reasons of sex, either directly or indirectly, nor is it even faintly tainted with sex discrimination."

14. The Employment Tribunal then went on to find that in any event the respondents, merely by complying with their TUPE obligation to preserve the terms and conditions of the Initial employees, had not applied a requirement or condition (within the meaning of s1(1)(b) of the Sex Discrimination Act 1975) with which the appellant could not comply.

The EAT

15. Before the EAT Mr Linden, for the respondent, did not seek to support that alternative basis for decision. He accepted that a requirement could be spelt out of the facts to the effect that in order to obtain the higher pay rate the employee must be someone to whom TUPE applies. It therefore becomes unnecessary to consider that point further. As for the Employment Tribunal's first and main basis of decision, only one ground of appeal was advanced, namely that the Tribunal erred in paragraphs 9 and 10 of their decision in rejecting the appellant's statistical evidence of adverse impact based on the pool of employees which she had advanced. The EAT dealt with that argument as follows:

"11. It was the Appellant's case that the relevant pool consisted of the six Initial employees plus the Appellant and Mr Sinarda. Based on that pool she contended that 80% of men (the 4 Initial male employees) could comply and 20% (Mr Sinarda) could not; whereas 66.66% of woman (the 2 female Initial employees) could comply and 33.33% (the Appellant) could not. Hence the proportion of woman who could comply was considerably smaller than the proportion of men who could comply (66.66% compared with 80%), relying on the statistical difference upheld by the Court of Appeal in London Underground Ltd v. Edwards (No 2) (1998) IRLR 365, namely 4.8%.

12. The Tribunal approached the question of adverse impact in two ways. First, they were not confident that the Appellant had selected the correct pool; they posited that the appropriate pool might involve a wider slice of the Respondent's employees, say those involved in catering or alternatively the whole of the Initial employees transferred to them and subsequently employed at the hospital. Secondly, having referred to a passage in the ECJ judgment in Enderby v. Frenchay Health Authority and Secretary of State for Health (1993) IRLR 591, paragraph 17, in which the court said:

"It is for the national court to assess whether it may take into account those statistics, that is to say, whether they cover enough individuals, whether they illustrate purely fortuitous or short-term phenomena, and whether, in general, they appear to be significant"

the Tribunal held that it was inappropriate to make such statistical comparisons based on only eight employees.

13. We accept Mr Linden's submission that here the Tribunal were finding that the statistical comparison, based on the pool selected by the Appellant, was purely fortuitous. It so happened that the limited number of persons engaged on like work split as they did on gender lines and was not generally significant. In our judgment that was a factual conclusion which the Tribunal was entitled to reach."

16. In short, the EAT upheld the Employment Tribunal's conclusions that they were satisfied neither: (a) that the correct pool of employees had been selected for the comparison to be made, nor (b) even assuming that the eight selected (rather than all 300-odd staff transferred or at least all those employed in catering) were the right pool, that the comparison showed a significant rather than merely fortuitous or short-term result.
17. So far from those conclusions being challengeable as perverse, they seem to me manifestly correct and nothing in London Underground Limited -v- Edwards (No 2) (above) - a decision to which I was party - could sensibly be understood to suggest the contrary. It was highly artificial to have selected so small a pool and appears likely to have been sheer chance that the proportions between the sexes were as they were. Is it to be said that, had the transferred group of six split 4:2 the other way, Mr Sinarda would then have been entitled to claim? And assume the appellant's claim succeeded, how then would Mr Sinarda have stood?
18. That, however, is not the end of this appeal. Mr Langstaff QC, for the appellant, does not question the Employment Tribunal's conclusions on the facts. Rather he contends that the Tribunal here erred in law in putting the burden of proof on the appellant to establish her case of indirect discrimination. Mr Langstaff submits that once she had credibly raised such a case it was then for the respondent employers to disprove it. This is not an argument, I should at once point out, which was advanced before the EAT. Let me, however, put that objection aside.
19. The argument, as I understand it, runs essentially as follows. First, Mr Langstaff asserts as a proposition of law that, where an employee advances a credible suggestion of indirect discrimination (a credible suggestion, that is, of a particular requirement or condition having had a disproportionate adverse impact upon their sex), the burden then lies upon the employer to disprove it. It is unnecessary, he submits, for the employee to establish even a prima facie case of disproportionate adverse impact. Secondly, Mr Langstaff submits that the Employment Tribunal here can be seen to have accepted that a credible suggestion of disproportionate adverse impact was being advanced. He relies in this regard upon the first two sentences of paragraph 9 of the Tribunal's decision (set out in paragraph 13 above) stating that on the figures advanced the appellant "has a reasonable argument" but that the Tribunal is "not confident" that they are based on "the correct pool of employees". Similar doubts, he suggests, were expressed by the Tribunal in the first sentence of paragraph 10 of their decision where they speak of their "concern … whether the appropriate pool [had been taken] for comparison". In other words, runs the argument, the Tribunal were unsure about the matter: they had only a small snapshot of the position and needed a bigger picture to see whether it was reliable. In those circumstances, submits Mr Langstaff, it was for the respondents as employers to provide it. As it was, however, the Tribunal at the end of paragraph 10 of their decision held that it was "for the applicant in these circumstances to show, on the balance of probabilities that their has been indirect discrimination" and, finding no sufficient evidence of this, they "therefore" concluded that there was no direct or indirect sex discrimination.
20. Let me take each limb of the argument in turn.

The burden of proof

21. The 1970 Act implemented article 119 (now article 141) of the Treaty of Rome and Council Directive 75/117EC (the Equal Pay Directive). Both the Employment Tribunal and the EAT referred in their decisions (see above) to the European Court of Justice's judgment in Enderby -v- Frenchay Health Authority [1994] ICR 112. Amongst the questions on which this court in Enderby was inviting a preliminary ruling was "whether the principle of equal pay for men and women requires the employer to prove, by providing objective justification, that a difference in pay between two jobs assumed to be of equal value, of which one is carried out almost exclusively by women and the other predominantly by men, does not constitute sex discrimination". The claimant there was a woman speech therapist who was asserting that her work was of equal value to that of (better paid) pharmacists. The Court of Justice answered the question as follows:

"13. It is normally for the person alleging facts in support of a claim to adduce proof of such facts. Thus, in principle, the burden of proving the existence of sex discrimination as to pay lies with the worker who, believing himself to be the victim of such discrimination, brings legal proceedings against his employer with a view to removing the discrimination.

14. However, it is clear from the case law of the court that the onus may shift when that is necessary to avoid depriving workers who appear to be the victims of discrimination of any effective means of enforcing the principle of equal pay. Accordingly, when a measure distinguishing between employees on the basis of their hours of work has in practice an adverse impact on substantially more members of one or other sex, that measure must be regarded as contrary to the objective pursued by article 119 of the Treaty, unless the employer shows that it is based on objectively justified factors unrelated to any discrimination on grounds of sex: see Bika-Kaufhaus GmbH -v- Weber von Hartz (Case 170/84 [1987] ICR 110, 125, para 31; Kowalska -v- Freie und Hansestadt Hamburg (Case C-33/89) [1992] ICR 29, 35, para 16 and Nimz -v- Freie und Hansestadt Hamburg (Case C-184/89) [1991] ECR I-297, 320, para 15. Similarly, where an undertaking applies a system of pay which is wholly lacking in transparency, it is for the employer to prove that this practice in the matter of wages is not discriminatory, if a female establishes in relation to a relatively large number of employees, that the average pay for women is less than that for men: see Handels-og Kontorfunktionaernes Forbund i Danmark -v- Dansk Arbejdsgiverfornening (Case 109/88) [1991] ICR 74, 80, para 16.

15. In this case, as both the health authority and the United Kingdom observe, the circumstances are not exactly the same as in the cases just mentioned. First, it is not a question of de facto discrimination arising from a particular sort of arrangement such as may apply, for example, in the case of part-time workers. Secondly, there can be no complaint that the employer has applied a system of pay wholly lacking in transparency since the rates of pay of National Health Service speech therapists and pharmacists are decided by regular collective bargaining processes in which there is no evidence of discrimination as regards either of those two professions.

16. However, if the pay of speech therapists is significantly lower than that of pharmacists and if the former are almost exclusively women while the latter are predominantly men, there is a prima facie case of sex discrimination, at least where the two jobs in question are of equal value and the statistics describing that situation are valid.

17. It is for the national court to assess whether it may take into account those statistics, that is to say, whether they cover enough individuals, whether they illustrate purely fortuitous or short term phenomena, and whether, in general, they appear to be significant.

18. Where there is a prima facie case of discrimination, it is for the employer to show that there are objective reasons for the difference in pay. Workers would be unable to enforce the principle of equal pay before the national court if evidence of a prima facie case of discrimination did not shift to the employer the onus of showing that the pay differential is not in fact discriminatory: see, by analogy, Handels-og Kontorfunktionaernes Forbund i Danmark -v- Dansk Arbejdsgiverfornening (Case 109/88) [1991] ICR 74, 79, para 13.

19. In these circumstances, the answer to the first question is that, where significant statistics disclose an appreciable difference in pay between two jobs of equal value, one of which is carried out almost exclusively by women and the other predominantly by men, article 119 of the Treaty requires the employer to show that that difference is based on objectively justified factors unrelated to any discrimination on grounds of sex."

22. Enderby establishes that the burden of proving sex discrimination lies initially on the employee (paragraph 13). To shift that burden to the employers the employee (depending upon the particular nature of the case) must establish that the measure "has in practice an adverse impact on substantially more members of one or other sex" (the first limb of paragraph 14) or, where the system lacks transparency, must "establish … in relation to a relatively large number of employees, that the average pay for women is less than that for men" (the second limb of paragraph 14). Or, as is described in paragraphs 16-18, the complainant must establish "a prima facie case of sex discrimination" (the phrase used in paragraphs 16 and 18), on statistics which are "valid" (paragraph 16) and "appear to be significant" (paragraph 17), at which point "it is for the employer to show that there are objective reasons for the difference in pay" (paragraph 18). Or, as summarised in paragraph 19, it is for the employee to establish "an appreciable difference in pay" by "significant statistics" at which point the onus shifts to the employer to show that that difference is justified.
23. That decision was subsequently applied by the ECJ in Specialarbejderforbundet I Danmark -v- Dansk Industry ]1996] ICR 51 (the Royal Copenhagen Case), where at paragraph 24 the court said:

"Similarly, where significant statistics disclose an appreciable difference in pay between two jobs of equal value, one of which is carried out almost exclusively by women and the other predominantly by men, so that there is a prima facie case of sex discrimination, article 119 of the EEC Treaty requires the employer to show that that difference is based on objectively justified factors unrelated to any discrimination on grounds of sex: see Enderby at pp161 and 162, paras 16 and 19."

24. In the light of those judgments Mr Langstaff recognises that, if an unequal pay claim which depends on indirect sexual discrimination is made in the Employment Tribunal directly under article 141 of the Treaty (as, of course, it can be), then the burden rests on the claimant to establish disproportionate adverse impact. If he or she were to discharge that burden, the onus would then shift to the employer to prove that his practice is not in truth discriminatory but rather is justifiable.
25. Mr Langstaff recognises too that if a claim of indirect sexual discrimination is brought under s1(1)(b) of the Sex Discrimination Act 1975 ("the 1975 Act") (by which the UK implemented Council Directive 76/207 EC - the Equal Treatment Directive), then too (at any rate until the Sex Discrimination (Indirect Discrimination and Burden of Proof) Regulations 2001 were brought into force on 12 October 2001) the burden of proof rests on the claimant to establish disproportionate adverse impact. The 2001 Regulations, one may note, implemented Council Directive 97/80 EC (on the burden of proof in cases of discrimination based on sex) and introduced into the 1975 Act the following new section:

"63A Burden of proof: employment tribunals

(1) This section applies to any complaint presented under section 63 to an employment tribunal.

(2) Where, on the hearing of the complaint, the complainant proves facts from which the tribunal could, apart from this section, conclude in the absence of an adequate explanation that the respondent--

(a) has committed an act of discrimination against the complainant which is unlawful by virtue of Part 2, or

(b) is by virtue of section 41 or 42 to be treated as having committed such an act of discrimination against the complainant,

the tribunal shall uphold the complaint unless the respondent proves he did not commit, or as the case may be, is to be treated as having committed, that act."

26. It seems to me tolerably clear that the effect of s63A was to codify rather than alter the pre-existing position established by the case law. The burden of proving indirect discrimination under the 1975 Act was, as Mr Langstaff accepts, always on the complainant, and there pursuant to s63A it remains, the complainant still having to prove facts from which the tribunal could conclude that he or she has been unlawfully discriminated against "in the absence of an adequate explanation" from the employer. Unless and until the complainant establishes that the condition in question has had a disproportionate adverse impact upon his/her sex the tribunal could not in my judgment, even without explanation from the employer, conclude that he or she has been unlawfully discriminated against.
27. This to my mind accurately reflects the position laid down by the ECJ in Enderby and that, indeed, is hardly surprising. True it is, as Mr Langstaff points out, that the Burden of Proof Directive expressly provides that "[T]his Directive shall not prevent Member States from introducing rules of evidence which are more favourable to plaintiffs". It is difficult to see, however, why the UK should have wished to introduce a rule more favourable to claimants (a) than had earlier been established by the domestic authorities, or (b) than the ECJ thought appropriate for a claim directly brought under article 119.
28. All these considerations notwithstanding, it is the appellant's submission that when one comes to a claim brought under the 1970 Act the burden lies throughout on the respondent employer, the claimant in an indirect discrimination case having to advance no more than "a credible suggestion" of disproportionate adverse impact.
29. This somewhat surprising conclusion, Mr Langstaff submits, is justified, indeed required, by the plain language of s1(3) itself, a provision differently framed from anything in the 1975 Act. Section 1(3) in terms puts the burden of proof on the employer. And support for this approach, he argues, is to be found in Lord Nicholls' speech in Glasgow Corporation -v- Marshall (see paragraph 9 above). He relies in particular upon Lord Nicholls' statement, in the second of the two paragraphs I have cited, that:

"In order to fulfil the third requirement [that the reason for the less favourable treatment is not 'the difference of sex', a phrase 'apt to embrace any form of sex discrimination, whether direct or indirect'] he must prove the absence of sex discrimination, direct or indirect."

30. The argument is in my judgment unsustainable. In the first place, it overlooks the very next sentence in Lord Nicholls' speech:

"If there is any evidence of sex discrimination, such as evidence that the difference in pay has a disparately adverse impact on women, the employer will be called upon to satisfy the tribunal that the difference in pay is objectively justifiable."

31. This seems to me to recognise that it is for the complainant initially to establish that the matter complained of has indeed had "a disparately adverse impact on women". Secondly, however, it should be appreciated that Glasgow Corporation -v- Marshall was not concerned with the burden of proof at all; that simply was not an issue in the case.
32. There seems to me every reason for approaching the burden of proof in indirect discrimination cases in the same way irrespective of whether they are brought under article 119 (141), under the 1975 Act, or under the 1970 Act. As Lord Browne-Wilkinson said in Strathclyde Regional Council -v- Wallace [1998] ICR 205, 212:

"The cases establish that the Equal Pay Act 1970 has to be construed so far as possible to work harmoniously both with the Sex Discrimination Act 1975 and article 119. All three sources of law are part of a code dealing with unlawful sex discrimination: see Shields -v- E Coomes (Holdings) Ltd [1978] ICR 11590 and Garland -v- British Rail Engineering Ltd [1982] ICR 420. It follows that the words 'not the difference of sex' where they appear in section 1(3) of the Equal Pay Act 1970 must be construed so as to accord with the Sex Discrimination Act 1975 and article 199 of the EC Treaty, ie an employer will not be able to demonstrate that a factor is 'not the difference of sex' if the factor relied upon is sexually discriminatory whether directly or indirectly. Further a sexually discriminatory practice will not be fatal to a subsection (3) defence if the employer can 'justify' it applying the test in the Bilka-Kaufhaus case [1987] ICR 110."

33. Mr Langstaff's argument furthermore seems to me irreconcilable with at least one of the authorities relied upon by Mr Linden: Barry -v- Midland Bank plc [1999] ICR 319 (Court of Appeal); [1999] ICR 859 (House of Lords). I shall content myself with a brief citation from a judgment at each level. In the Court of Appeal Peter Gibson LJ said at pp334-335:

"In our opinion it would be necessary to look at all part-time workers at the time of Mrs. Barry's termination of employment and the average of their hours of work throughout their service and to compare the men and the women in the advantaged and disadvantaged groups. But there are no such statistics available, as we understand the position. It was an agreed fact that 12 out of the 33 part-time staff who were female employees (of unspecified grades throughout the Bank) made redundant in April 1993 had previous full-time service. But we have no more details and it is unsafe to base any conclusion on that bare statistic. The Bank as the employer is likely to have the relevant information, though it may well be that it would not be readily to hand. But it was for Mrs. Barry to prove her case of indirect discrimination, seeking, if necessary with the Industrial Tribunal's assistance, the relevant information from the Bank."

34. Lord Slynn in the House of Lords at p862 said this:

"The question is thus whether Mrs Barry can establish indirect discrimination by showing (a) that she belongs to a group of employees which is differently and less well treated than others, and (b) that that difference affects considerably more women than men and, if she can, whether (c) the Bank can show that the difference in treatment is objectively justified …."

35. Mr Langstaff submits that Barry, properly understood, does not assist the respondents. The issue there, he contends, was not where the burden lay for the purposes of establishing the s1(3) defence, but rather whether Mrs Barry had surmounted the initial hurdle of demonstrating a breach of the equality clause under s1(2), something in the event she was found not to have done. This, however, to my mind involves too narrow and technical an analysis of the judgments in that case. It would, I think, be bizarre to require a claimant to establish her prima facie case of indirect discrimination for the purpose of establishing that a term of her contract "is … less favourable to [her] than a term of a similar kind in the contract under which [a man in the same employment] is employed", but not when her case of indirect discrimination is advanced to counter the employer's explanation for her less favourable term, an explanation which is apparently genuine and attributable to reasons other than sex.
36. I have in short come to the clear conclusion that in an indirect discrimination case the burden of proving disproportionate adverse impact lies on the complainant and that merely to raise "a credible suggestion" that, were the relevant (valid and significant) statistics provided, these might establish disproportionate impact is not sufficient for the claimant's purposes and imposes no further burden of explanation upon the employer.
37. I am conscious that not everyone has hitherto taken this view. Mr Langstaff, indeed, has provided us with the decision of an Employment Tribunal (chaired by Mr J K Macmillan) dated 9 December 2002 which, following an admirably thorough and skilful analysis of the case law, concluded at paragraph 25:

"But although the authorities demonstrate that it lies somewhere between a requirement that the applicants should allege disproportionate adverse impact and the need to establish a prima facie case, the precise point at which the burden shifts to the respondent remains unidentified. In my judgment, having regard to the clear words of section 1(3) and the guidance which I derive from Byrne and Tyldesley [Financial Times Limited -v- Byrne (No 2) [1992] IRLR 163 and Tyldesley -v- TML Plastics Limited [1996] ICR 356, two decisions of the EAT which I have not thought it necessary or helpful to discuss], all that is required for the burden of proof to be shifted to the respondents is a positive averment by the applicant (which might be made by way of an amendment to the originating application following either disclosure or the respondent's written answers to questions) that the factor of which the complaint is made has disparate adverse impact on women, together with sufficient explanation of why the point is made to demonstrate that it is not being made vexatiously or mischievously."

38. For the reasons given above that is not an approach which for my part I accept. Rather it is for the claimant to provide the necessary statistics although of course, as Peter Gibson LJ observed in Barry -v- Midland Bank (see paragraph 33 above) "seeking, if necessary with the [Employment] Tribunal's assistance, the relevant information from the [employer]". It has long been possible for claimants to ask for Further and Better Particulars of their employers and to interrogate them (as, indeed, the appellant did here). Nowadays, moreover, the claimant can serve upon the employer a questionnaire under the 1970 Act which further facilitates the proof of a valid claim. There is to my mind nothing unfair in putting upon the complainant the same burden under the 1970 Act as would be faced in establishing the equivalent claim under article 141 of the Treaty.

The Employment Tribunal's view of the facts

39. The conclusion I have reached on the burden of proof makes it strictly unnecessary to address the second limb of Mr Langstaff's argument set out in paragraph 19 above. All I would say is that for my part I question whether in reality the tribunal here were accepting that a credible case of disproportionate adverse impact had been advanced. Their reference to "a reasonable argument" I take to be a euphemism for at best a plausible argument. Rather, moreover, than their having genuine doubts as to whether the statistics advanced were valid and significant it seems to me that they clearly concluded they were not. Either way, I conclude that it was for the appellant to show on the balance of probabilities a disproportionate adverse impact and thereby establish a prima facie case that she had suffered indirect discrimination, and that she had plainly failed to do so.
40. By way of footnote I add only this. Mr Langstaff would have liked also to challenge the Employment Tribunal's approach to the annual pay rises which, of course, were widening the pay gap between the appellant and Mr d'Silva. Since, however, this was not a point raised on appeal to the EAT, it was not, as he speedily recognised, an argument open to him before us. I say no more about it.
41. I would dismiss this appeal.

Lord Justice Dyson:

42. I agree.

Lord Justice Scott Baker:

43. I also agree.
ORDER: Appeal dismissed. The appellant pay to the respondent's representatives, the Engineering Employers Federation, the respondent's costs of the appeal in the sum of £5,756.25. Permission to appeal to the House of Lords refused. (Order not part of approved judgment)