Average pay levels must be used when assessing indirect discrimination within a pay band
The Court of Appeal has held in McNeill and others v HM Revenue & Customs that the correct basis for assessing indirect discrimination within a pay band was to look at the average pay of women and men within the pay band, not at the distribution of women and men at the top and bottom of the pay band.
A group of women employed by HMRC in grades 6 and 7 of its pay scale claimed equal pay with their longer-serving higher-paid male comparators in the same grade. The factor causing the difference in basic pay between the two groups was length of service, and although pay was not solely determined by this, it was a factor. The claimants argued that length of service was indirectly discriminatory and could not be objectively justified. They argued that the "clustering" of women towards the lower ends of each pay scale, and men towards the upper end, was of "particular disadvantage" for women.
The Court rejected the argument that collective disadvantage could be established by showing that there are proportionately more women towards the bottom and therefore proportionately more men towards the top of the pay grade. It concluded that it is essential to take into account the actual amounts paid to each person in the group, and the only way in which that can be done definitively is by taking an average; the differences in average pay for men and women will give "the most accurate picture of collective advantage or disadvantage".
Take note: Following the decision in McNeill it is clear that, when establishing whether there is a potential case of indirect discrimination in relation to pay within a grouping of employees, it is important to look at the differences in average pay for men and women. The distribution of men and women at the top or bottom of a pay band (as in this case) will only support an equal pay claim if the average pay data also shows a collective disadvantage.