Jenkins v Kingsgate (Clothing Productions) Ltd

Factual and Procedural Background

The Plaintiff, a part-time worker employed by Company A, claimed entitlement to the same hourly pay rate as full-time male employees of the Company. Initially, the claim was made solely under the Equal Pay Act 1970 but was later supplemented by reliance on Article 119 of the E.E.C. Treaty. The industrial tribunal in The City dismissed the claim, providing brief reasons. The Employment Appeal Tribunal subsequently referred the case to the European Court of Justice for a preliminary ruling. The facts, agreed by both parties and set out in the referral order, established that Company A paid part-time workers, all women at the relevant time, 10% less per hour than full-time workers. This pay differential was introduced following negotiations with the trade union and intended to discourage absenteeism and maximize machinery utilization. The Plaintiff performed like work to a full-time male comparator, working approximately 30 hours per week, operating multiple machines in a factory employing 90 workers. Overtime was available to full-time workers and, to a lesser extent, to part-time workers. The industrial tribunal found that the difference in hours worked justified the pay difference and upheld the employer's defence under the Equal Pay Act 1970. The Plaintiff appealed, arguing that a mere difference in hours worked could not justify pay disparity. Counsel for the Plaintiff conceded that existing case law under the 1970 Act precluded success without reference to European Community law, leading to the referral of several questions to the European Court of Justice. The European Court ruled that pay differences between full-time and part-time workers do not amount to prohibited discrimination unless they are an indirect means of sex discrimination, given that part-time workers are predominantly women. The case returned to the national court for application of this ruling.

Legal Issues Presented

1. Whether the fact that a woman is a part-time worker and the comparable man is a full-time worker constitutes, by itself, a "material difference" under Section 1(3) of the Equal Pay Act 1970, preventing the equality clause from operating.
2. Whether the difference between part-time and full-time work is an irrelevant factor in determining the existence of a "material difference" for the purposes of Section 1(3).
3. Whether a pay differential aimed at achieving greater utilization of plant and reducing absenteeism amounts to a relevant or sufficient "material difference" under Section 1(3).
4. Whether it suffices for the employer, under Section 1(3) and Article 119, to show only the absence of discriminatory intent or whether the pay differential must be objectively justified for some other reason.

Arguments of the Parties

Appellant's Arguments

• The Plaintiff contended that a mere difference in hours worked could not constitute a lawful justification for pay disparity under Section 1(3) of the Equal Pay Act 1970.
• Counsel acknowledged that prevailing case law under the 1970 Act barred success absent European Community law considerations but reserved the right to challenge those cases on appeal.
• The Plaintiff relied on Article 119 of the E.E.C. Treaty and the Council Directive of 10 February 1975, arguing that these provisions required equal pay irrespective of hours worked and that the question should be referred to the European Court of Justice.
• It was argued that economic justifications related solely to employer profitability, such as increased machinery utilization, were extrinsic factors and did not constitute a "material difference" under the Act.

Respondent's Arguments

• The Employer maintained that the pay differential between full-time and part-time workers was introduced to discourage absenteeism and maximize machinery utilization, which were legitimate economic objectives.
• The Employer did not oppose the referral of questions to the European Court of Justice.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by acknowledging the European Court of Justice ruling that a pay difference between full-time and part-time workers does not constitute unlawful sex discrimination unless it serves as an indirect means of discriminating against women, who predominantly constitute part-time workers. The court examined the statutory language of Section 1(3) of the Equal Pay Act 1970, which exempts pay differences genuinely due to material differences other than sex. It found ambiguity in this provision, necessitating interpretation consistent with Article 119 of the E.E.C. Treaty.

The court rejected the notion that the mere fact of part-time status constitutes a material difference sufficient to justify pay disparity. It held that prior decisions to the contrary, such as Kearns, were no longer good law. However, the difference between full-time and part-time work remains a relevant factor, not an irrelevant one.

Regarding economic justifications such as reducing absenteeism and maximizing plant utilization, the court emphasized that such factors could constitute a material difference only if the employer proves that the pay differential actually achieves these objectives, not merely that the employer intended them.

The court then addressed whether absence of discriminatory intent suffices under Section 1(3). Drawing on domestic statutes and comparative authority, including the Sex Discrimination Act 1975, the Race Relations Act 1976, and the U.S. Griggs case, the court concluded that objective justification is required. Thus, the employer must demonstrate that the pay difference is reasonably necessary to achieve a legitimate, non-sex-related objective.

The court acknowledged some ambiguity in the European Court of Justice's ruling but assumed, without deciding, that Article 119 may not require objective justification in cases of unintentional indirect discrimination. Nevertheless, the court held that the domestic Equal Pay Act 1970 should be interpreted to require objective justification, potentially conferring greater protection than Article 119.

Finally, the court summarized the approach industrial tribunals must take in cases involving part-time workers, emphasizing the need to assess whether pay differentials are objectively justified rather than relying solely on part-time status as a material difference.

Holding and Implications

The court ALLOWED THE APPEAL and remitted the case to the industrial tribunal to determine whether the lower pay for part-time workers was reasonably necessary to achieve legitimate objectives such as reducing absenteeism and maximizing machinery utilization.

The direct effect is that the previous tribunal decision, which upheld the pay differential solely on the basis of part-time status, was incorrect in law. The case must be reconsidered under the clarified legal framework requiring objective justification.

The court recognized that this ruling might have significant economic consequences for employers and potentially affect female employment levels but emphasized that its role was to apply the law as it stands, not to weigh policy considerations.

No new binding precedent beyond the interpretation of Section 1(3) in light of Article 119 was established, but the decision signals a stricter requirement for employers to justify pay differentials affecting predominantly female part-time workers.