Skills Development Scotland Co Ltd v Buchanan & Anor

Here, the Employment Appeal Tribunal upheld the appeal of the respondent employer and rejected a prior holding of the Edinburgh Employment Tribunal that found the respondent employer liable for having violated Section 1(3) of the Equal Pay Act for having given a male staff member a more favorable employment contract than two female co-workers and having done so without genuine, material, and sex-neutral factors accounting for this disparity. The claimants in this appeal were two female employees of Scottish Enterprise, a non-departmental public body of the Scottish Government focused on economic development. The women alleged that a male co-worker doing work of equal value had a more favorable employment contract, and that there were no genuine, material, and sex-neutral factors accounting for this disparity. The Employment Appeal Tribunal accepted respondent’s argument that the reason for the disparity in compensation between the claimants’ contracts and that of their male comparator was due to the fact that the terms of the male comparator’s contract were protected under Scotland’s Transfer of Undertakings (TUPE) regulations. These regulations protect an employee’s contract from modification in the case of a business transfer. While the lower tribunal had accepted that this explanation for the disparity was genuine, it held that the respondent should have frozen the male comparator’s salary and not granted him pay increases after a certain period to keep his pay equal to that of the claimants. The Employment Appeal Tribunal rejected this holding and granted the appeal, noting that it was not the respondent’s practice to freeze salaries for any employees. Furthermore, the Employment Appeal Tribunal stated that the lower tribunal had made “no finding that the Claimants suffered discrimination on grounds of sex.” Neither had it made any finding that respondent committed any form of “culpable inactivity” motivated by sex. Finally, the Employment Appeal Tribunal found that the respondent established a valid defense under the Equal Pay Act. The Equal Pay Act states that an employer must show that “that the difference in pay or other conditions is explained by something that has nothing to do with sex.” The Employment Appeal Tribunal found that the respondent made a “causal link between a non gender related explanation and the difference in pay complained of,” and that, therefore, respondent had established a defense. Therefore, it rejected the decision of the Edinburgh Employment Tribunal, upheld the appeal, and dismissed the claims.