Kirsty Hinchcliffe
The below is a summary of the full article by Emma Darlow Stearn of Cloisters Chambers. The original article can be found here.
The Employment Appeal Tribunal (EAT) has clarified how employers should rely on the material factor defence under section 69 of the Equality Act 2010. In Mrs A Perkins v Marston (Holdings) Ltd [2025] EAT 170, the EAT reviewed how indirect discrimination applies in equal pay claims. It stressed that tribunals must focus on substance rather than form.
Background
The claimant worked as Head of Enforcement – Local Taxation (HoELT). She compared her pay to three male colleagues in senior enforcement roles. These roles included Regional Enforcement Managers and Divisional Enforcement Directors.
By the end of the period, the pay gap reached around £40,000.
The employer relied on several explanations. These included market forces and recruitment pressures. It also pointed to retention issues linked to Enforcement Agents. This workforce was around 90% male. The employer recruited REMs and DEDs only from that group.
The Employment Tribunal’s decision
The Tribunal accepted that some of the employer’s explanations were neutral. It acknowledged the gender imbalance in the Enforcement Agent workforce. However, it found no indirect discrimination.
The Tribunal focused on why the workforce was male dominated. It decided that no barrier had prevented the claimant from entering that field. On that basis, it rejected her claim.
It also commented on justification. It said the employer’s reasons would likely fail if justification had been required.
The appeal
The EAT disagreed with the Tribunal’s approach. It said the Tribunal had asked the wrong question.
The correct issue is whether the material factor causes a disadvantage linked to sex. The reason why the workforce is male dominated does not matter.
If a factor disadvantages women and the claimant, the burden shifts to the employer. The employer must then justify the factor.
The EAT warned against narrow or overly technical readings of section 69(2). Instead, tribunals should take a practical and realistic approach.
The EAT sent the case back to a new Tribunal. That Tribunal will decide whether the factors were discriminatory and, if so, whether they were justified.
Key takeaways
Employers must support material factor defences with clear evidence. General claims about market forces or merit will not be enough.
Tribunals should examine how those factors work in practice. They should not accept vague or unclear explanations.
Opaque pay systems can create problems for employers. They make it harder to prove that differences are lawful.
This decision does not change the law in a major way. However, it sharpens the correct approach. It will help practitioners dealing with equal pay and indirect discrimination claims.