Equal pay claims can expose employers to significant financial and reputational consequences, particularly where differences in pay between male and female employees cannot be objectively explained.
This was highlighted in the recent Employment Tribunal case of Ms Stewart v Galloway European Coachlines Ltd. The Claimant successfully brought claims for equal pay and direct sex discrimination after being paid less than male colleagues performing the same or broadly similar work.
The Tribunal ultimately awarded her more than £17,000 across her successful claims, including compensation for lost wages and injury to feelings. The case reminds employers to maintain transparent pay structures and be able to explain why employees doing comparable work receive different pay rates.
For HR professionals, it also shows why concerns about equal pay for equal work should be investigated carefully rather than treated as simple employee dissatisfaction with salary.
What Happened in the Galloway European Coachlines Case?
The Claimant worked as an Assistant Operations Manager for Galloway European Coachlines, a privately owned bus company. She was employed on a salary which increased to £29,000 from September 2023.
During her employment, she became concerned that she wasn’t receiving the same pay as male colleagues. Her claim identified three male comparators and alleged she was doing the same or broadly similar work while receiving less favourable pay. The Tribunal heard that the Claimant performed management responsibilities and, when covering for another manager, effectively managed some of the employees she later relied upon as comparators.
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However, the company’s pay arrangements were not straightforward. The Claimant was salaried, whereas the male comparators were paid hourly, and duties overlapped between employees. This lack of clarity became particularly significant during the proceedings. Employment Judge Hutchings stated that there was “no doubt” that the employer’s pay structure lacked clarity and transparency.
The Claimant also argued that she hadn’t received the unsociable hours rate paid to two male colleagues and raised concerns about office roles that had instead been given to male employees. The Tribunal concluded that her equal pay claim and part of her direct sex discrimination claim were well founded.
Why Did the Equal Pay Claim Succeed?
Under the Equality Act 2010, the principle of equal pay for equal work can apply where an individual’s work is like that of a comparator, has been rated as equivalent or is of equal value. In Ms Stewart v Galloway European Coachlines Ltd, the Tribunal considered whether her work was the same as, or broadly similar to, the work carried out by the male comparators.
Although their roles differed, the Tribunal concluded that differences in supervision tasks and driving hours weren’t of practical importance when considering the terms and conditions of employment. As a result, the Claimant’s equal pay claim succeeded.
The finding is particularly relevant for employers because different job titles or contractual arrangements don’t necessarily prevent equal pay claims. The Tribunal compared a salaried employee with male colleagues paid hourly rates, but it still considered the work actually performed.
Employers therefore need to look beyond job titles when considering whether employees are receiving equal pay for equal work. What individuals actually do in practice can be crucial.
Why Did the Direct Sex Discrimination Claim Succeed?
The Tribunal also upheld the Claimant’s complaint of direct sex discrimination in relation to pay. It found that she had not received the same standard and unsociable hours rates as male colleagues, despite sufficient commonality between their roles. Once the Claimant established facts from which discrimination could potentially be inferred, the burden shifted to the employer to provide a non-discriminatory explanation for the difference.
The employer argued that the Claimant’s additional hours formed part of her employment arrangements and that she was entitled to time off in lieu. However, the Tribunal didn’t accept this explanation as genuine. It noted that it hadn’t been directed to a TOIL policy or evidence demonstrating that such an arrangement had been discussed with the Claimant at the beginning of her employment.
This is an important point for HR professionals. Employers may have legitimate reasons for pay differences, but those reasons must be explainable and supported by evidence. Where pay arrangements are informal, inconsistently documented or applied differently between employees, defending a subsequent discrimination or equal pay claim can become considerably more difficult.
Which Parts of Stewart’s Claim Were Unsuccessful?
Not all of the complaints succeeded. The Claimant’s direct sex discrimination complaints concerning two office roles given to male employees were unsuccessful. Although she considered not securing those roles to be less favourable treatment, the Tribunal concluded that she hadn’t established sufficient facts from which it could infer that the decisions had been made because of her sex.
Her indirect sex discrimination claim was also dismissed. This concerned a practice requiring an Operations Manager to occasionally remain at work beyond their scheduled finish time. The Claimant argued that this placed women at a particular disadvantage because women were more likely to have caring responsibilities.
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The Tribunal accepted as a general principle that women are more likely to carry the primary burden of childcare, but found that the evidence before it didn’t establish the required group disadvantage in relation to the particular workplace practice.
Another claim dismissed by the Tribunal was the Claimant’s constructive unfair dismissal complaint. This was because she didn’t have the required two years’ continuous employment under the law applicable to her claim. Her complaints concerning unauthorised deductions from wages and notice pay were also unsuccessful, while claims relating to holiday pay and time off in lieu were withdrawn.
The outcome demonstrates that an employee bringing several complaints doesn’t need to succeed on every allegation for an employer to face substantial liability.
How Much Was Awarded?
The Tribunal subsequently considered the compensation due for the successful equal pay and direct sex discrimination complaints. For the equal pay claim, the Claimant was awarded £4,378.96 gross. This comprised a wages shortfall of £3,960.56 together with £418.40 in interest. For direct sex discrimination, she received a compensatory award of £10,407.34 net, which included lost wages and interest. She was also awarded £2,422.40 for injury to feelings and associated interest. Together, these awards amounted to more than £17,000.
The Tribunal had found that the employer’s pay structure lacked clarity and transparency and that the claimant never received an accurate statement of her terms and conditions. The employer’s lack of a genuine, evidenced explanation for the difference in pay resulted in liability.
This is an important lesson when considering potential equal pay claim payouts: an employer doesn’t necessarily need to have deliberately decided to disadvantage a female employee for an equal pay or discrimination problem to arise.
Why Does the Case Matter for Employers?
Perhaps the clearest lesson from the Galloway European Coachlines case is the importance of pay transparency within the organisation itself. The Tribunal specifically criticised the lack of clarity and transparency within the employer’s pay structure. Where different employees receive different hourly rates, bonuses, overtime payments or unsociable hours premiums, HR should be able to identify why those differences exist.
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Pay differences aren’t automatically unlawful. Employers may have legitimate explanations for paying employees differently. Problems arise where those differences cannot be justified, where comparable employees of the opposite sex are treated differently, or where the organisation lacks adequate evidence explaining how it reached its decisions.
Informal pay arrangements can make this particularly difficult. A practice that develops gradually without proper documentation may seem harmless internally but become difficult to explain when scrutinised by an Employment Tribunal.
Review Whether Employees Are Performing Equal Work
Employers should periodically examine what employees actually do rather than relying entirely on their contractual job descriptions. Roles evolve. Employees take on additional responsibilities, cover for colleagues and assume duties that may not have existed when their original contract was drafted.
Over time, two jobs with different titles may become substantially more similar than an employer realises. Regular job evaluations and reviews of responsibilities can help HR identify these changes.
Where employees are undertaking the same or broadly similar work, employers should consider whether differences in contractual terms or remuneration remain appropriate and legally defensible. This is particularly important following restructures, promotions or significant changes to individual responsibilities.
Make Pay Decisions Transparent and Evidence-Based
Employers should also ensure a clear rationale behind decisions about salary, overtime, bonuses, allowances, and other forms of remuneration. If one employee receives an enhanced rate for unsociable hours while another employee carrying out comparable work doesn’t, the employer should be able to explain why.
Pay decisions should therefore be supported by objective criteria wherever possible. Experience, qualifications, responsibility, performance, and market conditions may influence remuneration, but employers must ensure these criteria are genuinely applied rather than used retrospectively to explain an unexplained difference.
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Written records can become extremely important if an employee later challenges a decision. The Galloway case demonstrates the difficulties that can arise when an employer’s explanation is not supported by policies or contemporaneous documentation.
Conduct Regular Equal Pay Audits
Employers don’t need to wait for an employee grievance before investigating potential pay inequalities. Regular equal pay audits can help organisations identify remuneration differences between employees performing comparable work and determine whether those differences can be objectively explained.
An audit can consider basic salary alongside overtime, bonuses, allowances and other contractual benefits. Employers should also examine whether patterns exist across departments, seniority levels or particular types of work.
Where unexplained differences emerge, they should be investigated promptly. Addressing an inconsistency internally may be considerably less disruptive than waiting until an employee raises a formal grievance or brings an Employment Tribunal claim.
Take Equal Pay Grievances Seriously
The Claimant raised concerns about her pay during her employment, but her grievance wasn’t upheld. For employers, any grievance alleging sex discrimination or unequal pay should trigger a careful and impartial investigation. HR should identify the proposed comparators, examine the work performed by each employee and review the reasons for any difference in contractual terms or remuneration.
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Employers should avoid assuming that different job titles or payment methods automatically resolve the issue. The investigation should focus on the substance of the roles and the explanation for the difference. Even where HR ultimately concludes that a pay difference is lawful, documenting the investigation and reasoning can provide important evidence if the decision is subsequently challenged.
Equal Pay Compliance Should Be Proactive
The Galloway European Coachlines decision demonstrates how unclear employment arrangements can develop into expensive equal pay claims. The evidence pointed towards a small business operating with overlapping responsibilities, unclear roles and an insufficiently transparent pay structure. This led the Claimant to succeed in her equal pay and direct sex discrimination claims and receive more than £17,000 in compensation.
For employers, the message is clear. Equal pay compliance shouldn’t begin when an employee submits a grievance. HR teams should understand who is doing comparable work, how salaries and additional payments are determined, and whether differences are supported by clear evidence. Transparent pay structures, accurate job descriptions, documented decisions and regular reviews can help employers identify inequalities before they result in disputes.
Ultimately, equal pay for equal work is not simply a payroll issue. It’s an important part of equality compliance, and employers that cannot explain why comparable employees are paid differently may have to provide that explanation before an Employment Tribunal.
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