‘Equal Pay for Work of Equal Value’ the importance of comparing like with like

In a decision handed down by the Industrial Tribunal (the ‘Tribunal’) on 5^th October 2022 in the names James D’Anastas vs Wembley Stores Company Limited (and confirmed by the Court of Appeal on 12^th July 2023), the Tribunal was tasked with assessing whether there had been a violation of the principle of ‘equal pay for work of equal value’ due to the employee receiving a lower remuneration package when compared with another employee who allegedly carried out the same work.

Facts of the Case

‍James d’Anastas (the ‘Employee’) was employed with Wembley Stores Company Limited (the ‘Company’) on an indefinite basis, which employment commenced in 1999. He initially occupied the role of ‘Delivery/Casual Labourer’ and ‘Storekeeper’, and eventually took on the position of ‘Warehouse Manager’ in March 2008. The Employee’s employment was terminated by the Company in February 2017 for reasons of redundancy, due to an ongoing restructuring exercise, and following a previous set of redundancies which had been carried out by the Company in 2014.The Employee proceeded to file proceedings against the Company, claiming that during his employment, he had received an inferior remuneration package when compared to his colleague who performed the same work. The Employee referred to Article 27 of the Employment and Industrial Relations Act (Chapter 452 of the Laws of Malta), which provides that “employees in the same class of employment are entitled to the same rate of remuneration for work of equal value”. The Employee argued that this difference in pay therefore constituted discriminatory and abusive treatment by the Company, and requested that he be compensated by the Company for the difference in the rates of pay between the Employee’s remuneration and his colleague’s remuneration. The Employee argued that the losses which he had suffered due to the alleged difference in remuneration amounted to a total of €57,388.60.On the other hand, the Company argued that the duties and responsibilities of the Employee, and those of the particular colleague who the Employee was comparing himself to were different, and therefore, whilst the remuneration of the two employees was indeed different, this difference was not discriminatory. The Employee carried out duties of a warehouse manager / storekeeper, whilst his colleague was an electrician and handyman.The Company also argued that the Employee’s remuneration consisted of a basic salary plus overtime, and was given additional benefits such as the use of the Company van (including fuel), whilst the Employee’s colleague received a fixed remuneration package. The Company also argued that between 2011 and 2016, save for one year, the Employee had actually earned a higher salary than his colleague’s due to the overtime hours worked by the Employee. Additionally, the Employee’s colleague was also required to be on call 24 hours a day as he was responsible for carrying out maintenance works, and this had also been factored in by the Company when setting his remuneration.As a sidenote, apart from these proceedings, the Employee had also filed another set of proceedings against the Company, challenging the redundancy and claiming that his termination constituted one of unfair dismissal. In a separate decision which was also handed down by the Tribunal on 5^th October 2022, the Tribunal declared that the Employee’s termination constituted one of unfair dismissal, and proceeded to order the Company to pay the Employee compensation in the amount of €16,000. These proceedings will however not be discussed further in this article.

‍Considerations & Decision by the Tribunal

‍In its considerations, the Tribunal placed significant weight on the job descriptions which were submitted by the parties. The Tribunal also noted that the conditions of employment of the two employees were different, with the biggest difference being that the Employee’s colleague was required to be on call 24 hours a day, which did not apply to the Employee. The Tribunal recognised that there were certain ‘overlaps’ between the work carried out by the two employees, but noted that the Employee’s colleague carried out duties related to maintenance and other electrician and handyman-related duties, which the Employee did not carry out. The Tribunal therefore concluded that the work carried out by the two employees could not be considered as work of equal value. As a result, the Tribunal rejected the Employee’s claims and declared that the Employee had not faced discriminatory or abusive treatment by the Company.

‍Decision by the Court of Appeal

‍The Employee then proceeded to file an appeal before the Court of Appeal, claiming that (i) the Tribunal had failed to carry out a proper assessment of the evidence, from which it should have been determined that the work carried out by the two employees constituted work of equal value, and (ii) the Tribunal had failed to properly assess the principle of ‘equal pay for equal work of equal value’.The Court of Appeal, in its judgement of 12^th July 2023, confirmed the decision of the Tribunal in its entirety, noting that whilst there were certain overlaps between the work carried out by the two employees, it could not be concluded that the work carried out by the two employees was ‘equal work’. The Court of Appeal also held that the fact that the Employee was required to handover his work to said colleague after being made redundant continued to indicate that the work carried out by the two employees was not as similar as the Employee was claiming. With reference to the principle of ‘equal pay for equal work of equal value’, the Court of Appeal determined that the Company had not breached this principle as the roles of the two employees were not identical or ‘of equal value’.

‍Key Takeaways

‍The key message which can be elicited from this case is that in assessing whether there has been a breach of the principle of ‘equal pay for equal work of equal value’, it is essential that the comparison takes place between two employees who carry out like work, which is rated as equivalent, and is of equal value – that is, one shouldn’t compare apples to oranges. This case also highlights the importance of having clear and proper job descriptions in place which accurately reflect the duties being carried out by employees. In fact, in its decision, the Tribunal placed significant weight on the job descriptions which were submitted by the parties, noting that these constituted the ‘best evidence’ in this case. As HR Managers, in order to properly determine whether work carried out by two employees is of ‘equal value’, a job evaluation of the two jobs is to be carried out. The job evaluation should assess and score each job in terms of the demands placed on the employee in relation to certain ‘job factors’, which may include factors such as:

• Responsibility for people, equipment and money;
• Knowledge and qualifications;
• Skills required;
• Effort required;
• Physical and emotional demands.

If, after carrying out a job evaluation, both jobs result in the same score, it is clear that the two jobs are of equal value, and the two employees carrying out said jobs should therefore be receiving the same pay. Lastly, it is important for employers to keep in mind that in the context of the principle of ‘equal pay for equal work of equal value’, the definition of ‘pay’ is to be given a wide interpretation and extends far beyond one’s salary.

Disclaimer: Ganado Advocates is responsible for contributing to this law report but was not in any way involved as legal advisor for the parties in the judgement being covered in this law report. This article was first published in ‘The Malta Independent’ on 22/05/2024.

Author: Nina Fauser (Advocate)