Perkins v Marston clarifies material factor defence in equal pay claims

The Employment Appeal Tribunal has provided important guidance on the approach to the material factor defence under section 69 of the Equality Act 2010 in Perkins v Marston (Holdings) Limited [2025] EAT 170. The case addresses both the evidential burden on employers and the correct test for establishing indirect discrimination in equal pay claims.

Mrs Perkins claimed she was paid substantially less than three male comparators who performed work of equal value. By December 2021, she earned £51,500 as Head of Enforcement – Local Taxation, whilst her male comparators, who were Divisional Enforcement Directors, received £91,800. The respondent advanced three material factors to explain this £40,000 disparity: commercial pressure differences, market forces, and the recruitment and retention requirements for enforcement agents.

The Employment Tribunal accepted the employer's evidence that these factors genuinely caused the pay difference and were not directly discriminatory. However, the tribunal's approach to indirect discrimination proved problematic. When examining whether the material factors were tainted by sex discrimination, the tribunal impermissibly investigated why the pool of enforcement agents was 90% male, speculating about perceived risks of physical confrontation deterring women.

Deputy High Court Judge Andrew Burns KC held this constituted an error of law. Following the Supreme Court's reasoning in Essop v Home Office, the tribunal should have focused solely on whether the material factors disadvantaged women, not why they did so. The causal link required is simply between the material factor and the particular disadvantage—the underlying reasons are irrelevant.

The tribunal had wrongly concluded that Mrs Perkins did not share the disadvantage affecting other women because she had not been deterred from becoming an enforcement agent. This reasoning conflated two separate issues: whether a material factor creates disadvantage and why that disadvantage exists. The correct approach requires assessing whether the fact that Mrs Perkins was not a former enforcement agent, coupled with the 90% male composition of that pool, put her at the same disadvantage as women generally.

The EAT emphasised that section 69 should not be applied formulistically. Consistent with the pragmatic approach in Bainbridge v Redcar and Cleveland Borough Council, tribunals must focus on whether the material cause of pay differences is tainted by sex-related factors. A claimant need not identify every woman doing equal work; such a requirement would create impractical barriers, particularly in large organisations or where women have no female colleagues performing comparable roles.

The cross-appeal succeeded on different grounds. The tribunal's alternative finding on justification lacked the critical and thorough evaluation required by Hardy & Hansons plc v Lax. The tribunal failed to analyse which portion of the pay gap was proportionate, did not properly consider the impact on staff retention and certification requirements, and appeared to assess proportionality using an incorrect pool of employees.

The matter has been remitted to a fresh tribunal to determine whether the material factors were tainted by sex discrimination and, if so, whether they constituted a proportionate means of achieving legitimate aims. Whilst employers need not satisfy a higher evidential threshold beyond proving facts sufficiently cogently, the case reinforces that opaque pay systems and reliance on market forces warrant careful scrutiny, particularly where stereotypes about gendered pay expectations may operate.

The judgement clarifies that the indirect discrimination analysis under section 69(2) mirrors the approach in section 19, ensuring consistency across the Equality Act's framework whilst recognising the particular complexities arising in equal pay disputes.

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