In the complex arena of Equal Pay litigation, the battleground often shifts from "equal value" to the "material factor defence." The recent Employment Appeal Tribunal (EAT) judgment in Perkins v Marston (Holdings) Ltd [2025] EAT 170 provides critical clarity on three pillars of this 'defence': the cogency of evidence required, the correct test for indirect discrimination, and the granularity required when assessing proportionality.

The case concerned a startling pay 'disparity': Ms Perkins, a Head of Enforcement, was paid approximately £51,500, while her male comparators, Divisional Enforcement Directors doing work of equal value, received nearly £92,000. The employer relied on market forces and the necessity of recruiting from a specific pool of "Enforcement Agents" (90% male) to justify the gap.

The Evidential 'Threshold': No "Higher Standard"

A persistent question in Equal Pay disputes is the level of evidence required to prove a material factor. The Claimant argued that following BMC Software Ltd v Shaikh [2019] IRLR 606, employers face a heightened threshold of "cogency and particularisation."

The EAT rejected this interpretation. While an opaque pay system (as was present here) demands convincing evidence to rebut the presumption of discrimination, there is no special, elevated burden of proof for Equal Pay cases. The standard remains the civil balance of probabilities. As the EAT noted, if a Tribunal accepts oral evidence that a specific sum was necessary to retain an employee, that factual finding stands, even in the absence of a pristine paper trail.

Indirect 'Discrimination': The "Reason Why" Trap

Perhaps the most legally significant aspect of this judgment is the correction of the Employment Tribunal's approach to particular disadvantage. The Tribunal had initially rejected the claim of indirect discrimination, reasoning that Ms Perkins personally had not been deterred from entering the male-dominated "Enforcement Agent" pool.

The EAT held this to be a fundamental error of law. Citing the Supreme Court in Essop v Home Office [2017] IRLR 558, the EAT reiterated that a claimant does not need to prove why a provision puts women at a disadvantage; they only need to prove that it does.

The Tribunal had impermissibly engaged in a factual inquiry into the sociological reasons for the male dominance in the recruitment pool (e.g., risk of violence). The EAT clarified that such an inquiry is irrelevant. If the recruitment pool for the higher-paid roles is 90% male, and that requirement drives the pay disparity, the disadvantage is established prima facie. The "reason why" is distinct from the fact of the disadvantage itself.

'Proportionality': Beware the "All or Nothing" Approach

On the cross-appeal regarding objective justification, the EAT provided a stern reminder regarding the detailed analysis required under Hardy & Hansons plc v Lax [2005] IRLR 726. The Tribunal had rejected the employer's justification defence essentially because the £40,000 pay gap was considered excessive, suggesting the employer could have recruited from a wider, cheaper pool.

The EAT found this analysis lacking. Proportionality is not a binary switch. The Tribunal erred by adopting an "all or nothing" approach, implying that because the entire gap wasn't necessary, the defence failed completely.

Instead, the EAT mandated a more critical 'evaluation': the Tribunal should have analyzed what part of the pay differential was proportionate to the legitimate aim of retention. Even if a £40,000 premium was disproportionate, a smaller premium might have been justified. By failing to weigh the specific business risks (loss of staff and certification) against the discriminatory impact, the Tribunal failed to perform the necessary balancing exercise.

Practical takeaways

  1. Do not argue for a heightened evidential threshold under BMC Software Ltd v Shaikh: Perkins holds there is none. An opaque pay system demands convincing evidence to rebut the presumption, but oral evidence that a specific sum was necessary to retain an employee will stand on the balance of probabilities without a paper trail.
  2. Prove that the provision puts women at a disadvantage, not why. On Essop v Home Office, a recruitment pool for the higher-paid roles that is 90% male and drives the differential establishes the disadvantage prima facie.
  3. Object to any tribunal inquiry into the sociological causes of the imbalance. The ET's reasoning that the risk of violence explained male dominance, and that Ms Perkins was not personally deterred from entering the Enforcement Agent pool, was an error of law.
  4. For respondents, justify the quantum and not merely the policy. Under Hardy & Hansons plc v Lax the question is what part of the differential is proportionate to the retention aim: a £40,000 premium may be excessive where a smaller one is justified.
  5. Appeal an "all or nothing" proportionality finding. A tribunal that rejects the defence outright because the whole gap was unnecessary has skipped the balancing exercise.
  6. Put the specific business risks in evidence so they can be weighed. In Perkins those were loss of staff and loss of certification, and the ET's failure to weigh them against the discriminatory impact founded the successful cross-appeal.