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Service-related pay must be objectively justified, Court of Appeal rules

21 October 2009

A Health and Safety Executive female worker has won her seven-year discrimination battle against her employer.

Christine Wilson, a band 3 inspector with the HSE, claimed that compared with three of her male colleagues she had been discriminated on grounds of sex under the organisation’s service-related pay scheme.

HSE’s pay scheme provided for salary increases based on length of service which, Mrs Wilson claimed, discriminated against women.

In 2003 an employment tribunal found in her favour, saying that the length of service criterion had a disparate impact on women because they would tend to have shorter service than men as a result of career breaks to have children or delayed starting work until later because of childcare responsibilities.

Rejecting HSE’s appeal, Lady Justice Arden said: “The need to protect rights arising from the use of a service-related criterion is not an academic question, as it is common ground that women are often disadvantaged by the use of such a criterion in pay schemes.”

She said that distinguishing between the adoption of such a criterion and its use would be too technical an approach that could lead to the creation of “legal black holes”.

“An employer can be required, in the proceedings in which an equal pay claim is brought, to provide objective justification for his use of a length of service criterion as well as its adoption in the first place,” she ruled.

She said that where there were “serious doubts” that a criterion was discriminatory, it was for the employer to show it was not.

Robin Allen QC, for the Equality and Human Rights Commission, which intervened in Christine Wilson’s support, said that the requirement for “serious doubts” could not be interpreted as re-imposing a further burden of proof on the employee because that would be inconsistent with the EU’s Burden of Proof Directive in employment cases.

Arden LJ agreed, saying the European Court of Justice has set up the ‘serious doubt’ test as “a filter on claims”.

“The employee has to show that there is evidence from which, if established at trial, it can properly be found that the general rule does not apply. The employee does not necessarily have to descend into detail,” she added. “But there would have to be some basis for inferring that the adoption or use of the length of service criterion was disproportionate.”

Schona Jolly, an employment barrister at Cloisters Chambers, said women were often penalised in wage structures because they have had time out to have and then raise children.

“It was presumed that employers who used length of service as a wage deal criteria could do so unless ‘serious doubts’ as to whether the criteria was being used properly to reward loyalty, increasing skills or experience were raised by the employee,” she said.

According to Jolly, the ruling will make it easier for employee to raise such doubts.

“An employee does not need to do very much to raise these doubts, and employers will have to justify the use of length of service to fix pay in many more situations than was previously thought,” she said.

“Companies who will fall foul of this ruling are ones who cannot show that the length of service criteria is rewarding increased skills or experience over that time or those that cannot show that using length of service is appropriate and necessary to achieving such an aim.”

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Procedures Police & Prisons Discrimination Local government