The Government's Equality Bill will include measures aimed at eradicating the pay gap that still exists in many workplaces between men and women. Incremental pay scales based on length of service can disadvantage women, who are more likely to have fewer years' service either because of career breaks to look after children or because they are relatively new entrants into traditionally male-dominated professions.
In Wilson v Health and Safety Executive (HSE), Mrs Wilson, a health and safety inspector, contended that the somewhat complex pay system operated by the HSE, which rewarded pay in part by reference to length of service, constituted a breach of the Equal Pay Act 1970. She accepted that the nature of the job was such that performance would be likely to improve with experience for the first few years but she did not believe that the HSE was justified in applying this criterion over a ten year period.
The Employment Tribunal (ET) gave its decision in the light of the judgment of the Employment Appeal Tribunal (EAT) in a similar case, Cadman v HSE. The EAT had concluded that the effect of European case law was that with respect to full-time workers it was not necessary for an employer to justify a pay difference resulting from the application of length of service criterion. Although the ET was inclined to think that a ten-year period was not justified to reach the requisite level of skill in this case, it found that Mrs Wilson's case must fail.
Mrs Wilson appealed. The appeal was stayed because Cadman had by this time been appealed and the Court of Appeal had made reference to the European Court of Justice (ECJ) for a ruling as to whether differences in pay based on length of service need to be objectively justified to be lawful.
The ECJ judged that as a general rule the criterion of length of service is appropriate to attain the legitimate objective of rewarding experience acquired which enables the worker to perform his or her duties better. An employer does not generally have to produce specific proof in order to justify the practice unless a worker provides evidence capable of raising serious doubts as to whether the link between pay and length of service is in fact rewarding experience that enables the worker to perform better. In that case, the employer must demonstrate the absence of unlawful discrimination.
When Mrs Wilson's appeal was heard, the EAT identified that the real issue to be determined was whether once it has been accepted that the nature of the job is such that pay can properly be made to depend on length of service, is that the end of the ET's enquiry or can it also consider, in an appropriate case, whether the degree of recourse to length of service (and therefore, experience) can be justified?
Although the ECJ's judgment in Cadman had not provided the desired clarity on this point, in the EAT's view the ET does have the power to question whether the length of service criterion used by the employer is justified in circumstances where the employee has raised serious doubts as to whether or not it is. To do so, the ET would have to be satisfied that that there was 'real reason to suspect that the employer has stepped beyond the margins which can properly be afforded to employers when considering whether added experience typically improves job performance'.
The matter was referred to a fresh Tribunal to consider the issue of serious doubts again.
Contact Dean Parnell for assistance in ensuring that your pay scheme complies with the law.
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