Thackray Williams

The Guardian stated:

Higher pay for long service ruled illegal

Employers cannot lawfully pay some workers much higher salaries than others solely on the ground of long service, the European court of justice ruled yesterday in a judgment that will force thousands of employers to review their pay schemes.

The ruling from Luxembourg sets a precedent and means employers in the UK, if challenged, will be obliged in many cases to give a valid reason for paying thousands of pounds extra to someone with more experience, and will not be able to merely cite years of service.

Whereas The Times’ view was:

Mothers lose right to equal salaries

Women who take time out of the workplace for maternity leave have no automatic right to the same pay as male colleagues who are doing the same job but have not had time off, Europe's top court ruled yesterday.

The landmark ruling, described as the most important sex discrimination judgement for 10 years, means that companies can legally pay some workers more for length of service even though a woman's ability to compete on time served will be curtailed by her decision to have children.

The ECJ held that unless a serious doubt is raised by the worker, then length of service is an appropriate objective to reward experience.

To explain this more simply, if it can be shown that length of service equals greater experience, then length of service can be used as an 'appropriate objective' of a pay policy. It will be evident that in some roles, after two years in the job, there will be a greater level of experience than after six months; which can be rewarded. One of the situations where a worker may be able to raise a 'serious doubt' will be where after two years' service, there is no greater experience demonstrated, comparing that person with someone who has five years' experience. Some jobs will reach a saturation level where, after a certain length of service, the level of experience will not objectively continue to increase.

Mrs Cadman’s case is due to go back to the Court of Appeal for it to decide whether she can raise 'serious doubts' and whether it was 'appropriate' for her employer, the HSE, to use length of service when setting pay levels.

Employers will also need to consider the Age Discrimination Regulations introduced on 1st October 2006 and other legislation when setting pay schemes.

If you have any questions arising from this case, on Equal Pay or on employment law generally, please contact Victoria Wright, Head of the Employment Law Department.