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Changing the law on equal pay - test case (Cadman)

15 January 2010

Length of service is a particularly difficult issue in the context of equal pay law. Across the UK and Europe, women tend to have shorter service than men, often as a result of career breaks for family reasons, or because they are more recent joiners in areas traditionally seen as men's work. Many pay schemes in both public and private sectors are based in some way on length of service, and it is recognised that this is a significant factor in maintaining the gender pay gap. Cadman v Health & Safety Executive Length of service in equal pay claims: rewarding experience fairly

Length of service is a particularly difficult issue in the context of equal pay law. Across the UK and Europe, women tend to have shorter service than men, often as a result of career breaks for family reasons, or because they are more recent joiners in areas traditionally seen as men's work. Many pay schemes in both public and private sectors are based in some way on length of service, and it is recognised that this is a significant factor in maintaining the gender pay gap.

However, legal challenges to pay schemes based on length of service have not been easy. The European Court of Justice determined as long ago as 1989 that employers were free to reward length of service even if that disadvantaged women and even if there was no good reason for doing so. No challenge could be brought even if, in practice, the longer service did not lead to improved performance.

We are acting in litigation supported by Prospect, the union, to try to address this issue. In Cadman v HSE, we acted for Mrs Cadman in the Court of Appeal and in the European Court of Justice. The ECJ in Mrs Cadman's case accepted that in some circumstances an employer does have to justify its use of length of service in pay schemes. The decision amounted to the opening of a door which had previously been shut to claims. The principle established by the ECJ in Cadman now has to be applied by the courts in the UK, and we are acting in the 'sister' case, Wilson v HSE in the Court of Appeal. It is hoped that the Court of Appeal's decision in Wilson will provide some much needed guidance on this area.

Overall, these cases are likely to have a significant impact on equal pay law and in reducing the gender pay gap, because so many employers use pay schemes which reward length of service. Paying more to longer serving staff generally disadvantages younger workers as well as women, so there may be an additional or alternative age discrimination challenge in some length of service cases. To defeat a claim of age discrimination in this context, an employer will probably need to provide good business reasons to explain why their pay scheme is structured as it is.