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Length of service related pay

Posted on 10th December 2009
Case law

The Court of Appeal has held that an employer will be required to justify the use of length of service as a criterion for pay where an employee provides "evidence capable of raising serious doubts" on its appropriateness. Additionally the Court held that the evidential burden on the employee is low.

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Julie Temple Julie
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Wilson v Health and Safety Executive [2009]

Background

A female (or male employee) is entitled to equal pay if they carry out similar work to a male (or female) colleague unless the employer can show any difference in pay is due to a "genuine material factor which is not the difference in sex".

Length of service is often used as one factor in determining pay, but this is potentially discriminatory as it is more likely that men will have longer service than women. The use of such criteria usually requires objective justification. Combining the effect of two ECJ decisions, the use of length of service will not necessarily require objective justification because rewarding experience is a legitimate aim. However, justification is needed where the employee provides "evidence capable of raising serious doubts".

The decision

The Court of Appeal held that an employee raised "serious doubts" when she put forward evidence that her claim had some prospects of success and some basis for the court to infer that the use of the criterion was disproportionate. In this case there was evidence that a ten year length of service criterion was too long and that five years was sufficient to "reward experience". Having raised serious doubts, the burden passed to the HSE to justify the pay structure.

In practice

Given this decision, employers must revisit any pay policy which includes length of service to determine pay scales. It is important that any use of length of service for this purpose legitimately reflects the added benefit to the employer of the additional experience of an employee with longer service in comparison to shorter serving employees.

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