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Higher pay for long service ruled illegal

This article is more than 17 years old
Employers face equality challenges

The following correction was printed in the Guardian's Corrections and clarifications column, Saturday October 7 2006

The headline on the article below was incorrect. What the first paragraph of the report said was that employers could not award higher salaries to some workers "solely on the grounds of long service". Here is an explanatory note from our legal editor, Clare Dyer: "The length of service must enable the man to do his job better. This will be presumed in the usual case so the employer need not justify it on a case-by-case basis. But in a case like Bernadette Cadman's, where there are serious doubts about whether the length of service enables the man to do his job better than the woman, the woman may now challenge the extra pay and the employer must justify it."


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.

The decision will have a potentially huge impact on public sector employers, including the civil service, where wide differentials based on length of service are more common than in the private sector.

However, it will not have an effect on women taking maternity leave, despite some reports last night that the ruling would leave women who took time off after having a baby with no right to claim the same pay as male colleagues.

The Confederation of British Industry warned last night that experience was a "critical factor for companies when deciding how much staff are paid".

The European court said experience generally enabled workers to perform their duties better and therefore warranted more pay. But there were cases which raised serious doubts whether this was so and in those cases employers would have to justify in detail paying the longer-serving workers more.

Lawyers said that, while it would generally be justified to pay someone with five years' experience more than someone with one year, it would be hard to justify much greater rewards for a worker with 15 years' experience compared with a colleague with 12 or even eight years.

The court's decision is a victory for Bernadette Cadman, a principal Health and Safety Executive inspector who took her case to an employment tribunal five years ago after discovering that male colleagues in the same grade were earning between £5,000 and £9,000 more.

Her union, Prospect, which supported her claim, described the case as the most important on equal pay to be brought in the past 10 years.

Ms Cadman, 43, who was backed by the Equal Opportunities Commission, argued that a £9,000 difference for male colleagues based on length of service amounted to sex discrimination because women were more likely to have career breaks and shorter service. Lawyers said it probably also contravened age discrimination laws which came into force this week.

Ms Cadman had been promoted more quickly than male co-workers, yet was paid substantially less. They earned more because they had worked for longer with the inspectorate, although in a junior grade. The case will go back to the court of appeal, and probably then back to the tribunal, where Ms Cadman could win a salary rise and six years' backdated pay.

Prospect's general secretary, Paul Noon, said the ruling would have "enormous implications not just across the public service, but for any employer whose pay or benefits system unreasonably rewards length of time in employment, including enhanced leave to reward years in service". He added: "The government and the Treasury pay lip-service to calls to modernise pay systems but now they will need to remove their heads from the sand."

He said the union had been told by the Treasury that no additional funding would be available to equalise pay as a result of the ruling and that "outstanding anomalies" would have to be "resolved within the chancellor's stranglehold of a 2% pay limit". "That is not acceptable," he said.

Ms Cadman said her case was "not about winning compensation, but about recognition that women should not be paid less than their male counterparts".

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