Mrs Wilson was employed as a band 3 inspector by the Health and Safety Executive (HSE). In July 2002, she issued an equal pay claim. Wilson relied on three comparators who were paid more than her, each of whom was also employed as a band 3 inspector. In part, this was because of their longer service. Broadly, the HSE’s pay scheme provided for pay to increase with length of service, up to a maximum of 10 years. Wilson argued that the HSE’s pay scheme was not justified.
In the case of Danfoss, the European Court of Justice (ECJ) had ruled that pay differences arising from service criteria do not have to be justified on the basis that rewarding experience is a legitimate objective. This was qualified in the later case of Cadman, which held that employers have to show objective justification where a claimant provides “evidence capable of raising serious doubts” as to whether that criterion is appropriate “as regards a particular job”.
The employment tribunal first heard the case in 2003. At this stage, Cadman had not reached the ECJ. Therefore, applying Danfoss, the tribunal held that Wilson’s claim had to fail.
Wilson appealed to the Employment Appeal Tribunal (EAT). The appeal was stayed while Cadman went before the ECJ. Then, in light of the Cadman decision, the EAT remitted the case back to the tribunal to determine whether Wilson had provided evidence capable of raising serious doubts about the appropriateness of using a length of service criterion to determine pay in her job. The tribunal held that she had not, and that once it was accepted that the criterion had been appropriately applied, the tribunal could not question the way in which it had been applied.
Wilson appealed to the EAT again, arguing that the tribunal’s scrutiny should not end with asking whether a length of service criterion is appropriate it should also ask whether its application (in this case 10 years) is justified.
The EAT agreed. It held that “serious doubts” can arise over whether a length of service pay criterion is appropriate for a particular job, and whether the period of time over which the criterion is applied is appropriate. The EAT suggested that the “serious doubts” test requires the tribunal to be satisfied that in light of the claimant’s evidence there is real reason to suspect that the employer has stepped beyond the margins that can properly be afforded to employers when considering whether added experience improves job performance. The EAT therefore remitted the case back to the tribunal to consider whether the serious doubts test was satisfied. It asked for a speedy conclusion.
This case clarifies the meaning of the serious doubts test outlined in Cadman and gives employers further insight into when they might be required to objectively justify using length of service criterion in their pay schemes.
Employees will still have to establish serious doubts about the appropriateness of making pay dependent on length of service. However, once they have done that, it is open to a tribunal to find that a pay scheme falls foul of equal pay law in relation to the appropriateness of using the criterion and the period of time over which it is applied. Employers should therefore review pay schemes rewarding length of service and consider whether they genuinely reflect experience-related performance improvements.
Jonathan Exten-Wright, partner, DLA Piper