Today’s decision by the ECJ enshrines in law the right for employees to tackle pay inequality where employers unreasonably use length of time in service as defence against pay differences in comparable roles.

The ruling marks a milestone in Bernadette Cadman’s fight for justice against her employer the Health and Safety Executive that started five years ago at a UK employment tribunal hearing. Her union Prospect has supported her throughout.

It will have widespread implications for any employer whose pay or benefits system rewards length of time in employment which, when challenged, it cannot justify. Cadman’s case will now return to the UK legal system where the union will pursue her claim, along with those of other Prospect members, on the basis of today’s announcement.

Cadman worked for HSE for 13 years and was promoted to a band 2 inspector in 1996. Five years later, after checking with personnel she discovered she was earning £5,000 to £9,000 per year less than male colleagues on the same grade. The union and legal representatives from Russell Jones & Walker argued that it is unlawful to allow colleagues in a comparable role to be paid more solely on the basis of length of service without any need to justify the extra money.

Prospect General Secretary Paul Noon said: "The ruling has proved that on-going differences in pay due solely to historical length of service cannot be justified indefinitely. This will 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.

"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. A recent meeting with the Chief Treasury Secretary revealed that no provisions or additional funding will be made available to take account of this ruling and outstanding anomalies will have to be resolved within the Chancellor’s stranglehold of a 2 per cent pay remit. That is not acceptable."

Cadman’s case was backed with evidence from the Equal Opportunities Commission which showed that when service-related pay is analysed, women are often clustered at the lower parts of the pay band because statistically they have on average shorter service due mainly to children or other care responsibilities or, as in this case, the workforce has been traditionally male dominated.

Bernadette Cadman commented: "Equal pay is an important issue for women. I am grateful for the support of my union and delighted that the ruling makes clear that pay systems that result in the unfair treatment of women are not acceptable. This is not about winning compensation, but about recognition that women should not be paid less than their male counterparts."

Emma Hawksworth, a partner in Russell Jones & Walker's Employment Department, represented Mrs Cadman. Hawksworth said: "The decision gives some much needed clarification on the law and marks a significant step forward in the move to narrow the gender pay gap.

"Additional experience does not lead to better performance indefinitely or in every case. Employers will have to ensure that their pay schemes reflect this. Where there is no good reason for using or continuing to use length of service criteria, it will be unlawful to do so. In Bernadette’s case, after five years in her job, she was still paid up to £9,000 per year less than her male colleagues doing exactly the same job as her. The HSE will now have to justify this."

Background to the case:

The Cadman case arose due to changes to the HSE pay system, common to the civil service, which until the early 1990’s was the national incremental pay system. It was replaced by a performance related pay system, which had the effect that people at (or near) their top of the pay scale continue to be paid substantially more than others, leaving those at the lower end of the scale with little chance of being able to catch up.

In May 2002, backed by the union, Cadman took her case to an employment tribunal, which found that women were disproportionally adversely affected by pay systems based on length of service. The tribunal found that HSE could not objectively justify the differences in pay.

But an Employment Appeal Tribunal in July 2003, citing an earlier European Court of Justice decision, ruled that HSE was not required to produce specific justification. Despite this setback the union, and their solicitors Russell Jones & Walker, pursued the case through the Court of Appeal, which expressed sympathy with Prospect’s argument and referred the case to the ECJ.

The ECJ hearing was on March 8 in the Grand Chamber with 15 judges from various member states. Prospect’s argument was supported by evidence from the Equal Opportunities Commission and the European Commission. In addition to the UK Government, opposition came from Ireland and France.

The Advocate General’s opinion was given on May 18 and found that where the pay system has a disproportionate impact on women the employer is required to provide objective justification for differences in pay.

While the ECJ backed away from the Advocate General’s view that length of service awards are automatically indirectly discriminatory, it acknowledged that there might be situations in which using length of service must be specifically justified by the employer. In these cases the court ruled that the worker would need to provide evidence capable of raising serious doubts as to the appropriateness of awarding pay increases based on length of service to reward experience, having regard to the particular job in question.

Prospect accepts there may be a lead-in period in a job and that in most cases different levels of pay can be justified for up to five years to allow for experience and effectiveness to be gained. But it believes that continuing pay differentials for comparable work after a certain period depending on the nature of the job amounts to discrimination. The union currently has further cases pending in light of today’s ruling.