The judgement means that employers who move staff to a new pay scale, where they are doing like work, can maintain legacy pay differences between them on the new scale that are inherited from their former pay scales, even when it disadvantages a group of women.

In a restructuring exercise, the Audit Commission had created a new post of housing inspection officer on a new pay scale, where the nine claimants and their two male comparators were doing like work. But the two males were placed at the top of the scale, the nine women further down. The result was "a significant pay disparity tainted by sex," Prospect argued.

In June 2008 the union's solicitors, Russell Jones & Walker, argued that the Audit Commission was in breach of its statutory duty under the Sex Discrimination Act 1975 (Public Authorities) (Statutory Duties) 2006 because it failed to conduct an equality impact assessment when creating the new role.

The original case was heard in September 2010. In December that year the employment tribunal ruled that all nine claims had succeeded, but the Audit Commission appealed. It took a year for the appeal to be heard and another year before the judgement was issued on December 6.

Lord Justice Mummery, considered the Court of Appeal's main expert on equal pay cases, ruled in favour of the women, but Lord Justice Lewison and Sir Mark Waller disagreed.

Prospect Legal Officer Linda Sohawon said: "We welcome the finding by Lord Justice Mummery, the lead judge, that the union's case was right. He agreed with us that the nine female staff had faced indirect sex discrimination and that the employer should have to justify objectively why two male comparators were paid much more.

"But we are dismayed that the other two appeal court judges disagreed and the court found in favour of the Audit Commission."

Prospect will not appeal the decision.