MJ O'Connor Solicitors

The Brief

02.10.2007

Fair Play for Equal Pay: Cadman v. The Health Service Executive

Since women have more breaks in service during their working lives than men, usually to have children and raise a family, they often work for shorter periods of time. Is it then discriminatory for an employer to use length of service as a criterion for pay?

When the European Court of Justice issued its judgment in the case of Cadman v HSE on the 3rd of October 2006, not even a press release report from the European Union (which usually accompanies such judgments when issued) was given, and yet the coverage and debate subsequent to the decision itself – not least in Ireland - was astounding. So what did it do that stirred so much concern amongst certain groups?

Reports subsequent to the decision, state that the Cadman case was not a landmark ruling. Ms Cadman was attempting to overturn the two judgments of the European Court in Kontorfunktionaerenes Forbund I Danmark v. Dansk Arbejdsgiverforening ("Danfoss") [1989] ECR 3199 and 1991 (Nimz), but it would appear that the Cadman v HSE judgment simply upheld the existing law.

It is often the case that courts tend to concentrate on legal preciseness with narrow focus on the purpose of the legislation rather than its meaningful application in industrial contexts. Many employers are now left with the residual reality of implementing legal solutions with little practical consideration in the long term.

The issue in this case, Cadman v Health Service Executive, was whether determining pay by reference to length of service must be objectively justified under equal pay legislation as set down in various directives including Article 1 of Directive 75/117, and Article 141(1) EC which lays down the principle that equal work or work of equal value must be remunerated in the same way, whether it is performed by a man or a woman (Case C-320/00 Lawrence and Others [2002] ECR I-7325, paragraph 11.

For those lost in the realms of equal rights voices that had trumpeted from Europe on previous occasions, it was considered to be a disappointing if not surprising judgment that appeared to turn the tide for womens’ equal stance in the workplace.

What is at issue is not simply a pay policy but how that policy affects individual employees.

Ms Cadman was an inspector in the Health and Safety Executive (HSE). She brought a claim under the Equal Pay Act 1970 because she was being paid between £4000 and £9000 per year less than four male colleagues whose job had been rated as equivalent under a job evaluation study.

The question before the court was whether Article 141, which stipulates that equal work or work of equal value must be remunerated in the same way, requires the employer to provide special justification for recourse to the criterion of length of service as a determinant of pay. If the use of that criterion leads to disparities in pay between men and women then in what circumstances will that arise? Further would the answer differ if the employer applied the criterion on an individual basis so that an assessment was made as to the extent to which length of service justified a greater level of pay and finally whether there was any relevant distinction to be drawn in the case of part time and full time workers?

The European Court of Justice has strutted intrepidly forth in deciding that, as a general rule, recourse to the criterion of length of service is appropriate. This is because it acknowledges the experience acquired to enable the worker to perform his duties better. In that sense the employer does not have to establish specifically that recourse to that criterion is appropriate as regards a particular job.

The European Court of Justice went further and stated that where a job classification system is determined according to evaluation of work and the pay policy is based on that system then it is not necessary to show that an individual worker has acquired experience during the relevant period.

The crucial point is that that will not apply however, when the worker provides evidence capable of raising serious doubts.

It is important to highlight that employers will need to review their pay structures in any event and establish whether these indicate any prima facie case of indirect sex discrimination. If so, employers may need to consider whether it can justify in general terms how the pay scale works for employees within that grade or at that level and the incremental progression on that level. In any event, there would be a need to demonstrate that increased length of service brings with it a level of greater experience or competence necessary to that role which justifies the award of a higher pay. Perhaps this may also be of issue where the work itself necessitates certain skills, experience and qualifications as opposed to the repetitive type of work. In short, employers should always strive to achieve transparency and proportionality in order to avoid a potentially onerous argument on difference in pay levels.

The European Court of Justice's ruling will have a significant impact on pay disparities within the civil service and throughout the public and private sectors, and more particularly wherever long service-based pay schemes are in operation as part of the pay policy.

As the law stands, it would appear that recourse to the criterion of length of service is appropriate to acknowledge experience acquired enabling the worker to perform his duties better.

Some would say that perhaps the aspiration of equal rights in the workplace is long past resuscitation. However, on closer examination and inspection it would appear that the additional point raised by the ECJ that an employee may produce evidence raising a serious doubt of equal treatment could indeed cause a stir in the workplace. On that point, it may be that there is an onus on the employer despite the existence of a job classification system to objectively justify his reliance on seniority.

The case will now return to the Court of Appeal, which will give judgment on Ms Cadman's equal pay claim.

Will fair play generate equal pay? Only a transparent policy will positively answer such a contested and sensitive question.


Emma L. Callanan , Barrister-At-Law

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