Pulham and ors v London Borough of Barking and Dagenham
The law says that employers cannot justify the use of transitional arrangements in situations where past gender discrimination has been “recognised”. In Pulham and ors v London Borough of Barking and Dagenham, however, the Employment Appeal Tribunal (EAT) has said that age discriminatory pay protection arrangements might be justifiable if they were introduced around the time that the age regulations came into force.
Basic facts
For many years, the Council operated a scheme under which employees over 55 received increments once they had completed 25 years' service. With the introduction of the age regulations, the Council decided it could no longer justify the scheme and agreed with the trade unions (as part of negotiations introducing single status) to close it to new entrants as of 1 April 2007. It was retained for existing employees as a form of pay protection.
Ms Pulham, who satisfied the length of service criterion as early as March 1999, was not entitled to an increment until April 2011 because of the age criterion. However, following the single status negotiations, the Council informed her that she would not be entitled to an increment at all because she would not be a member of the scheme by 1 April 2007. Ms Pulham claimed age discrimination.
Tribunal decision
The tribunal agreed she had been treated less favourably than someone who was 55 or over, but said that it was justified because the Council's aim was to modify the scheme so that it would not be illegal under the age regulations.
This was a legitimate aim which the Council had achieved by quite properly including it in the single status negotiations with the unions. As the only real alternative to abolishing the scheme was to throw it open to everyone (which would involve huge costs), the tribunal decided that the Council had arrived at an outcome “that was appropriate and necessary in achieving the legitimate aim”.
EAT decision
The EAT said it was clear from the Court of Appeal decision in Redcar and Cleveland Borough Council v Bainbridge that employers cannot justify the use of transitional or phasing-out arrangements in situations where past discrimination has been “recognised”. However, they may be able to justify transitional arrangements that continue features of a regime that are subsequently recognised as discriminatory. In those circumstances, tribunals have to apply a “proportionality test”.
In this case, the EAT could see no reason why an employer, faced with the introduction of the age regulations, should not be able to include an element of pay protection into “ the adjustments necessary to conform to the new law, notwithstanding that that will of its nature involve a degree of continuing discrimination. Since all kinds of age discrimination can in principle be justified there is no reason to treat discrimination occurring in this particular way any differently”.
But was the tribunal right that the arrangements were justified? The EAT said that the tribunal had placed too much importance on the fact that the arrangements were negotiated with the unions and had, as a result, abdicated its responsibility to carry out “the necessary proportionality exercise”. It was for the tribunal (not the Council or the union) to decide whether the outcome was a fair balance between the needs of the Council and “its undoubtedly discriminatory impact”.
It also said that the tribunal had probably placed too much importance on the fact that the Council had exhausted its budget for settling equal pay claims. Although the size of relevant budgets can be used as a useful benchmark, the EAT ruled that it cannot be the decisive factor.
Ms Pulham also argued that, regardless of the pay protection arrangements, not giving her access to the increment when she attained the service requirement, but had not yet reached age 55, was also discriminatory. The EAT held that denial of access was discriminatory and required justification.
As the tribunal’s reasoning on justification, on both components of the claim, was flawed, the EAT remitted the issue to a fresh tribunal.