The People Bulletin

The London Borough of Barking and Dagenham had been running a pay scheme to reward long service. When employees had 25 years’continuous service and were 55, they became eligible for the cash as at the next 1 April. 

Mrs Loraine Pulham met the service but not the age requirement. Once the Employment Equality (Age) Regulations 2006 came into force on 1 October 2006, her employers had to abolish the scheme with effect from 1 April 2007. However, under a new single status agreement scheme negotiated with the trade unions, the former loyalty and experience scheme was closed to new entrants, but employees who had already been receiving payments would continue to receive them, frozen at the current rate with no increase. 

Mrs Pulham argued that she had been subjected to age discrimination between 1 October 2006 and 1 April 2007 by her exclusion from the scheme on grounds of age (she had not reached the age of 55) and after 1 April 2007 by her subsequent exclusion from the pay protection arrangement (as she could not benefit from original loyalty scheme in the first place). 

The employment tribunal accepted that the council’s aim to modify the scheme so it complied with the age regulations was entirely legitimate. It also took on board the large cost of extending the scheme to all employees of over 25 years service, and found the council’s single status agreement reflected the interest of the workforce and was appropriate. It concluded that the age discriminatory effect was justified. 

Mrs Pulham appealed to the EAT which found the original tribunal’s decision had been ‘flawed’. This was because it had attached too much weight to the fact the single status agreement was the result of negotiations between the local authority and the trade unions, and to the fact that a budget for setting equal pay claims arising from the agreement has been exhausted. For this reason the EAT remitted the case to a fresh employment tribunal. 

However the EAT did rule that while a transitional or phasing-out arrangement introduced after a practice had been recognised to be directly or indirectly discriminatory and which continued this discrimination could not be justified; if the arrangement already existed before the practice had been recognised as discriminatory it was capable of being justified: 

‘We can see no reason why an employer faced with the coming into force of the Regulations should be absolutely disentitled to incorporate 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.’ 

The judgment was handed down on 28 October 2009. 

www.bailii.org/uk/cases/UKEAT/2009/0516_08_2810.html