This was a test case brought by four Administrative Officers ("AOs") who work for HMRC in Merseyside and who are aged 32 and under.
In 2006, 500 new AOs joined HMRC (as a result of a Government department reorganisation). Of these 500 employees, 80% were aged 32 and under.
Most Government departments implemented a two year pay freeze in 2011 (with pay rises limited to 1% in the following three years). The pay freeze affects those with annual salaries of £21,000 a year or more. Those with annual salaries of less than £21,000 continued to receive pay increases, although at a fixed amount of £250 a year.
The claimants argued that this group (and those aged 32 and under specifically) were subjected to a set of circumstances that resulted in them suffering a disadvantage. Those aged over 32 tended to be receiving the maximum level of pay for their grade, whereas those aged 32 or under did not.
The claimants argued that the pay freeze was a provision criterion or practice ("PCP") which placed those aged 32 and under at a disadvantage, and that this was therefore indirect age discrimination.
The Employment Tribunal dismissed the claimants' claims.
The Employment Tribunal held that the PCP was the pay awards since June 2006, not the pay freeze from 2011 (para.42). The correct pool for comparison were staff who joined from June 2006, instead of pre-June 2006 since the pay structure was materially different then and one would not be comparing like with like under s23 of the EqA 2010 (para.45);
The Employment Tribunal also held that the claimants’ age group was not particularly disadvantaged since the Employment Tribunal accepted HMRC’s statistical evidence which showed a difference in salary of only 0.83% between staff over 32 and those 32 and under who joined at the same time as the claimants’s (para.48)
As the claimants had not shown they had been put at a particular disadvantage, it was unnecessary for HMRC to prove justification.
The test case had major implications for most government departments who have implemented the pay freeze from 2011. If the claimants had been successful, Government departments would have faced a raft of similar claims. As the claims failed, Government departments are unlikely to face future claims.
For a copy of the judgment, click here (nb file is 8mb so takes a while to open)
Mort and others v Commissioners for HM Revenue and Customs, 2410596/13 Liverpool Employment Tribunal, 22 May 2014