An employer's genuine material factor (GMF) defence will need to be justified if the factor relied on to explain the gender pay gap is "tainted" with sex discrimination. For the last ten years or so the Cadman litigation has explored whether there is an exception to this rule where the pay disparity is due to rewarding length of service. With the Court of Appeal's decision in the related case of Wilson v Health and Safety Executive we now have an answer of sorts.
According to Wilson the so-called service-related exemption is no more than a rule of thumb. It will generally be assumed that it is justifiable to reward length of service, but it will be possible for the claimant to call evidence to displace this assumption. In this case the adverse impact of the service-related increments (which applied for ten years) was so great that the employment tribunal had been entitled to conclude that the employer's GMF defence had failed. So we have a clear decision on the facts of this case, but little guidance on what levels of service-related increments are likely to be justifiable in the future.