In Pulham v London Borough of Barking and Dagenham the EAT had to consider whether an employer was able objectively to justify the continuation of a remuneration scheme, which relied on both length of service and age, after 1 October 2006, when the Age Regulations came into force.

 

The EAT held that:

  • The tribunal misdirected itself by attaching too much weight to the fact that the pay arrangements had been negotiated by the trade unions. The fact that agreement had been reached between the trade unions and the borough could not be conclusive evidence that the proportionality test was satisfied. It potentially constituted evidence that the test was satisfied, but it was for the tribunal to decide whether the outcome represented a fair balance between the reasonable needs of the borough and its discriminatory impact. There was no evidence that the tribunal performed that assessment.
  • It is acceptable for the size of relevant budgets to be treated as a relevant factor, as long as those relevant budgets are not determinative. An employer cannot justify their failure to eliminate discrimination based on the fact that they have exhausted the budget allocated.
  • The EAT warned that employers should ensure that tribunals are given sufficient information about (1) the discriminatory impact on claimants and (2) the alleged costs and financial background against which the affordability of those costs falls to be judged.

 

Pulham v London Borough of Barking and Dagenham, EAT