Case C-17/05, Cadman

The Grand Chamber delivered an interesting judgment today concerning the applicability of the 1989 Danfoss judgment.

In Danfoss (link below), the Court of Justice held that the use of length of service as a criterion in a pay system need not be justified by the employer, even if it worked to the disadvantage of women, since ‘length of service goes hand in hand with experience and since experience generally enabled the employee to perform his duties better’.

Although Cadman did not directly call into question pay systems that use length of service as a pay criterion, it might indirectly affect such systems.

The referring Court, the Court of Appeal (England and Wales) (Civil Division), asked essentially whether, and if so in what circumstances, Art. 141 EC required an employer to provide justification for recourse to the criterion of length of service as a determinant of pay where use of that criterion led to disparities in pay between the men and women to be included in the comparison.

The Court held that, as a general rule, recourse to the criterion of length of service was appropriate to attain the legitimate objective of rewarding experience acquired which enabled the worker to perform his duties better.

The employer was therefore free to reward length of service without having to establish the importance it had in the performance of specific tasks entrusted to the employee.

The Court held that in Danfoss, it did not, however, exclude the possibility that there might be situations in which recourse to the criterion of length of service must be justified by the employer in detail.

That was so, in particular, where the worker provided evidence capable of giving rise to serious doubts as to whether recourse to the criterion of length of service was, in the circumstances, appropriate to attain the abovementioned objective.

It was in such circumstances for the employer to prove that that which was true as a general rule, namely that length of service went hand in hand with experience and that experience enabled s the worker to perform his duties better, was also true as regards the job in question.

The Court now added that where a job classification system based on an evaluation of the work to be carried out was used in determining pay, there was no need to show that an individual worker had acquired experience during the relevant period which had enabled him to perform his duties better.

Text of Judgment

Relevant case law:
Case 109/88 Handels‑og Kontorfunktionærernes Forbund I Danmark v Dansk Arbejdsgiverforening (‘Danfoss’) [1989] ECR 3199