Freeze frame

A recent test case explored whether the impact of the public sector pay freeze on the pay progression of staff aged 32 and under was indirectly discriminatory. Simon Lambert analyses the ruling.

In Mort v HMRC the four claimants were all administrative officers ("AOs") working in HMRC's personal taxation division in Merseyside. They joined HMRC between 2006 and 2008.

Before they joined HMRC, in 2005, the then Customs and Excise and Inland Revenue merged. As part of the merger there was an assimilation exercise. As part of this exercise, if AOs had between one and five years' service in their grade and they were below a notional rate of pay, their pay would be uplifted to that notional rate. From 2005 HMRC's pay policies did not reward length of service.

The claimants' case was that as a result of various circumstances, including HMRC's desire to reduce the minima and maxima for each grade in their pay scale and the Government's public sector pay freeze from 2011-2013, despite having five years' service as an AO they are still not paid the maximum for their role. They contended that this is a result of HMRC's pay policy being indirectly discriminatory on the grounds of their age, as all the claimants are aged 32 and under.

The employment tribunal disagreed. They found that the provision, criteria or practice about which the claimants' complained was the pay awards since June 2006, not the pay freeze from 2011.

This was because focusing on the pay awards from 2011 onwards would not reflect the true picture of the pay rises, because prior to 2011 HMRC's pay policy had the effect of giving larger percentage pay increases to those at the bottom of the scale.

The employment tribunal went on to find that 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. Otherwise one would not be comparing like with like.

They found that the claimants' age group i.e. 32 and under, was not particularly disadvantaged because they 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.

In conclusion, they found that the reason for any disadvantage in pay was related to the claimants' length or service before the pay freeze was implemented and not because of their age.

What this means for employers

This test case had major implications for most government departments who implemented the pay freeze from 2011. If they had lost, they would have faced a raft of similar claims.

The decision might also be relevant to private sector employers who have implemented some kind of pay restraint in recent years. The case is a useful reminder that if an employee's treatment relates to their length of service this does not necessarily mean it is age discriminatory.

The case is also a good illustration of how employers can refute allegations of group disadvantage in indirect discrimination cases by having relevant and up to date statistics about the impact of their policies. This is only a tribunal decision which may be appealed.

Simon Lambert is a partner at DAC Beachcroft. He can be contacted on 0117 918 2085 or This email address is being protected from spambots. You need JavaScript enabled to view it..