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Equal pay: Calculation of part-timer's severance payment objectively justified

This report relates to 1 case(s)

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    Barry v Midland Bank plc [1998] IRLR 138 CA (1 other report)

    • Severance pay terms upheld

      1 March 1998

      In Barry v Midland Bank plc the Court of Appeal has ruled that a redundancy pay scheme whereby severance pay is calculated on the basis of the employee's current pay at the date of termination does not contravene Article 119 of the EC Treaty even though it disadvantages part-time workers who previously worked full time by not taking into account any full-time service they may have had.

Calculating severance payments by reference to final pay, so that a part-timer who had previously worked full time did not have her full-time service reflected in her severance payment, was not proven to have a disproportionately adverse effect on women as compared with men but, if there was indirect discrimination, it was objectively justified, holds the Court of Appeal in Barry v Midland Bank plc [1998] IRLR 138. The primary objective of the scheme under which severance payments were made was to cushion employees against unemployment, and its secondary objective was to compensate them for the loss of their jobs and to reward their loyalty.