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Equal pay: Severance payment based on final salary not discriminatory

This report relates to 1 case(s)

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    Barry v Midland Bank plc [1999] IRLR 581 HL (1 other report)

    • Severance terms did not discriminate

      1 September 1999

      In Barry v Midland Bank plc the House of Lords 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 did 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 length of service and final pay, so that a part-time employee who had previously worked full time did not have her full-time service reflected in her severance payment, was not discriminatory, holds the House of Lords in Barry v Midland Bank plc [1999] IRLR 581. Given that the purpose of the severance payments at issue was to cushion employees against unemployment and job loss, there was no relevant difference in the treatment afforded to full-time and part-time employees.