News & Insights

Part time punishment

Ian Machray reports on a recent decision on whether you can pay your part-time employees less than the pro-rata full time equivalent salary

Part-time workers have the right not to have less favourable contractual terms than a comparable full-time worker unless this treatment can be justified on objective grounds. In determining whether a worker has been treated less favourably the pro-rata principle should be applied unless it is inappropriate; namely the part-time worker should receive comparable pay and benefits calculated with reference to their number of hours of work.

In the case of British Airways v Pinaud the Employment Appeal Tribunal (EAT) had to consider British Airways’ (BA) approach to a complex contractual working pattern whereby employees are required to be available to work for a certain number of days followed by an off-shift period. The arrangements for full and part time staff were different and meant that Mrs Pinaud, who worked part-time, was paid a basic salary of 50% of her full-time colleague but required to be available to work 53.5% of the days that colleague was required to be available.

The Employment Tribunal (ET) decided this difference was less favourable treatment on the grounds that she was a part-time worker. It found BA’s rationale for the difference in treatment, namely that it was needed to provide a workable part-time shift pattern was a legitimate objective. However, the difference in pay was not a necessary or appropriate means to achieve that objective. The ET stated that the arrangements were unlawful and BA should have simply paid Mrs Pinaud 53.5% of the full-time salary.

The EAT upheld the ET’s finding of less favourable treatment but decided it was incorrect in its approach as to whether the treatment was justified. In particular it should have considered the statistics provided by BA to assess the actual impact of the unequal treatment on the employee in order to decide if other approaches were necessary or appropriate.

The facts of this case are unlikely to arise in most companies but there are important points for all employers to note. The EAT emphasised that in order to justify unequal treatment an employer must have precise, concrete factors to support that there is a genuine need for the unequal treatment and that the treatment is appropriate and necessary to achieve their legitimate objective. Also an assessment should be carried out as to the actual impact of the unfavourable treatment, if any impact is minimal this would be useful to show any alternative approach (such as an increase in salary) would be disproportionate. Ideally a company would have concrete statistics or evidence that the impact is minimal.

This case highlights that, although it is possible for an employer to justify less favourable contractual terms retrospectively, it would be much easier if it can demonstrate it carried out an assessment of the various alternative approaches and gathered the necessary evidence to inform its choice at the time the contractual term was entered into.