When pursuing social policy aims Member States must comply with the fundamental principles of Community law
Nicole Seymour-Smith and Laura Perez worked in the United Kingdom for their respective employers from February 1990 to May 1991, when they were dismissed. They complained to the Industrial Tribunal that they had been unfairly dismissed and sought compensation, but the Tribunal refused to consider their claims because the relevant UK legislation affords protection against unfair dismissal only after a qualifying period of two years' continuous employment (Employment Protection Consolidation Act 1978).
The dismissed employees then challenged the legality of that requirement on the basis that it was incompatible with Community law. They consider that women are discriminated against under the national rules and rely on statistics to demonstrate that the proportion of women with two years' employment (the pre-condition for compensation for unjust dismissal) is lower than the proportion of men satisfying the requirement.
On appeal by both parties, the House of Lords stayed proceedings and referred to the Court of Justice for a preliminary ruling questions concerning the interpretation of the EC Treaty and the equal pay and equal treatment directives.
The Court first ruled that a judicial award of compensation for breach of the right not to be unfairly dismissed constitutes pay and is thus governed by the Community law principle of equal pay for men and women.
It then considered the legal test for establishing whether a measure adopted by a Member State has disparate effect on men and women to such an extent as to amount to indirect discrimination prohibited by the Treaty.
The best approach is to compare the relevant statistics by considering, on the one hand, the respective proportions of men in the workforce able to satisfy the requirement of two years' employment under the disputed rule and of those unable to do so, and, on the other, to compare those proportions as regards women in the workforce. It is for the national court hearing the case to assess the relevance and validity of the statistics presented, the degree of disparity between the men and women affected, and the length of time the disparity has existed.
It is also for the national court to establish whether, and to what extent, a rule which has a more detrimental impact on women than on men is justified by objective reasons unrelated to any discrimination based on sex.
Lastly the Court pointed out that, although social policy is essentially a matter for the Member States, the pursuit of a social policy aim cannot have the effect of frustrating the implementation of a fundamental principle of Community law, in this case that of equal pay for men and women.
Mere generalisations to the effect that the disputed rule is designed to encourage recruitment, by limiting the risk that employers will be exposed to proceedings for unfair dismissal brought by employees who have only fairly recently been engaged, do not in themselves constitute objective justification for measures that may be regarded as discriminatory.
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