Barry v Midland Bank plc [1999] UKHL 38

In brief

A severance scheme calculating payment by reference to final salary and years of continuous service was held not to constitute indirect sex discrimination, despite disproportionately affecting women who had reduced their hours. The purpose of severance pay — to cushion income loss at termination — justified using final salary as the relevant measure.

Key provisions

• barry-p1 — Severance pay as deferred pay under Article 119 EC Treaty: Severance/redundancy pay constitutes 'pay' within Article 119 (now Article 141) EC Treaty and is subject to equal pay obligations.
• barry-p2 — Three-stage test for indirect discrimination: Indirect discrimination claims require: (1) a difference in treatment; (2) disparately adverse impact on women; (3) whether objective factors unrelated to sex justify the difference.
• barry-p3 — Purpose of payment determines whether difference exists: At stage (1), the purpose of the payment is central. Severance pay cushions income loss at termination, so using final salary is not a relevant difference.
• barry-p4 — Identifying the correct comparator group: The disadvantaged group must be correctly defined — not simply all part-time workers versus full-time workers.
• barry-p5 — Objective justification — proportionality of scheme aims: Even where disparate adverse impact is established, a scheme is lawful if objectively justified by factors unrelated to sex.
• barry-p6 — Distinction between purpose and method of calculation: Changing the method of calculating a payment may alter its fundamental purpose. A court must assess whether an alternative actually serves the same objective.

When relevant

Any proportionality assessment where the severity of impact on trans people varies. A blanket ban on all trans people accessing a facility requires far more compelling justification than a narrowly tailored, case-by-case restriction. Directly relevant to single-sex exception decisions under Schedule 3 and occupational requirements under Schedule 9. Use in EqIA proportionality sections and the Proportionality Wizard.