An employer cannot justify a provision that is otherwise indirectly discriminatory on the basis of cost alone. In Heskett v The Secretary of State for Justice the EAT had to consider whether a policy that was introduced primarily in response to costs constraints could be justified.

The claimant worked as a Probation Officer. As a result of public sector pay constraint, changes were made to the employer's pay progression policy, so that it took significantly longer to progress to the top of scale than had previously been the case. This put younger employees at a particular disadvantage and the claimant brought a claim of indirect age discrimination. This failed because the tribunal accepted that the new pay progression policy was a proportionate means of achieving a legitimate aim.

On appeal, the employee argued that the employer could not show that it had a legitimate aim for introducing the pay progression policy – this was a situation where the policy was introduced purely for costs reasons. As such, it could not be justified. The EAT rejected that argument. It was clear that it was legitimate for an organisation to seek to break even year on year and to make decisions about how to allocate its resources. The employer took steps to try to mitigate the policy's discriminatory effects by prioritising progression for those on the lowest levels of the scale and it was unfair to categorise the employer's approach as being a policy arising from cost alone.

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