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July 2009 Updates

What is an average salary?

The Office for National Statistics' annual survey of hours and earnings was released in July. According to that survey, the average gross salary in 2008 across all jobs was £26,020.

A gross annual salary of £31,759 would put someone in the top 25% salary bracket. An average annual salary of £44,881 is enough to place someone in the top 10% and a salary of £58,917 would put someone in the top 5%. Finally, the top 1% bracket belongs to those who earn a gross annual salary of £118,027 or more.

The meaning of "likely" and the Disability Discrimination Act

The House of Lords has handed down its important decision in the case of SCA Packaging v Boyle. It has stated that the word 'likely', as used in the Disability Discrimination Act 1995, (the "DDA"), should be interpreted as meaning 'could well happen', rather than 'more likely than not'. In order to decide whether an illness (hoarseness caused by nodes on the vocal chords in this particular case) qualified as a disability for the purposes of the DDA, the Court had to consider the meaning of the word 'likely' in two specific contexts:

  1. The likelihood of a substantial adverse effect if the corrective measures were not taken.
  2. The likelihood of a recurrence of that effect at some point in the future.

The House of Lords firmly rejected previous authority that 'likely' in the context of the DDA was taken to mean a 51% chance or more. Following this case, the new (lower) standard to be met is ?could well happen' if a tribunal is to conclude that an impairment would be likely to have a substantial adverse effect on a person's ability to carry out normal day-to-day activities but for any corrective or treatment measures taken and/or that an effect that has ceased is likely to recur.

Equal pay claims and TUPE

The Court of Appeal has handed down its decision in Gutridge v Sodexo. This is a case involving equal pay rights and TUPE. The Court of Appeal held that:

  1. Claims for equal pay losses which have accumulated during employment up to the date of transfer must be brought against the transferee (i.e. the new employer) within six months of the date of the transfer.
  2. Claims for losses after the date of the transfer are able to proceed against the transferee for up to six years' losses from the date of the claim. Claims must be pursued within six months of the termination of that employment.

This means that employers taking over employment contracts will continue to be liable for equal pay claims long after the TUPE transfer has taken place for so long as those transferred remain employed (without alleged pay equality).

Such claims would be based on the earnings of suitable comparators employed by the transferor (i.e. the old employer) before the transfer occurred.

Review of the national default retirement age

The Government has announced, in a consultation document entitled 'Building a society for ages', that it will bring forward its review of the default retirement age (the "DRA") to 2010. The review was originally scheduled for 2011 but has been brought forward to reflect the 'change in economic circumstances' since the DRA was introduced.

The Government has now begun engaging with stakeholders and gathering evidence in order to inform the review. If the DRA is found to no longer be necessary, then any changes would not be implemented until 2011 to allow employers sufficient time to prepare and employees sufficient time to consider their retirement plans. The Age Positive initiative, a Government scheme that works with employers to promote the retention and recruitment of older workers, will be extended to encourage more employers to give employees more choice over their retirement.


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SRA number 404293