It was held by the House of Lords and the European Court of Justice that a two-year qualifying period had a disparate impact on women given that significantly fewer women worked long enough to be protected by the unfair dismissal law, but that the government could, at that point in the 1990s, succeed in an objective justification of increasing recruitment by employers.
Ms Nicole Seymour-Smith and Ms Perez had made a claim against the Secretary of State for Employment that the United Kingdom's qualifying period of two years for unfair dismissal constituted indirect discrimination against women under the Treaty of the European Union, article 119 (now TFEU art 157) and the Equal Treatment Directive 76/207/EEC.
Statistically fewer women had long enough periods of service as men to accrue the protection of unfair dismissal law, for data collected between 1985 and 1991 when Ms Seymour-Smith was working.
The Court of Appeal held that under the Equal Treatment Directive, a two-year qualifying period for unfair dismissal was indirectly discriminatory, and the Secretary of State for Employment had failed to prove that there was an objective justification for the disparate impact.
However, it was unclear that compensation for unfair dismissal was "pay" within the meaning of the Treaty of the European Community, article 119, and so it was unable to grant relief.
In that connection, the United Kingdom Government maintains that a Member State should merely have to show that it was reasonably entitled to consider that the measure would advance a social policy aim.
It is true that in paragraph 33 of the Nolte case the Court observed that, in choosing the measures capable of achieving the aims of their social and employment policy, the Member States have a broad margin of discretion.
However, although social policy is essentially a matter for the Member States under Community law as it stands, the fact remains that the broad margin of discretion available to the Member States in that connection cannot have the effect of frustrating the implementation of a fundamental principle of Community law such as that of equal pay for men and women.
Accordingly, the answer to the fifth question must be that if a considerably smaller percentage of women than men is capable of fulfilling the requirement of two years' employment imposed by the disputed rule, it is for the Member State, as the author of the allegedly discriminatory rule, to show that the said rule reflects a legitimate aim of its social policy, that that aim is unrelated to any discrimination based on sex, and that it could reasonably consider that the means chosen were suitable for attaining that aim.The House of Lords held[5] by a majority of three to two that the extension of the qualifying period in 1985 had had a considerable disparate impact on women.
However, the majority of their Lordships were agreed that there had been a sufficient objective justification by the government, namely encouraging recruitment by employers, to pass the 1985 Order.
This question raises an issue of fact, to be decided on the basis of the extensive documentary evidence adduced by the parties.
To condemn the minister for failing to carry out further research or prepare an impact analysis, as recommended in 'Burdens on Business', would be unreasonable.
Objective justification: the continuing operation of the 1985 Order The requirements of Community law must be complied with at all relevant times.
Accordingly I consider the Secretary of State discharged the burden of showing that the 1985 Order was still objectively justified in 1991.Seymour-Smith tested the impact that legislation for equality had on other provisions of national law, and came to the conclusion that member states should have a broad discretion in the kinds of social policies they pursue, but that their reasoning process was subject to review by the European Court of Justice, as was the quality of evidence provided, and that in any event no social policy could contravene the principle of equal treatment.
The House of Lords affirmed this in holding that while there may have been objective justification in 1991 still for a two-year qualifying period, experience of such measures could call for a different assessment at a later point in time, and a government would have to keep the issue under review.