Companies can pay male workers more than females purely on the length of their service without taking into account absences for having and bringing up children, says the European Court of Justice.
But the Court's complicated ruling says that in some cases discrimination based on experience would not be permitted without a detailed justification from employers.
The ruling came in the case of British health inspector Bernadette Cadman. She said that her employer paid male colleagues more than her for the same job because they had served longer. She said that the pay difference was up to £9,000.
Cadman sued the Health and Safety Executive and won her case at the Employment Tribunal. The HSE appealed the decision and referred the case to the ECJ on specific points of law. That court has ruled that in most cases employers can discriminate on the basis of experience.
"As a general rule, recourse to the criterion of length of service is appropriate to attain the legitimate objective of rewarding experience acquired which enables the worker to perform his duties better, the employer does not have to establish specifically that recourse to that criterion is appropriate to attain that objective as regards a particular job, unless the worker provides evidence capable of raising serious doubts in that regard," said its judgment.
It also said that an employer does not in general have to give a detailed explanation of exactly what experience is being rewarded by higher pay. "There is no need to show that an individual worker has acquired experience during the relevant period which has enabled him to perform his duties better," said the judgment.
The Court did say, though, that there may be some situations in which an employer must provide more information about pay discrimination between employees on the basis of length of service.
"That is so, in particular, where the worker provides evidence capable of giving rise to serious doubts as to whether recourse to the criterion of length of service is, in the circumstances, appropriate," said its judgment. "It is in such circumstances for the employer to prove that length of service goes hand in hand with experience and that experience enables the worker to perform his duties better is true as regards the job in question."
Cadman had argued that the practice discriminates on the basis of gender since women are more likely to have shorter service than men because they are more likely to take time out from work to have and raise children.
The ruling was hailed in some quarters as a victory for Cadman because it said that explanations should be provided in some cases, but most observers disagreed with that interpretation.
Cadman told reporters that the case was "not about winning compensation, but about recognition that women should not be paid less than their male counterparts".