Part-Time and Support Staff Are Often Outside the Annual Pay Review Cycle

There is a structural problem inside lots of medium to large organisations that the EU Pay Transparency Directive will make visible whether employers want it visible or not. It concerns two overlapping groups of workers who quietly sit outside the processes the rest of the business takes for granted. The first is the auxiliary or support tier, the roles that grew up to service the work going on elsewhere. The second is part-time staff, who in many organisations are not actually included in the same annual pay review or performance review cycles as their full-time colleagues. Both groups are disproportionately female. By June 2026, the directive will require organisations to defend how they have categorised, paid and progressed these workers, and many will struggle.

The auxiliary tier

Every established organisation carries some version of an auxiliary or support category. The labels vary: administrative support, auxiliary services, support functions, back office, operations support, customer support as distinguished from sales, facilities, reception, executive assistant, paralegal, HR support, marketing coordinator. These are operational classifications, not formal legal categories. They sit inside the job architecture and shape evaluation, pay banding and promotion decisions without ever being written into policy as a hierarchy. The work is real and often complex. The labelling, however, presupposes that there is main work going on elsewhere that this work supports, and that the main work is what generates the value.

That linguistic move encodes a value hierarchy before any objective evaluation takes place. The category itself becomes the justification for lower pay, lower visibility, and slower progression, when a proper analysis of the actual cognitive, relational and consequential demands of the work would often produce a very different result.

In Vasiliki Nikoloudi v Organismos Tilepikinonion Elladas (Case C-196/02), the Court of Justice ruled in 2005 that where a job category is composed exclusively or near-exclusively of women by rule or by structural design, differential treatment of that category constitutes direct sex discrimination, not indirect. The case concerned cleaning staff at the Greek telecoms incumbent, an exclusively female part-time auxiliary category, which the collective agreement structurally excluded from permanent appointment. The Court found that the categorisation itself was the discrimination. The employer could not justify the differential treatment by pointing to the category, because the category was sex-segregated by design.

The distinction matters because direct discrimination has a much narrower set of defences than indirect discrimination. Once a category is in Nikoloudi territory, the standard material-factor and business-need justifications that work for indirectly discriminatory pay practices become substantially weaker.

The part-time problem

Sitting alongside the auxiliary tier in most organisations is the part-time workforce, which carries the same demographic concentration and an additional structural problem. The OECD reports that nearly 60% of women in the Dutch labour market work part-time. Eurostat data for 2024 shows the highest shares of part-time work among women with children are in Austria at 70.5%, the Netherlands at 66.6% and Germany at 66.1%. Across the EU, part-time work is overwhelmingly carried out by women.

In many organisations, part-time staff are quietly excluded from the same processes that drive pay and progression for full-time staff. The exclusion is rarely written down as policy. Most organisations can show that their pay and performance policies apply equally to all employees regardless of working pattern. The exclusion happens at the level of operational practice, not formal policy. That distinction matters because the directive’s enforcement architecture operates on outcomes and process architecture, not policy statements. An employer that can point to an inclusive policy but cannot show inclusive practice will not be protected. The annual performance review cycle is built around full-time staff. The annual pay review uses performance review outputs as inputs. Promotion decisions draw on performance review documentation. Part-time staff who are not in the performance review cycle do not have the documented case that would put them in scope for either pay progression or promotion. The system does not formally exclude them. It just does not include them, and the effect on their careers is the same.

The compounding effect

A pay differential between full-time and part-time staff that begins small does not stay small. The OECD’s 2021 working paper Sticky Floors or Glass Ceilings finds that the part-time hourly wage penalty remains broadly constant across women’s working lives, embedding the disadvantage rather than allowing it to narrow with tenure. The OECD’s 2022 Same Skills, Different Pay analysis shows career breaks around the time of childbirth carrying earnings losses of 4 to 8% of pre-break earnings per break, predominantly through lower wage growth within the firm due to missed experience and human capital depreciation. Manning and Petrongolo’s foundational UK research puts the raw part-time hourly wage penalty at 22 to 26%, of which approximately 13 percentage points are explained by worker characteristics and 3 to 10 percentage points are unexplained by any objective factor. That residual is the territory in which exclusion from pay and performance review cycles operates.

Pro rata temporis, the principle that part-time workers should receive proportionate pay and benefits, does not solve this problem. The principle assumes the part-time worker is in the same pay-setting process as the full-time worker. Where the part-time worker is not in the process at all, pro rata gives the wrong answer, because there is no current pay decision to apply it to.

The progression effect is worse because it does not show up in any single pay decision. It shows up in the absence of decisions. A part-time worker who is not in the performance review cycle does not have the conversation that would identify them for stretch projects, leadership development, or promotion to the next grade. They do not generate the documentation that supports a business case for an off-cycle adjustment. Their career stalls without anyone deciding to stall it.

The legal architecture

The Part-Time Work Directive 97/81/EC, transposed in the UK by the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, provides that part-time workers shall not be treated in a less favourable manner than comparable full-time workers solely because they work part-time, unless different treatment is justified on objective grounds. The principle is straightforward. The question for most organisations is whether their exclusion of part-time staff from comp and performance review cycles is justified on objective grounds, and the honest answer is usually no.

Two recent Court of Justice judgments sharpen the question. In Lufthansa CityLine (Case C-660/20, judgment 19 October 2023), the Court ruled that identical trigger thresholds for additional remuneration applied to full-time and part-time pilots breached Clause 4 of the Framework Agreement. The Court reasoned that requiring a part-time pilot to work the same number of additional hours as a full-time pilot before earning the supplement amounts to less favourable treatment, because the proportionate burden on the part-time pilot is greater.

In the joined cases of KfH Kuratorium für Dialyse und Nierentransplantation (Cases C-184/22 and C-185/22, judgment 29 July 2024), the Court went further. Where overtime supplements are paid only for hours worked in excess of the normal working hours of full-time workers, and where the part-time workforce is predominantly female, the practice is not just less favourable treatment of part-time workers. It is indirect sex discrimination contrary to Article 157 TFEU and Directive 2006/54. The Court rejected the German employer’s justifications of avoiding overload of full-time staff and incentivising flexible deployment, finding them neither appropriate nor necessary.

The trajectory of the case law is clear. Practices that look facially neutral as between full-time and part-time workers will be analysed by reference to their disparate impact on women, and the bar for objective justification is rising.

The Pay Transparency Directive overlay

The directive matters because it requires worker categories themselves to be objectively and non-discriminatorily constructed. Article 3(1)(h) of Directive 2023/970 defines a category of workers as those grouped in a non-arbitrary manner based on the non-discriminatory and objective gender-neutral criteria of Article 4(4). Article 7 gives workers the right to information on the average pay levels of workers performing the same work or work of equal value, broken down by sex. Article 9 requires pay gap reporting by category of worker. Article 10 triggers a joint pay assessment for any category where the gender pay gap exceeds 5% without objective justification.

The implication for auxiliary categorisations and for part-time staff is significant. If auxiliary or support categories cannot be defended as non-arbitrary on objective criteria, the categorisation itself is at risk. If part-time staff are housed in the same category as full-time staff but excluded from the processes that determine pay progression within that category, the resulting pay gap inside the category will be hard to justify under Article 10. Where the category is itself female-dominated, the disparity will likely engage indirect discrimination analysis under the Recast Directive and Article 157 TFEU.

The principle

The reframing that makes this tractable is simple. Part-time staff are not full-time, they are still employees. Auxiliary staff are not in the front line of the business, they are still employees. They belong in the same processes as everyone else. They should be in the same performance review cycle, with the same documentation and the same conversation about development. They should be in the same pay review cycle, with the same access to merit increases and the same right to a properly evidenced case for off-cycle adjustment. They should be in the same progression conversation, with the same opportunity to be identified for stretch assignments and promotion.

Where their working pattern requires the application of pro rata temporis to pay or benefits, the principle applies. The principle does not justify excluding them from the process that generates the pay decision in the first place.

What employers should do now

Three practical steps are available before any transposition deadline. The first is an audit of who is actually in the annual performance review cycle, broken down by full-time and part-time status, by category and by sex. Most organisations are surprised by what this audit returns. The second is the equivalent audit of the annual pay review cycle. The third is a structural review of legacy auxiliary and support categories against the actual demands and contributions of the work, with the question being whether the categorisation can be defended as non-arbitrary under Article 3(1)(h).

For organisations carrying both layers, the auxiliary tier and the excluded part-time workforce, the structural exposure to the directive’s enforcement architecture is significant. The protection is not in defending the existing categorisation. The protection is in ensuring that every employee, full-time or part-time, in the auxiliary tier or in the front line, is in the same processes that determine their pay and their progression.

The organisations most exposed under the directive may not be those with intentionally discriminatory systems. They may be those whose processes quietly stopped seeing part-time and auxiliary workers as part of the same workforce.

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