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Employment Law - Equal Pay for Equal Work

Employment Law - Equal Pay for Equal Work

The pay difference between men and women who carry out the same or similar roles is very much still a live issue, 47 years after the Equal Pay Act. The Equality Act 2010 now tackles the issues of equal pay for equal work. We look at exactly what this means for employers and employees.

You only need to cast your memory back to July 2017 when the BBC published the salaries of staff that earned over £250,000. Women accounted for just a third of the BBC's biggest earners, with only one woman in the top nine. Across the BBC, the average pay of men is 10% higher than women. The principle of equal pay is that both women and men should receive equal pay for equal work and, as such, is considered a gender issue.

​What is equal pay?

There are three categories of equal work:

1. Like work such as work that is the same or broadly similar
2. Work rated as equivalent under a Job Evaluation Scheme
3. Work of equal value in terms of effort, skill or decision making

Employers should be aware that employees are entitled to know how their remuneration is calculated.

Equal pay claims can be brought by either gender, although the majority of cases are brought by women. Employers should be aware that an employee may also have a sex discrimination claim.

The following are examples covered by equal pay legislation:

  • Basic pay
  • Paid holiday entitlement
  • Sick pay
  • Hours of work
  • Performance related pay and benefits
  • Non-discretionary bonuses
  • Non-monetary terms

A comparator

An employee who believes that they may be receiving unequal pay needs to compare themselves to the opposite gender. This comparator can be a current or previous employee and must be or has been working in the same employment.

The comparator must be actual and not hypothetical.

A defence of unequal pay

An employer does have a defence to unequal pay if they can show that the variation in pay is due to a 'material factor' which is not directly or indirectly discriminatory. Any defence is dependent on the individual facts of the case.

Material factors may be:

  • Past performance
  • Seniority
  • Length of service
  • Different hours of work
  • Geographical reasons
  • Market forces and skill shortages

Whilst a 'material factor' may be identified, it still needs to be shown that such material factor is not directly or indirectly discriminatory.

This is likely to be the main hurdle that an employer faces in seeking to defend an equal pay claim.

What if an employee believes they are not receiving equal pay?

Employers should be aware that an employee can request from their employer certain information that will assist in establishing whether there is a pay difference and, if so, the reasons for the difference.

An employee may also seek to raise a formal grievance using the employer's grievance procedure.

Lastly, it is open for an employee to make a complaint to the employment tribunal, whilst still working in the job or up to six months after leaving to which their claim relates. Arrears can go back up to six years before the date the claim was brought, meaning that any judgement in the employee's favour is likely to be substantial.

Employers who lose equal pay claims may be forced to conduct an equal pay audit and publish the results.

Pay secrecy clause

Employers should note that any pay secrecy clause in a contract of employment is unenforceable to the extent that it prevents an employee from making any relevant pay disclosures.

Further, the Equality Act 2010 makes it unlawful to victimise an employee for making or seeking a relevant pay disclosure. Employers can still seek to prevent pay rates from being discussed/disclosed to individuals outside of the workplace.

How to address the pay gap

There are a number of ways of addressing the pay gap and/or to work out whether there is a risk of an equal pay claim being brought by an employee.

The most comprehensive way is through a Job Evaluation Study/Scheme. Alternatively, if an employer does not wish to implement a Job Evaluation Study/Scheme, it may decide to carry out an Equal Pay Review or Audit to discover and put right if applicable any gender-based pay inequalities.

More information

For expert legal employment advice for employers, Pinney Talfourd Solicitors can help. We have an experienced and dedicated team of specialist employment lawyers based in offices across Essex and London who will be happy to advise on any pay issues or matters concerning equal pay.

We have late night and Saturday appointments available in our Essex locations and offer a free initial telephone consultation for all new employment law enquiries. You can book your free initial employment consultation using our online booking form or by calling your local office. This telephone appointment will allow you to explain the situation with an expert lawyer and discuss the best steps to minimise stress and delays.



 
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