| Topic Index |
|---|
| Overview |
| Like work |
| Work rated as equivalent |
| Work of equal value |
| Comparators |
| Employer's defences |
| Questionnaires |
| Tribunal claims and remedies |
| Resources |
Overview
- Equal pay is very much a live issue. Despite the fact that equal pay law has been around for over 30 years, the gender pay gap for women and men working full time is 16%, rising to 27% for women aged over 40.
- Broadly speaking, the Equality Act 2010 covers claims about discrimination in employees' contractual terms, and operates only where there is a comparator of the opposite sex.
- 'Pay' for the purposes of the Equality Act 2010 includes basic pay, overtime rates, commission, non-discretionary bonuses, sick pay, redundancy pay, hours of work and paid holiday, access to and benefits under pension schemes, and fringe benefits such as company cars and travel allowances.
- The Equality Act 2010 says that equal treatment must be given when women are employed on the same work as men, on work rated as equivalent under a job evaluation scheme and when they are employed on work of equal value to that carried out by men.
- An equality clause is presumed to operate in every employment contract, giving women the right to equal pay with men, and vice versa.
- The Equality Act 2010 applies to all 'employees' and 'workers', whether full or part-time, permanent or casual, regardless of length of service or whether the contract of employment is governed by English law.
- Although equal pay reviews are not required by law, the Equality and Human Rights Commission recommends such a review as the best way of ensuring equality in pay systems. If no progress is made voluntarily, the Equality Act 2010 contains a power (as yet unexercised) to require employers with 250+ staff to publish information about their differences in pay between male and female staff.
- Employers have limited opportunities to defend unequal pay practices.
Like work
- Like work is work that is the 'same or broadly similar' to that of the comparator and any differences between the things she does and things he does are not of practical importance.
- A tribunal will look at the skills, qualifications and knowledge needed for the work, as well as the degree of responsibility involved. It will also look at the extent of any differences between the things that the claimant and her comparator do, and whether these differences are of practical importance in relation to terms and conditions of employment.
Work rated as equivalent
- If a job evaluation study (JES) has been carried out, the law requires equal pay to be given when the job of a woman has been given an equal value, in terms of the demands made (e.g. skills, decision-making and effort) with the job of a man.
- The existence of a JES can act as a bar to workers bringing equal value claims, but only if it has been applied specifically to the group of workers.
- The JES must be thorough in analysis and of course must not be discriminatory in itself.
Work of equal value
- If a woman is employed on work which is not the same as or similar to that of a man and has not been rated as equivalent under a JES, she may still claim equal pay with a man if her work is, in terms of the demands made on her (under such headings as effort, skill and decision-making), of equal value to that of a man in the same employment.
Comparators
- A comparator is a worker of the opposite sex who is being paid more.
- Usually the comparator will be in the same workplace but a woman can choose a comparator in another workplace owned by the same employer if they work under 'broadly similar' terms and conditions.
- Where a woman and her comparator are employed at different workplaces and there are no common terms, there cannot be 'same employment' unless there is a real possibility of the comparator being employed at her establishment in the same or broadly similar job and the terms of such employment would be broadly similar to those under which employees of his class are employed at his establishment.
- A woman must identify actual, not hypothetical, comparators. The comparator can be current colleague, or a predecessor, but not a successor.
Employer's defences
- Once a woman has established unequal pay and that she and her comparator are doing equal work, the burden then falls on the employer to defend the claim.
- An employer's main defence for the employer is to show that the pay difference is genuinely due to a material factor that is not the difference of sex - the so-called 'genuine material factor' or GMF defence.
- It is up to the employer to prove that such a factor exists. It is not enough merely to show that a difference exists between the woman and the man - the employer must also show that the difference is the effective cause and real reason for the variation between the man's terms and the woman's.
- Examples of GMFs that can justify a difference in pay include additional contractual obligations, greater responsibility, night work, experience and length of service, different gradings, geographical location, merit pay, market forces and economic factors, and red circling (protected pay).
- Once a GMF is shown, the employer must then show that it is not tainted by either direct and indirect sex discrimination.
- It is the indirect discrimination issue that can cause most problems for employers. Indirect discrimination arises where the discriminator applies a specific factor which appears to apply to all groups equally but which has the effect of discriminating against a particular group. The Equality Act 2010 stipulates that introducing measures such as pay protection to reduce inequality will always be regarded as a legitimate aim that could potentially justify the indirect discrimination that is often inherent in such schemes. An employer would still have to show that the way in which it introduced such a scheme was proportionate.
- If the GMF is directly discriminatory, the GMF defence will fail. But if it is indirectly discriminatory, the GMF defence can still succeed if the employer can provide objective justification, by showing that there is a real business need for the GMF, the GMF meets that business need, and the GMF is appropriate and no more than is necessary to meet that need.
Questionnaires
- Employees who think that they are receiving unequal pay can use a questions procedure to find out relevant information from their employer.
- While it is not compulsory to respond to such a questions form, employers are well advised to do so within 8 weeks of receiving one because a tribunal can, and will, draw adverse inferences from such a failure, or from evasive or ambiguous replies.
Tribunal claims and remedies
- The time limit for a claim is 6 months from the end of employment (or, if applicable, the end of a 'stable employment relationship').
- There are special procedures for bringing equal value claims, which usually involve the appointment of an independent expert to evaluate the jobs being compared.
- A tribunal can award:
- an increase in the woman's pay to match her comparator's
- equalisation of other contractual terms for the future, and
- compensation consisting of up to 6 years of arrears (if the claim is about pay) or damages (if the claim is about some other contractual term)
Resources
ACAS
Business Link
CIPD
Equality and Human Rights Commission
- Equal Pay resources and audit toolkit
- Quick Start to Providing Equal Pay: joint guidance from EHRC and British Chambers of Commerce to help SMEs examine their pay systems to ensure legal compliance
- Questions form for equality of terms
- Equal Pay: Statutory Code of Practice
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