What is equal pay?

What is equal pay?

Equal pay reared its head again at the start of 2020 marking a continuation of claims over the last decades relating to unequal pay between men and women.

Samira Ahmed BBC equal pay case

Newswatch presenter, Samia Ahmed’s, successful claim in the Employment Tribunal reportedly prompted pay-outs amounting to more than £3m by the BBC to avoid further equal pay claims.

In 2017, the BBC found itself under pressure when gender pay reporting showed that many male members of staff earnt significantly more than female counterparts. This famously led to Carrie Gracie’s resignation as China editor after discovering she was paid much less than international editors for North America and the Middle East.

Meanwhile, there are some half a million potential claimants in disputes against the ‘Big 4’ supermarkets that could be worth over £8bn together.

So, with gender equality and pay back in the media, what are the rules and how can employers ensure that they are paying their staff correctly?

What does equal pay mean?

Does Everyone Doing the Same Job Have to be Paid the Same Salary?

In short, no. An employer is entitled to pay employees whatever it wants for doing a certain job providing the rate of pay is at least equivalent to the national minimum or national living wage for that employee.

What they cannot do is pay two people doing work of equal value a different salary where the only difference between those people is their sex. This is very specific legislation where gender is concerned but paying two people differently for doing the same job or jobs of the same value is likely to look unreasonable in most situations and may lead to other disputes.

Equal pay for work of equal value

Employers should be particularly careful if employees doing the same or similar job are paid differently and the only difference between them is any of the protected characteristics under the Equality Act. While sex is specifically covered in the legislation, any other disparity could give rise to a discrimination claim.

The Equal Pay Act 1970: What is the law on equal pay?

Equal pay stems from EU law. In 1970, the UK introduced the Equal Pay Act so the concept has existed for 50 years now. The introduction of the Equality Act in 2010 tied together a lot of previous legislation including the Equal Pay Act.

The law as it stands is that employees of the opposite sex are entitled to be paid equally for doing work which is ‘equal work’ for the employer. The Equality Act slots a provision into every employment contract for gender-equality to this effect, whether written or not.  

What Is Pay?

Pay does not simply refer to salary, it means all the payments and terms and benefits of employment with an employee might receive.

It can therefore include basic pay, bonuses, overtime rates, benefits and access to pension schemes, annual leave entitlement, use of a company car, medical insurance and even working hours.

Discretionary benefits are not pay and do not fall under equal pau legislation. This requires a discrimination claim.

What counts as ‘Equal Work’?

‘Equal work’ is not necessarily the same job; it is work which:

• is ‘like work’ – broadly similar work
• can be said to be ‘equivalent’ in an evaluation of the job, or
• is of equal value.

Examples of ‘Equal Work’

This is something, which is judged on a case-by-case basis. Examples may include:

• A teaching assistant and a roadworker both employed by a local authority.
• A cleaner and a packing operative in a factory.
• A distribution centre worker and a checkout operator in a supermarket

The job of the tribunal is to decide whether the two roles are equal work and they will examine factors including:

• The knowledge and skill required for the role,
• The experience and training which were required for appointment,
• Level of responsibility the role entails especially for quality of work, supervision of others, data,
• The physical and emotional demands of the job, and
• Environmental demands of the job and any risk factors to the job holder

Do I have an equal pay claim?

Equal pay claims are, in theory, quite straightforward. If you are being paid less to do a similar job to someone who is of the opposite sex to you then you probably have a valid claim.

In the first instance, you should address this directly with your employer directly, or via their HR department. They may not have realised the pay discrepancy and they may agree to correct it once it is brought to their attention.  You should be prepared to explain why the two roles are of equal value especially if they are not factually very similar.

How to prove an equal pay claim

Importantly someone of the opposite sex has to be doing or have done the work you are claiming is equal to your own. Unlike most discrimination claims where you can use a hypothetical person who does not have your protected characteristic, you have to be able to show an actual person (or predecessor) doing the work in a pay claim.

If there were no real comparator then a claim would be for direct sex discrimination, which allows a claimant to use a hypothetical comparator.

Can equal pay be backdated?

Pay claims are contractual and therefore you can claim unpaid back pay for up to 6 years. This is why Samira Ahmed’s case is worth hundreds of thousands of pounds. Even £2 per hour over the course of 6 years for an average full time worker could be in excess of £20,000.

Can employees discuss their salary?

Firstly, most people do not want to and discussing salary with colleagues carries the risk of personal disputes.

Legally, pay secrecy or salary confidentiality clauses do exist and it is a common misconception that they are unlawful. The Equality Act does mention secrecy clauses but only if an employee is stopped from discussing a ‘relevant pay disclosure’.

An employer cannot prevent discussions between colleagues and trade union representatives about salaries if the reason for that discussion is to establish whether the pay is discriminatory.

Equal pay for equal work: A summary

Chris Dobbs, specialist employment & HR solicitor, says:

“Equal pay claims are not going away and even cases which do not fall under equal pay legislation may still meet the criteria for sex discrimination. Employers should be prepared to be transparent about their pay system. This does not mean publish everyone’s salary but it does mean that employees should be able to understand how their pay and benefits are calculated.  

“It is always worth conducting an internal pay review to ensure that there is no apparent discrepancy in pay that could be seen as discriminatory. This is also a good opportunity to ensure that pay scales are considered across the organisation.”

Specialist Employment Solicitors in Bournemouth, Christchurch and Ringwood

Chris Dobbs is part of Frettens' specialist Employment & HR Law Team, along with Paul Burton. One of the most experienced specialist teams in the region, they advise both employers and employees on work-related legal matters. They are recommended in the Legal 500, a highly-regarded independent guide.

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