In the UK, women and men are entitled to equal pay for doing the same or equivalent work. The principle of equal pay for equal work is an important part of the law as it aims to prevent unfair workplace practices such as discrimination on the basis of sex, age, race, religion or disability. The UK’s equality legislation helps to ensure workplace equality and that hard-working employees get the recognition and pay they deserve from their employer.
What does the law in the UK say about equal pay?
The Equality Act 2010 states that employees must receive equal pay for equal work unless a difference in pay scales can be justified. Despite the law being introduced to narrow the gender pay gap, it applies equally to both male and female workers and even more broadly across many different sets of contractual terms. Apprentices are included, for example, as are those on different types of contracts such as casual, agency, part-time or zero hours workers. Nor does it just extend to pay — the law also says that men and women must receive equality of terms in the areas of:
- overtime rates and allowances
- performance-related benefits
- non-discretionary bonuses
- severance and redundancy pay
- access to pension schemes
- benefits under pension schemes
- hours of work
- company cars
- sick pay
- fringe benefits such as travel allowances
- benefits in kind
Employers must abide by the Equality Act as otherwise they may find themselves facing a discrimination case taken by an employee who feels they have been treated unfairly or in front of an Employment Tribunal.
What defines equal work?
Equal work falls under the following three categories:
Like work: jobs involving activities which require the same level of skill and knowledge and which aren’t markedly different from one another.
Equivalent work: jobs which have been evaluated under a valid job evaluation system as being of equal value.
Equal value work: jobs which are not similar or equivalent, but which are of equal value in terms of effort, skill and responsibility.
It may be a case where two very different-seeming jobs are classed as equal work such as a clerical and a warehouse role.
When are differences in pay allowed?
Under British equality legislation, differences in pay and contractual terms between employees are, in fact, allowed, but if an employee feels that that difference in pay or more favourable treatment of one worker over another is because of their sex and wishes to pursue the matter, it is up to the employer to prove that the difference exists because of certain material factors. These material factors must:
- cause the difference in pay
- be a genuine reason for the difference in pay
- be significant and relevant
- be explicable in how they were assessed and how they were applied in the employee’s specific case
- not be as a result of direct or indirect sex discrimination
In the era of remote working too, if an employee lives in a place with a higher cost of living (London, for instance), that may also be a valid reason for paying them more than one of their colleagues living elsewhere. Disparities due to experience levels are another reason why an employee might not be paid as much as a colleague.
Obligations for employers
Even an employer acting in good faith may find themselves in breach of the Equality Act, especially those without clear written policies or up-to-date job descriptions. Pay scales should be underpinned by job evaluations and descriptions to ensure their accuracy and that employees doing the same work are receiving the same pay, benefits and bonuses. While a competent HR department will be able to handle matters such as a job evaluation scheme, for those businesses without an HR department, an equal pay review or audit is the best way to ensure that all employees are being paid fairly and under the terms of the Equality Act. Although for small businesses this may not be a common practice, it is vital in protecting the organisation against sometimes fully justified claims by women of direct or indirect sex discrimination and non-compliance with equalities legislation.
Should issues such as pay disparities and discriminatory practices be found, an action plan must be put in place immediately to rectify them by producing an equal pay policy and an equality impact assessment as well as reviewing job descriptions and evaluations and adjusting pay accordingly. Even for those businesses broadly in compliance with the Equality Act, constant monitoring of progress and regular pay reviews are important to ensure that all employees are being paid properly.
Under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, employers with 250 or more employees are required to publish information relating to the gender pay gap in their organisation.
Public sector bodies must also abide by the 2011 Equality Duty which states that public bodies must make efforts to eliminate discrimination, victimisation and harassment based on sex, race, religion, disability, sexual orientation, age or marital status.
When compiling a pay policy, employers should take note of the Equality and Human Rights Commission (EHRC) code on good equal pay practice.
Best practice for employees
Contrary to what some employers may wish, it is good practice for employees to discuss their pay among themselves. Transparency by both employers and employees allows open discussion of pay and pay scales which helps to bring any discrepancies in pay, imbalances in gender equality and potential breaches of the Equality Act to light.
Making a discrimination complaint
If an employee or group of employees feels that a pay difference is unjustifiable and the employer fails to take action to address the situation, they may make a discrimination complaint or equal pay claim under the Equality Act. This may, unless a period of conciliation or negotiation is successful, see the employer facing an employment appeals tribunal.
If an employer cannot prove that pay differences are wholly justified, the tribunal may declare that the claimant is fully entitled to the same pay and bonuses as their colleagues. In certain cases, the tribunal may also order the employer pay any wage arrears — with interest — based on what the claimant should have been paid had they not been discriminated against on the basis of sex. The award can date back six years prior to the date that proceedings were issued.
How can Branch Austin McCormick help?
Whether you’re an employer or employee, our employment law solicitors in London can provide the most up-to-date and relevant information and advice in relation to employment law and the Equality Act. If you’re an employee making a pay claim or an employer facing one, our lawyers can offer practical, actionable advice when it comes to negotiations or employment tribunals. We can suggest and negotiate solutions to disputes before they reach the tribunal stage and fully and clearly put your case across if they do.
As well as dispute situations though, that experience with employment law means we can offer pertinent advice on the legal aspects of employment contracts, conditions of employment and pay policies meaning that we can help identify and prevent issues before they occur. It is absolutely vital for employers that they remain in compliance with the Equality Act as failing to do so can result in both financial and reputational damage.
For further information on the issues raised, please contact Elliot Hammer at: eh@branchaustinmccormick.com
Branch Austin McCormick LLP
32 St James’s Street
London
SW1A 1HD
