Equal Pay – Update

23 January 2015

Equal Pay Update – January 2015

Bonus season is approaching and some employees will inevitably get paid more than others.  Sometimes there is a good reason, but what about if the reason is gender?

The Law

Since 1970, men and women have been entitled to equal pay for equal work (that is: like work, work rated as equivalent or work of equal value), unless the difference in the employee’s pay is due to a material factor which is not either directly, or indirectly discriminatory on grounds of sex.  For example a difference in pay may be permitted where one employee is simply more experienced than the other, or works in a different geographical location.

Employees can bring claims in a Tribunal or in the civil courts relating to their unequal pay, seeking payment of sums they should have received had they been paid fairly.  In some circumstances, they may also be able to bring claims for sex discrimination.

The Reality

So far, so good.  However 44 years after equal pay laws were brought in, the Office of National Statistics’ 2014 study showed that there was still a 9.4% pay gap between men and women, and that women earn an average of £209,976 less than men over a lifetime.

Many employees still do not know that they are being paid less than their opposite gender colleagues.  This is despite the fact that the Equality Act 2010 makes pay secrecy clauses unenforceable, where the reason the employee wants to know about pay is to find out if there is (amongst other reasons) a link between their gender and their pay.

The Future

The Equality Act 2010 contained a section enabling the Government to pass laws which would require employers with more than 250 employees to publish their gender pay gap figures.    The current Government has not yet made this law, but last month, Labour MP Sarah Champion put forward a Bill that would bring this into force.  In December 2015, the Bill was backed by 258 MP’s with only 8 MP’s voting against it.

This brings the prospects of big companies being required to disclose their gender pay gap a step closer, so what should you do?

  • Make sure that you have clear pay scales;
  • Appraise employees at least annually so that they are aware of how their performance feeds into pay;
  • Make sure that you can justify differences in pay; and
  • Arrange for your staff to attend Equal Opportunities training.

What can we do?

We provide bespoke employment advice for both employers and senior employees on a wide range of employment issues, including unequal pay.  We can also come to your offices to provide cost effective training to your staff, helping you to avoid claims. If you would like further advice on Equal Pay or you have another Employment law related matter that you would like to discuss, contact us on 0203 178 5360 or email us by clicking here.