Equal Pay for Employers

The Equality Act 2010 provides that employers should ensure that within their workforce men and women performing like-work or work of equal value should receive the same pay.

For the purposes of determining what amounts to 'pay' employers should interpret this as wages and benefits, including the following elements:

• Basic pay
• Bonuses
• Overtime rates and allowances
• Performance-related benefits
• Severance and redundancy pay
• Access to pension schemes
• Benefits under pension schemes
• Hours of work
• Annual leave entitlement
• Company cars
• Sick pay
• Employee benefits (eg private medical insurance)

In order to make the comparison between members of staff of the opposite sex the comparators must be either carrying out work which is broadly similar in role or establish that the different roles carried out are rated as equivalent or of equal value to the employer.

It can be quite a complex process of determining if one job is of equal value to another and in many cases the services of an independent expert will be required to evaluate the positions and advise.

Some of the elements that could be considered when seeking to establish whether one role is of equal value to an organisation as another could include:

• Responsibility for organising work or managing people 
• Experience, knowledge, training or qualifications required to carry out the role
• Responsibility for health and safety, quality, data protection, resource allocation, supervision, or training etc. 
• Responsibility for security and confidentiality
• Concentration, accuracy, and memory
• Emotional demands
• Decision-making
• Freedom to act
• Requirement for a certain level of written and/ or verbal communication
• Management of working relationships
• Interpersonal skills
• Physical effort, physical skills, manual dexterity or physical capabilities
• Environmental demands and/or working with hazards

If a worker is successful in establishing that they have not received equal pay for like-work or work of equal value, they may be able to recover back-pay for up to 6 years being the difference between what they received when compared to the other worker. The worker can also claim interest on the sums sought going back over the period claimed. Where the worker has raised a grievance, which has not been complied with, in accordance with the ACAS code, relating to the equal pay claim the Employment Tribunal can also increase the compensation by up to 25%.

In addition to compensation a worker can also be awarded a declaration from the Tribunal that, going forwards, they must be paid the same pay and benefits as the comparative role.

There are several available defences which could be available to the employer, even if the roles are deemed to be of equal value and/ or broadly similar.  The defences available rely upon the employer establishing that there was a “Material Factor” which justified the difference in pay.

Examples of Material Factors which could apply include the following:

• Different hours of work
• Market forces
• Rewarding productivity
• Geographical reasons
• Recognising length of service
• Recognising additional responsibilities
• Ring-fencing/pay protection

What amounts to a Material Factor justifying a difference in pay is very fact-sensitive for individual cases and in some cases can be difficult to establish as worthy justification for a difference of pay.

Equal pay claims are potentially high value due to the length of period over which the damages can be claimed as well as the variety of elements which can make up a worker’s pay. However, they are also difficult and complex claims to deal with and specialist legal advice should always be sought as early as possible.

Biscoes can assist you with a claim but can also assist in investigating and seeking to establish whether it appears there may be a difference in pay when assessed against the parameters above which could constitute a potential claim.