Equal Pay & Gender Pay Lawyers

Our Employment Law team will be able to assist and advise on the process that you should follow if the employer finds itself needing to discipline one of its employees. 

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Equal Pay Legistlation 

Under Equal Pay legislation, the starting point is that every employee has the right to equal pay for ‘equal’ work in the same employment. Equal pay relates specifically to men and women in the same employment, performing equal work being entitled to equal pay unless a pay difference can be justified.  

For Employers
For Employees

From a legal perspective, there are two critical elements to consider for employers when they’re looking at salaries and pay equality across their organisation. The first is their risk for a claim under Equal Pay legislation and the second is their Gender Pay Gap data.

Equal Pay
Under Equal Pay legislation, the starting point for employers is that every employee has the right to equal pay for ‘equal’ work in the same employment. Equal pay relates specifically to men and women in the same employment, performing equal work being entitled to equal pay unless a pay difference can be justified.

The right to equal pay applies to employees, workers (including agency workers), on full-time, part-time, or temporary contracts, apprentices and, in some limited cases, even self-employed contractors.

Contractual provisions for equal pay will be implied into an employment contract where an employee and their comparator of the opposite sex are employed to do equal work, which could be:

  • like work – work that involves similar tasks, knowledge and skills
  • work rated as equivalent – work that is graded as equivalent under a job evaluation scheme
  • work of equal value – work that is different but equal in terms of demands such as effort, skill and decision-making

Equal pay extends to basic pay, pensions, holiday, overtime, redundancy, sick pay, performance-related pay, benefits such as a company car or gym membership, and other contractual terms such as working hours and annual leave. Critically, it will normally include bonuses and commission as well.

It is important to note that an Equal Pay claim under the Equal Pay Act 1970 can only be brought by a woman or a man citing a comparator of the opposite sex. However, it is possible to allege being paid less than a comparator amounts to discrimination under the Equality Act 2010, if the reason for any pay difference is attributable to a protected characteristic. It is therefore common, when an employee is bringing an equal pay claim, for the employee to also pursue a claim for sex discrimination in the alternative at the same time.

It would be also possible for an employee to bring a claim for discrimination alone if they believed they were being paid less due to their race, or disability or any other protected characteristic unrelated to their sex but protected under the Equality Act 2010. For further information on discrimination and discriminatory acts under the Equality Act 2010.

Gender Pay Gap
An additional consideration for UK employers with over 250 employees is the requirement to publish gender pay gap figures annually through an on-line portal. This is a mandatory requirement for employers over this size.

An employer is also required to publish the ‘snapshot’ data each year on their website explaining the Gender Pay Gap data. We also recommend that employers produce supporting notes and an action plan on combatting gaps in their staff structure and payroll.

Employers are required to report:

  • Proportions of males and females in quartile pay bands
  • Median gender pay gap using hourly rates
  • Mean gender pay gap using hourly rates
  • Median bonus gap
  • Mean bonus gap
  • Bonus proportions of male and female employees

Should employers fail to report, the Equality and Human Rights Commission can take enforcement action. Therefore, it is important to make timely reports as non-compliance can affect an employer’s reputation and may also support an equal pay claim made by an employee.

How can we help?
We can assist you with conducting equal pay reviews, displaying and communicating the Gender Pay Gap findings and advising on diversity and inclusion strategies.

Through exercises such as equal pay audits, we can advise you on the scope, analyse the data, identify areas of risk, produce an action plan.

We can also advise on reporting and communication, and develop a strategy and conduct the audit under legal privilege, so that its findings remain confidential.

FAQs

What happens if an employee complains about unequal pay?

Employers must follow a fair and thorough process prior to disciplining or dismissing an employee. Employers must thoroughly investigate and obtain evidence of the misconduct prior to commencing the disciplinary process. This should include an investigatory meeting with the employee who has committed the alleged misconduct. Once you have obtained the information you should invite the employee to a disciplinary hearing, at which they will have the right to be accompanied. 

If an employer does not have its own disciplinary process, employers should at least follow the procedure set out in the ACAS Code of practice. 

Can unequal pay ever be justified?

In brief, yes. In certain circumstances it is possible to justify a difference in pay between a man and a woman who are performing equal work. This defence is known as the “material factor” defence and applies where there is a particular reason, which has nothing to do with the employee’s sex, that one employee is on better terms than the other. For example, the material factor might be market forces at the time one employee was hired, geographical location, previous experience or qualifications.

However, if the effect of difference in terms is discriminatory, then an employer must also show that the material factor that they are relying on is objectively justified. This means that there must be a legitimate aim behind the material factor and it must be a proportionate way of achieving that aim.

What are the time limits for an equal pay claim?

There are a number of time limits that could apply to an equal pay claim, however broadly an employee will have 6 months from the termination of their employment, or from when they became aware they were being paid less than their comparator to bring a claim for equal pay in the Employment Tribunal. As an equal pay claim is a breach of contract claim, an employee could also bring such a claim in the civil courts and if they decide to pursue civil litigation, they will have up to 6 years from the breach to do so.

An employee who is being paid unequally to their colleague can also claim back up to 6 years in arrears, so employers need to be aware that the financial exposure for such a claim could be vast

If you have a gender pay gap does that mean you have an equal pay issue?

No, not necessarily. Although a large gender pay gap could indicate potential pay disparities between your male and female employees. The gender pay gap analysis is much broader than the comparisons drawn in an equal pay claim. As a starting point, the gender pay gap will look across an organisation, irrespective of job titles or terms and conditions and look at the average differences between remuneration for female versus male employees. Equal pay claims are much more specific and will only look at cases where employees are doing equal work and are being paid unequally for it.

 

However, it is critical that the data obtained as part of Gender Pay Gap report is analysed carefully and regular pay and remuneration reviews take place annually, so that employers can guard against the risk that their gender pay gap data exposes an equal pay issue.

Discrimination & EqualityUnder Equal Pay legislation, the starting point is that every employee has the right to equal pay for ‘equal’ work in the same employment. Equal pay relates specifically to men and women in the same employment, performing equal work being entitled to equal pay unless a pay difference can be justified.

The right to equal pay applies to employees, workers (including agency workers), on full-time, part-time, or temporary contracts, apprentices and, in some limited cases, even self-employed contractors.

Contractual provisions for equal pay will be implied into an employment contract where an employee and their comparator of the opposite sex are employed to do equal work, which could be:

  • like work – work that involves similar tasks, knowledge and skills
  • work rated as equivalent – work that is graded as equivalent under a job evaluation scheme
  • work of equal value – work that is different but equal in terms of demands such as effort, skill and decision-making

Equal pay extends to basic pay, pensions, holiday, overtime, redundancy, sick pay, performance-related pay, benefits such as a company car or gym membership, and other contractual terms such as working hours and annual leave. Critically, it will normally include bonuses and commission as well.

It is important to note that an Equal Pay claim under the Equal Pay Act 1970 can only be brought by a woman or a man citing a comparator of the opposite sex. However, it is possible to allege being paid less than a comparator amounts to discrimination under the Equality Act 2010, if the reason for any pay difference is attributable to a protected characteristic. It is therefore common, when an employee is bringing an equal pay claim, for the employee to also pursue a claim for sex discrimination in the alternative at the same time.

It would be also possible for an employee to bring a claim for discrimination alone if they believed they were being paid less due to their race, or disability or any other protected characteristic unrelated to their sex but protected under the Equality Act 2010. For further information on discrimination and discriminatory acts under the Equality Act 2010.

An employee who thinks they may have an equal pay claim may submit questions to the employer to help them determine whether they have such a claim and, if they do, to help them to formulate the claim in the best way. It is best practice to raise a grievance with the employer before bringing an equal pay claim through the Tribunal.

Herrington Carmichael can assist with all steps through the equal pay process. 

FAQs

How can I find out if I am being paid fairly compared to my colleagues in similar roles?

You may seek information on assessing your own pay in relation to your peers from your employer by putting questions to them directly. This could involve questions about the availability of salary information, whether there are established salary bands, and if there is a process for salary reviews or adjustments.

Additionally, although many employment contracts have a secrecy clause that may seek to prevent you from knowing how much others in your company earn, if you suspect you are not being paid equally, then this clause in your contract will be overridden by your right to seek information from a colleague (or former colleague) for the purposes of finding out whether you are being paid unequally to a comparator of the opposite sex.

What avenues are available to me to address my concerns about unequal pay or salary disparities?

If you believe you have not received equal pay, you should prepare a statement to send your employer explaining what has happened and why you believe that you have been discriminated against by not getting equal pay. The statement should identify the comparators who are receiving better terms, explain why the comparator is undertaking equal work and ask questions about how much the comparator is earning, why there is a difference, how the employer decides pay rates and ask for relevant statistics.

If your employer fails to address your statement or you consider that their answers are inaccurate or insufficient, then you can raise a grievance. It is important you get to know your internal grievance processes on how to raise a grievance to undertake this step. This is usually contained in your employee handbook or on your employer’s intranet with other HR policies and procedures.

If the outcome to the grievance also does not resolve the issue, then you can consider bringing a claim through the Employment Tribunal or the civil courts. You should seek advice on the grounds to bring your claim and how to do so. Contact us to learn more about this.

What is a comparator and what is considered equal work?

A comparator must be of the opposite sex to you, be a current or previous employee and working in the same employment. Although, they do not necessarily have to have the same direct employer as you, provided that both you and your comparator are part of the same corporate group of companies.

Can unequal pay ever be justified?

In brief, yes. In certain circumstances it is possible to justify a difference in pay between a man and a woman who are performing equal work. This defence is known as the “material factor” defence and applies where there is a particular reason, which has nothing to do with the employee’s sex, that one employee is on better terms than the other. For example, the material factor might be market forces at the time one employee was hired, geographical location, previous experience or qualifications.

However, if the effect of difference in terms is discriminatory, then an employer must also show that the material factor that they are relying on is objectively justified. This means that there must be a legitimate aim behind the material factor and it must be a proportionate way of achieving that aim.

What are the time limits for an equal pay claim?

There are a number of time limits that could apply to an equal pay claim, however broadly an employee will have 6 months from the termination of their employment, or from when they became aware they were being paid less than their comparator to bring a claim for equal pay in the Employment Tribunal. As an equal pay claim is a breach of contract claim, an employee could also bring such a claim in the civil courts and if they decide to pursue civil litigation, they will have up to 6 years from the breach to do so.

An employee who is being paid unequally to their colleague can also claim back up to 6 years in arrears, so the financial exposure for such a claim could be vast.

If my employer has a gender pay gap does that mean there is an equal pay issue?

No, not necessarily. Although a large gender pay gap could indicate potential pay disparities between male and female employees. The gender pay gap analysis is much broader than the comparisons drawn in an equal pay claim. As a starting point, the gender pay gap will look across an organisation, irrespective of job titles or terms and conditions and look at the average differences between remuneration for female versus male employees. Equal pay claims are much more specific and will only look at cases where employees are doing equal work and are being paid unequally for it.

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