Factsheet: Equal Pay Guidance for Employers and Employees
Equal Pay law provides a way of ensuring that men and women receive the same pay and terms for doing comparable work.
If you are an employee or a worker and you suspect you have been paid less than someone of the opposite sex who is doing “like” work, work rated as equivalent, or work of equal value then the law provides a remedy to ensure you are treated equally. By pursuing an equal pay claim you can achieve equality going forwards and you may also be able to recover the pay that you never received.
For employers, equal pay law means you have to think carefully about how you pay all of your staff. The information below demonstrates that a worker can rely on people doing different jobs, and this makes the risk of claims far higher than many small employers realise. Even if you do not intend to discriminate against members of your workforce, the costs of getting it wrong can be huge.
All employees and workers are able to claim the right to equal pay. For the purpose of this factsheet we refer to “workers” throughout.
Who is protected by equal pay legislation?
Both male and female workers are covered by equal pay legislation. This includes:
- Agency workers and Casual workers, e.g. a bank nurse, supply teacher, etc.;
- People who are personally providing a service even though they might consider themselves self-employed.
It does not matter how long the worker has been employed, or whether the worker is full-time or part-time. Part-time workers may also have claims under separate laws.
Equal pay claims are not about ‘fair pay’ or re-grading – they are about ensuring that men and women are paid equally for doing comparable (i.e. equal) work.
What is Equal Work?
Workers are entitled to have the same terms in their contract as members of the opposite sex, provided that the comparator is a current or former employee. The worker and their comparator must perform work which is:
- Broadly similar; or
- Rated as equivalent, i.e. the worker and their comparator are employed on the same grade, band etc. under a job evaluation study (or the worker is employed on a higher grade than their comparator); or
- Of equal value, i.e. although the worker and their comparator do different jobs, the worker’s job is of equivalent (or greater) demands.
There are also requirements about where the comparator works – some workers can rely on comparators employed in different locations.
Under the Equality Act 2010 it is now possible to bring a sex discrimination claim even if there is no actual comparator in the workplace. This is different to an equal pay claim.
Job Evaluation Studies
Job evaluation studies (also known as ‘job evaluation schemes’) are a means by which employers analyse and “rank” the jobs within their organisation according to demands. Many employers use job evaluation studies as a basis for deciding how they pay their workers going forwards.
Traditionally, job evaluation studies are more common in the public sector (e.g. Single Status in local authorities, Agenda for Change in the NHS). However, they are becoming increasingly common in the private sector. Anyone with a ‘band’ or ‘grade’ may well be doing work rated under a job evaluation study.
What does “Equal Value” mean?
In the private sector today, the majority of equal pay claims rely on the worker and their comparator doing different jobs which are of “equal value”.
Deciding whether one job is of “equal value” to another is far from an exact science. If a worker brings an equal pay claim, the Employment Tribunal will generally appoint an Independent Expert in the field of job evaluation. The expert will analyse the worker’s job and their comparator’s job in careful detail, looking at a wide range of factors such as:
- Knowledge required to do the job;
- Experience and training required to be appointed to the role, and in-post learning;
- Responsibility for planning and organising work;
- Responsibility for quality and standards;
- Responsibility for health and safety;
- Responsibility for equipment and resources;
- Responsibility for supervision, training, assessing etc.;
- Responsibility for data;
- Security and confidentiality;
- Responsibility for care of others;
- Concentration, accuracy and memory;
- Emotional demands;
- Freedom to act;
- Written and verbal communication;
- Working relationships;
- Interpersonal skills;
- Physical effort;
- Physical skills and manual dexterity;
- Environmental demands;
The expert will then produce a report and this report will assist the Employment Tribunal to decide whether the two jobs are of equal value.
Types of work which could be of equal value are limitless. For example:
- In a local authority a Teaching Assistant and a Roadworker may carry out work of equal value. While the Roadworker’s job may be more physically demanding and potentially more dangerous, the Teaching Assistant is likely to require greater knowledge and training, their job is likely to require greater interpersonal skills and emotional demands, and they may be responsible for more people.
- In a factory, the job of a Cleaner may be equal to that of a Packing Operative. While the Packing Operative may lift heavier items throughout the day, the Cleaner may handle dangerous cleaning fluids and their responsibility for health and safety may be greater.
What terms does equal pay legislation cover?
While most workers are concerned with achieving equality in terms of pay (basic pay, overtime rates, bonuses, commission, allowances, redundancy pay, notice pay, shift allowances, etc.) equal pay legislation is not confined to pay. The law covers all terms of the contract including:
- Fringe Benefits: Company car, laptop, mobile telephone, etc.
- Pension entitlements: Membership, amount of employer contributions, etc.
- Other terms: Performance targets, holiday entitlements, overtime availability etc.
For example, martin searle solicitors recently acted for a Sales Manager whose basic pay was lower and whose sales targets were higher than her comparator’s. The employee was entitled to receive higher basic pay. She was also entitled to have her commission re-calculated as if she had lower targets, even though this took her total pay above that earned by her comparator.
Claims concerning bonuses are more complicated because sometimes workers will need to bring sex discrimination claims instead of – or in addition to – equal pay claims.
Defences to Equal Pay Claims
An employer who pays comparable workers differently must be able to show that this is due to a “Material Factor“. Unless an employer can do so then they are at high risk.
Material factors can include, for example:
- Different hours of work;
- Market forces;
- Rewarding productivity;
- Geographical reasons;
- Recognising length of service;
- Recognising additional responsibilities;
- Ring-fencing/pay protection.
Material factors are fact-sensitive and can often be difficult to prove.
What can a worker recover?
If a worker successfully brings an equal pay claim they can recover:
- Back pay, i.e. the difference between what the worker received and what their comparator received. The maximum period for which back pay can be awarded is six years, but in some cases awards of back pay can go back further. Compensation can also include interest. Also, the Employment Tribunal can increase or decrease compensation by up to 25% if either the employer or the employee has not complied with the ACAS Code of Practice on Grievances; and
- A declaration that the worker is entitled to receive the same pay and benefits as their comparator in future. This will ensure that employers pay the worker correctly going forwards.
There is a time limit of six months for bringing a claim in the Employment Tribunal, commencing from when the period of work or employment ended. Equal pay claims can also be brought in the civil courts within a period of six years, however, specialist advice should be sought in these cases.
The way in which time limits operate in equal pay claims is complex, particularly where a worker has changed jobs, their contract has been varied or replaced, they have worked under a succession of contracts, or their employment has been transferred under TUPE. There are also special rules concerning workers who are incapacitated and where discrimination has been ‘concealed’. Specialist advice should be sought in all such cases.
Special situations – maternity and equal pay
A woman who is taking maternity leave, or has returned from maternity leave, is entitled to receive the benefit of any pay rises she would have received had she been at work during her maternity leave. This is a stand-alone right.
If a woman is denied performance bonuses while on maternity leave, she should also seek specialist advice about bringing a sex discrimination claim.
I am a Worker – what should I do if I feel that I have been discriminated against?
You should raise a grievance with your employer, naming wherever possible the person who you believe is earning more than you (i.e. your comparator).
If you cannot resolve your complaint informally at this stage, you may bring an equal pay claim in the Employment Tribunal or, if out of time, in the County Court. While it is important to allow your employer enough time to resolve the grievance, you should not delay in bringing an equal pay claim since there is a maximum period of back pay that you can recover.
It is also advisable to send your employer an Equality Act Questionnaire either before or at the same time as raising your grievance, but you should not delay in sending a grievance. Sending a Questionnaire will allow you an opportunity to ask your employer for certain information such as what pay your comparators receive. Your employer may be reluctant to disclose all of this information but this silence could be used against them.
The Equality Act 2010 has made it unlawful for employers to discipline workers who make certain disclosures about their pay. If you are concerned about discussing pay with colleagues you should seek specialist advice.
I am an Employer – do I have to worry?
In principle, any employer can be vulnerable to equal pay claims where they employ men and women who carry out “like” or comparable work, but either sex are paid less. But whether such a claim will be successful will depend on the facts.
You may wish to carry out an Equal Pay Audit to identify risk areas and take appropriate compliance action. Further guidance is available from the Equality and Human Rights Commission and specialist advice should be sought.
I am an Employer – what should I do if I am faced with an equal pay complaint?
If you receive warning of an equal pay claim – for example, through a grievance or an Equality Act Questionnaire – you should seek legal advice immediately.
Attempting to deal with matters without advice can be dangerous as you might make admissions that could be used against you at a later stage.
I am an Employer – should I be thinking about a Job Evaluation Study?
The main advantage of a job evaluation study is that if it is carried out properly it can act as a defence to equal value claims brought by workers graded under it.
Conversely, if you have carried out a job evaluation study improperly – or you have carried it out properly but pay people on the same grade differently – you are likely to be more vulnerable to an equal pay claim.
If you wish to carry out a job evaluation study you should therefore seek specialist advice to ensure that you are “equal pay proof” rather than more vulnerable.
What can martin searle solicitors do?
If you are a worker, martin searle solicitors can:
- Advise whether you may have an equal pay claim against your employer;
- Assist you from the initial stages – for example, by helping you prepare grievances and Equal Pay Questionnaires;
- Represent you throughout the Employment Tribunal process.
If you are an employer martin searle solicitors can:
- Assess the risk and assist you to carry out an equal pay audit;
- Give you expert advice on any equal pay complaint you might face – we can advise you on the strength of an equal pay claim, we can identify and advise you on the complex legal issues involved, we can quantify the claim, and we can help you to identify and assess any defences you may have;
- We can assist you with the initial stages – for example, in relation to grievances and responding to Equal Pay Questionnaires;
- We can represent you throughout the Employment Tribunal process – from Case Management Discussions and the Equal Value process, to final hearings;
- We can help you to settle claims in the most cost-effective and commercially sensible ways.
For more help and advice on equal pay contact Fiona Martin at firstname.lastname@example.org or call 01273 609911.