Equal pay

Overview

Audrey Williams, Fox Williams Last Modified  04 March 2016

The right of men and women to receive equal pay for equal work is contained in the Equality Act 2010. The right automatically implies a 'sex equality clause' into all contracts of employment, entitling a woman to equal pay for equal work.

The provisions protect those carrying out work in a personal capacity (such as self-employed consultants), as well as employees and apprentices.

Key points

  • The right of men and women to receive equal pay for equal work is contained in the Equality Act 2010.
  • A woman cannot claim the right to equal pay unless the difference in pay is attributable to sex.
  • In order to bring a claim for equal pay, the claimant must identify an actual comparator of the opposite sex; hypothetical comparisons are not permitted.
  • The Equality Act 2010 contains a separate provision allowing an employee to bring a direct sex discrimination claim in relation to contractual pay using either an actual or a hypothetical comparator.
  • Employers cannot defend a claim for equal pay by comparing the total remuneration and benefits package of those in comparison.
  • Equal work may be work which is the same or broadly similar, or which rates as equivalent, or which is of equal value.
  • 'Like work' is where a woman's work and a man's work are the same, or of a broadly similar nature, and the differences (if any) between the work they do are not of practical importance in relation to employment terms and conditions.
  • Work that has been 'rated as equivalent' refers to the job's grading in a job evaluation study undertaken with a view to conducting an analytical evaluation of the jobs done by the relevant employees.
  • 'Work of equal value' is where a woman's work is of equal value to that of a man's in terms of the demands made on her with regard, for instance, to effort, skill and decision-making.
  • Once a woman establishes that she is paid less than a man engaged on like work, or work rated as equivalent or of equal value, it is for the employer to show that the difference is not due to sex.
  • An employee can ask his or her employer for information to establish whether he or she has received equal pay and, if not, the reason for the difference in treatment. Acas has produced guidance on this process.
  • Claims can be brought by existing or ex-employees irrespective of length of service or age.
  • Provisions in the Equality Act 2010 impose equality of terms in to pension scheme rules regarding male and female members and obligations on trustees.
  • Equal pay reporting is to become mandatory for private sector and voluntary organisations (the public sector is likely to be exempt) employing 250 or more under the Small Business, Enterprise and Employment Act 2015 after April 2016.
  • Special 'victimisation protection' exists to prevent individuals being penalised for asking their employer or colleagues about their pay arrangements (see 'Equal pay' in-depth 'Relevant pay discussion').

Recent developments

Gender pay reporting
The Equalities Office has published draft Equality Act (gender pay gap information) Regulations 2016 along with a second consultation on the new reporting requirements. Private and third sector employers with more than 250 employees will have to publish gender pay gap figures annually on their websites. The first report, detailing the pay gap on 30 April 2017, is due by April 2018.

For these purposes ‘pay’ includes basic and holiday pay, shift premiums and location allowances, maternity pay, standby or call out payments, and clothing, car and special responsibility allowances. Bonuses are also included. Benefits in kind, redundancy pay, overtime and expenses are excluded.