Overview

The key legislation covering equal pay is the Equality Act 2010.

The principle of ‘equal pay for equal work’ originates with European legislation. UK courts and tribunals must therefore interpret the Equality Act and other legislation in a way that is consistent with EU legislation.

UK and EU equal pay legislation has historically been very complex and the Equality Act has not simplified equal pay issues to any significant extent.

The Equality and Human Rights Commission has published a comprehensive Code of practice on equal pay for England, Scotland and Wales. It:

  • provides detailed explanations of the equal pay provisions in the Equality Act
  • applies the legal concepts to everyday situations
  • does not impose legal obligations or give an authoritative statement of the law, but can be used in evidence in equal pay claims.

Gender pay gap reporting arises where an organisation reviews the overall gap in pay between men and women working for it and/or produces a detailed breakdown based on grade or job types or full-time and part-time roles. The review is then published to increase transparency for employees.

Publishing information about a gender pay gap can either be done by employers on a voluntary basis or, especially for larger employers this will shortly become mandatory.

Mandatory (or compulsory) gender pay gap reporting

The government is planning to introduce mandatory gender pay gap reporting for larger companies.

The new measures will require employers with at least 250 employees to publish information about the differences in pay between men and women on a mandatory basis. This will be extended to the public sector as well.

  • Employers must publish their gender pay gap figures on their website by 4 April 2018 in a publicly accessible manner.
  • A signed statement that the information is accurate must accompany the figures.
  • Employers must also upload their results to the government’s reporting website.
  • Reporting will be on an annual basis, and each report must be kept on the employer's website for three years.
  • The Regulations do not require any ‘contextual narrative’ to explain the reasons behind a gender pay gap, but employers will be encouraged to do this on a voluntary basis.

Implementation timetable

In August 2016 the Equality Act 2010 (Commencement Order No 11) Order 2016 came into force.

  • 31 March 2017: The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 come into force and public bodies must start collecting their gender pay reporting data to be published a year later.
  • 6 April 2017: The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 for private and voluntary sector employers come into force. Employers in the private and voluntary sectors must start collecting their gender pay reporting data to be published a year later.
  • 30 March 2018: Public sector employers must publish their figures for the first time.
  • 4 April 2018: Private and voluntary sector employers must publish their figures for the first time.

Businesses will therefore be required to start collecting their data, in some cases for the first time, from March/ April 2017 and the gender pay reporting information will then need to be published by 30 March or 4 April 2018. The timings listed above reflect current government indications. The Regulations are brought in under section 78 of the Equality Act 2010 and the Small Business, Enterprise and Employment Act 2015.

Employers will be required to publish:

  • The percentage difference in mean pay between men and women.
  • The percentage difference in the median pay between men and women.
  • The difference in bonuses paid to men and women.
  • The proportion of men and women who receive bonuses.
  • Employers must also publish mean and median pay gaps regarding the bonuses including the proportion of male and female employees who receive a bonus at all.
  • Employers must also calculate their gender pay breakdown split between each quartile of their pay bands (see below). This will enable employers to compare their gender pay gap statistics with national and international statistics.
  • The overall mean and median gender pay gaps will be based on gross hourly pay for men and women, expressed as a percentage.

Public sector

Existing duties

There are already general duties and specific duties on employers in the public sector. The specific duties require publication of:

  • equality information, and
  • equality objectives.

Under the duty to publish equality information, a public authority must publish information relating to persons who share a relevant protected characteristic. This applies to both employees and other persons affected by its policies and practices.

The requirement to publish information about employees applies to public authorities with over 150 employees. So effectively from 2011, public authorities with over 150 employees have been required to publish annual details of matters such as their gender pay gap and ethnic minority and disability employment rates. They will still report on the diversity of their workforces in all respects, not just gender, and may include data on gender pay differences in the information that they publish.

Additional duties

Implementing the new Regulations will mean that public-sector bodies with 250 or more employees will need to go further with respect to male and female pay and will have to produce more detailed reports on gender pay gaps and comply with the new reporting dates.

The new public-sector requirements are being introduced as part of the existing public-sector equality duty. The annual date for collection of the pay information is 31 March for public -sector employers (5 April for private sector employers). Employers then have 12 months to publish the pay information on the public authority’s and government websites.

The new Regulations will cover organisations such as local authorities, NHS trusts, schools and colleges, regulatory and advisory bodies such as Acas and the Equality and Human Rights Commission (EHRC) and the BBC and Channel 4.

The mandatory gender pay gap reporting requirements will be added to larger public sector employers’ duties, to ensure consistency with the private sector.

Although many public bodies will already be collating and publishing gender based information under the existing public sector regulations, introducing a mandatory requirement ensures that larger public sector employers have to publish data on their mean and median gender pay gap, mean and median bonus pay gap, and information on the proportions of male and female employees in each salary quartile.

The EHRC can apply to the courts for a compliance order if any public sector body fails to report its gender pay gap.

Scotland

The Public Sector Equality Duty Amendment Regulations 2016 changed the position in Scotland to:

  • introduce a new requirement on listed public authorities to publish the gender composition of their boards and to produce succession plans to increase the diversity of their boards, and
  • ensure listed public authorities with more than 20 employees publish information on their gender pay gap and equal pay statements.

The existing requirement in the specific duties Regulations applying to public authorities with 150 or more employees will remain so that they will still report on the diversity of their workforce in all respects, not just gender, and may include data on gender pay differences in the information that they publish.

Additional points for employers

Based on the draft Regulations, the following points highlight how mandatory gender pay gap reporting will work:

  • The Regulations apply where there are at least 250 'relevant employees' which means an individual who ordinarily works in Great Britain under a contract of employment.
  • Although there has been some conflicting information, it appears that the Equality Act 2010 wider definition of employee will apply. This means that some types of worker who are not 'employees', such as self-employed contractors, LLP members, apprentices and those on zero hours contracts are likely to be included.
  • The numbers of employees across group companies do not need to be aggregated to establish if the employer has at least 250 relevant employees as each company stands alone for these purposes.
  • A director, partner or equivalent will have to personally sign off the data.
  • Private sector employers are not yet faced with enforcement provisions to compel compliance with the Regulations. The idea is that the requirement to publish public reports will be sufficient enforcement. Any failures to report will be visible to the public, employees and shareholders. The Equality and Human Rights Commission may inquire into the reasons for non-compliance and any non-compliance may be used as evidence of pay discrimination.
  • Once the new Regulations come into force, the government will use the information to produce league tables ranking different employment sectors by pay gap so that people can see how the sectors compare.
  • The government league tables will be by sector and so will not be broken down to reveal individual employers. However interested parties such as the media may use the publicly available information to make comparisons between competing businesses.
  • 'Pay' includes basic pay, paid leave, maternity pay, sick pay, allowances, shift premiums and bonus pay and commission, including any deferred incentive award schemes, common within the financial services sector.
  • The information on pay is based on a snapshot of each relevant employee’s pay taken on 5 April 2017 and every subsequent 5 April.
  • 'Pay' excludes expenses, benefits in kind, overtime and the value of any salary sacrifice benefits.
  • While complex bonuses and pay systems such as deferred incentive awards will be included, it is not clear how they should be reported as the payment could accrue at the time it is awarded or when it falls due. Other complex pay structures may give rise to similar problems.
  • The Regulations include employees ordinarily working in Great Britain under a contract of employment which is governed by UK legislation so some international employers will be caught by them if, for example, the contract of employment has a clause which says that UK law will apply to the contract.

Quartiles

Employers must publish details not only of their overall pay gap, but also details of how many women and men are employed in each quartile of the employer's pay distribution.

There has been some confusion about what is meant by quartile in this context. As quartile could mean equal numbers of employees in each quartile, or just splitting the pay range into four equal segments, or it can mean separating off the lowest and highest 25% and looking at the difference between the two.

It appears that an employer should look at the overall range of hourly rates paid to employees and create four equal pay bands. Each band will consist of one quarter of the difference between the lowest and highest hourly rates. Large employers must therefore publish the numbers of male and female employees employed in all four pay bands.

Employers can therefore examine not only their overall pay gap, but the representation of women in each pay quartile and on how that changes over time. Obviously if either gender is under-represented in any quartile that will need investigating and taking into account when setting pay.

What should employers do?

Employers will obviously be concerned about the risks of retrospective employee claims for equal pay potentially going back over six years, and negative publicity.

Employers should review all current pay practices and find any differentials between men and women's pay.

The original proposals for fines have not been implemented so employers with large pay gaps may decide to avoid publishing their details rather than risk the reputational damage of being bottom of the government’s league table.

However, the Equality Act 2010 has its own enforcement measures, including enforcement by the Equality and Human Rights Commission (EHRC). It is possible that the government may publicise the identity of employers who are bottom of the league tables and employers who have not complied, as periodic checks will be conducted to assess non-compliance.

Fines may be introduced subsequently, as a review of new legislation nearly always takes place to assess the first few years of its implementation. Therefore it looks safer for employers to comply and assess their pay gaps, rather than risk 'getting away' with it.

Employers should examine their approach to pay, including complex incentive based pay, as these may contain inequalities which are revealed once the new system is under way. Gender pay gaps in incentive and bonus payments are suspected to be a particular equality issue.

Employers should start considering their approach as soon as possible, so they have time to analyse the data and if there is a gender pay gap, mitigate the risks and also improve any gaps before disclosure is required.

Pro-active employers should consider carrying out an equal pay review now in order to reduce risks. If employers quantify their own gender pay gaps as early as possible this may prevent the new reporting regime affecting recruitment, retention, and reputation.

Pay reviews undertaken now could be confidential initially and lead to an action plan to minimise risks before the changes come into effect.

Guidance

The government has announced that it will be publishing guidance in 2016 to help employers comply with the new mandatory gender pay reporting legislation. The guidance will consist of a quick start guide and a more comprehensive manual.

Voluntary gender equality reporting

Until the mandatory gender pay gap reporting legislation is in place, a voluntary scheme for gender pay reporting still applies mainly in the private and voluntary sectors. The Government’s Think, Act, Report framework encourages these employers, especially those with 150 or more employees, to undertake their own analysis of gender equality in their organisation, take action (if appropriate) to address any issues and in time report publicly if they choose.

The framework sets out the principles behind the voluntary approach to gender equality reporting, and suggests measures that employers might adopt.

It is important for employers to remember that voluntary gender equality reporting does not provide a defence against an equal pay claim, nor constitute an equal pay audit.

Equal pay claims have increased despite the overall fall in tribunal claims. These are mainly large equal pay claims being brought against public sector organisations such as local authorities and the National Health Service.

To prevent equal pay claims employers should consider following:

  • the Equality and Human Rights Commission (EHRC) advice on good equal pay practice, equal pay audits, and equal pay checklists
  • the Government’s Think, Act, Report framework on voluntary gender equality reporting (see the related FAQ What is gender equality reporting and is it compulsory for employers to do this?).

The EHRC has recommended that, to prevent equal pay claims, all employers should carry out equal pay audits or reviews to elicit comprehensive information on how their pay and benefit systems operate and the effect such systems have on people of a particular sex. These reviews can also operate as a risk management tool to highlight areas such as race, religion, disability or age discrimination.

New measures will come into force which will require employers with 250 or more employees to publish information about their gender pay gap on a mandatory basis. For further information, see the related Q&A What is gender equality reporting and is it compulsory for employers to do this?

However, even employers who will not be affected by the new measures on reporting should become comfortable with gathering information about pay and grading arrangements, job evaluation schemes etc. In particular employers should:

  • Be comfortable with carrying out a job evaluation scheme, or have already determined which groups of employees are doing 'equal work' in their workplace. For further information on this see the related Q&A What is the basis of an equal pay claim?
  • Identify the causes of any gaps which are identified in the average pay between male and female employees. Are there any non-discriminatory reasons behind them, for example London weighting, performance pay, pay progression, pay protection etc?
  • Produce a plan to remove any gender based pay gaps. Increasing the pay of underpaid employees is expensive, but reducing the pay of overpaid employees may be breach of contract leading to resignations and constructive unfair dismissal claims.

Following the Equality Act 2010, the EHRC have produced a revised Code of practice on equal pay. This includes a whole section on best practice and supplies a five-step model for carrying out an equal pay audit.

The Code of practice not only provides guidance for employers, but is admissible in evidence in an employment tribunal. Employers may also like to consider including an analytical job evaluation scheme which would make its pay practices even more transparent to employees.

Data coming from an audit, review or report does not achieve change, but if any patterns of pay inequalities are discovered, the employer should take all reasonable steps to remove them. The employer should also make sure the pay system is as transparent as possible. If employees understand the basis for salaries and other benefits and can see them applied fairly in practice, they will be less likely to bring claims against their employer.

Compulsory equal pay audits

From 1 October 2014 employment tribunals can order equal pay audits. Employers who lose a tribunal claim (relating to gender based issues with terms or pay) are at risk of having to conduct an equal pay audit. Some employers may simply settle one equal pay case to avoid an audit (Equality Act 2010 (Equal Pay Audits) Regulations 2014 (SI 2014/2559)). These audits are different from gender pay reporting (see the related Q&A, What is gender equality reporting and is it compulsory for employers to do this?).

An audit has to:

  • include the relevant gender pay information relating to the persons specified by the tribunal
  • identify any differences in pay between the sexes and the reasons for those differences
  • include the reasons for any potential equal pay breach identified by the audit, and
  • include the employer’s plan to avoid breaches occurring or continuing.

An audit is not required if:

  • an audit has been carried out in the past three years
  • it is clear without an audit whether action is required to avoid equal pay breaches occurring or continuing
  • there is no reason to think there may be other equal pay breaches, or
  • the disadvantages of an audit would outweigh the benefits.

Micro-businesses and new businesses are exempt for a period of ten years from the date that the Regulations come into force. Micro-business are those that have fewer than ten full-time equivalent employees. New businesses are those that have been established in the 12 months up to the date that the equal pay claim was made.

Once the tribunal has made an order to an employer to carry out an audit the tribunal will specify:

  • the descriptions of persons in relation to who the pay information must be included
  • the period of time to which the audit must relate, and
  • the date by which the audit report must be received by the tribunal (which must be no later than three months from the date of the order).

An audit has to include the following:

  • the relevant gender pay information relating to the persons specified by the tribunal
  • identification of any differences in pay between the sexes and the reasons for those differences
  • the reasons for any potential equal pay breach identified by the audit, and
  • the employer’s plan to avoid breaches occurring or continuing.

The employer then submits its report to the tribunal, who will determine whether or not the audit is compliant with the Regulations. If the tribunal is satisfied with the audit it will make a final order stating that the audit complies with the necessary requirements. The employer must then publish the equal pay audit on its website, if it has one, or in a format accessible to all affected staff. The report must be published within 28 days of the tribunal’s final order and remain on the website for three years.

Tribunals will also have the power to impose a financial penalty of up to £5000 on an employer who does not comply with an equal pay audit order. There is a further power to impose further penalties of up to £5000 (repeatedly if necessary) until the order is complied with.

Since provisions in the Equality Act 2010 came into force, any contractual provisions which attempt to restrict an employee from making a ‘relevant pay disclosure’ are unenforceable. This includes:

  • asking a colleague to provide information about his or her pay and benefits
  • providing information to a trade union representative about pay and benefits
  • receiving information from a colleague about pay and benefits.

This provision is intended to restrict the custom adopted by many employers of including clauses in employment contracts which state that employees must not discuss their salaries and benefits with colleagues in any circumstances. Employers may continue to put such clauses in contracts, but the clauses will be unenforceable if they are used to prevent employees trying to find out if they are being discriminated against or if there is a breach of the equality clause. Many employers will choose not to include such clauses at all, while others will still include the clauses whilst appreciating that the clause may be unenforceable.

Strictly speaking the clauses only restrict 'relevant pay disclosures'. These are discussions to find out if there is a connection between the amounts paid to employees and having a protected characteristic - such as the differences between male and female pay or the amounts paid to black and white employees. An employer can still require their employees to keep pay rates confidential from people outside the workplace, for example a competitor organisation.

Examples

  • A discussion between a white woman and a white man for the purpose of establishing whether the man is being paid more than the woman could involve a relevant pay disclosure.
  • A discussion between a white woman and a black woman for the purpose of establishing whether the white woman is being paid more than the black woman could involve a relevant pay disclosure.
  • However, two white female colleagues simply comparing their respective salaries is unlikely to be making a relevant pay disclosure, unless they are investigating pay disparities which may be linked to age, disability or another protected characteristic.

If an employer treats an employee differently for making a relevant pay disclosure that employee may claim victimisation.

Clearly it is good practice to have transparent pay structures. Nearly 40 years after the Equal Pay Act 1970, ONS figures show that the gender pay gap remains at around 19 per cent, including full and part-time employment. This figure varies according to the methods used and the sector being assessed. However the gap is higher in some sectors such as financial services where the gender pay gap can be as much as 79 percent in bonus pay. Further measures to tackle the pay gap and encourage transparent pay structures are dealt with in the related Q&A What is gender equality reporting and is it compulsory for employers to do this?

Equal pay provisions in the Equality Act 2010 apply to both men and women. There is no upper or lower age limit on the right to claim equal pay, nor is there a qualifying period of service for bringing a complaint. (There must also be a connection between the relevant employment relationship and Great Britain, currently including England, Scotland and Wales.)

The equal pay provisions apply to employees, office-holders and members of the armed forces, where one person’s work is equal or equivalent to the work of another. The position under previous legislation was that this included any people who are engaged under a contract personally to execute work or labour. The Equality Act was not intended to change this. Therefore some self-employed persons should still be covered.

Throughout the Equal pay Q&As it has been assumed that the employee bringing the equal pay claim is female and the comparator is male. However, when an equal pay claim is brought by a male complainant, the comparator would, of course, be female.

For more information on the use of comparators see the related Q&A, Who is a suitable comparator in an equal pay claim?

In order to bring an equal pay claim, an individual must choose a person of the opposite sex as their comparator. The individual must then show that the comparator is:

  • employed on 'like work', or 
  • employed on 'work rated as equivalent' under an analytical job evaluation study, or 
  • employed on work of 'equal value'.

The procedure to be followed in an employment tribunal will differ depending on the nature of the comparator's work.

Like work

If the claim is for 'like work' the work will be of the same type or broadly similar in nature. Any differences in the work must be of little practical importance in relation to the terms and conditions of employment. The fact that a comparator may be required to perform additional duties is not of itself sufficient; it is necessary to look at the frequency with which the employee performs these duties in practice.

Some useful examples of like work where any differences were not found to be of practical importance in relation to pay (taken from the Code of practice on equal pay) include the following:

  • Male and female drivers where the men were more likely to work at weekends (Hatch v Wadham Stringer Commercials (Ashford) Ltd (ET Case No 40171/77)).
  • A female cook preparing lunches for directors and a male cook catering for other employees (Capper Pass Ltd v Lawton (1976)).
  • Male and female laboratory assistants where the man spent some time on the shop floor (Crook v Dexter Paints Ltd (COET 2089/166)). 

Work related as equivalent

In relation to a claim for work 'rated as equivalent', it is necessary under the Equality Act 2010 for a formal job evaluation exercise to be conducted. Job evaluation systematically assesses the relative value of different jobs. In Eaton v Nuttall [1977] ICR 272, the EAT set out five main methods of job evaluation.

These are:

  1. points assessment
  2. factor comparison
  3. job ranking
  4. paired comparison
  5. job classification.

Example

Staff nurses working in a hospital may be assessed as undertaking work rated as equivalent to that of maintenance craftsmen or technicians also working in the hospital. Job evaluation exercises may themselves be subject to challenge if they have not been conducted objectively or are inherently discriminatory in some respect.

For further information on job evaluation, please see our Market pricing and job evaluation factsheet.

Equal value

A woman may also be able to show that her work is of equal value with a man's in terms of the demands made on her. In such cases, as with work rated as equivalent, the jobs done by the woman and her male comparator are different, but have equal worth, taking into account the work performed, training, skills, the conditions of work and the decision-making aspects of the role.

Examples of claims between different jobs, which have been successfully found to have been of equal value include:

  • Hospital head of speech and language therapy and head of hospital pharmacy.
  • Canteen workers and cleaners and clerical workers.
  • Nursing home sewing room assistant and plumber.
  • Primary school classroom assistant and library service driver.

In a claim for work 'of equal value', an expert's report will have to be obtained on the comparative worth of both jobs. This is often a lengthy and complicated process, although specialist employment tribunals have powers to determine the question of equal value rather than appointing independent experts to prepare a report on that question. If a tribunal has decided to appoint an independent expert, the employer or employee can still appoint their own expert, but they cannot challenge facts which have already been found (see Surtees vMiddlesbrough Borough Council(2007) and (2008)).

In Redcar and Cleveland Borough Council v Bainbridge and Surtees v Middlesbrough Borough Council (2008) (heard together), the Court of Appeal agreed with the Employment Appeal Tribunal that claims based on work rated as equivalent and equal value claims are both important limbs of the duty under Article 141 of the Treaty of Rome to provide equal pay for work of equal value. However, the two types of claim are very different in their approach to back pay. A worker employed on work of equal value may be able to claim they had been employed in equal value work previously if the job has remained the same. By contrast, until a job evaluation study has been undertaken from a particular date it is hard to claim a job is rated as equivalent before that date.

If an individual believes that they are receiving less pay or benefits for like work, their first course of action should be to raise a grievance in accordance with the employer's grievance procedure. It is not necessary for the woman to name her male comparator at the grievance stage although she may do so if she wishes.

The grievance procedure followed should at least comply with the Acas Code of practice on disciplinary and grievance procedures which covers complaints about pay or terms.

If matters are not resolved by following the grievance procedure then equal pay claims can be brought by lodging a claim form in the employment tribunal at any time during employment or up to six months after the termination of employment.

Before commencing proceedings, employers and employees may consider alternative forms of dispute resolution such as conciliation (which is offered by Acas amongst others) or mediation. Any employee who wants to make an employment tribunal claim now has ;to notify Acas first by completing an early conciliation notification form and needs an Acas Early Conciliation Reference Number before issuing a claim.

Employees will also need to pay a fee, categorised as either Type A or Type B (Type B claims attract higher fees). Equal pay claims are categorised as Type B.

Employers will need to take legal advice at an early stage as equal pay claims are complex. An early assessment will need to be made to decide if the woman and her comparator are indeed doing equal work, and how any difference in pay or benefits can be objectively justified.

With equal value claims specially trained chairmen are available and the employment tribunal is entitled to choose to determine the question of equal value itself rather than appoint an independent expert to prepare a report.

For more information on discipline and grievance procedures see our Discipline and grievance procedures Q&As.

For more information on Acas early conciliation see the Q&A What is Acas early conciliation? in our Tribunal claims, compromise and settlement Q&As.

The Equality Act 2010 implies a provision into every contract of employment giving a woman or man the same right to contractual pay and benefits as a person of the opposite sex engaged in ‘like work’, ‘work of equal value’ or ‘work rated as equivalent’, usually in the same employment.

Basically, if the terms of a contract do not include a sex equality clause, they are deemed to include one.

The sex equality clause varies the employee’s contract so that it is no longer less favourable than the comparator’s. It does not work to downgrade the comparator’s terms, but to increase the complainant’s terms.

A comparator usually has to be a real person and not a hypothetical one (see Who is a suitable comparator in an equal pay claim?).

The basic rule is that each provision must be compared like with like and not the total package. For example, if men receive more basic pay but female employees get more holiday, the equal pay clause operates to give the female employee the same rate of basic pay and the male employee increased holiday.

However, if an employee of one gender does not receive a benefit, for example a bonus, but the comparator of the other gender does, then it may be possible to aggregate the pay for the purposes of the comparison. For example, under pre-Equality Act 2010 legislation, in Degnan v Redcar and Cleveland Borough Council (2005), it was held that bonus payments and attendance allowances paid to male employees (including drivers and gardeners) in addition to their basic pay could be aggregated with their basic pay for the purposes of comparison in an equal pay claim. The aggregated pay should then be compared to the basic pay paid to the female employees including cleaners and home helps who did not receive the bonuses or attendance allowances (see also What is the basis of an equal pay claim? and, for more aspects of the Redcar litigation, What is the material factor defence in an equal pay claim?).

In an equal pay case the employer should have ensured equality of terms. It does not matter if the female employees get a better remuneration package than their comparators. This is because the comparison looks at each term and not the contract as a whole (see St Helens & Knowsley Hospitals NHS Trust v Brownbill (2011)).

By way of broad guidance, equal pay claims relate to contractual pay and benefits, not discretionary payments such as discretionary bonuses. If the worse treatment is in connection with a discretionary payment, the claim may be for sex discrimination rather than equal pay.

The Equality Act 2010 deals with discrimination in pay and other terms and conditions of employment. The provisions are like a special type of sex discrimination concerned with women who are paid less than men for doing the same job, or a job of equal value or work rated as equivalent by a job evaluation scheme. They only apply if there is a gender related reason for the discrepancy. Unequal pay for a non-gender related reason is not covered. (In such circumstances an employer may be vulnerable to a claim based on breach of the implied term of trust and confidence which is implied into all employment contracts.)

The equal pay provisions are designed to achieve equality between men and women in pay and other terms of employment where the work of an employee and his or her comparator are equal. The Act provides for a sex equality clause to be read into the employee’s contract of employment. A similar sex equality clause is implied into the terms of pension schemes.

Example

A female cook working 40 hours a week preparing meals for the employer's directors and their guests is paid less than two male cooks who prepare meals for the rest of the staff. The female cook could claim that she was doing like work to that done by the two male cooks and that therefore under the terms of the sex equality clause implied into her contract of employment by the Equality Act 2010 she would be entitled to the same rate of pay, as long as there were no material practical differences sufficient to warrant the differences in the terms and conditions. The only reason why the female cook's rate of pay was different from the others is because she was a woman and they were men (see Capper Pass Ltd v Lawton (1997)).

Employers should note that although equal pay claims are like a special type of discrimination claim the claimant will not fail because they can’t establish either direct or indirect discrimination. Where a pay disparity arises there must be an explanation for the disparity; it is not sufficient for an employer to show why one party is paid as they are (see Calmac Ferries v Wallace (2013)).

For more information on the use of comparators, see Who is a suitable comparator in an equal pay claim?

The Equality Act 2010 also requires that a woman’s contract must be read as including a maternity equality clause. No comparator is required in such cases. The maternity equality clause is designed to ensure that any pay increase a woman receives or should have received is taken into account in the calculation of her maternity related pay. In addition, the maternity equality clause deals with the payment of bonuses and pay on return to work following maternity leave.

The comparator in an equal pay claim must be of the opposite sex 'in the same employment' as the claimant. Men shall be treated as in the same employment with a woman if they are employed by:

  • her employer, or 
  • any associated employer at the same establishment, or
  • an associated employer at a different establishment or workplace provided that common terms and conditions apply, either generally between employees or as between the woman and her comparator.

The claimant must therefore show that the comparator is either employed in the same establishment by the same or any associated employer, or that the comparator is employed at a different establishment on common terms and conditions. The definition of establishment is not restricted to a single place. A woman may claim equal pay with a man doing equal work employed by the same council, but working in a different geographical location.

In an equal pay claim, if an employer is a single undertaking and employees work under the same terms and conditions, there may still be a ’same establishment’ even if the men and women work at different geographical places. In each case the facts and circumstances have to be evaluated (see City of Edinburgh Council v Wilkinson (2011)).

Employers should note that where an equal pay claimant seeks to rely on a comparator employed at a different establishment, there does not have to be a real possibility of the comparator ever doing the same, or broadly similar, job at the claimant’s place of work. Even if it is not feasible that the comparators would ever work at the same establishment, this does not prevent the terms needing to be equalised. In North v Dumfries and Galloway Council (2013), the Supreme Court decided that female employees based at schools and male council employees based at other locations were in ‘the same employment’ for the purpose of an equal pay comparison. It was sufficient that, if they had been employed in the same place they would have broadly similar terms and conditions. This gives effect to principle where the difference in treatment can be attributed to a ‘single source’ capable of rectifying the pay inequality.

The Equality Act 2010 has confirmed that if there is no actual comparator then the sex equality clause cannot operate. Hypothetical comparators cannot therefore be used in equal pay claims, but sex discrimination claims may use hypothetical comparators (see the related Q&A, Can a comparison be made with a predecessor or successor in an equal pay claim and what happens if there is no comparator?).

It is worth noting that the legislation covers different organisations (rather than companies) that are either directly or indirectly controlled by the same third party, such as a government department.

The following examples, although mostly decided under pre-Equality Act 2010 legislation, also show the use of comparators in equal pay claims:

  • South Ayrshire Council v Morton [2002] IRLR 256 confirmed that an equal pay claim could be brought by a group of head teachers whose comparators worked for a different education authority. This was because the comparators were paid by reference to the same nationally negotiated pay scales which had been set by a 'single source', the statutory body.
  • Armstrong v Newcastle upon Tyne NHS Hospital Trust (2005): women workers in an National Health Trust hospital could not use male workers in another trust hospital as comparators for equal pay, as there is no 'single source' responsible for setting pay.
  • Dolphin v Hartlepool Borough Council (2005): the governing bodies of different local authority schools were not a single source responsible for the inequalities in pay, but the employees and their chosen male comparators who worked for other local authority departments were held to be employed on 'common terms and conditions' because the terms applied in the same way to other local authority establishments.
  • North Cumbria Acute Hospitals NHS Trust v Potter (2009) adds to the cases referred to above by confirming that although the concept of the 'single source' is valid, it should not be incorporated into section 1(6) of the Equal Pay Act 1970. This is because requiring a single source may restrict the proper operation of the Equal Pay Act and limit otherwise valid comparisons from being made.
  • In Glasgow City Council v Unison (2014) the Scottish Court of Session held that one of two limited liability partnerships over which the Council maintained close control after a Tupe transfer was an 'associated employer' for equal pay purposes. Women had been previously employed by Glasgow City Council to provide services for parking enforcement and direct care services (including care, cleaning, catering). They were then transferred to the LLP. The CS ruled that they could compare their pay with men who remained employed by the Council. The Council could, in practical terms, restore equal treatment between the claimants and their comparators and it was therefore attributable to a single source. Employers who outsource where there is a single source responsible (mainly local authorities) need to be diligent to avoid inadvertently assuming large financial liability for equal pay claims.

A woman can compare herself to a man who is not in the same employment, but where the difference in pay is attributable to ‘a single source’ which has the power to rectify the difference. Cross employer comparisons are therefore prone to arise only in the public sector and need to show:

  • the discrimination is attributable to a single source, and
  • the body responsible for the inequality could restore equal treatment - that is the organisation that gave the (usually female) employee less pay has the power to rectify that situation.

Other points to consider when deciding whether the employee has chosen a comparator envisaged by the legislation include the following:

  • In equal pay cases after business transfers any employees transferring to a new employer under TUPE can choose employees as comparators who did like work, but did not transfer as comparators (see Gutridge v Sodexho (2009)).
  • This means that the new employer could be liable for up to six years of unequal pay claims, so it's important that warranties and indemnities should be included in transfer agreements to cover potential equal pay claims transferring across to the transferee employer (see Gutridge v Sodexho).

Whether a comparison can be made with a predecessor or successor in an equal pay claim and what happens if there is no comparator is considered under the following headings.

Predecessor

Yes ;a claimant can compare themselves with a predecessor. The European Court of Justice ruled inMacarthys Limited v Smith [1980] ICR 672 ECJ that an individual can go as far back in time as they want in order to find a comparator. However, the ability to prove one's case will obviously be more difficult if it is based on historical information and evidence.

The Equality Act 2010 specifically confirmed that a comparator need not be someone who is employed at the same time as the person making a claim, but could be a predecessor in the job.

Successor

However the Employment Appeal Tribunal has held that a female employee’s successor (as opposed to a predecessor) cannot be used as a comparator in an equal pay claim as it would be too hypothetical. This approach is different to the concepts of comparators used in discrimination cases.

No comparator

Both European Union and United Kingdom legislation appear to require an actual comparator in equal pay cases, not a hypothetical one. (See Walton Centre for Neurology and Neurosurgery NHS Trust v Bewley [2008] IRLR 588, EAT).

The Equality Act 2010 has confirmed that if there is no actual comparator, then the sex equality clause cannot operate. Therefore the woman can use a hypothetical comparator doing equal work, but this will be a sex discrimination claim not an equal pay one.

Example

A female assistant sales manager sells clothing in an outdoor clothing store for both men and women. There are no male employees. The woman overhears her manager saying if I could get a male assistant manager I would pay him more. This claim cannot be dealt with under the equality clause provisions as there is no male comparator.The woman can bring a claim of direct sex discrimination as the less favourable treatment she has received is clearly based on her sex.

It is not necessary to choose a single comparator in an equal pay claim; a group (or groups) can be chosen. There is no limit on the number of comparators an individual can select and in practice, an individual will often choose several comparators in order to improve his or her chances of success.

The most expensive case law example in recent times was Wilson v North Cumbria Acute NHS Trust. This case started in 1997 and settled in 2005. The settlement terms involved the NHS having to pay some £300 million to about 1,500 female employees who were working (or who had worked) at Cumberland Infirmary and at West Cumbria Hospital. The women were awarded between £35,000 and £200,000 each. The equal value claims involved 14 different working categories, using five different male comparators. The women ranged from catering assistants to telephonists. They compared their pay with for example, joiners, building labourers, wall washers, and maintenance assistants. The pay rates, hours of work, pensions, weekend working rates and sick pay were all included in the comparisons which showed historic pay discrimination in the health service against women.

One of the earlier key cases in this area is Hayward v Cammell Laird Shipbuilders Ltd [1988] IRLR 257 HL where a female cook claimed work of equal value and consequently parity of terms and conditions with men working as painters, insulation engineers, and joiners.

An individual can therefore choose a class of employees as his or her comparator if necessary. In Enderby v Frenchay Health Authority [1994] ICR 112 ECJ senior speech therapists chose senior pharmacists and clinical psychologists as their comparators.

No, an employee cannot usually claim both sex discrimination and breach of the sex equality clause relating to a pay discrepancy.

The Equality Act 2010 says that the sole remedy in respect of claims made about sex discrimination in contractual pay matters should be under the sex equality clause provisions.

Example

A female assistant sales manager selling women’s clothing in a department store realises that a male assistant sales manager for the same store doing the same job in men's clothing is paid more. Her claim will be dealt with under the sex equality clause provisions and she cannot claim sex discrimination as well.

In some circumstances the sex equality clause does not work. This can arise if there is no comparator doing equal work with whom the woman can compare her pay. In such situations, the woman can bring a claim for sex discrimination or dual discrimination in relation to contractual pay. For further information see the related Q&A, Can a comparison be made with a predecessor or successor in an equal pay claim and what happens if there is no comparator?

Employers should also remember that claims under other legislation may arise. For example, an employer pays a lower hourly rate to a part-time female employee than to a full-time male employee, simply because she works part-time. The employer is also likely to be acting in breach of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551) if the difference in pay is based on the fact that the employee is a part-time worker.

The area of contingent or ‘piggy back’ equal pay claims is complex. If faced with such claims inevitably the employer should seek expert legal advice.

Essentially 'piggy back' or contingent claims typically involve three groups of employees:

  • women being paid less than the male comparators for doing different jobs which constitute like work
  • male comparators who earn more than the women for doing like work 
  • another group of men earning the same as the women, for doing the same or a very similar job.

The female employees bring equal pay claims and show that their work is of equal value to the men working in the different jobs. Once those women are successful in their claim, then the second group of men would then end up being paid less for doing the same work.

This situation arose in McAvoy v South Tyneside Borough Council (2009), where the Employment Appeal Tribunal ruled that male employees doing like work as female employees who bring equal pay claims are entitled to bring contingent piggyback claims and do not have to wait until a final decision is made on the female employees' claims. If the women’s claims succeed, the men will also be entitled to the improved contractual terms and any arrears of pay.

There are three main ways an employer can defend an equal pay claim:

  • the woman and her comparator are not doing equal work
  • the chosen comparator is not legally valid (for example, he is not in the same employment)
  • the difference in pay is due to a material factor.

Not doing equal work

The first task for any employer in defending equal pay claims is to show that the claimant is not engaged on 'like work', 'work rated as equivalent' or 'work of an equal value'. In other words, the employer must show that there are valid differences between the claimant's and comparator's jobs. If these differences are proved, the difference in pay will be irrelevant - even if the comparator is paid more than the difference in work justifies.

In cases of 'like work', the claimant need only show that his or her job is broadly similar to that of the comparator. Again a 'broad brush' approach will be adopted by tribunals, who will not get bogged down in the intricate details of each job, see Capper Pass Ltd v Lawton [1977] ICR 83 EAT. The comparison however, must involve the whole job and not just part of the job. As a result the claimant cannot cherry pick those of the comparator's duties which he or she claims are the same.

Any difference between the two roles must be of practical importance. Such differences can include:

  • additional or different duties
  • the time at which work is carried out
  • greater responsibility or seniority, or
  • greater skills

In each case a tribunal will consider the nature and extent of such differences and the frequency with which they occur.

In cases of 'work rated as equivalent' the employer must show that the claimant's job has been rated differently as part of a job evaluation study (JES). Provided the JES is conducted in accordance with the Equality Act 2010 and has not incorporated any discriminatory values or assumptions, its findings will be difficult to challenge.

In cases of 'work of equal value' the tribunal will usually refer the matter to an independent expert, so that a report can be prepared on whether the jobs are truly of equal value.

Employers will often attempt to argue that there are men doing the same job who are treated in the same way. However, this argument will not always circumvent an equal pay claim. A certain type of employee may equally comprise men and women who are treated in exactly the same way, but if there is another group of workers doing work rated as equivalent who are predominantly male and receive better terms then there may still be a claim.

For example, see Home Office v Bailey [2005] ICR 1671 (HL). This extensive litigation involved nearly 2,000 female staff in administrative, executive and support grades in the Prison Service. One aspect of the case held that two women employed on the higher executive officer grade could pursue their claim for equal pay with male comparators who were employed on governor grades. It was accepted by both parties that the claimants and comparators were employed on work rated as equivalent by a valid job evaluation scheme. An argument by the Home Office that the higher executive officer grade was almost equal men and women (with just over 50 per cent being women) did not succeed. The women higher executive officers were entitled to choose the governors (who were predominantly male and appeared to receive better pay) as their comparators. The Home Office is therefore required to objectively justify the pay difference, even though women are not more adversely affected than men within the disadvantaged group of higher executive officers.

The chosen comparator is not legally valid

See the related Q&A, Who is a suitable comparator in an equal pay claim?

Difference in pay is due to material factor

See the related Q&A, What is the material factor defence in an equal pay claim?

Even if the individual bringing an equal pay claim can show that their work is 'like work', 'work rated as equivalent' or 'work of an equal value', the employer may still be able to avoid liability for the effect of the sex equality clause. If the employer can show that the less favourable treatment is due to a genuine material factor other than sex, then the employer will have a valid defence. The difference in pay (or other contractual terms) must be due to a material factor which does not discriminate against her either directly or indirectly because of her sex.

The employer must identify the factor(s) and prove they are:

  • the real reason for the difference in pay
  • not a sham or pretense*
  • the cause of the difference in pay between the woman and her comparator
  • material that is significant and relevant
  • do not involve direct or indirect sex discrimination.

*Note that the difference in pay must still be genuinely due to a material factor which is not related to the sex of the jobholders.

Unlike other cases of discrimination, this defence will often be considered by an employment tribunal at a preliminary stage in order to see if there are any merits in proceeding with the case.

For example, if the comparator is on a higher rate of pay because of extra skills and qualifications which are used in practice by the comparator and are relevant to his role they will amount to a genuine factor.

So what factors are capable of amounting to a material factor? The following is a list of factors which may avoid liability:

  • market forces
  • some forms of pay protection or red circling (where an employee is downgraded but allowed to keep their rate of pay)
  • paying the comparator more because of a skills shortage 
  • geographical differences, for example London weighting
  • experience, qualifications and seniority
  • unsocial hours and rotating shifts
  • night work payments.

The employer will need actual evidence of the difficulties. For example, the problems of recruiting and retaining people to do the job being done by the higher-paid man.

However, it is important to remember that each case will be considered on its own particular facts and what works for one employer may not work for another. The following cases all include attempts to defend equal pay claims by showing a genuine material factor other than sex. Even cases decided under pre-Equality Act 2010 legislation are still valid to illustrate how employers may use the above factors to defend claims.

Cadman v Health and Safety Executive [2006] IRLR 969, ECJ

The Court of Appeal (CA) considered if length of service was always an appropriate criterion in a pay system. A female employee brought an equal pay claim, citing four male comparators who, although employed in the same band at the HSE, were all paid more than her.

This difference was explained by the pay system in operation within the HSE which sought to reflect and reward long service - which the four men all had. The proportion of men in the relevant part of the HSE's workforce with longer service was greater than the proportion of women. The female employee therefore claimed that the employer could not rely on long service as a determinant of pay, as this was indirectly discriminatory. The CA having referred the matter to the European Court of Justice (ECJ) confirmed that generally specific justification is not required by employers who use length of service as a criterion in a pay system because length of service generally results serves the legitimate aim of rewarding experience.

However, the ECJ suggested length of service may require specific justification if the worker produces evidence which raises serious doubts as to the appropriateness of awarding the higher pay for longer length of service in the specific circumstances of the case. An example of this may arise where the further experience adds no greater business value. Similar facts may also give rise to an age discrimination claim unless the provisions fall within an exception.

Redcar and Cleveland Borough Council v Bainbridge and Surtees v Middlesbrough Borough Council (2008)

In these two cases, heard together, the Court of Appeal has clarified whether pay protection arrangements, which were introduced to protect a predominantly male group of employees from the job re-grading, attracted the genuine material factor defence to the equal pay claims. In essence, the CA found that the existence of separate bargaining arrangements may constitute a non-sex based explanation for a difference in pay, but would not save the employer if, as here, there was sex discrimination in the operation of the bargaining arrangements.

Blackburn v Chief Constable of West Midlands Police (2008)

The Court of Appeal confirmed that the Equal Pay Act 1970 did not require West Midlands Police to pay extra to two female employees whose child-care arrangements prevented them from working nights. The male police officer comparator was being paid more because he received a special payment for working night work shifts which was justified as a proportionate means of achieving a legitimate aim of rewarding night work.

Wilson v Health and Safety Executive (2009)

Following on from the Cadman case above, the Court of Appeal again considered if length of service was always an appropriate criterion in a pay system. The Health and Safety Executive pay system used pay bands which increased according to length of service up to a maximum of ten years. The claimant claimed equality of pay with three male comparators in the same band whose pay was higher than hers primarily due to the difference in their lengths of service. She had had time off to raise children and so did not have the same continuous length of service as the men. The CA confirmed that although employers do not generally have to justify schemes linking length of service to pay, they do have to if there is evidence that this is having a disproportionate impact on women.

Employers should always proceed carefully with pay schemes which reward length of service and consider if they discriminate against women or entail potential age discrimination issues.

The remedies that are available for breaches of the sex equality clause and the relevant time limits are discussed under the following headings.

Remedies

The remedy most commonly awarded by a tribunal is a monetary award. This will consist of:

  • the same level of pay or benefits as the complainant's comparator for the future (if he or she is still in the same job) and
  • backpay representing the difference in pay for a period of up to six years' (five years' in Scotland) prior to the date on which proceedings are commenced with interest.

The tribunal can also make a declaration in respect of the employer's actions. An employment tribunal cannot make an award for injury to feelings for breach of an equality clause.

Arrears of pay are recoverable for a maximum of twenty years in cases where an employer has concealed information necessary for the commencement of proceedings. An employment tribunal cannot make an award for injury to feelings for breach of a sex equality clause.

As employees are usually entitled to six years back pay an employer taking over employees in a TUPE situation could be liable for six years losses which arose with the previous employer. In Gutridge and others v Sodexho [2009] IRLR 720, CA the Court of Appeal confirmed that women who are subject to a TUPE transfer:

  • can claim for equal pay losses which have accumulated during employment up to the date of transfer of the undertaking to the new employer,
  • claims must be brought against the employer within six months of the date of the transfer (and will otherwise be barred by limitation rules),
  • claims for losses after the date of the transfer can be for up to six years' losses,
  • claims must be pursued within six months of the termination of that employment.

Those employers who win new public sector service contracts remain liable for equal pay claims long after the transfer has taken place, whilst the transferred employees remain employed. The claims can be based on the earnings of comparators employed by the public authority before the transfer occurred.

Time limits

Equal pay claims in the employment tribunal;

For applications concerning breaches of the sex equality clause (that is, equal pay claims) the normal period is six months after the employment ended. In some cases the time limit may be six years which is explained below. In some cases where the six month time limit applies this may be measured from the date on which the less favourable treatment was, or should have been, discovered as well as from the end of employment.

The time limits are different from sex discrimination claims which have a normal time limit of three months from the last act of discrimination.

Special rules apply if the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply. In some cases (relating to employment with the transferor) the equal pay claim must be lodged against the new employer, the transferee (if it is liable) within six months of the transfer. In other cases where there is a separate claim against the transferee in respect of a breach, the six-month time limit may not start to run until the end of employment with the transferee.

If the pay inequality has deliberately been concealed by the employer, the time starts to run from the date when the employee discovered or could reasonably have discovered the inequality.

Equal pay claims in the courts

Employment tribunals often deal with equal pay claims. However, unusually for statutory employment claims it appears that equal pay claims can also be heard in the civil courts as breach of contract claims. This means that if the six-month time limit has expired, an employee may bring such a claim in the courts within the normal breach of contract time limit which is much longer, namely six years. (Based on decision inBirmingham City Council v Abdulla and others [2012] UKSC 47, SC.

The significant impact of this decision is that equal pay claims can now be raised in the civil courts by former employees up to 6 years after their employment ends (5 years in Scotland). The Supreme Court confirmed that in most cases equal pay claims would be more conveniently disposed of by a Tribunal. However, if the claim was out of time in the Tribunal then it may proceed in the normal courts. This will increase the number of claims especially against public sector employers. However, bringing claims in the civil courts instead of the tribunal involves greater financial risk, as the losing party usually has to meet the winning party’s costs.

Obviously prudent and well advised employees will play safe and bring their claim within the tribunal six month time limit. Employers can argue that the claim should have been brought in the tribunal within that time. For an equal pay claim to be brought in a civil court the employee will have to explain why the claim was not brought in time before an employment tribunal.

Questionnaires were used historically in equal pay cases so that employees who thought they had not received equal pay could obtain information from employers. For more information see the FAQ What should an employer do if they do not wish to answer an employee's questions in a discrimination and/or equal pay claim? in our Tribunal claims, settlement and compromise Q&As.

Specific matters may arise in equal pay cases. With regard to questions on equal pay and contractual terms and conditions, employers are likely to be asked to deal with the following submissions from the employee.

Who is the comparator?

The employee must set out who is receiving better terms and conditions. This is the comparator and will usually be working for the same employer, but may be working for an associated one. The employee can ask other employees about their pay and benefits to identify if they are being paid unfairly. However, other employees do not have to discuss this issue if they do not wish to. Employers should not try to prevent employees finding out this information as any attempted prevention might be unlawful under the Equality Act 2010.

Explain how the comparator is doing equal work

The employee should explain why the comparator is doing equal work to the employee's job. This may be because the job is the same as theirs or has been rated as equivalent under a recent job evaluation; or perhaps because both jobs require similar skills.

Further relevant pay-related questions

The employee can also ask further questions such as how pay is determined by the employer and what is in the comparator’s job description that could explain any difference in pay.

The employer should then reply in a reasonable time either:

  • agreeing that there is pay discrimination and taking steps to put this right, or
    challenging the selection of the comparator, or
  • providing some material reason or justification of why the questioner’s pay and benefits are different.

Acas guidance gives the example that in some circumstances different geographical locations may justify a difference in pay or other terms, or the operation of market forces, such as the need to recruit for particular jobs or the need to retain employees. However the employer has to show the reason for the difference in pay is a legitimate business reason and to justify its actions the employer must show the treatment was a proportionate means of achieving that legitimate business aim. Establishing genuine objective justification is a high hurdle for an employer to meet.

A number of further developments are expected which will affect the area of equal pay. They are discussed under the following headings:

Brexit

In a referendum on 23 June 2016 the UK voted to leave the EU. For information on what Brexit will possibly mean for employment law read the blog by our Public Policy Advisor (Employer Relations).

We have also set up a resource hub on our website where relevant resources and details of our ‘Brexit’ activities will be published.

Gender pay reporting

Section 78 of the Equality Act 2010 provides for regulations compulsorily requiring employers with 250 or more employees to publish pay information in order to reveal any differences in the pay of male and female employees.

As voluntary reporting was not successful, these regulations have been implemented. Employers will be required to gather information from 2017 so they can publish information about their gender pay gaps from 2018. For more information on these changes see the related Q&A What is gender equality reporting and is it compulsory for employers to do this?

Case law

Despite the overall reduction in employment tribunal claims, the number of equal pay cases brought to the employment tribunal remains significant. This volume of case law is often generated by claims against public sector organisations such as local authorities and the National Health Service and will continue to produce some interesting decisions.

Public sector

Significant pay inequalities have included those within various local authorities including Barnsley, Birmingham, Dorset, Hull, Newcastle, Stockport and Wolverhampton. To settle such claims from 2011 onwards, the Department for Communities and Local Government authorised the authorities to raise a total of £200 million for equal pay back-pay. This was mostly for women on low pay who were paid less for doing equally valued jobs. The local authorities can settle their equal pay claims by borrowing against or selling their assets.

Problems continue in other local authorities, for example Birmingham needed about £200 million to settle equal pay claims brought mainly by female staff, including home care workers and school cooks who were paid less than men for work of equal value and missed out on bonuses. This will need to be funded by selling off assets. The total cost to the Council is estimated in the region of £1.2 billion.

Such local authority cases are likely to be a further source of future developments.

Private sector

In the private sector there have been a number of cases involving supermarkets. For example over 7,000 female employees at Asda have brought a claim for equal pay alleging they have been underpaid in comparison to men working in equivalent roles in Asda distribution warehouses, who are being paid substantially more. Asda has said that this is the most important, complex and financially significant equal pay claim ever pursued in the private sector, with ramifications for the retail trade generally.

Sainsbury’s is facing the prospect of similar litigation from shop floor workers who are claiming that they are paid less than men to do equally valuable jobs at the supermarket chain.

Supermarket check-out staff and shelf-stackers are mostly women and the warehouse staff are mostly male and the men get paid more. The equal pay argument is that the jobs are pretty much the same. In the warehouse food gets taken off the shelves and put on a lorry. In the supermarket the food is put on the shelves. The supermarket cases therefore depend on determining whether supermarket shop floor jobs are of equal value to the higher-paid jobs in the male-dominated distribution centres.

Other big supermarkets with their own distribution centres such as Tesco, and Waitrose/John Lewis may face similar equal pay claims for six years back pay.

Explore our related content

Factsheets

Equal pay

Explore the legal position in the UK surrounding equal pay as well as good employment practices

Read more
Podcasts

Think, Act, Report

Episode 73: This episode focuses on the impact of the voluntary initiative for encouraging transparency in equal pay – Think, Act, Report. Two years on from its implementation, how is it working out?

Read more
Podcasts

CEO pay

Episode 93: This episode addresses the contentious issue of CEO pay, the growing gap between average workers and the top executives in an organisation and what role the HR Director could and should be playing.

Read more
Top