What is equal pay?
The Equality Act 2010 intends to ensure that women and men receive the same pay and other contractual benefits when they are doing equal work.
There are three ways in which work can be considered to be equal:
1. Like work – This is perhaps the most straightforward category where workers doing the same or broadly similar jobs should have the same terms. In the supermarket context, this would mean that female and male checkout assistants should be paid the same where the only difference between them is their gender.
2. Work rated as equivalent – Where a job evaluation scheme has been carried out and implemented by an employer, those individuals whose roles have been “rated as equivalent” should receive equal terms. Whilst job evaluation schemes tend to be common in the public sector, as there is no obligation on employers to put these in place, there will be relatively few workers who will have had their role evaluated in this way.
3. Work of equal value – Where workers do not do like work to their chosen comparators and there is no job evaluation scheme in place, this final category will apply where workers can show that their roles are equal in terms of the demands made on them by reference to factors such as effort, skill, and decision-making. Experts will often be appointed to provide the Tribunal with an opinion as to the relative value of the roles in question.
What is an equal pay audit?
An equal pay audit is a tool used by employers to identify potential discrimination in the workplace arising from unequal pay for equal work.
Is an equal pay audit mandatory?
An equal pay audit is not mandatory, unless it is ordered by an Employment Tribunal. Usually, employers who carry out an equal pay audit do so on a voluntary basis. The process can be beneficial to the employer as an equal pay audit will:
- Promote pay equality;
- Evidence the employer’s commitment to achieving equal pay;
- Compare the pay of certain groups who do “like” work;
- Investigate the cause if any equal pay gaps are spotted that cannot be legally justified;
- Use the findings to feedback and build on risk assessment for pay structures; and
- Reduce potential equal pay breaches going forwards.
Macken v BNP Paribas
The case of Macken v BNP Paribas was the first case where an Employment Tribunal ordered a large multinational (or indeed any company) to submit an equal pay audit for pay and bonuses to the Employment Tribunal, to ensure that pay between men and women is indeed equal.
Stacey Macken, the Claimant, issued claims against BNP Paribas for equal pay, direct sex discrimination, victimisation, and protected disclosure detriment and harassment. She was successful in her claims and awarded in excess of £2 million.
The Employment Tribunal noted that BNP Paribas’s practice had fallen significantly below the statutory guidance on equal pay, such that it was ‘logical’ that other women working at BNP Paribas would have been in the same situation as Ms Macken. The Tribunal further commented that ‘it is notable that BNP Paribas] has chosen to retain an opaque pay system’ suggesting again that this is a practice the Tribunal is going to continue to be both on the lookout for and increasingly critical of in future cases.
The case has started the #MeTooPay (an extension of #MeToo) which is backed by the Financial Times.
What else can be done to promote equal pay?
In order to reduce the risks of an equal pay claim (and subsequently the potential for an order to complete an equal pay audit), employers should ensure they are considering the Equal Pay Statutory Code of Practice and that they are undertaking equal pay audits on a regular basis.
In order to reduce the risk even further, employers could also consider having transparent pay practices with clear guidance for employees on how pay progression takes place and against which criteria pay is assessed.
How can we help?
For further information or advice in relation to equal pay, sex discrimination, or any related subjects, please contact a member of our expert Employment Law team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.
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