Reporting in respect of Equal Pay (Gender Pay Gap Reporting) will affect many businesses next year if you have more than 250 employees on the payroll but a recent ruling that female store workers at Asda can proceed with the UK’s largest private sector equal pay claim is likely to have “far-reaching implications” for all employers regardless of the number of employees that they employ.

The Equal Pay legislation has been in force since 1970 and although the number of cases pursued each year against private companies as opposed to the public sector are relatively low, this high profile claim will and has already triggered interest amongst other employees supported by pressure groups and trade unions. The high profile nature of the case will almost certainly give rise to employees questioning their pay and looking to investigate and pursue their own circumstances compared to their male counterparts.

Employers must give men and women equal treatment in the terms and conditions of their employment contract if they are employed to do:

  • ‘like work’ - work that is the same or broadly similar
  • work rated as equivalent under a job evaluation study
  • work found to be of equal value in terms of effort, skill or decision making.

Employees can compare any terms in the contract of employment with the equivalent terms in a comparators contract. A comparator is deemed to be an employee of the opposite sex working for the same employer, doing like work of equal value.

Employees are entitled to know how their pay is calculated and for the purposes of the legislation, pay can include:

  • basic pay
  • overtime rates
  • performance related benefits
  • hours of work
  • access to pension schemes
  • non monetary terms
  • annual leave entitlements.

For example a female service centre receptionist who is having a relationship with a male member of the servicing team who collects and delivers cars for service discovers that he earns £2 per hour more than she does and she has no access to the bonus scheme.

An employee who believes that they are not being treated equally with a comparator of the opposite sex can write to their employer asking for information that will help them establish whether there is a pay difference and if so the reasons for the difference.

If the problem cannot be resolved informally or through the formal grievance procedure, an employee may complain to an employment tribunal under the Equality Act 2010 while still working in the job or up to six months after leaving the employment.

The Manchester Employment Tribunal recently told 7,000 current and former female Asda employees that they can compare themselves to more highly paid male colleagues, who work in the retailer’s distribution centre, allowing them to bring a series of test cases that could lead to payouts of more than £100m.

As an employer regardless of the number of employees that you employ you should therefore be alert to the legal issues that inequality of pay present whilst also the affect that it might have on workforce moral and relations.