As we start the month of March, marked by marches and events calling for gender equality, yet another supermarket giant faces claims for equal pay that could cost billions.
Campaigners, politicians and Hollywood stars stood shoulder to shoulder outside the Palace of Westminster to call for gender equality in the #March4Women rally on 4 March, ahead of International Women’s Day on 8 March.
Despite society being a long way from what may be true equality, in an encouraging display many men joined the crowd of thousands marching for women’s rights. This included Mayor of London Sadiq Khan and Hollywood actor Michael Sheen who said he would ‘absolutely’ take a pay cut if it meant being paid the same as an actress and said equal rights were ‘incredibly important to me’.
We explore gender pay gaps and equality in remuneration and why this seems to be the unachievable holy grail.
What the law says – Equal Pay Act
The Equal Pay Act 1970 was implemented following social pressures to recognise equality between the sexes. Female machinists striking for the same pay as men in the Dagenham car factory achieved notoriety and paved the way for the concept of equal pay for equal work. The focus is on the differences in contractual terms between men and women, including pay, overtime rates and bonuses, holiday, sick pay and pensions.
Equal pay has always been used to make reference to discrimination in pay between men and women, as opposed to any other protected characteristic (such as age). A claim for inequality in pay between the sexes is not brought under the Equality Act as a straightforward sex discrimination claim but under the Equal Pay Act.
Under the Equal Pay Act, a woman is usually required to find an actual man with whom she can compare herself, unless there is evidence of direct discrimination in pay and the claim is based on a hypothetical comparator.
The male comparator (there can be more than one) being used for the purpose of bringing a claim has to be employed by the same employer or at least an associated employer, but working at the same establishment. If the comparator works at a different establishment, it is necessary for the woman to show that the other establishment shares some common terms or terms which are substantially comparable on a broad basis. This often requires significant analysis.
The nature of the comparison can take the following forms: equal work, like work and equal value.
It is equal work if:
- The woman is doing work which is like the man, it can be the same or broadly similar, and any differences are not of any practical importance
- The work the woman is doing can also be ‘rated equivalent’ under a job evaluation study, which essentially gives the work the same value in terms of demands
- The work can be considered ‘equal’ if the work being carried out is deemed of ‘equal value’, that is determined by the demands made on the woman to perform the work, based on factors such as effort, decision making and skills
This is one of the most straightforward routes for a woman to claim equal pay. It is where a woman can compare her pay with that of a man in the same employment, if her work is ‘like’ the work of the man.
In deciding whether the work is truly ‘like’ that of the man, the tribunal considers the claim in two stages:
- Firstly, the tribunal will look at whether the work done by the woman and the man is the same or broadly similar. A general consideration of the type of work and skill and knowledge that is required to perform the ‘job’ is undertaken.
- Secondly the tribunal will look at whether there are any differences in the work done by the man and the woman and whether any differences are of any practical importance. In essence, this means, would you expect there to be a difference in pay?
This is one of the hardest categories within an equal pay claim. It requires analysis of two different jobs and then breaking them down to determine factors such as effort, skill and demand which render them ‘equal’. An analytical comparison is then necessary by the tribunal which is a wholly adversarial process as opposed to the commissioned job evaluation study in an equal work claim.
If any of the above tests can be satisfied, a woman may have a tangible claim for equal pay.
Is there a defence for employers paying men and women unequally?
Employers who can show that the difference in pay is because of a genuine ‘material factor’ other than sex may have a defence. Examples of such factors are:
- Geographical location
- Increased skill
- More experience
- Additional responsibilities
- Market forces (with caveats)
Equal pay claims – What should employers do?
We cannot say for sure how these equal pay claims will turn out. The Asda claim has been four years in the making and still half a year away from a decision.
These are all test cases. However, employers should re-evaluate any pay discrepancies to minimise risk of such claims in the future as the financial implications of an order to pay up to six years back pay could be crippling.
It is also noteworthy that where store operatives can be compared to warehouse distribution centre operatives, where does this comparison end? It is entirely possible that many other people will piggyback on the wave of these claims and the tribunals will be flooded with more equal pay claims from the private sector.
Employers are advised to take steps to minimise the risk of claims being lodged against them by.
- Carrying out pay audits
- Paying particular attention to pay rates between genders where men and women carry out the same or similar role
- Ensure any differences in pay, bonus, commission structures between the sexes can be objectively justified and are non-discriminatory
- Consider negotiations with staff in the event there are discrepancies in pay to reduce risk of claims and damage to reputation