Equal Pay Act

The Equal Pay Act

The Equal Pay Act was introduced to prevent men and women carrying out similar roles or duties in the workplace from receiving salaries which are different. Men and women must be treated fairly in relation to terms and conditions of their employment for work they carry out that is similar, work which is classed as being equivalent during a job evaluation exercise or work which is identified as being of equal value in terms of decision making, skill or effort.

Employees are able to compare terms and conditions of contracts between men and women and they should be exactly the same.

Equal Pay Act

Employers can defend claims successfully if they can demonstrate that the reason for the difference in pay is due to a genuine factor rather than one which is defined by Equal Pay legislation.

Employees are well within their rights to ask employers to break down their salary into the various parts such as bonuses. This is so employees can understand how bonuses are calculated and how bonuses are awarded.

The Equality Act 2010

The details of the Equality Act 2010 make it against the law for employers to stop their employees discussing pay to identify whether there are any differences which would cause concern. Employers can however prevent employees from disclosing their pay to other people outside of the organisation. Equal pay legislation covers a variety of issues in relation to pay and benefits as well as;

  • The rate of basic pay
  • Rates for overtime
  • Benefits which relate to performance
  • Hours of work
  • Pension scheme opportunities
  • Any terms which are non monetary
  • Entitlements to annual leave

If an employee believes that they are not receiving equal pay they can put their concerns in writing to their employer requesting information which will allow them to determine whether there is a difference in pay and allow them to provide an explanation for the difference.

If the issue cannot be resolved informally or using the appropriate grievance procedures you can take your complaint to an employment tribunal using the Equality Act 2010 as your reason for doing so.

A claim can be taken to an employment tribunal if you are still employed or if you have left the company no more than six months after you leave. Since the 01st October 2014 any employer who loses an equal pay claim may be obliged to conduct an equal pay audit and publish the findings.

When applying the law, men and women are entitled to receive equal amounts of pay. This also includes the basic salary or wage and any benefits as a result of the employment contract such as bonuses or pension contributions. The legislation in the Equal Pay Act is part of employment law and should be dealt with separately from laws on discrimination.

The Origins of Equal Pay

Even before 2010 there has been in existence legislation which enforces equality in terms of pay. There are three key principles in the 1970 Equal Pay Act. The first is that it relies on a European Union legal framework which was developed to remove inequality on the basis of whether the employee was male or female.

The second principle identifies that the Equal Pay Act only relates to being male or female and does not relate to other forms of discrimination. The third and final principle is a clear differentiation between the Sex Discrimination Act and the Equal Pay Act.

The legislation introduced in the 1970 Equal Pay Act places an obligation on employers to include what is known as an equality clause into the employment contract.

An equality clause is a contract provision which links to the terms of employment outlined in the contract. Any terms which are not included in the contract should be treated as though they have been included and a term which is less favourable should be modified accordingly.

Making a Claim

To make a claim under any equal pay legislation the claimant or employee must be able to make a comparison between an individual who is in the same type of employment. By this, the person being compared must be working with the same or associated employer in the same organisation or a different business but where the same terms apply.

The comparison must be based on work which is similar, work that is equally rated and work which is of equal value. An example of similar work could be a female employee who alleges that she is doing very similar work to a male employee yet she is paid less.

The defence of an employer could be that the difference in pay is due to a material factor which is something other than being male or female. Differences could include more skills or more relevant work experience. If a material factor can be demonstrated equality clauses cannot be enforced.

A successful claim submitted by an employee under the Equality Act must be able to demonstrate three elements;

  • The work carried out by the claimant is similar to the other employee
  • The work carried out by the claimant is equal to that of the other employee in terms of skill, effort, decisions or other responsibilities
  • The work carried out by the claimant has been graded to be the same through a valid job evaluation exercise as the other employee

After the employee has identified that they are employed and the work they conduct is comparable with their comparable employee, they are entitled to receive equal pay. This can be applied provided that their employer can prove that the difference in pay is the result of a material factor rather than being male or female.

Legal Framework – European Union

The principle of equal pay was developed through Article 141 of the Treaty of Rome 1957. This also initiated the European Economic Community which is now known as the European Union and defined the principle of equal pay. Where work is of the same value there cannot be any form of discrimination.

Remedy for Equal Pay

If a claimant submits an equal pay claim to an employment tribunal and they are successful the remedy will be damages or arrears for a period of up to six years. The timescale is measured from the date of application to the tribunal. Damages for stress or inconvenience are not awarded in claims for equal pay.

Equal pay claims are complex and it is important that you can prove that there is an employee carrying out similar work and they are on a different pay grade. The work must be classed as being of equal value or equal rating to the complainant.

Claimants can also determine whether the employer could provide a defence of material factor to explain the reason for the difference in pay. If the employer can bring this defence the equality clause will cease to operate.

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This article was written by a member of the Expert Answers legal advice team. Expert Answers provides online legal advice on all aspects of UK Law to users in the United Kingdom.