What Does the Law Say?

The right to equal pay for equal work between men and women is set out in in the Equality Act 2010.

The act implies a sex equality clause into everyone’s contract of employment, modifying any term that is less favourable to someone of the opposite sex.

The Equality and Human Rights Commission publish codes of practice, which although not legally binding, may be used in evidence in equal pay claims.

 

When Differences In Pay Might Be Allowed

Differences in pay and other terms and conditions might be allowed in some circumstances. For example, it might be possible for someone to be paid more than someone of the opposite sex who does similar work because:

• they're better qualified, if their skills are crucial to the job and hard to recruit

• of where they are located – for example, in London where the cost of living is higher

• they do night shifts, and the employer can prove that they can only cover night shifts by paying staff more

Getting paid more must have nothing to do with someone's sex.

 

What Does the Law Require?

The law requires a four-stage approach:

• Selecting an appropriate comparator of the opposite sex

• Proving that the comparator is employed to carry out equal work

• Comparing the claimant’s and the comparator’s terms and conditions of employment

• Assessing whether the employer can prove the reason for any discrepancy in pay (“the material factor defence”) and whether the difference is due to sex discrimination.

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Who is The Comparator?

Claimants have to name a comparator of the opposite sex who is employed:

• By the same or an associated employer at the same establishment or workplace

• By the same or an associated employer at a different establishment or workplace but where common terms and conditions apply

• By the same or an associated employer where there are no common terms and conditions but the employer who decides pay is a “single source”.

The comparator/s usually have to be working at the same time as the claimant.

However, if a woman has evidence of direct sex discrimination in relation to her contractual pay but cannot find an actual comparator doing equal work, (for example where the comparator is someone who did the job before her), she can claim sex discrimination instead of using the sex equality clause.

 

What Claims Can Be Made?

The Equality Act 2010 provides three ways for a claimant to show that their work is equal to that of their comparator.  

• 'Like work' – work where the job and skills are the same or similar

• 'Work of equal value' – work that is not similar but is of equal value. This could be because the level of skill, training, responsibility or demands of the working conditions are of equal value

• 'Work rated as equivalent' – work rated as equivalent, usually using a fair job evaluation. This could be because the level of skill, responsibility and effort needed to do the work are equivalent

 

What is Involved In a “Like Work” Claim?

’Like work’ is work that is the same or broadly similar. 

It involves similar tasks requiring similar knowledge and skills, where any differences are not of practical importance.

To determine ‘like work’, assess:

• tasks involved and any differences between the two roles

• the frequency, nature and extent of any differences (for example in the level of responsibility, the skills, qualifications or training required, or the physical effort involved) to see if they are of practical importance

A difference in workload doesn’t itself prevent a ‘like work’ comparison, unless the increased workload represents a difference in responsibility or other difference of practical importance.

These examples have been judged to be ‘like work’ by the courts:

• a woman preparing lunches for directors and a man preparing breakfast, lunch and tea for employees

• male and female supermarket employees who perform similar tasks requiring similar skill levels, although the men may lift heavier objects from time to time

Work rated as equivalent

• ‘Work rated as equivalent’ has been rated under a valid job evaluation scheme as being of equal value in terms of how demanding it is, including effort, skill and decision making.

• Jobs involving dissimilar tasks may be rated as equivalent.

The work of an occupational health nurse might be rated as equivalent to that of a production supervisor when components of the job such as skill, responsibility and effort are assessed.

 

What Is Involved in a “Work Rated as Equivalent” Claim?

The claimant’s and comparator’s jobs must be rated the same under a job evaluation scheme carried out by the employer.

This measures the demands made on the two workers under headings such as effort, skill and decision making.

The job evaluation scheme must be free from discrimination and must be analytical.

 

What is Involved in a “Work of Equal Value” Claim?

These claims are the most difficult to assess. 

In the absence of a job evaluation scheme, the tribunal has to decide whether the claimant’s and the comparator’s jobs are of equal value, taking into account the nature of the work, the skills necessary to do it and the level of decision-making attached to the job.

Normally, tribunals ask an independent expert to do an evaluation of the two jobs. 

This is similar to a job evaluation scheme done by an employer, but the independent expert only looks at the job of the claimant and the comparator.

Employees cannot bring work of equal value claims if the two jobs have been properly rated in a non-discriminatory analytical job evaluation scheme.

Instead, they would have to make a work rated as equivalent claim.

 

Work of Equal Value

‘Work of equal value’ is not like work and has not been rated as equivalent, but is of equal value in terms of demands such as:

• effort involved

• skills necessary to do the job

• decision-making that is part of the role

In some cases, the two jobs may appear broadly comparable, such as a female head of personnel and a male head of finance.

 

More commonly, entirely different types of jobs, such as manual and administrative, can turn out to be of equal value when analysed.

 

‘Work of Equal Value’ Examples

Examples of different jobs which have been ruled to be of equal value by the courts include:

• clerical assistant equal to warehouse operative

• canteen workers and cleaners equal to surface mineworkers and clerical workers

• school nursery nurse equal to local government architectural technician

• head of speech and language therapy service equal to head of hospital pharmacy service

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This does not necessarily mean that jobs with these job titles or similar will always be of equal value to each other in every organisation that uses the same titles.

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Material Factors

If an employer relies on a material factor to explain a difference in pay, this must not involve treating the woman less favourably than the man because of their sex. This would be unlawful direct sex discrimination. 

For example, in one case, a council could not use ‘market rates’ to justify the difference in pay between female catering assistants and male road sweepers, refuse collectors and gardeners. 

The market itself was tainted by sex discrimination which saw the claimants’ work as ‘women’s work’.

The material factor must not put women as a group at a particular disadvantage compared to men, unless:

• the employer has a legitimate aim in applying the material factor i.e., a real need that is not discriminatory

• applying the material factor is a proportionate (appropriate and reasonably necessary) way to achieve that aim

For example, in one case, a police force wanted to reward night working by using ‘special priority payments. 

This put women at a particular disadvantage compared to men because they were less likely to be able to work at night due to caring responsibilities.

However, the police force had a real need for people to work night shifts and acted proportionately, as there was no other way to encourage night working without offering higher pay. 

Therefore, the police force had acted lawfully.

 

Who Has a Right to Equal Pay

By law, men and women must get equal pay for doing 'equal work'.  This is work that equal pay law classes as the same, similar, equivalent or of equal value.

This means someone must not get less pay compared to someone who is both:

• the opposite sex

• doing equal work for the same employer​

Equal pay applies to:

• employees

• workers

• apprentices

• agency workers

• full-time, part-time or temporary contracts

• self-employed people who are hired to personally do the work

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What Terms and Conditions are Compared?

Most terms of the claimant’s contract and the comparator’s contract are compared separately, except for some terms relating to pay. 

Sometimes basic pay and bonuses paid for basic hours of work will be lumped together as one term.

The “sex equality clause” applies to all elements of contractual pay including 

• basic salary

• basic wages

• pension

• working hours

• annual leave allowance

• holiday pay

• overtime pay

• redundancy pay

• sick pay

• performance-related pay, for example a bonus that's in the employment contract

• benefits, for example gym membership or a company car under European law, non-contractual benefits such as travel concessions and discretionary bonuses may also be covered.

 

What Defences are Available?

If the claimant can show that their work is of equal value to that of their comparator but that they are being paid less, then the onus shifts to the employer to prove that the variation is due to a material factor or factors, which is/are not related to the sex of the job holder.

If the employer can show that there is a reason (or reasons) for the difference in pay that are not direct discrimination it may be possible to show that the factors put forward by the employer are indirectly discriminatory. 

For example, by demonstrating that there is evidence of indirect sex discrimination in the pay system.

If there is evidence of indirect sex discrimination, the employer has to justify the difference by showing that the reasons or factors is or are a proportionate means of achieving a legitimate aim. 

The reason put forward for the difference in pay must be the actual reason and not a sham or pretence (although it can be given in hindsight). 

In other words, the employer does not have to have thought of it at the time, provided it really does explain the difference. 

The reason must also be “significant and relevant”, and it must be the cause of the difference in pay between the claimant and their comparator.

Examples of material factor defences that employers have used to defeat equal pay claims include:

• Market forces and skills shortages

• Red circling

• Geographical differences

• Different skills, qualifications and experience.​

The material factor defence will fail, however, if the reason itself is “tainted with discrimination” and is not justifiable.

For example, the House of Lords refused to accept an employer’s material factor defence based on market forces when the market itself discriminated against the claimants – female catering workers. 

The evidence in that case indicated that the market valued the work of catering workers at a lower rate because catering workers are, for the most part, women.

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Can Employers Impose Pay “Secrecy”?

No, the Equality Act 2010 states that employers cannot stop their employees from having a discussion with each other or their trade union representative about whether there are differences in their pay related to protected characteristics.

It also outlaws the use of “gagging clauses” in people’s contracts. 

However, employers can stipulate that employees keep pay rates confidential from certain groups outside the workplace, for example competitor organisations. 

If an employer takes action against an employee for making or seeking to make a disclosure or for receiving information as a result of a disclosure, the employee may claim victimisation.

 

What is gender pay reporting?

From April 2018, businesses with more than 250 employees were required to publish gender pay gap information, including the difference between the pay of men and women and the difference between the bonus payments they receive

 

How do Claimants Obtain Information From Their Employer?

Anyone who believes he or she is not receiving equal pay can write to their employer asking for information.  A trade union representative can help with this.

• Making a subject access request under the Data Protection Act may help get information about pay decisions. 

• A freedom of information request to a public body may help get statistical or equalities information.

• Employers frequently refuse to give information due to its confidentiality or because the comparator has not given permission.  Only a court or tribunal order issued after a claim has started can force the employer to disclose confidential information.

 

What is the Time Limit for Bringing a Claim?

Tribunal applications must be lodged within six months less one day of the termination of any contract of employment. Claims can also be brought in a civil court within six years (five years in Scotland) from the last day that any inequality in pay occurred in a particular contract. 

However, although the time limit is much longer, claimants should note that free, independent experts are not available in these courts.

There is an exception to this rule where there is a series of contracts for more or less the same job. 

For example, a series of fixed term or temporary contracts.

A contract can end for the purposes of equal pay law when a job is transferred as part of a transfer of employment under the Transfer of Undertakings Regulations 2006. 

The equal pay claim must be lodged against the transferee within six months of the date of the transfer.

A contract can also end by agreement. 

For example, redeployment to a different job with the same employer. In certain cases, the law treats contracts as ended where there is a substantial change in the job and terms of employment. 

As it is not always clear when a contract ends, it is important to get advice quickly.

 

Burden of Proof

The burden rests on the claimant for some parts of an equal pay claim and on the employer for others. Whoever, the burden rests on must prove their case on a balance of probabilities, which means they must prove that it is more likely than not.

The claimant first has to show the employment tribunal that they are receiving less pay than a valid comparator doing equal work.

As an employer, you must then either accept the claim or prove to the employment tribunal that the difference in pay was due to a material factor which is not tainted by direct sex discrimination. 

If you do not prove this, the employee wins their claim.

If you do prove that the factor you relied on is not tainted by direct sex discrimination, the employee may still be able to show that it is indirectly discriminatory if it puts women at a particular disadvantage compared to men.

If the employee can do this, you will lose the claim, unless you can prove that you had a legitimate aim in doing so, and that your actions were appropriate and reasonably necessary to achieve the aim

 

Awards of Equal Pay

If the employee succeeds in their claim they are entitled to:

• an order from the employment tribunal declaring their rights

• their pay, including any occupational pension rights, being raised to that of their comparator

• any beneficial term in the comparator's contract but not in theirs must be inserted into their contract

• any term in their contract that is less favourable than the same term in the comparator's contract must be made as good as it is in the comparator’s

• equality in the terms of their contract for the future (if they are still in employment)

• compensation consisting of back pay (if the claim is about pay) and/or damages (if the complaint is about some other contractual term)

• Back pay can be awarded up to a maximum of six years in England and Wales or five years in Scotland from the date that proceedings were filed with an employment tribunal.​

The employment tribunal may also award interest on the compensation and can order the employer to carry out an equal pay audit.

 

What Remedies are Available?

There are two remedies available to a tribunal in an equal pay case.

 

Declaration

The tribunal may make a declaration as to the rights of the claimant and/or their employer in relation to the claim brought. 

For example, a pay rise to the level of the comparator’s pay or the inclusion of any beneficial term not in the claimant’s contract and order the employer to pay arrears of pay or damages to the person who has brought the claim.

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Compensation

If a claimant is successful, they will be entitled to:

• An equality clause inserted into their contract of employment to ensure they get the same pay as their comparator.

• Back pay to the date of the insertion of the equality clause into their contract, up to a maximum of six years (five years in Scotland) before the date of lodging the tribunal application.

• Interest on back pay.

Claimants cannot recover compensation for injury to feelings in equal pay cases.

 

Protection Against Victimisation

The Equality Act 2010 protects employees from being victimised for:

making a complaint or allegation about equal pay or sex discrimination (unless it’s both untrue and made in bad faith)

giving evidence or information about such a complaint.

This means that employees are protected from being disadvantaged because they have raised a complaint.

The complaint doesn’t have to be a claim to an employment tribunal – it also includes any communication about the matter between you and your employee.

The protection against victimisation covers:

• the employee making the complaint

• any other employee who assists them, for example a comparator who gives information or a witness statement

• any trade union or employee representatives

This protection lasts even after the employment has come to an end if the victimisation is closely connected to the employment relationship.

It is also unlawful to victimise an employee who seeks, gives or receives information about pay, if the information is being disclosed to find out if pay is connected to the employment relationship.