The Equal Pay Act came into force in 1970 to prohibit less favourable treatment between men and women in terms of pay and conditions of employment. The Act sets out that men and women doing work of equal value should be paid the same amount. This extends to all contractual benefits such as bonuses, overtime, company cars and benefits in kind; despite the act being in force for 48 years, women are still fighting to be paid the same as male employees.
The BBC has recently publicised the pay of its highest earners, revealing apparently unjustifiable differences causing complaints by female staff and damage to its reputation. It is public sector and other large unionised businesses that are mainly subject to high value equal pay cases. The potential settlement figures for such claims can be astronomical as claims can go back 6 years.
Recent claim figures include:
- Birmingham Council paid £1 billion to settle equal pay claims
- Glasgow City Council is currently considering how to settle 11,000 claims
- ASDA more than 10,000 equal pay claims brought
- Tesco currently facing up to £4 billion in equal pay claims, as many as 200,000 employees could bring claims going back 6 years
Elsewhere, Iceland has been ranked by the World Economic Forum as the best country in the world for gender equality but it still has a gender pay gap. It has recently introduced a law requiring employers to provide evidence of pay parity or, be liable for a daily fine of Euro 400 for non- compliance. The UK Government has introduced a requirement that large employers publicise gender pay gap information but only showing the differences in average pay between men and women. Otherwise it is down to individuals to complain and if necessary file their claims at tribunal. The number of such claims is likely to increase with the removal of tribunal fees.
What steps should businesses be taking now to ensure pay parity between male and female employees?
- Audit pay levels within your business;
- If there is a difference in pay check it is due to a justified non- gender reasons which may for example be market forces or seniority;
- If the difference is not justified, act to ensure you are not acting unlawfully. For example, look at your pay practices; do differences in pay occur in starting salaries, performance reviews or overtime opportunities for example;
- Many claims of discrimination arise from differences in bonus payments and to minimise claims ensure that employees know how to earn a bonus and how it is calculated;
- Deal promptly and effectively with equal pay complaints.
If you have any employment law queries in relation to the issues mentioned in this blog please contact Emma McLoughlin or your usual Morrisons’ adviser.