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Considering Equal Pay and the Gender Pay Gap

Equal pay and the gender pay gap have been at the forefront of the headlines recently. This is in part due to the high-profile resignation of the BBC’s Carrie Gracie over unequal pay, the large volume of equal pay cases currently battling their way through the courts and the new gender pay gap reporting rules which organisations across the country are currently grappling with. 

In this article, we will look at these two interrelated areas of law, the recent legal developments surrounding these areas and provide some guidance on how to improve gender equality in your organisation in 2018. 

Equal Pay

In the workplace, men and women are entitled to equality in pay, treatment, and other contractual terms for doing “equal work”. It has historically been unlawful to pay men and women differently for the same job since the implementation of the Equal Pay Act 1970, however notwithstanding this the average earnings of male employees still exceeds that of female employees by 18.1%. 

There are circumstances in which an employer can justify paying one sex less than another for equal work, however, there will be a heavy burden to prove that any difference is due to a “genuine material factor” as opposed to the employee’s sex. For example, if a male employee is more senior and has a longer length of service, this could in theory justify differential treatment. However, we would advise that employers tread carefully and ensure that they can properly justify any pay differences within their workface. 

The significance of equal pay law has recently been highlighted by an ongoing claim against Asda. A collective equal pay claim was brought by over 7,000 (predominantly female) claimants, who sought to compare their work to their male colleagues. Asda tried to justify the pay discrepancy by stating that it is solely because of the demands of the two jobs. The Employment Tribunal held that the two types of work are of equal value and accordingly the two groups’ pay should be comparable. Asda have now been granted permission to appeal to the Court of Appeal. 

Gender Pay Gap

The gender pay gap is a measure of the difference between average earnings of men and women in general, whatever their job roles may be. The Gender Pay Gap Regulations which came into force in April 2017 require employers with more than 250 employees to annually publish statistics illustrating their gender pay gap. This increased transparency aims to highlight gender pay discrepancies, encourage public scrutiny of unfair practices and ultimately shame employers to action unjustified pay gaps.

It may be comforting for some employers to note that when producing their report on pay gap figures there is an option to provide some narrative explanation for the results. This may include an explanation of the context in which the business operates and/or details about steps the business is taking to address the gender pay gap in their organisation.

There are no penalties for employers who have large gender pay gaps, however it could result in adverse publicity, reputational damage, affect staff morale and promote the potential for equal pay claims. 

The Equality and Human Rights Commission has indicated that businesses who fail to publish data or accurate data face potentially unlimited fines as well as criminal convictions.

Here are our five steps you can follow to start addressing the issue of the gender pay gap within your workforce: 

1. Does your organisation come within the criteria of 250 or more employees? If so, you will be obliged to report annually from April 2017. If your organisation has fewer than 250 employees, we would strongly advise that you get ahead of the game and start considering what the gender divide is like within your workforce.  

2. Conduct a review of your pay structure and identify any areas of concern or discrepancies in levels of pay between your male and female employees. 

3. If a gap is identified, consider the context behind this, whether it needs to be addressed and whether you can justify it. 

4. Assess the extent of any gender pay gap across your organisation. 

5. Consider taking remedial action in relation to any discrepancies. 

If you need help and advice regarding equal pay and/or gender equality within the workplace, please do not hesitate to contact me or the employment team on 0113 350 4030 or at hello@scesolicitors.co.uk.

If you would like to be kept up to date with employment law and dispute resolution updates, please subscribe to our monthly newsletter.

SCE Solicitors is a boutique employment law and dispute resolution practice based in Leeds which advises clients nationwide.  Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here.

Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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