What is the say on equal pay?

16 March 2017

A focal topic of 2017 so far has been equal pay which requires that workers carrying out the same or similar job should receive the same pay and benefits irrespective of sex unless there is some justification for the difference. However, the right to equal pay not only covers workers in the same or similar jobs but also those carrying out work of 'equal value'.

Case study

In October 2016, the Employment Tribunal ruled that employees working in the retail stores of a large supermarket were entitled to compare themselves for the purposes of an equal pay claim with their colleagues who worked in the supermarket’s distribution centres.

Some 7000 claims were made, mainly by female employees, and heard as one claim. The claimants were seeking equal pay with their male counterparts in the supermarket’s distribution depots on the basis that the work done in the retail stores was of equal value to the work done in the distribution centres but for which they were being paid substantially less. The claimants argue that the supermarket’s views on the value of the work carried out in retail compared to that in its distribution centres amount to historical discrimination.

The issue to be determined at this hearing was whether the employees in the retail store were entitled to compare themselves with employees in the distribution centre as the terms of employment for each were set under different processes albeit by the same employer. The Employment Tribunal decided the retail employees were entitled to make this comparison as the supermarket’s executive board was ultimately responsible for decisions on pay and could rectify any inequality.

The case has not yet been concluded though as the question of whether the retail work is of equal value to the work in the distribution centre is still to be determined. If successful though, it will have a significant impact on the supermarket as the sums it may be liable for could exceed £100 million. It could also lead to further equal pay claims being brought against other employers in the retail sector. 

What’s the difference between equal pay and the gender pay gap?

A gender pay gap is the difference between the average earnings of men and women over a period of time, irrespective of role or seniority. Gender pay gap reporting is intended to capture pay differences on a broader level. Measures designed to ensure equal pay and those aimed at closing the gender pay gap have the overall objective in eliminating sex discrimination in relation to pay.

Gender pay gap reporting legislation requires large employers to publish their overall mean and median gender pay gaps. Employers in private and voluntary sectors must calculate their statistics from 5 April 2017 and publish before 4 April 2018. Employers in the public sector must calculate from 31 March 2017. The intention behind gender pay gap reporting is therefore to increase transparency of the differences in pay between men and women in the workplace with the aim of employers developing plans to close the gender pay gap. A gender pay gap does not mean an equal pay claim will be proven; however the existence and size of a gap may encourage an employee or a group of employees to bring an equal pay claim. 

An employer can have an effective equal pay policy yet still have a gender pay gap if, for example, the majority of women are employed in lower-paid jobs. Therefore, the primary purpose of the equal pay legislation is not to prevent a gender pay gap but to ensure that men and women are not paid differently for doing the same or similar work unless the difference is justified. 

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