The value of protecting your organisation from equal pay risks and claims

With many high-profile cases hitting the headlines this year and the mandatory requirement for larger businesses to report their gender pay gaps - equal pay should now be on the agenda for all employers. But what does it mean, why is it important and what can employers do to avoid an equal pay claim?

What does equal pay for equal work mean?

The principle of equal pay broadly requires that men and women be entitled to the same pay and benefits for doing the same work.

What is equal work? 

Equal work doesn’t just mean comparing men and women who do the same job. It is broader than that. For example, it covers work which is similar or broadly similar. The Employment Tribunal claim brought by BBC presenter Samira Ahmed is that she was paid 85 per cent less than Jeremy Vine for hosting Newswatch which she claims is ‘very similar work’ to Jeremy Vine hosting Points of View. The BBC refute this, arguing the work is not similar because the programmes have different formats and are aimed at different audiences. We expect a judgment in the case early next year.

Equal work also includes work which is of ‘equivalent value’; that is, where the work is equal in terms of the demands made on the individual when factoring in the level of effort, skill and decision-making required for the role. Some leading supermarkets are facing equal pay claims from female employees working in the retail side of the business who claim their work is of equivalent value to those working in the distribution side of the business who are mainly men. Find out further information about this case.

Why is equal pay becoming an issue? 

The mandatory requirement for employers with at least 250 employees to publicly report their gender pay gap figures has shone a spotlight on the issue of unequal pay. Whilst a gender pay gap doesn’t automatically mean there is an equal pay issue, it is a strong indication that there might be. 

Smaller employers are also at risk as a consequence of this and the spate of recent high-profile equal pay cases which have raised greater public awareness of the issue.

Why must employers tackle equal pay?

Defending an equal pay claim is expensive and takes up a considerable amount of internal resource and time. If the claim succeeds, the employer is liable to pay up to six years’ back pay to all those who have been impacted together with interest. As an example, Samira Ahmed is claiming almost £700,000 in her equal pay claim against the BBC.

It’s also important to consider the impact that possible equal pay issues can have on an employer’s ability to attract and retain talent in a competitive labour market.

What action can employers take to protect themselves from an equal pay claim?

1. Implement and promote equal pay policies

This can help attract talent, retain key female talent and improve your relationships with customers and suppliers.

2. Commit to analysing, understanding and acting on your Gender Pay Gap Report (GPGR)

Employers with at least 250 employees must publish an annual report containing data on their gender pay gap. The first step in tackling equal pay requires a commitment to understanding the report, planning a strategy to narrow any gap and implementing that strategy.

3. Conduct an equal pay audit

To truly identify whether there is an equal pay risk within the organisation requires an equal pay audit where roles across the organisation are compared and benchmarked to establish whether the work is of equal value. If they are, and the terms of employment of one gender compared to another are less favourable, the audit will then establish whether there is any justification for the difference (which could include past performance, seniority or length of service).

If you would like further information on dealing with an equal pay claim or carrying out an equal pay audit, please contact Jennifer Mansoor.