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Equal pay

Overview
The right of men and women to receive equal pay for equal work is contained in the Equality Act 2010. The right automatically implies a 'sex equality clause' into all contracts of employment, entitling a woman to equal pay for equal work.
 
The provisions protect those carrying out work in a personal capacity (such as self-employed consultants), as well as employees and apprentices.

Key points

  • The right of men and women to receive equal pay for equal work is contained in the Equality Act 2010.
  • A woman cannot claim the right to equal pay unless the difference in pay is attributable to sex.
  • In order to bring a claim for equal pay, the claimant must identify an actual comparator of the opposite sex; hypothetical comparisons are not permitted.
  • The Equality Act 2010 contains a separate provision allowing an employee to bring a direct sex discrimination claim in relation to contractual pay using either an actual or a hypothetical comparator.
  • Employers cannot defend a claim for equal pay by comparing the total remuneration and benefits package of those in comparison.
  • Equal work may be work which is the same or broadly similar, or which rates as equivalent, or which is of equal value.
  • 'Like work' is where a woman's work and a man's work are the same, or of a broadly similar nature, and the differences (if any) between the work they do are not of practical importance in relation to employment terms and conditions.
  • Work that has been 'rated as equivalent' refers to the job's grading in a job evaluation study undertaken with a view to conducting an analytical evaluation of the jobs done by the relevant employees.
  • 'Work of equal value' is where a woman's work is of equal value to that of a man's in terms of the demands made on her with regard, for instance, to effort, skill and decision-making.
  • Once a woman establishes that she is paid less than a man engaged on like work, or work rated as equivalent or of equal value, it is for the employer to show that the difference is not due to sex.
  • An employee can ask his or her employer for information to establish whether he or she has received equal pay and, if not, the reason for the difference in treatment. Acas has produced guidance on this process.
  • Claims can be brought by existing or ex-employees irrespective of length of service or age.
  • Provisions in the Equality Act 2010 impose equality of terms in to pension scheme rules regarding male and female members and obligations on trustees.
  • Equal pay reporting is to become mandatory for private sector and voluntary organisations (the public sector is likely to be exempt) employing 250 or more under the Small Business, Enterprise and Employment Act 2015 after April 2016.
  • Special 'victimisation protection' exists to prevent individuals being penalised for asking their employer or colleagues about their pay arrangements (see 'Equal pay' in-depth 'Relevant pay discussion').

Recent developments

New ACAS guidance on Equal Pay

Celebrating the fact that the Equal Pay Act came into force on 29 May 1970, Acas issued new guidance on 29 May 2020 to help employers and their staff understand the law around this subject. The new guidance explains that, by law, men and women must get equal pay for doing 'equal work' (work that equal pay law classes as the same, similar, equivalent or of equal value).

Some jobs can be classed as equal work, even if the roles seem different. For example, a clerical job and a warehouse job might be classed as equal work.

The new guidance includes steps on how staff can raise concerns at work if they feel they have an equal pay case and good practice guidance for employers on how to try to prevent discriminatory practices in their workplace.

Acas highlights that equal pay law does not simply apply to wages but also covers pensions, working hours, annual leave allowance, overtime pay, benefits such as gym membership or a company car, redundancy pay and bonuses that are include in an employment contract.

It also makes clear that the rules apply not only to employees but also to workers, apprentices, full-time, part-time or temporary contracts, agency workers and self-employed people who are hired to personally do the work.

The guidance also reminds employers of situations when differences in pay might be allowed.

 

Gender pay reporting

Although organisations are legally required to provide equal pay to both men and women if their duties and work they do is the same or broadly similar, a pay gap still exists today.

In 2017, the government introduced an obligation on organisations to publish data on the salary of male and female employees. Specifically, organisations will need to show what the gap is between male and female pay - see 'Gender pay gap reporting' for more information.