1970, when the Equal Pay Act was first enacted, seems like a long time ago: Nixon was President of the United States, there were no microwave ovens, video recorders, DVDs and John Craven was two years away from starting Newsround. It was also quite common for men and women to be paid different rates for the same work. The equal pay legislation has changed such attitudes significantly since then; but equal pay claims – normally of a less obvious kind – are still common. The Equal Pay Act has now been replaced by the Equality Act 2010.
This is an overview of how equal pay claims work. It is not a comprehensive, and should not be used as an alternative for proper legal advice. The issues are complex and require expert attention, and “shortcuts” have been used in this article to make it more understandable. Do feel free to contact or call us should you have any questions. Our employment law solicitors are experts in their fields.
Do you need a solicitor to help you?
Equal pay claims are pretty complex as you’ll see from the information below!
- If you are an employee and you think you have been subjected to unequal treatment against, take a look at our employment tribunal representation page.
- If you are an employer and an employee is making allegations of unequal treatment against you in the employment tribunal, take a look at the employment tribunal defence service.
Summary of the equal pay claims
The idea is simply that men and women should receive the same pay for equal work. This is easy if comparing the same job for the same employer, but gets more complex when the jobs are alleged to be “equivalent” but not the same (for instance, should a female traffic warden be paid the same as a male police officer?).
Equal pay laws work by imposing a “sex equality clause” into the woman’s contract of employment, which automatically gives her equality of terms (e.g. pay) as a man doing the same work.
The employer has a defence if the difference in terms is due to a “material factor” which is not discriminatory. For instance it may be that the difference in pay is due to exceptional market conditions which required enhanced pay in a particular situation.
Note the following points:
- Men as well as women can bring equal pay claims (although the legislation, and this note, presumes that normally it is the women bringing the claim);
- Any women who wishes to bring a claim needs to specify someone she is comparing herself to; this person is called the “comparator”;
- Job applicants cannot bring equal pay claims about the terms of a job offer.
What is covered?
Equal pay claims can relate to pay and any other contractual term. For instance:
- Pay, sick pay, holiday pay
- Hours of work
- Performance-related pay and benefits, overtime rates and allowances
- certain bonuses and benefits in kind such as company cars
- Pension benefits and access to pension schemes
- Automatic pay progression
Equal pay law uses “equality clauses” which are “incorporated” into every contract of employment (whether written or not). They apply where the woman is employed to do equal work to that of a man in the same employment.
Unless the employer has a defence, where there is equal work, the equality clause improves any term of the woman’s contract to the relevant term in the man’s contract. In other words the two contracts are made the same.
The equality clause improves the woman’s contract, it does not worsen the benefits of the man’s contract. In other words, an employer cannot defend an equal pay claim by reducing the man’s pay.
What does “less favourable” mean?
To decide if the terms of the woman’s contract are “less favourable” than the comparator, each term of the contract must be considered separately. In other words, an employer cannot argue that just because a woman has better holiday pay than the male comparator, she should not be entitled to seek the same pay as him.
To bring a claim, a woman bringing an equal pay claim must find a “comparator” – i.e. someone she compares herself against. The comparator in an equal pay claim:
- must be of the opposite sex;
- can be a current or previous employee, including a predecessor (but not a successor);
- must be (or have been) working “in the same employment”;
- must be actual, not hypothetical;
- does not have to give their consent;
- does not have to be “representative” of employees doing that particular type of work.
It does not matter if the employer can point to a different man doing the same work as the woman for the same pay as the woman.
Equal pay: “A man in the same employment”
The man and woman must be in the “same employment” which means employed by the same employer or by an associated employer at the same place; or at different places where “common” terms of employment apply. This may sound quite simple – but actually there are lots of “variables” here beyond the scope of this article.
Types of equal work
There are three categories of equal work: “like work”, “work rated as equivalent” and “work of equal value.” Employees can bring a claim under more than one category in the same set of proceedings (although only one can succeed).
“Like work” means that the work is basically the same; or at least broadly similar, and any differences are practically irrelevant. So for instance you might have a “sales administrator” and an “export administrator” who both do the same work, i.e. answering the phones, data entry etc. The fact that the subject matter in one case is sales and the export may not be practically significant. The jobs in this case may be “like work”. In assessing this, job descriptions are important, but the Tribunal will want to look at the “reality” of the situation – i.e. what is actually done.
Work rated as equivalent
Some large employers undertake a job evaluation scheme in order to assess all the jobs in the organisation and to ensure that they are compliant with equal pay legislation. Such schemes are called “job evaluation schemes.” They band employees in groups of work where they are “rated as equivalent.” A valid non-discriminatory job evaluation scheme can also be used by an employer as a defence to an equal pay claim for an employer.
Work of equal value
Work of equal value is work which is equal “in terms of the demands made” on the woman and her male comparator. Factors such as skill, and decision-making and effort are used to analyse two roles and consider if they are of equal value. To establish if two jobs are of “equal value”, an individual analysis is undertaken, similar to a job evaluation study. Normally, such work in undertaken by an independent expert.
Effect of a job evaluation study (JES) in equal value claims
If a valid job evaluation study (JES) has already given two jobs a different rating, this is normally an absolute defence to an equal value claim unless there are “grounds for suspecting” that the JES itself was discriminatory, or unreliable in some way. In terms of the situation before the job evaluation study, a Tribunal may use the study itself, or get another study to consider it.
The material factor defence
An employer can pay a man more than a woman for doing equal work, but only if it can prove that the variation in pay is due to a material factor which is not directly or indirectly discriminatory. This is called the “material factor defence”.
The employer has to prove that the “material factor” is the real reason for the difference in pay, and that it is not related to sex. Furthermore, the factor must have applied all the way through the period of the claim.
Material factor examples
The sort of things that can establish a defence, are: performance, length of service, different hours of work, market forces and skills shortages, or historical reasons.
The material factor cannot be sex discriminatory
The employer has to show that the material factor is not discriminatory or “tainted by sex” in the language of the courts. It is the employer who has to show that the factor is not sex-tainted. The courts will perform an analysis of the material factor to see if it is discriminatory in the usual way, as if it was a sex discrimination case.
If a woman shows that the material factor relied on by her employer is indirectly discriminatory, the employer will still be able to defend the claim if it can “justify” the difference in treatment.
In order to be objectively justified, a difference in pay:
- Must correspond to a real need on the part of the employer.
- Must be an appropriate means of achieving the objective pursued.
- Must be necessary to that end.
Claims and remedies
Equal pay claims are usually brought in the employment tribunals but can be bought in the civil courts.
Equal pay questionnaires
If an employee thinks she may have an equal pay claim against her employer, she can submit an equal pay questionnaire: either by using the statutory Equal pay questionnaire, or by simply submitting questions in writing. A questionnaire can be served on the employer at any time before a tribunal claim is submitted, within 21-days of the claim being submitted, or later if permitted by the tribunal. The employer must then serve a reply within eight weeks of receipt.
Grievances in equal pay claims
The 2009 version of the ACAS Code of Practice on Disciplinary and Grievance procedures recommends steps that employers and employees should take to resolve a grievance internally before the employee seeks recourse to an employment tribunal.
Time limits for equal pay claims
An equal pay claim can be brought in an employment tribunal at any time during the employment to which it relates or, if the employment has ended, any time before the end of the “qualifying period”. Tribunals cannot extend the time limits – they are set in stone. In some cases existing claims can be amended to include new types of claim or other comparators.
What are the tribunal qualifying dates?
The tribunals have four different methods of determining the qualifying date.
- Standard cases
The qualifying date is “six months after the last day on which the woman was employed in the employment”. In this case “the employment” means employment under a particular contract, so problems can arise if contracts change – but see “stable work cases” below.
- Stable work cases
Where there was a “stable working relationship” time starts to run when the stable employment relationship ends, not when one contract is superseded by another. The point of this is that women who have signed new contracts changing their employment might still be able to claim even though it is more than six months since the contract was signed.
- Concealment cases
If an employer hides some fact without which the woman cannot know she has an equal pay claim, the qualifying date is six months after the date the woman discovered the relevant fact.
- Incapacity cases
Special rules apply for employees who lack the mental capacity to bring claims.
Time limits in the civil courts
The civil courts can hear breach of contract claims within a six-year limitation period. Many employees will find the employment tribunal more attractive though – if a woman loses her claim in the civil courts she is much more likely to have to pay the costs of the case which can of course be large.
A tribunal can:
- equalise the woman’s contractual terms to the man’s;
- require payment of any arrears, or award damages;
- Award for injury to feelings are not available in equal pay cases.
Entitlement to arrears
In a standard case, arrears can go back up to six years before the date the claim was brought. However, the arrears date can be extended if the employee has any incapacity or there has been concealment or fraud by the employer.
If you would like any help with equal pay, please call our employment law team on 0115 2536559 or 0845 225 2635