What does the right to ‘equal pay’ actually mean?

The Equality Act 2010 says that men and women in the same employment performing ‘equal work’ must receive equal pay, unless any difference in pay can be justified.  It doesn’t just cover basic pay, it applies to all contractual terms, including: holiday and overtime pay, annual leave, non-discretionary bonuses, performance related pay, pension, redundancy pay, working hours and other benefits. 

These protections are a day one right and cover people whether they are permanent, work part-time, are on a casual/temporary contract, or work through an agency.  Apprentices are also covered.

The Equality and Human Rights Commission have a Code of Practice outlining the  obligation on employers when it comes to equal pay.  

The Commission also has the power to carry out investigations if it suspects an employer  of having unlawfully discriminatory pay practices.

What is ‘equal work’?

There are three categories of ‘equal work: like work, work rated as equivalent’, and work of equal value.   Identifying the category applicable to an individual’s situation can be very complex, and is often the subject of challenge by employers, but in summary:

‘Like work’ is work which is the same or broadly similar.  In other words, it involves similar tasks which require similar knowledge and skills, and any difference in the work is not of practical importance. 

‘Work rated as equivalent’ is work that has been rated under a valid job evaluation scheme as being of equal value, e.g.  in terms of the skills needed and demands made on you.

‘Work of equal value’ is work which is not similar or rated as equivalent, but which is of equal value in terms of the demands made on you.

Comparators

If you pursue an equal pay claim, you must compare your pay to someone of the opposite sex who you believe is carrying out equal work but is being paid more than you. They are known as a ‘comparator’.

Your comparator can be a  current or previous employee (unlike in discrimination claims, you cannot have a hypothetical comparator). They must also be (or have been) working ‘in the same employment’. In other words, they must be (or have been) employed by the same employer or associated employers, either: at the same workplace as you, or at different workplace where common terms and conditions apply. Identifying the correct comparator is not straightforward and requires careful consideration.

Can differences in pay ever be allowed?

An employer can pay a man more than a woman for doing equal work (or vice versa), but only if it can prove that the variation in pay is due to a ‘material factor’ which is not directly or indirectly discriminatory .  Basically, the employer will have to show  the reason for the difference in pay/terms and conditions is not related to the person’s sex. 

Examples of material factors that might be justifiable include: seniority, length of service, geographical reasons, and market forces and skills shortages.

What claims can you pursue and where?

As a general rule, an equal pay claim must be brought in an employment tribunal within six months less one day starting from when the period of work in question or employment ended.   However, identifying the correct deadline by which to bring an equal pay claim can be complex, particularly where someone has changed roles, their contract has been amended over time, or they may have worked under a succession of contracts.  You should therefore seek advice as soon as you suspect or become aware that you are being paid less than someone of the opposite sex.  

Before issuing a claim in the tribunal you would first need to have gone through Acas early conciliation.  

If the deadline to pursue a claim in the employment tribunal has passed it may still be possible to bring a breach of contract claim in the civil courts.  You would have six years from the date of the alleged breach (five years if you are in Scotland) in which to issue a claim.

What are you entitled to if your claim succeeds?

If you succeed, you are entitled to:

• an order from the employment tribunal confirming your terms and conditions
• your pay, including any occupational pension rights, being raised to that of your comparator
• if you are still in employment, any other beneficial term in the comparator's contract, but not in yours, being inserted into your contract
• compensation consisting of back pay).

The employment tribunal may also order your employer to carry out a full equal pay audit.

If you would like to know where you stand in relation to an equal pay issue, or want to know more about what your rights are, sign up to our legal advice service to speak to one of our specialist Employment solicitors.

What additional rights might I have?

Whilst inequality of pay is often, but not exclusively, a gender issue, you may have a claim that your pay or other benefits are less favourable than those of a (real or hypothetical) comparator on grounds of any of the other eight protected characteristics under the Equality Act 2010 (i.e.  age, race, religion or belief, sexual orientation, disability, marriage and civil partnership, pregnancy and maternity, and gender reassignment). 

In addition:

• if you are on a fixed term contract, you have the right to equal treatment as compared to permanent employees doing ‘broadly similar’ work, unless your employer can show that there is a good business reason to do so.
• if you are a part time worker, your employer must not treat you less favourably compared to full time workers doing ‘broadly similar’ work unless, again, there is a good business reason to do so.

There are strict time limits for pursuing claims in the employment tribunal relating to any breach of the above rights.  Usually, you only have three months less one day from the date of any act of discrimination or less favourable treatment  in which to issue a claim. And before you do you first need to go through Acas early conciliation. So you need to act fast.