Pay inequality cannot be ignored

Employers should not ignore pay inequality, as it can result in costly and time-consuming litigation and, as we have seen in recent times, adverse publicity.

The Samira Ahmed case serves as a reminder to employers to take a fair approach of setting pay and career progression and to not pay colleagues differently for doing the same job because of gender.

The law on equal pay is set out in the ‘equality of terms’ provisions of the Equality Act 2010. The act gives a right to equal pay between women and men for equal work. This covers individuals in the same employment, and includes equality in pay, benefits and all other contractual terms.

The act implies a sex equality clause automatically into all contracts of employment, ensuring that a woman’s contractual terms are no less favourable than a man’s. Essentially, employers must give men and women equal treatment in the terms and conditions of their employment contract if they are employed to do:

  • ‘Like work’ – work that is the same or broadly similar
  • Work rated as equivalent under a job evaluation study
  • Work found to be of equal value in terms of effort, skill or decision making

Employees can compare any terms in the contract of employment with the equivalent terms in a comparator’s contract. A comparator is an employee of the opposite sex working for the same employer, doing like work of equal value.

However, an employer may defend a claim if they show the reason for the difference is due to a genuine factor and not based on the sex of the employee.

Tips for employers

  • Conduct an equal pay audit. This is a good way of identifying where any potential claims might exist and where corrective action can be taken to reduce any potential liability going forward
  • Ensure your organisation has transparent and robust pay structures, reward policies and grading systems
  • Conduct regular training for managers on how to make pay decisions using legitimate rationale
  • Ensure that appraisals are well conducted and documented, to ensure that all employees are fully aware of their performance and how this may affect their pay
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