Equal pay

On this page you will find a summary of equal pay and its relationship to the gender pay gap.

Equality in contractual terms

Equal pay means that there should be no difference in the contractual terms of a woman and a man doing equal work, who both work for the same employer.

The Equality Act 2010

Women, and men, have been entitled to equal pay for equal work ever since 1970, when the Equal Pay Act was introduced, but since 2010 the law on equal pay has been set out in the ‘equality of terms’ provisions of the Equality Act 2010.

For more on the Equality Act 2010 go to Law

As well as basic pay, ‘pay’ includes occupational pension benefits, non-discretionary bonuses, holiday pay, sick pay, overtime, and shift payments. ‘Pay’ also includes non-monetary contractual terms such as leave, company cars, or access to sports and social benefits.

Equal work is work which is:

  • the same or broadly similar (like work’); or,
  • different, but which is rated under the same job evaluation scheme as being work of equal value (work rated as equivalent’); or,
  • different, but of equal value in terms of factors such as effort, skill and decision-making (‘work of equal value’).

Work of equal value is intended to tackle the pay inequalities that arise out of occupational segregation, which as we have seen in the page on the gender pay gap, often results in women’s work being undervalued.

A woman’s employer is the only source of information on whether the work being done by a woman and a man is equal, and what the reasons are for any differences in their pay.  This means that employers, and only employers, can provide evidence of the extent to which women are actually getting equal pay for equal work. While national statistics can tell us about the gender pay gap across the UK, information about differences in contractual terms can only be derived from employers’ payroll and human resource data.

For more on the gender pay gap, go to GenderPayGap

Claiming equal pay

If a woman has reason to believe she is not getting equal pay, she can bring an equal pay claim to the Employment Tribunal. Employers can defend the claim in a number of ways, but principally by arguing that:

  • the work the woman does is not equal to that being done by the man with whom she is claiming equal pay; or,
  • the woman’s job has been rated as unequal under a non-discriminatory analytical job evaluation scheme; or,
  • there is a non-discriminatory reason for paying her less than her male colleague.

In certain circumstances it is also possible to take a claim in the civil courts. For more on this go to Law.

For more on claiming equal pay or on defending a claim, go to nappieswebmediaCA2Q28FFBringingaClaim

If a woman considers that the pay inequality is caused by the way in which discretionary bonuses are allocated, she can bring a claim under the sex discrimination provisions of the Equality Act 2010. This is because a discretionary bonus does not form part of a contract of employment, and therefore any pay inequality arising out of its payment to a male colleague does is not regarded as an allegation of  unequal pay, but as one of unequal treatment, that is, but for the fact that she is a women, she would have been awarded a discretionary bonus.

Pay inequality for reasons other than gender

Workers from any of the other groups protected against discrimination also have a right not to be discriminated against in respect of pay and terms and conditions of employment, but, unlike women, this is not a contractual right and if they want to claim equal pay they cannot use the equal pay provisions, but, as with women challenging discretionary bonuses, they can bring a claim under the anti-discrimination provisions of the Equality Act 2010.

For more on the Equality Act 2010 go to Law.

For more on pay inequality for the other protected groups, go to BeyondGender.

The incidence of equal pay claims

Statistics released by the Ministry of Justice showed that there were a total of 4,200 single claims received in the period April to June 2016, down 3 per cent on April to June 2015. However, equal pay claims bucked the trend, being up at 3,367, a rise of 72 per cent.

The duration of a tribunal case, that is, how long it takes from being lodged to its eventual conclusion, increased for multiple claims, many of which will be equal pay claims, but went down slightly for single claims. For single claims, the mean age of a case ranged from 34 weeks for sex discrimination claims to 91 weeks for equal pay claims. The mean duration of a multiple equal pay claim was 320 weeks (well over 5 years), but with some cases already having lasted 440 weeks.  The length of time taken to dispose of equal pay claims may be contributing to the 15 per cent increase in outstanding cases in Employment tribunals.

For more on the Ministry of Justice statistics click here.

The relationship between equal pay and the gender pay gap

A figure summarising differences in average earnings can be derived either from official data sources (in which case the figure says something about the positioning of women within the UK labour market), or from an organisation’s own payroll and human resource data (in which case the figure says something both about the positioning of women within that organisation or workplace and about the likelihood of her receiving equal pay).

As differences in average earnings are affected by factors such as women and men being clustered into different types of work, a gender pay gap is a reasonably good indicator of women’s position in comparison to men within the given population.

However, because differences in average earnings cannot show whether women are doing equal work to men, or whether the differences in pay are for some legitimate reason, a gender pay gap based on differences in average earnings is not an indicator of the extent to which women are getting equal pay.

And while, with the introduction of gender pay gap reporting, there will be an obligation on employers to monitor their gender pay gap, there is no obligation to monitor the extent to which their female employees are getting equal pay for equal work. There is therefore no official information on the extent to which women are getting equal pay.

For more on gender pay gap reporting, go to GenderPayGapReporting.

 

Last updated 1st October 2016