Equal Pay - Factsheets - CIPD

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1/28/16, 113qual pay - Factsheets - CIPD

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Equal payRevised November 2015

In this factsheet

What is meant by equal pay?

The legal position

Equal pay claims

Good employment practices and reporting

CIPD viewpoint

Useful contactsReferences

Further reading

What is meant by equal pay?

Equal pay is an aspect of sex discrimination law which has been in force in the UK for over 40 years. It

gives the right for men and women to be paid the same for the same, or equivalent, work. Where men

and women are paid at different rates for the same, or similar, work, the employer must prove that

there is a reason for it which is not gender-related.

Inspite of the legislation, there is still a significant gender gap in pay1. The reasons are many and

complex, and include historical notions about men being the breadwinner in a family, higher value

being accorded to jobs requiring traditionally male qualities, the concentration of women in certain job

roles, the concentration of women in part-time roles, childcare requirements, and women missing out

on promotion opportunities due to maternity leave.

Read our report Closing the gender pay gap: how can we speed up progress?

The legal position

The law on equal pay in the UK was introduced by the Equal Pay Act 1970 and is now contained

within the Equality Act 2010.

The Equality and Human Rights Commission has published a range of guidance on all aspects of the

Equality Act on their website (see Useful contacts below). CIPD members can find out more in our

Equality Act 2010 factsheetand more on discrimination generally in our Discrimination law FAQs,while our Equal pay law FAQscover that more specific topic.

The law gives a woman the right to be paid the same as a man (and vice-versa) for:

like work, or

work rated as equivalent by analytical job evaluation study, or

work of equal value.

Like workis two employees who are doing the same or very similar roles.

Related resources

Factsheets

Equality Act 2010

Sex discrimination, sexual orientation,

gender reassignment and employment

Guides

Global talent gazetteer

Managing age: new edition 2011

Survey reports

Gender diversity in the boardroom: reach for

the top

Diversity & inclusion - fringe or fundamental?

Books

The rise of HR: wisdom from 73 thought

leaders

People and Organisational Development : A

New Agenda for Organisational

Effectiveness

Dvds

Selection Interviewing Skills

Performance Management

Training coursesDiscrimination and the Law - Short courses -

Training - CIPD

Achieving Greater Gender Diversity (in the

workplace) - Short courses - Training -CIPD

Conference details

HR in SMEs Conference

Speakers - Conference

Practical tools

Developing performance management

Engagement for sustainable organisation

performance

View all resources

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Work rated as equivalentcould be totally different jobs which have been given the same rating as the

result of an analytical job evaluation scheme.

Work of equal valueis when there are two jobs that are very different, but the employee claims that

they require a similar level of skill and ability. For example, a female cook comparing her work to that

of painters, insulation engineers and joiners who work for the same organisation.

The right to make a claim under equal pay legislation applies to employees, and also to anyone with a

contract personally to carry out any work or labour.

To bring a claim before an employment tribunal for breach of the equal pay legislation, an applicantmust point to a comparator. A comparator is a person of the opposite gender, working for the same

employer, doing like work (or work rated as equivalent, or work of equal value) who is paid more or has

more beneficial terms and conditions of employment, than the person bringing the claim.

The comparator can be someone working for the employer at the same time or in the past (a

predecessor) but not someone employed afterwards (a successor). A comparator may even work for

another employer as long as the inequality in pay is attributable to a single source (for example, within

the public sector where there are employees doing similar work in several different locations). Under

the Equality Act, if a woman cannot find an actual comparator, she can consider a sex discrimination

claim instead.

The law doesn't allow a contract of employment to be considered as more or less favourable as a

whole than that of a comparator so it's not a defence to a claim to say that a lower hourly rate of pay

for one person is compensated for by, for example, a better annual holiday entitlement. The contracts

of employment of the claimant and the comparator need to be compared side-by-side and clause by

clause. The claimant can effectively pick and choose the most beneficial provisions from their own

and the comparators contracts.

Equal pay claims

Equal pay claims are usually dealt with by employment tribunals. An employee may bring a claim up to

six months after leaving employment. There have also been some successful equal pay claims in the

normal civil courts, in which case the time limit is six years. Historically, employees have used an equal

pay questionnaire form to obtain information from employers. However this has been repealed and

replaced with non-statutory Acas guidance2for employees to follow to find out whether they have

received equality of terms in accordance with the Equality Act 2010.

The person bringing the claim must show that, on the face of it, they are being paid less than a person

of the opposite gender doing the same work. The employer is then required to give a non-

discriminatory reason for the difference in pay.

The tribunal can order:

a declaration of the claimants rights

equalisation of their contractual terms for the future

arrears of pay for up to six years (five years in Scotland)

an equal pay audit.

To defend a claim an employer must be able to show that:

the person bringing the claim and the comparator (or hypothetical comparator) are not engaged

in like work, ora bona fide and non-discriminatory job evaluation scheme has been conducted and the work is

not rated as equivalent, or

the work is not of equal value, or

any difference in pay is due to a material factor or difference other than the difference of gender.

There are special rules of employment tribunal procedure for dealing with claims for work of equal

value. This might involve the tribunal appointing an independent expert to investigate and report back.

The Material Factor defence


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The employer has a defence to an equal pay claim if it can show that, although men and women are

being paid differently for the same or similar work, the reason is due to a material factor. This material

factor must not itself contain any element of sex discrimination. A good example of a material factor

would be a London Weighting allowance.

The material factor defence can succeed only if the material factor itself does not put one sex at a

disproportionate disadvantage. If there is such a disadvantage, it has to be objectively justifiable as a

proportionate means of achieving a legitimate aim. For example, if the material factor was that the man

was more experienced than the woman and the woman would find it more difficult to gain the

experience because of career breaks for childcare reasons, then the employer would have to show

that it was justifiable to reward the additional experience by paying the man more.

Difficulties arise when the claim is for work of equal value between a woman and a man doing different

jobs. The fact that there are historical reasons for the different pay levels is not sufficient to establish

the defence. However, an employer might be able to show that the wage differences are a result of

skill shortages or for night rather than day work.

In areas such as local government and the NHS, there is often a long history of women working in

comparatively poorly-paid areas of work, whose jobs have subsequently been found to be of equal

value to work done by more highly paid men. Similar claims have arisen in the private sector too, for

example in supermarkets with male warehouse staff being paid more than female staff working in the

supermarket. Where women have not been adequately compensated for unequal pay in the past, they

may bring individual claims against employers for back pay.

Good employment practices and reporting

Employers are responsible for ensuring that their pay structures meet the requirements of the Equality

Act 2010. The Code of Practice3recommends equal pay reviews, reports or audits as the most

appropriate method of delivering a pay system free from gender bias. An online toolkit to help

employers carry out an equal pay audit is available from the Equality and Human Rights Commission4.

The Equality Act did not make reporting of gender pay gaps compulsory. Instead, in summer 2011, the

Government launched a voluntary gender equality reporting scheme within a framework called Think,

Act, Report5which was developed by the Government Equalities Office, with guidance for employers

by Acas6. The idea was to encourage private sector employers to disclose information related to

workforce gender profiles and aspects of pay on a voluntary basis.

Listen to our podcast on the Think, Act, Report initiative

However, this voluntary reporting initiative led to only a few employers publishing their gender pay gap.

In 2015, the Government confirmed they will support mandatory reporting and undertook a further

consultation on how this could work in practice.

Read our response to the consultation

The Government have announced that regulations will be introduced in 2016 requiring all employers

with 250 or more employees to publish their gender pay gap information.

To ensure compliance with equal pay legislation across a business where there might be many

different job types and pay structures, a job evaluation scheme could be set up. However, great care

should be taken when formulating the scheme to ensure that it does not contain in-built gender bias

based on assumptions about the levels of skills, etc. required for various jobs. For more information onthis topic see our factsheet on job evaluation factsheet.

Go to our Market pricing and job evaluation factsheet

Alongside good practice, inequalities in pay between men and women can be addressed by:

the wider availability of flexible working

the elimination of discrimination against part-time workers

building an awareness within the business of other barriers to the progress of women.
http://www.cipd.co.uk/hr-resources/factsheets/market-pricing-job-evaluation.aspxhttp://www.cipd.co.uk/publicpolicy/consultation-responses/closing-gender-pay-gap.aspxhttp://www.cipd.co.uk/hr-resources/podcasts/3-think-act-report.aspx


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Gender pay secrecy

The Equality Act 2010 introduced legislation relating to pay secrecy clauses. Its unlawful to prevent or

restrict employees from discussing their pay. Any pay secrecy clauses in a contract of employment are

unenforceable, and if an employee suffers any detriment from discussing their pay this will be unlawful.

This only applies to discussing pay within the organisation. An employer can require employees to

keep their pay confidential from outside bodies, such as a competitor organisation.

Tribunal equal pay audits

Under the Equality Act 2010 (Equal Pay Audits) Regulations 2014, employers found guilty of pay

discrimination must carry out an equal pay audit unless an exception applies. Where an audit has

been ordered it must be published on the employers website and be left there for three years. If an

employer fails to comply the tribunal can impose a penalty of up to 5,000.

CIPD viewpoint

The causes of inequalities in pay between men and women are complex and go beyond direct

discrimination. For example issues such as career choices, part time working and opportunities to earn

bonuses and overtime and promotion can have a causal effect. This is why it is common sense and

good management practice for employers to scrutinise their approaches to reward in a holistic way.

Spotting unjustifiable differences in the earnings of male and female employees can help surface

underlying indirect discrimination which may otherwise go unnoticed and stop employers making the

best use of female talent. CIPD was a key stakeholder in influencing the Think, Act, Report initiative.Although this initiative did not lead to a significant increase in voluntary pay gap reporting, proactive

employers have been given the opportunity to investigate and improve any gender pay gaps before

disclosure becomes mandatory.

Useful contacts

Acas- Equal pay

GOV.UK - Employers: preventing discrimination

Equality and Human Rights Commission

Government Equalities Office

Equal Pay Portal

European Commission's Equality Pays Off project: gender pay gap

References

1. OFFICE FOR NATIONAL STATISTICS. (2015)Annual Survey of Hours and Earnings, 2015

Provisional Results. London: ONS. Available at: http://www.ons.gov.uk/ons/rel/ashe/annual-

survey-of-hours-and-earnings/2015-provisional-results/index.html

2. ACAS (2014)Asking and responding to questions of discrimination in the workplace: Acas

guidance for job applicants, employees, employers and others asking questions about

discrimination related to the Equality Act 2010. London: Acas. Available at:

http://www.acas.org.uk/media/pdf/m/p/Asking-and-responding-to-questions-of-discrimination-in-

the-workplace.pdf

3. EQUALITY AND HUMAN RIGHTS COMMISSION. (2011) Equal pay: statutory code of practice.London: EHRC. . Available at: http://www.equalityhumanrights.com/publication/equal-pay-

statutory-code-practice

4. EQUALITY AND HUMAN RIGHTS COMMISSION (2010) Equal pay audit toolkit [online].

Available at: http://www.equalityhumanrights.com/private-and-public-sector-guidance/employing-

people/equal-pay/equal-pay-audit-toolkit

5. GOVERNMENT EQUALITIES OFFICE. (2011) Think, Act, Report framework. London: Home

Office. Available at: https://www.gov.uk/government/policies/creating-a-fairer-and-more-equal-

society/supporting-pages/think-act-report
https://www.gov.uk/government/policies/creating-a-fairer-and-more-equal-society/supporting-pages/think-act-reporthttp://www.equalityhumanrights.com/private-and-public-sector-guidance/employing-people/equal-pay/equal-pay-audit-toolkithttp://www.equalityhumanrights.com/publication/equal-pay-statutory-code-practicehttp://www.acas.org.uk/media/pdf/m/p/Asking-and-responding-to-questions-of-discrimination-in-the-workplace.pdfhttp://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/2015-provisional-results/index.htmlhttp://ec.europa.eu/justice/gender-equality/gender-pay-gap/index_en.htmhttp://www.equalpayportal.co.uk/https://www.gov.uk/government/organisations/government-equalities-officehttp://www.equalityhumanrights.com/https://www.gov.uk/employer-preventing-discriminationhttp://www.acas.org.uk/index.aspx?articleid=1811


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6. ACAS. (2011) Voluntary gender equality analysis and reporting: action for workplaces in the

private and voluntary sectors. London: Acas. Available at: http://www.acas.org.uk/index.aspx?

articleid=3439

7. GOVERNMENT EQUALITIES OFFICE. (2011) Voluntary gender equality reporting: baseline

report. London: Home Office. Available

at: https://www.gov.uk/government/publications/voluntary-gender-equality-reporting-baseline-

report-2011

Further reading

Books and reports

RUBENSTEIN, M. (2015) Discrimination: a guide to the relevant case law. 28th ed. London: Michael

Rubenstein Publishing.

WOMEN AND WORK COMMISSION (2009) Shaping a fairer future: a review of the recommendations

of the Work and Women Commission three years on. London: The Commission.

Visit the CIPD Storeto see all our priced publications currently in print.

Journal articles

CHARLTON, J. (2015) Gender pay gap: how to prepare for new regulations. Employers' Law.

September. pp12-13.

GILBERT, K. (2012) Promises and practices: job evaluation and equal pay forty years on! Industrial

Relations Journal. Vol 43, No 2, March. pp137-151.

WELFARE, S. (2010) Reporting gender pay gaps. IRS Employment Review. 5 March. 8pp.

WILD, S. (2015) Preparing for an audit. Employers Law.November. pp18-19.

CIPD members can use our online journalsto find articles from over 300 journal titles relevant to HR.

Members and People Managementsubscribers can see articles on the People Managementwebsite.

This factsheet was last updated by Lisa Ayling, solicitor and employment law specialist, and by CIPD

staff.
http://www.peoplemanagement.co.uk/http://www.cipd.co.uk/onlineinfodocuments/journalshttp://www.cipd.co.uk/bookstorehttps://www.gov.uk/government/publications/voluntary-gender-equality-reporting-baseline-report-2011http://www.acas.org.uk/index.aspx?articleid=3439

Documents

Equal Pay - Factsheets - CIPD