New legislation has made it easier for employees to obtain information from their employers about their colleagues’ salary and benefits.Osborne Clarke employment lawyer Caroline Dunne reports on regulations that could end in more equal pay claims.
Equal Pay
With the Gender Pay Gap a hot topic in the news at present, Caroline Dunne answers the most commonly asked questions and looks at the best way to prevent such claims.
Research by PayFinder.com in 2004 showed the average pay gap between men and women at 24% – the gap was 30% in the South East. According to a report commissioned by the Equal Opportunities Commission, in 2002 and 2003, with regard to part time workers, women in comparison with men working full time, earned 41% less, a figure that has hardly changed since 1975. The equal pay and discrimination in the workplace debate is not going away.
Recent legislative changes made in the Employment Act 2002 (the "EA") and the Equal Pay Act 1970 (Amendment) Regulations 2003 (the "Regulations") making it easier for employees to obtain information on salary and benefits of colleagues and to pursue such claims has brought the debate even more sharply into focus.
1. Who does Equal Pay legislation apply to?
The legislation applies to all employers, regardless of size and is for the protection of employees, workers and even self-employed persons if they are contracted to execute the work personally.
2. What does it mean?
An employee may successfully bring an equal pay claim if they prove there is a person of the opposite sex, who works in same employment, doing equal work but is getting paid more or is receiving more/other benefits than they are.
3. Is there a defence to such a claim?
If you can show that the man and woman are not, in fact, doing equal work, the claim will fail. If it is equal work, you must be able prove that a difference in pay is justified, i.e. that the difference in pay is for a genuine and material reason, which is in no way based on the differences in sex. Remember, sex discrimination, which may very well be joined with claims for Equal Pay.
4. How long does an employee have to bring a claim?
Employees still have six months from the end of the employment in which to present a claim to an Employment Tribunal. This limit can be extended in circumstances where the employer has deliberately concealed any relevant fact.
5. What can an employee recover, if successful?
Under the new Regulations, damages can be claimed back as far as six years preceding the date of the proceedings.
6. What is an Equal Pay Questionnaire?
Employees can ask employers questions in order to obtain information to help establish their claim for equal pay. The questionnaires mirror the format of questionnaires commonly used in sex and race discrimination cases.
The claimant will set out why they think they are receiving unequal pay, who they believe their comparators are and ask a series of factual questions on the pay of themselves and their comparators. The employer will be invited to either agree or disagree with the claimant's views, particularly in regard to whether the claimant and the comparator are engaged in equal work.
7. What's the response time?
Employers have eight weeks in which to respond. Although you are not obliged to answer any questions, failure to do so without a reasonable excuse, or if you give evasive and unequivocal responses may result in inferences being drawn from the Tribunal. It is strongly advised to take legal advice before replying to a questionnaire.
8. What information must be disclosed?
The questionnaire is not an automatic right for the claimant to fish around for all pay information relating to their comparator. Employers are still subject to the laws relating to the Data Protection Act and they can legitimately refuse to answer a question based on this duty and on the issue of confidentiality.
9. How is the risk of such a claim minimised?
Pay and benefits systems should be as transparent as possible – if you are concerned your system is not it may be appropriate to undertake a review. If you do decide to undertake a review, the headline points to remember are:
· Decide the scope of the review.
· Determine where men and women are doing equal work – as mentioned above this will not just depend on the job description but an analysis of what each employee actually does;
· Collect and compare pay data – you will also need to consider bonus, overtime and performance related pay, in addition to basic pay;
· Establish the causes of any gaps which are identified and assess whether there is any justification for those gaps – it is the actual impact that pay has and not the intention behind pay structures that will be important; and
· Ongoing, continuous review and monitoring will help to make sure that gaps do not occur in the future.
