Equal Pay: new legislation and caselaw

26 January 2015

Amanda Jones

Today’s session

Overview Determining the

comparator Challenging JES Employer’s defence Equal Pay Audits Case law throughout

Barbara Castle – 9/2/1970

‒ “There can be no doubt that this afternoon we are witnessing another historic advance in the struggle against discrimination in our society…”

‒ Speech on the Second Reading of the Equal Pay Act, House of Commons, 9 February 1970

Where are we now: The Statistics

Global Gender Gap – UK drops from 18th in 2013 to 26th in 2014

Annual Survey of Hours and Earnings, November 2014 (mean figures used)

Pay gap 11.5% (Men FT vs. Women FT) Average weekly earnings £95.60 less Gap varies across regions and sectors

Determining the Comparator

‒ North v Dumfries and Galloway Council 2013‒ Common terms and conditions = broadly

similar ‒ “Real possibility” consideration not required‒ Scope for comparison– Glasgow City Council

v UNISON Claimants [2014] – ALEO employees can compare with direct Council employees

Challenging a Job Evaluation Scheme‒ No defence if there are “reasonable grounds

for suspecting” that the system was discriminatory or “otherwise unreliable”

‒ Burden is on the claimant (Hartley v Northumbria Healthcare NHS Foundation Trust )

‒ McDonald v Glasgow City Council EAT heard appeal in December 2014

JES: Pay Protection

‒ Perpetuating discrimination vs. cushioning the blow

‒ Express endorsement in 2010 Act of the legitimacy of pay protection

‒ McDonald and ors v Glasgow City Council ET decision 2013

Pay Protection – legitimate aim

‒ Audit Commission v Haq (2013)‒ Aim of projecting employees caught in a

restructure was legitimate ‒ Objective was based on fairness and retention

of valuable staff ‒ Do the statistics show a disparate impact?‒ No need to identify a PCP

Employers defence since 2010

‒ Material factor defence (“genuine” removed)‒ Kenny and ors v Minister for Justice, Equality and

Law Reform and ors 2013‒ Employer must objectively justify the difference in pay ‒ “Good industrial relations” cannot constitute the only

basis of objective justification ‒ Ministry of Justice v O’Brien 2013

Caselaw since 2010

‒ Calmac Ferries v Wallace (2013) -First EAT decision concerning 2010 Act

‒ Yates v Collins and Hobson plc. 2013 ET - Cautions against stereotyping

‒ Bradley v Royal Holloway and Bedford New College 2013

Private Sector – in the news “That's Asda price: Firm in equal pay row as more than 1,000 staff threaten legal action”

Equal Pay Audits (EPA)

‒ From 1 October 2014 ‒ Background: Modern Workplaces

Consultation ‒ “Think, Act, Report” failed to make significant

progress‒ Not a requirement to publish gender related

pay information

EPA: Name and Shame

‒ Unsuccessful employers (at ET) will be ordered to carry out and publish an EPA

‒ In an equal pay or sex discrimination claim‒ What will be required from an audit (ET has

wide discretion):– Relevant gender pay info including overtime and

bonus; Gender related pay differences and reasons why; plans to address issues identified

EPA: Exceptions

‒ New businesses (<12 months)‒ <10 employees ‒ Audit within last three years ‒ If Tribunal can find what remedial action is

required without an EPA‒ No suggestion of any other breaches ‒ Disadvantages outweigh benefits

EPA: Time and Penalties

‒ Employers will have at least 3 months from the date of the order

‒ Expected to allow up to one year for large companies with complex pay structures

‒ Failure to comply >£5000 fine payable to SoS‒ Ne deadline then given, further >£5000 fine if

continues to fail to comply ‒ No limit on number of penalties

EPA: Impact and Risks

‒ Low risk? ‒ Reducing number of ET claims ‒ Few equal pay claims lead to determination

by the ET ‒ Consider a voluntary audit?‒ Public sector should be carrying out audits as

part of PSED

Contact

Amanda JonesPartner0330 222 1810amanda.jones@mms.co.uk