Equal Pay Claims Increase

Unions, equal pay campaigners and the Fawcett Society have declared 30 October a “women’s no pay day” to highlight the average earnings pay gap between women and men. Statistics show that Employment Tribunals received more claims for equal pay than any other type of employment claim in 2007/2008, giving rise to some key developments relating to equal pay issues. Pay Protection or “Red Circling” Some public sector employers, such as local authorities and the NHS, have being carrying out job evaluation studies and, in negotiation with trade unions, have created a single pay structure. These new pay structures are designed to correct historical pay inequalities. Moving employees to the new pay structures has meant that some employees, mostly women, have received pay rises, whilst some employees, mostly men, have had their pay reduced. In order to help those receiving reduced pay adjust, pay protection schemes – known as red circling – had been implemented so that pay is reduced gradually over a period of time. In the cases of Surtees v Middlesbrough Borough Council and Bainbridge v Redcar and Cleveland Borough Council, female claimants argued that the pay protection schemes unfairly protected pay of mostly male employees and continued pay discrimination against female employees. The Court of Appeal held that the pay protection schemes put in place by Middlesbrough Borough Council and Redcar and Cleveland Borough Council could not be justified. Not all pay protection schemes will be discriminatory, but employers need to be able to show that they have considered all the options and created a business case for their payment protection scheme. TUPE and Equal Pay The case of Sodexo Ltd v Gutridge and North Tees and Hartlepool NHS Foundation Trust demonstrated that a new employer whose employees have been transferred under TUPE can be liable for equal pay breaches created by the previous employer. New employers therefore need to obtain details of the pay structure from the previous employer and consider seeking warranties dealing with compliance with equal pay and indemnities against equal pay claims from transferred employees. Collective Agreements Employers must be aware of the potential for collective bargaining to create pay differentials that are detrimental to employees of one gender. The case of British Airways v Grundy demonstrated that employers cannot justify differentials in pay between a claimant and comparators by arguing that they had come about as part of a collective bargaining agreement. If you are concerned about equal pay, please contact Ashley Hunt on 0116 212 1000 now.