Caroline Underhill, Equal Pay Practice Lead for Thompsons Solicitors, discusses the complex issues surrounding pay discrimination
Issues surrounding fair pay and equal pay have been much discussed in the news recently. With the gender pay gap reporting deadline for major organisations coming up at the end of March, it is important to know the complex issues that arise when tackling instances of pay discrimination.
Equal pay has been in the news, off and on, since 1888. In 1961 there was a single pay spine for both men and women in the Prison Service. That meant that men and women doing the same job were paid the same. The Equal Pay Act 1970 came into force in 1975 for the same job or jobs in the same grade. When it was amended to include comparisons between different jobs; - the equal value amendment in 1983 - the opportunity to make an equal pay claim increased significantly. Most claims are between men and women who do different jobs, such as the 2005 claim for equal pay by administrative staff comparing themselves to Prison Officers and others in the Prison Service. They used job evaluation and equal value as the basis of their claim.
The latest developments
Equal pay is still in the news because women generally are still not paid the same as men. The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017, and similar regulations for the private sector, were introduced to try to pressure employers to take action to reduce the gender pay gap. Nationally, on average, women’s hourly rates are 18% less than the hourly rates for men.
Under these new regulations all employers employing more than 250 people have to publish their gender pay gap every year. For public authorities this must be done by 30 March 2018 for the first time and annually thereafter. The Ministry of Justice, which includes the Prison Service, has published their figures. They say that women’s hourly rates are 4.7% less than those of men on average. The middle man, where 50% of men are paid more and 50% of men are paid less, earns 10.6% more than the middle woman. The Ministry of Justice says that this big gap is because most men who work in the sector work as Prison Officers, a role which typically includes fewer women. This implies that more women work in the lower paid jobs in the Ministry of Justice. The proportion of men and women in each pay quartile confirms this - women outnumber men in the lowest paid quartile by around 2:1.
The Ministry of Justice also reports that, although a higher proportion of women receive a bonus, women receive 18.3% less than men in bonus payments on average. For the middle man and middle woman, the woman gets 16% less than the man.
"The key message to all members is: where there is discrimination on grounds of gender or other protected characteristics, challenge it"
What is fair in the eyes of the law?
It certainly does not feel fair. There will be lots of pay practices that do not feel fair and are not fair. Some, but not all, will be related to gender.
The Equality Act 2010 can only be used to challenge differences in pay between people doing equal work and where there is gender discrimination or discrimination on one of the other protected characteristics, such as race, disability or age. What’s more, the employer has a defence for any pay practices that systematically disadvantage women. For example, they can look to show that the factor or factors creating the pay difference is necessary to achieve a good and sound purpose and that outweighs the effect of the discrimination. Examples might be pay protection for a short while after a pay change, or geographical differences to do with the cost of living and or recruitment. The complexities of the law make it like a game of snakes and ladders.
Pay that is unfair, but is not because of gender discrimination or discrimination on the grounds of one of the other protected characteristics, is not easy to challenge using the courts and tribunals. There is no fair pay law. Although bankers have had some success in persuading the courts to award them their phenomenal discretionary bonuses by relying on contract law, there is no sign that judges are willing to get involved in pay negotiation or arbitration generally. There is no general agreement about what is fair.
What can be done?
If the reason for the gender pay gap in pay and bonus is because men and women tend to work in different jobs, we have to look at why that is and what can be done to increase equality of participation in all jobs. Training, equal opportunities policies and mentoring can all help.
If some jobs are thought of as worth less than other jobs, we have to look at why that is. Maybe the preconceptions about what the job involves are out of date. Keeping any job evaluation up to date and relevant is important.
We have to be able to talk about pay and to understand why people are paid differently. The more information that is available the better. Any differences in pay should be able to be explained.
Where decisions about pay are based on a manager’s discretion we have to check that there is no discrimination. This is usually done by monitoring and analysis. Comparing results year on year will be important.
The key message to all members is: where there is discrimination on grounds of gender or other protected characteristics, challenge it.