Equal pay audits
Labour & European Law Review Weekly Issue 375 27 June 2014
The government has just published its response to a consultation setting out proposals for regulations requiring equal pay audits.
The response sets out the Government’s aim in making regulations on equal pay audits “to ensure that that those employers who have been found by an Employment Tribunal to have failed to comply with equal pay law, or who have discriminated on grounds of sex in non-contractual pay matters, are held to account by being required to carry out an equal pay audit”.
The new regulations, which come into effect on 1 October 2014, will:
- require employers found by a tribunal to have committed a breach of the equal pay legislation to carry out a systematic review of their pay policies and practices in a comprehensive and transparent way;
- set out the procedure for ensuring compliance where an equal pay audit is ordered;
- require employers to publish the results of the equal pay audit
The Government proposes that the regulations will set out the minimum requirements of an equal pay audit but leaves the detail to the discretion of the tribunals to determine certain elements of an equal pay audit such as the coverage and the timescale for completion. The government believes that the detail is best determined on a case by case basis as this will ensure that the scope of the audit is proportionate to the size of the organisation and based on the evidence presented at the hearing.
It will be for Tribunals to decide whether the employer has complied with an order to carry out an equal pay audit - for instance, if the audit is not submitted by the date specified or does not comply with the requirements set out in the order. They will also set out the next steps once an employer has been found to have failed to comply with an order to carry out an equal pay audit, including the power to impose financial penalties for non-compliance.
Employers will also be required to publish the results of an equal pay audit in a format accessible to all affected staff, unless they cannot do so because of a breach of a legal obligation which includes a breach of the right to privacy under article 8 of the Human Rights Act 1998. It will be for the employer to explain those reasons to the tribunal who can either accept or reject those reasons.
Finally, the government has decided not to publish additional guidance on pay audits because, it argues, a substantial amount of guidance is already available on the website of the Equality and Human Rights Commission.
Jo Seery from Thompsons Solicitors commented: “In its response the Government acknowledges the widening pay gap between men and women with the gender pay gap for all employees now standing at 20%. These regulations are unlikely to have any real significant effect on addressing the gender pay gap given that fewer than 1% of equal pay claims succeed at Tribunal. It’s a pity then that the Government has failed to implement the provisions in the Equality Act which would require employers to report on the gender pay gap which would have a greater impact on challenging unequal pay.”