In a landmark case which could give rise to more equal pay claims, the Supreme Court has ruled that Asda’s female retail employees can be compared with male distribution workers in terms of pay.
The judges unanimously upheld the Court of Appeal’s decision that the supermarket’s retail workers, who are predominantly women, are on ‘common terms’ with its distribution workers, who are predominantly male.
Although this ruling does not mean that the employee’s claim has succeeded, it does mean that they can proceed it to an Employment Tribunal. Therefore, this could lead to workers in similar positions lodging claims of equal pay, having potentially costly implications for employers.
During the case, an Asda spokesperson said: “We are defending these claims because the pay in our stores and distribution centres is the same for colleagues doing the same jobs regardless of their gender. Retail and distribution are very different sectors with their own distinct skill sets and pay rates.”
What can employers do to reduce the risk of an equal pay claim?
A claim of any type can significantly strain the resources of a business. Although it is not possible to guarantee the avoidance of an equal pay claim, there are several precautions that employers can take to reduce the risk.
- Ensuring that job descriptions are up to date and reflective of the work completed
- Avoiding any differences in job titles between men and women when the work completed is the same
- Being consistent when deciding pay and contractual terms e.g., having 1 pay structure for the business and limiting who can decide on salaries for new employees
- Ensuring that any equal pay queries are dealt with fairly
Key legal information
The Equality Act 2010 gives both women and men the right to equal pay for equal work.
This is a legal entitlement which applies when carrying out:
- Like work – two employees who are doing the same or broadly similar roles
- Work rated as equivalent by analytical job evaluation study – this could be two totally different jobs which have been given the same rating on evaluation
- Work of equal value – when there are two jobs that are very different, but the employee claims they require a similar level of skill and ability
The Equality Act 2010 also introduced legislation relating to pay secrecy clauses. Any such clauses in a contract of employment are unenforceable, and if an employee suffers any detriment from discussing their pay, this will be unlawful.
It is also unlawful to prevent or restrict workers from discussing their pay, but this only applies within an organisation. Employers can require employees to keep their pay confidential outside of work, such as from a competitor.
If an employer is found guilty of pay discrimination, it must carry out an equal pay audit unless an exception applies.
Addressing pay inequalities with job evaluation
A job evaluation scheme is likely to be the most comprehensive way for an individual employer to address pay inequalities within its organisation. It also helps to form a basis for a fair pay system and provides a hierarchy of jobs that is free from discrimination, thus reducing the risk of facing a claim. This should involve considerable participation from the employees, allowing them to understand the criteria used for job evaluation.
When conducting job evaluation, jobs can be ranked and then grouped into salary bands. All jobs then receive a level of pay which corresponds with their band, ensuring that equivalent jobs award equal levels of pay regardless of the employee’s gender.
ACAS points out that job evaluation is a complex process and therefore, having relevant expert guidance can go a long way. AHR Consultants are vastly experienced in the job evaluation process, offering advisory services and consultancy solutions that ensure best practice.
Identifying discrepancies with an equal pay audit
For employers looking to highlight any potential pay discrepancies across their organisation, conducting an equal pay audit is highly recommended. This allows them to complete a comprehensive assessment of the current situation and use this opportunity to address any issues.
If the audit finds that there are differences in pay across genders, it is crucial that the employer can justify this, as it will be decisive in their ability to defend a claim successfully.