Equal Pay claim could cost employer dear

An equal pay claim has been started against the Co-op supermarket chain by more than four hundred of its employees. It is believed by their legal representatives that if their claims are successful, they could be looking at £10,000 in repayments per employee.

The Co-op shop floor workers, who are mostly women, claim that in comparison with warehouse and distribution workers, who are mostly men, they are being underpaid by between £1.50 and £3 per hour.

The first hearing for the claim took place earlier this month at Manchester Employment Tribunal. In their claim, the affected workers are asking for up to six years of back pay.

It is believed that anywhere between 40,000 and 50,000 people may be eligible to bring claims if the tribunal rules in favour of the current claimants.

The claim comes after similar actions against Asda, Tesco, Sainsbury's and Morrisons.

The vast majority of businesses in the UK are far smaller than the national supermarket chains but equal pay claims can still date back several years and could end up costing employers dearly, regardless of their size.

What do employers need to know about Equal Pay?

The Equality Act 2010 says that men and women employed to carry out the same work, work rated as equivalent or work of equal value are entitled to the same rates of pay unless it can be shown that the pay differential is unrelated to sex or, where the differential is related, it is “a proportionate means of achieving a legitimate aim”.

It should be borne in mind by businesses intending to use the proportionate means defence that courts or tribunals take an extremely strict approach when it comes to equal pay law. They are likely to place the proportionate means defence under robust scrutiny.

Claims relating to equal pay may well have come about from employees in different jobs comparing their pay levels when socialising. Whilst it might have been possible in the past for employers to restrict their employees from discussing their pay or work with colleagues through the use of a contractual clause, this is no longer the case and businesses should not take disciplinary action against staff who do so as such action could well backfire on them.

As the retailers involved in recent cases have found out, equal pay is a highly complicated area of law. If a business receives complaints relating to equal pay – or is concerned that there might be inequalities in its pay structures – the advice is to take legal advice as soon as possible.

Equal Pay policies

It is important for businesses to adopt equal pay policies and procedures and review them regularly. This also has the benefit of demonstrating the organisation's commitment to complying with its obligations under equal pay legislation.

A good equal pay policy will usually cover the following areas:

Policy Statement

A short, written statement confirming the organisation's commitment to tackling sex discrimination and providing equal pay.

Definitions

It is advisable to clearly define in the document terms which are relevant to the organisation's legal obligations under the Equality Act 2010 such as 'pay', 'equal pay' and 'employee'.

Actions

The policy document should describe how the organisation intends to provide and maintain equal pay. These could include discussions with trade unions, formal pay reviews or audits, monitoring starting salaries for new staff or training and guidance for those who are involved in setting rates of pay.

Complaint Procedures

This document describes how the organisation will answer any concerns and/or complaints about possible breaches of the equal pay policy, along with details of any grievance procedures.

Monitoring

The organisation should commit to regularly reviewing the policy and assess the progress in delivering the action plan.

rradarstation

If, after reading this article, you feel you want to discuss your approach to equal pay, why not talk to our rradarstation advisors? rradarstation is a resource available through the AXA MLP where policyholders can access rradar’s legal advisory team over the phone or by email and web gateway that provides over 2,000 articles, step-by-step guidance sheets, forms, sample letters and templates to download relating to running your business/organisation.