It is a fundamental principle of employment law and most would agree that men and women should receive equal pay for equal work, but the law in this area is complex. What do employers need to know about handling this issue?
In summary, men and women should be paid equal pay for equal work. This means an employee is entitled to contractual terms that are as favourable as those of a ‘comparator’ of the other gender in the same employment if they are employed to do ‘equal work’ (see below for a summary of what these terms mean).
Employers can have a defence if the difference in contractual terms is due to a ‘material factor’ which does not amount to sex discrimination. This might be factors such as past performance, geographical reasons or seniority. Factors that are on the face of them gender-neutral, but which have a disproportionate adverse impact on women can potentially be objectively justified by the employer.
There are significant risks if it is found that an employer has failed to pay equal pay. Should they successfully bring a claim for equal pay, each employee can be awarded arrears of up to six years’ pay plus interest.
Although the principle of equal pay can seem straightforward, it can be legally complex and factually tricky to show whether an employee is, or is not being paid equal pay. For example:
1. Comparators are much broader than might be expected
2. What is ‘equal work’
‘Equal work’ is work that is defined as being either ‘like work’, ‘work rated as equivalent’ or ‘work of equal value’ as the comparator. This involves carrying out a detailed assessment of the work that is being done:
This note is for information only and is not legal advice. It reflects the position as at 17 September 2021. For any questions, please get in touch with Natasha Adom or your normal GQ|Littler contact.