Cambridgeshire County Council relied on robust employee data, clear policies and open dialogue with trade unions to conduct equal pay audit in line with best practice
The Equal Pay Act has been incorporated into UK domestic law since 1970, but how many employers can really state that they have addressed the issues that the legislation was first developed to address?
The challenges that the public sector has faced around equal pay has brought into focus some disciplines that should be embedded in all organisations and dare I suggest are pretty basic (and often get ignored in favour of more ‘interesting’ HR work).
Trying to defend and justify any differences in basic pay rates for men and women doing comparable jobs and the impact of performance-related pay and bonus arrangements requires strong information systems and good quality employee data, both current and historic.
The design of pay and reward systems needs to be built upon objective criteria, ideally using a job evaluation system that has been equality assessed, and the rationale for alterations to the outputs produced needs to be recorded. Sad but true, but this is an area where forensic attention to detail and being able to track audit trails are essential.
If you decide to run a pay audit, it is important to have clear HR policies that cover pay and reward for all levels of the organisation and address pay equality issues. This way all employees are aware of their rights and understand why any changes are to be made.
We found that working in an open and honest partnership with our trade unions was an important part of the process, and, in fact, we still maintain communication, and meet with them on a monthly basis to discuss pay and reward issues at a corporate level.
Educating HR professionals within an organisation is also best practice. Make sure that they are aware of equal pay implications and have an understanding of the law so that they are able to spot potential pay inequality issues.
In terms of conducting the audit itself, we set out the steps we needed to take right at the start of the project. These included producing a gender breakdown at all grades of the organisation and then running the reports via our HR system.
Building upon the notion of a forensic examination, the ability to track any local agreements that may have been reached and the discipline of eradicating ‘cowboy practices’ was also essential for us. If your internal arrangements lead to local custom and practice relating to pay arrangements, then you are more likely to find yourself exposed to potential risk.
With the implementation of the Equality Act 2006, there is now a statutory requirement for the public sector to undertake gender impact assessments in respect of our HR policies. While this may not be a statutory obligation upon other sectors, this approach has real value.
The regular audit and assessment of your pay and reward systems for disproportionate bias towards one gender is not only good practice, it is also common sense.
One of the other fundamental points in relation to equal pay is not to confuse equal pay with fair or low pay issues. It appears that in the case of some trade union representatives and even some HR professionals the issues have become clouded and confused – they are clearly not the same thing.
Stephen Moir is the director of human resources for Cambridgeshire County Council
Best practice tips
- Make sure your pay structure is objectively determined.
- Consider undertaking equal pay audits on a regular basis.
- If you apply bonus schemes check these for a real link to productivity.
- Ensure you maintain good quality HR/Payroll records.