Under the principle of equal pay, employers must pay men and women who perform substantially the same jobs equally.
Pay refers to any contractual entitlement bonus, holiday and pension, not just basic salary.
The effects of equal pay legislation have recently hit the higher education sector, with 23 male workers who were caretakers and tradesmen at the University of Wales Trinity Saint David suing for sex discrimination, claiming they were being paid less than women on the same pay grade, including secretaries and office workers.
The university has conceded the claims, with the projected settlement set to total more than £500,000. This example highlights the potential financial liability faced by employers that fail to level their employees’ contractual benefits.
Sign up to our newsletters
Receive news and guidance on a range of HR issues direct to your inbox
The law operates by implying a ‘sex equality clause’ into a contract, so that less favourable terms are replaced by more favourable terms that exist in the contract of an equivalent colleague of the opposite sex.
Claimants who feel discriminated against on equal pay grounds are entitled to pursue a claim for pay arrears going back six years, and damages for breach of a non-pay term.
Since 2005, more than 200,000 equal pay claims have reached the tribunal stage, the vast majority being in the public sector, principally involving councils. Earlier this year, Birmingham City Council workers agreed settlements totalling more than £1 billion.
The University of Wales case was followed by a more traditional equal pay claim: female workers in a large supermarket arguing that they are engaged in work of equal value to that of workers in distribution centres, roles that are primarily undertaken by men.
If the claim is successful, the cost to the supermarket could total millions of pounds. To protect their position, employers should establish whether there are significant pay gaps by undertaking equal pay reviews.
This would show whether any exist, and the potential liability, and may allow time for employers to consider the extent to which these can be justified objectively on factors other than gender.
Matthew Kelly is a partner at law firm Thomas Eggar