Karen Coleman: Mandatory job evaluation could mitigate equal pay claims

Karen Coleman

Morrisons has become the latest big supermarket group to face a challenge at the Employment Tribunal (ET) over equal pay by its shop staff; these are predominantly women who believe that they are being unfairly paid less than their male counterparts employed in distribution centres. If the test claim by eight shop floor employees succeeds, it could apply to a further 80,000 employees, adding approximately £1 billion to the retailer’s annual salary costs.

So, what is the legal framework and what can employers do, not only to prevent facing such claims themselves, but also to prevent the widening of any apparent gender pay gap?

The claimants in this case are seeking damages on the basis that although the jobs are of equal value, under the test set out in Section 65 of the Equality Act 2010, which refers to equality ‘in terms of the demands made’ on the role, the shop employees have been underpaid for the same value of work as that done by mostly male staff in distribution centres.

The publication of the retailer’s latest gender pay gap figures reveal an average difference of 14.9%; however, this rose to 47.8% when based solely on the bonuses paid. The report makes clear that Morrisons considers that improvements in its gender pay gap are best achieved by increasing the number of women in senior positions, rather than by re-balancing pay in lower paid positions.

Perhaps the best way for an organisation to avoid this position is to undertake a job evaluation study of every role within its business. Although the cost may be prohibitive for many small businesses, if the gender pay gap is to be seriously addressed by every employer, and if organisations are to protect themselves as much as possible from such claims, an argument exists that such studies should become mandatory.

Karen Coleman is an employment law specialist at Excello Law