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05. Pay Equity Laws

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United Kingdom

05. Pay Equity Laws

Extent of Protection

Equal pay legislation in the UK prohibits discrimination in relation to the terms and conditions of employment as between men and women. EU law which underpins the legislation will continue to be directly effective post-Brexit. Where men and women are paid at different rates, an employee can bring an equal pay claim and the employer must prove that the reason for this is not gender-related, or be able to objectively justify this.

 

Remedies

Equal pay claims are usually brought in the employment tribunal, either during employment or within six months of the termination of their employment or appointment.

Equal pay awards are made up of:

  • compensation of arrears of pay plus interest, limited to 6 years; and
  • revised contractual terms, including remuneration terms, so that they are, in the future, the same as that of the person of the opposite sex doing the same work.

In a successful equal pay claim, the tribunal will also order the employer to undertake an equal pay audit (unless an exception or exemption applies). This involves publishing relevant information about gender pay (such as gender pay information relating to the people in question, identifying the differences in pay and any reasons for those differences and the employer’s plan to avoid future equal pay breaches) on the employer’s website and providing this to the individuals involved.

Enforcement/Litigation

While historically equal pay claims were predominantly brought in the public sector, a significant number of claims have been brought against private sector employers in recent years, in particular in the retail sector. In one such claim, the UK Supreme Court (the final court of appeal) held that shop floor staff are entitled to compare their wages to those of distribution centre staff for equal pay purposes. Their decision will impact on other similar group action claims currently being brought against other major supermarkets.

Other Requirements

UK employers with 250 or more employees must report their gender pay gap figures annually. These are published on a government website and on the employer’s own website in an easily accessible place for the public to view. Although there are no formal monetary penalties for non-compliance, reputational risk of non-compliance is high. There was no requirement to report gender pay gaps for the 2019/20 reporting year due to the Covid-19 pandemic. This was resumed as normal from April 2021.

Voluntary ethnicity pay reporting has been introduced, with government guidance which sets out detailed advice on analysing and reporting on ethnicity pay.

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