In on the act: Equal Pay Act 1970

Our continuing series of quick guides to major employment legislation puts
key information at your fingertips and brings you up to date with the latest
developments. This week Gareth Brahams of law firm Lewis Silkin examines
current issues under the Equal Pay Act and the Government’s proposals to speed
up and simplify tribunal procedures in equal pay cases

The Equal Pay Act 1970 (EqPA) is one of the longest-standing pieces of
employment law, but it did not actually come into force until 29 December 1975
– the same day as the Sex Discrimination Act 1975 (SDA). Despite its name, the
EqPA covers not only pay but other discriminatory contractual terms as well. In
contrast, the SDA covers non-contractual benefits and discriminatory treatment
in areas such as recruitment, promotion and dismissal.

Equality clause

The way the EqPA works is to imply an equality clause into employees’
contracts of employment. In the case of a female worker, this operates where a
male member of staff is doing:

– Like work – the same or broadly similar work

– Work rated as equivalent under a job evaluation study, or

– Work of equal value.

The effect of the equality clause is to entitle the woman to contractual
benefits as favourable as those of the male comparator, unless the employer is
able to show the difference is genuinely due to a "material factor"
other than sex.

UK law on equal pay is greatly influenced by European Community law. The
right to equal pay for equal work was enshrined in article 119 (now article
141) of the Treaty of Rome and fleshed out in the Equal Pay Directive (No
75/117).

Term-by-term analysis

The EqPA operates on a term-by-term basis (Hayward v Cammell Laird
Shipbuilders [1988] IRLR 257). It is no defence for the employer to show that a
woman’s contractual package is as favourable as the male comparators. A female
worker can therefore focus on one particular term of her contract that is
disadvantageous – for example, basic salary – despite the fact that other
aspects of her contract, such as holiday and sick pay arrangements, may be more
beneficial than a man’s.

In some cases, however, it may be possible for the employer to establish a
material factor defence on the basis that the female employee’s superior
benefits are the genuine and non-discriminatory cause of the unfavourable term
of which she complains (Leverton v Clwyd County Council, 1989, IRLR 28). This
underlines the importance of employers having "transparent" pay
structures that explain the basis on which contractual benefits are allocated
as between workers who ostensibly do the same work or work of equal value.

Scope of comparison

Under the EqPA a claimant must identify a male comparator "in the same
employment". However, it seems that EC law may allow for a broader scope
of comparison.

There are currently two cases before the ECJ on this issue. In Lawrence v
Regent Office Care, 2000, IRLR 608, school dinner ladies who once worked for
North Yorkshire County Council but who are now employed by private contractors
are seeking to compare themselves with current employees of the council. The
ECJ may consider this case jointly with Allonby v Accrington & Rossendale
College, 2001, IRLR 364, which also raises important questions as to the
circumstances in which an equal pay comparison can be made between individuals
employed under contracts with different employers.

Whichever way the ECJ decides, it will still be essential for a claimant to
point to a specific comparator. It is not possible, for example, for a woman to
claim that her pay is below the industry norm for men.

Proposals for reform

Although the gap between male and female average earnings has narrowed from
37 per cent to 18 per cent in the 31 years since the introduction of the EqPA,
the Government is still concerned to narrow the gap further. Last December, the
Department for Education and Employment published Towards Equal Pay for Women,
a consultation paper on cutting red tape and streamlining the procedural rules
that tribunals follow in equal pay cases. The proposals include:

– Simplifying the claims procedure in multiple cases where a number of applicants
have the same claim

– Removing the provision in the EqPA which enables tribunals to dismiss an
equal value claim at the outset on the basis that there are no reasonable
grounds for determining the work is of equal value

– Allowing tribunals to appoint an assessor to sit on the tribunal as a
formal expert adviser on an equal value claim

– Removing the parties’ right to call their own expert witnesses: – only the
independent expert appointed by the tribunal would give evidence

– Introducing a questionnaire procedure to enable women to get information
from their employer when deciding whether to bring a case, and

– Removing the unnecessarily detailed separate rules of procedure for equal
value claims.

It is no surprise that the Government is seeking to tackle the complexities
in equal pay cases, as it is common for claims to take many years to grind to a
conclusion. However, it is questionable as to what impact such adjustments to
procedural rules will have. The law on equal pay is inherently difficult and in
most cases there is no getting around the problem of having to deal with
lengthy expert evidence.

A more powerful and pragmatic reform, according to the EOC’s Equal Pay Task
Force, would be to require employers to carry out pay audits of their workforces.
The Government has, however, ruled out mandatory pay reviews, because it would
place an unacceptable burden on business.

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