Equal pay ruling may trigger class actions against private employers

Private sector employers could face an equal pay headache following a landmark Court of Appeal decision, legal experts have warned.

The court ruled that the GMB union indirectly discriminated against female workers at Middlesbrough Borough Council because it prioritised pay protection for men over obtaining back pay for female members.

The union could now face a multi-million pound compensation bill, as an estimated 4,000 claims are outstanding against it. Unison is thought to be facing approximately 7,000 claims from its female members.

According to employment law specialists, the decision has ramifications for HR professionals working in the private sector as any claims are less likely to be settled out of court.

Tom Flanagan, employment partner at law firm Pinsent Masons, said: “Unions will become far more cautious, want more information from employers and push for pay audits and job evaluation schemes,” he said. “These involve a huge amount of detailed analysis of jobs, research into pay structures and are very formulaic.”

Job evaluation schemes can lead to substantial costs for consultants, and even when they are completed, the employer still has to decide whether there are valid non-discriminatory reasons for pay differences.

Ranjit Dhindsa, partner at Reed Smith law firm, warned that no-win, no-fee lawyers could use the decision to take mass action against employers. “It is ironic that in an era where employment law is moving towards mediation, we could in fact end up with class actions and litigation on a scale we have not yet seen,” she said.

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