Equal pay protections that were to be revoked under the Retained EU Law Act are to be safeguarded with new legislation, in a move described by the Labour party as a U-turn by the government.
EU law enshrined the principle of equal pay for equal work for men and women so long as the terms and conditions of a job were attributable to a “single source”. But these protections would have been lost under legislation to scrap many EU laws, which received Royal Assent in June.
The EU’s “single source test” was one of hundreds of laws to be abolished by the end of the year under the Retained EU Law (Revocation and Reform) Act 2023.
Angela Rayner, deputy Labour leader, had said the party would restore the equal pay protections. “Fifty years on from Barbara Castle’s Equal Pay Act, women are still fighting for equal pay for equal work,” she said. “The next Labour government will act to ensure equal pay claims cannot be unfairly blocked before they’ve even started.”
Ministers last night pledged to preserve the right for women to receive equal pay to men for doing the same or similar job, even if they work in different locations or the work is outsourced to a separate company.
A spokesperson for the government’s Equality Hub, part of the Cabinet Office, said: “There will be absolutely no reduction in equal pay protections. New secondary legislation will be laid in Parliament long before the end of the year.”
Anneliese Dodds, the shadow women and equalities secretary, described the announcement as a U-turn, having come hours after Labour committed to keeping the “vital” equal pay rights.
“Women will wonder if the party that put these rights at risk can really be trusted to protect them,” she posted on X.
Dodds also said that Labour would create a specialist enforcement unit in the Equality and Human Rights Commission to work with employers and trade unions to monitor equal pay cases and stamp out unfair practices.
Audrey Williams, employment partner at Keystone Law, said the announcement “essentially confirms that the status quo will remain as set out in the current Equality Act legislation and, one assumes, the related case law. However, the status of case law from the European Court after exit day on the topic of single source (and other areas of employment law) is also complex.
“Equal pay claims are notoriously difficult to pursue (and defend) but reducing the protection would have been unwelcome when inequity in gender pay remains a problematic. While it remains a relatively underused provision, the single source argument has been an effective line of attack with claims brought in the public sector and, more recently, against employers with complex group structures in the private sector.
“For example, where there may be multiple subsidiaries, ultimately owned and controlled by the same parent which is the decision maker when it comes to pay and benefits.”
Henry Clinton-Davis, partner at law firm Arnold & Porter, said: “There is a lot of politics at play here, but there was not much doubt that equal pay laws, which have been so long entrenched, would seriously be removed – especially by a government facing an election in a year’s time.
“Despite the great fanfare when the government initially threatened to automatically revoke most EU laws retained after Brexit, in the HR space at least, very little is scheduled to change, beyond some potentially welcome tweaks to the Working Time Regulations and to TUPE.”
In 2021, a landmark equal pay ruling by the Court of Justice of the European Union (CJEU) found in favour of Tesco shop-floor workers, ruling that Tesco’s lower pay rates for their mostly female shop staff relative to their mostly male colleagues in depots breached EU legislation and the principle of equal pay.
The workers’ case hinged on the “single source” principle, whereby it could be shown that the inequality in pay was attributable to a single source, in this case, the board of Tesco.
The ruling dismissed the retail giant’s argument that the EU principle defining equal pay for equal work or work of equal value was not applicable in this case. It also rejected its argument that the roles required “different skills and demands”.