An average of almost 29,000 equal pay complaints are received by employment tribunals in England and Wales per year as the Equal Pay Act reaches its 50th anniversary.
This is according to statistical analysis by law firm DLA Piper, which found there were 368,000 complaints relating to equal pay recorded by the Ministry of Justice since the 2007/08 financial year. This equates to 12% of all claims received by employment tribunals during this period.
However, the vast majority of equal pay cases recorded did not reach a full hearing, with 61% being withdrawn by the claimant; 19% being struck out at an early stage; and 18% having reached a settlement following Acas conciliation.
“Whilst the concept of equal pay for equal work has been around for 50 years, the consistently high number of employment tribunal claims year on year indicates that this is an issue which some employers are still grappling with,” said Jane Hannon, an employment partner at DLA Piper.
“However, the employment tribunal statistics may only be the tip of the iceberg – it is not clear how many of the claims that are withdrawn before hearing are actually withdrawn in return for a financial settlement.”
Hannon told Personnel Today that one of the main equal pay issues employers found themselves in was not being able to justify any differentials in pay between male and female employees, based on objective data.
She also warned about differences in discretionary bonuses, as these were not subject to the same level of scrutiny as pay bands, as well as infrequent job grading exercises and the application of blanket percentage pay increases that exacerbate pay gaps over time.
“So much of it comes down to data,” she said. “Some employers can be quite nervous about looking at this because they don’t want to reveal any problems.”
The number of equal pay claims brought in non-unionised environments was comparatively low and many employers did not realise that they have an equal pay issue until it is challenged by an employee, she said.
“This is all the more reason for employers to keep equal pay front of mind when reviewing pay and conditions and to ensure that if there is any differential for employees doing like work, work rated equivalent or work of equal value, there is a genuine and material factor to justify this,” Hannon said.
Anonymous surveys, spot-checks of pay in similar role and analysis of anomalies at annual pay reviews could help employers obtain the data they require to conduct an equal pay analysis.
She warned that getting it wrong could be catastrophic for an organisation, as many organisations have faced financial struggles after employees won back pay claims in the past.
Class action, such as the cases many supermarkets including Asda, Tesco, Morrisons and the Co-op are embroiled in, also present a significant risk.
The data did not include figures for 2019/20, due full financial year figures not yet being available.