Last week, Newswatch presenter Samira Ahmed won her equal pay case against the BBC, potentially leaving the BBC with a bill for hundreds of thousands of pounds in backpay. Ahmed successfully argued that her work is of equal value to Points of View presenter Jeremy Vine, who is paid significantly more than her.
So what exactly is ‘equal pay’ and when are your staff entitled to it? To help your business avoid being exposed to potential staff grievances, reputational damage or even employment tribunal claims for compensation or backpay, we’ve answered these, and other FAQs, below.
What is equal pay?
‘Equal pay’ refers to the fact that women and men have the legal right to be paid equally for equal work.
In this context, ‘pay’ refers not only your staff members’ wages, but also their benefits packages, including non-discretionary bonuses, performance-related benefits, company cars, sick pay, holiday pay etc.
Which of my staff are entitled to equal pay?
All of your staff are entitled to equal pay, unless they are self-employed freelancers.
How do the equal pay rules work in practice?
Your staff must be paid the same as other members of your staff (either current or former) of the opposite gender who are (or were) carrying out equal work to them.
For example, if you take on a new male employee and he has negotiated a higher salary than the salary you pay an existing female employee in the same role, her employment contract will automatically be modified to ensure that she is paid the same amount as him. Equally, you must pay a new female employee the same amount as her male predecessor, and if you offer a male employee a pay rise, you must offer an equivalent pay rise to a female employee doing equal work.
What is equal work?
‘Equal work’ doesn’t mean that your staff must be doing identical work, but it must be work which is either:
- similar, eg because the roles involve similar tasks or require similar skills;
- rated as equivalent (eg placed in the same grade) by a job evaluation scheme that your business has carried out; or
- of equal value because it makes makes equal demands of your staff, eg the roles require a similar level of skill, training or decision-making even though the jobs are entirely different. For example, a member of your staff who works in your canteen could carry out work of an equal value to an employee who works as a joiner on the factory floor. Whether or not the roles are of equal value will come down to the specific nature of the work in question.
Are there any exceptions to the equal pay rules?
The only exception to the equal pay rules is if you have a genuine, material factor other than gender to justify paying your staff members differently. This could be because the male comparator is more qualified than the woman and it’s difficult to hire individuals with his particular skills, or because he works in London where the cost of living is higher, whilst the woman works at a location outside London.
Sparqa Legal has detailed guidance about paying your staff, including what to consider when you are making job offers and how to operate staff bonus schemes fairly. If one of your staff members raises a grievance relating to equal pay, we’ve got guidance to help you handle the process properly.