Do employees have the right to equal pay for equal work? In this day and age, the answer might seem straightforward – of course, employees are entitled to equal pay for equal work. However, despite widespread awareness of this core principle, many large businesses still fall short of compliance, exposing themselves to significant legal risks, potential damages, and reputational harm from public scrutiny.
Let’s examine a recent case where this occurred, understand what went wrong, and explore how you can ensure compliance while protecting your business’ interests…
Do Employees have the Right to Equal Pay for Equal Work?
Yes - employees do have the right to equal pay for equal work. The Supreme Court’s decision in the landmark Asda Stores v Brierley case confirmed that employees are entitled to equal pay for work of equal value if certain conditions are met. Specifically, workers must be on substantially the same terms as those in different roles unless any differences can be objectively justified by material factors on a non-discriminatory basis.
Building on this precedent, a recent Employment Tribunal decision found that Next had engaged in sex discrimination. The retail giant paid its sales consultants - most of whom were women, lower hourly rates than their warehouse operatives, who were primarily men. The Tribunal rejected Next’s argument that the pay disparity was justified by higher market rates for warehouse work. This ruling potentially opens the door for over 3,500 current and former Next employees to file equal pay claims.
What Should Employers Do to Ensure Compliance?
To ensure compliance with the Equality Act 2010, employers should conduct an equal pay audit. This helps verify that your pay structures are fair, transparent and aligned with legal requirements, which mandate that men and women be paid equally for work that is the same, similar, equivalent or of equal value. The latter can apply even if the work isn’t identical, but is comparable in terms of effort, skill, and decision-making.
It’s important to note that potential claims for unequal pay can go back up to six years after an employee leaves the company, so taking proactive steps now could prevent costly legal issues in the future. For further assistance with this matter, please don’t hesitate to contact our HR/Legal Advice Line Team for FREE on 01455 852 028, where a team of experts can assist with your individual needs.
