The principle of equal pay is firmly established in today’s workplace, however, differences in average pay rates still exist. In the last week one survey suggests that whilst women earn less than men throughout their working lives, by the time they reach their 50s the gap is the widest when they earn £8,504 less per year than full-time working men.
These types of statistics are behind the introduction of gender pay gap reporting next year. The reporting will require large organisations to publish details of the percentage difference in pay between men and women in their workforce.
A large gender pay gap may or may not indicate that there are equal pay issues. There may be good reason why an employer has a higher wage bill for a male employee compared to a female employee, as they may be carrying out entirely different jobs.
However, it would be a mistake to consider that just because the job has a different title or involves very different activities, that equal pay cannot be an issue. Workers in entirely different jobs could be carrying out work that is equivalent or of equal value, and differences in pay can lead to claims.
An example of such a situation leading to claims has recently been considered in a case[1] involving female supermarket workers claiming parity of pay with male workers employed in the employer’s distribution depots.
The claimants argued that the difference in pay was down to their work having historically been seen as ‘women’s work’, which was thought to be worth less than the work done by men in the depot.
The employer had disputed though that any such comparison could be made on the grounds that the two groups of workers were in different establishments and subject to different management regimes. The comparisons for equal pay purposes could only be made where ‘common terms’ from a ‘single source’ applied at the establishments.
The employer’s arguments were rejected – The Manchester Employment Tribunal found the terms of the supermarket workers were broadly similar to those that applied to the distribution depot workers, taking into account that they were both hourly paid and their handbooks were structured in broadly the same manner. The Tribunal was also satisfied that the employer’s Executive Board exercised budgetary control and oversight over both the supermarket workers and the distribution depot workers, so that there was a ‘single source’ for the terms which had the power to restore equality.
The decision gives the go ahead for the equal pay claims of over 7000 workers to proceed in a case where the total cost to the employer has been estimated at over £100m.
More widely though, it should also serve as a reminder of the potential risks in larger organisations of equal pay disputes, particularly as preparations are made for publication of their Gender Pay Gap figures.