An Employer’s Guide to Equal Wage Law in the UK

It’s essential that growing business leaders and HR teams understand the nuances of UK employment law. Among the most critical pieces of the legislation is the law governing equal pay. Ensuring fair compensation and pay conditions for all employees is not only a matter of ethical business practice but a legal imperative to prevent discrimination. This article provides an overview of UK equal wage laws, offering guidance on how to address equal pay issues, and where to find further advice and information.

The foundations of equal pay: a little historical context

The principle of ‘equal pay for equal work’ has been a cornerstone of UK law for over five decades. The journey began with the Equal Pay Act of 1970, a landmark piece of legislation. This Act was introduced with the aim of eliminating the pay gap between men and women by improving wages and working conditions for women. It was a direct response to historical pay disparities and unfair pay conditions, and was significantly influenced by events such as the 1968 Ford sewing machinists’ strike, when female members of the workforce protested against being paid less than their male counterparts for similar work.

While the Equal Pay Act 1970 has since been incorporated into the Equality Act 2010, its legacy endures. The Equality Act 2010 consolidates various anti-discrimination laws, providing a more comprehensive and modern legal framework. For example, this Act protects employees from diverse types of discrimination, including on the basis of age, disability, sex, sexual orientation, marriage and civil partnership, gender reassignment, pregnancy and maternity, race, and religion or belief. A key section of this Act, for sex equality, is Section 66, known as the ‘sex equality clause’, and focused on equal pay for equal work between men and women. This Act continues to ensure that the principle of equality remains central to employment practice.

What constitutes equal pay under current UK law?

The Equality Act 2010 dictates that men and women in the same employment performing equal work must receive equal pay. This is a fundamental right embedded in their contract of employment. But what exactly constitutes ‘equal work’? Well, the law defines it in three ways:

• Like work: This is work that is the same or broadly similar, where any differences are not of practical importance. For example, a male and a female cashier doing the same job would be doing ‘like work’.

• Work rated as equivalent: This applies where different jobs have been evaluated as equivalent under a job evaluation scheme. Such a scheme would assess the demands of different roles, considering factors such as efforts, skills, and decision-making.

• Work of equal value: This is the broadest category. It allows for the comparison of jobs that are entirely different but of equal value. For instance, a female-dominated role could be compared to a male-dominated role if they are determined to be of equal value in terms of the demands placed on the employee.

It’s important to remember that ‘pay’ isn’t just about wages. The concept of equal pay covers all contractual terms and conditions, including bonuses, pension contributions, and any other benefits provided by the employer.

Identifying and addressing pay inequity

For an employer, the first step in ensuring compliance with both the letter and the spirit of the law is to be proactive. How can employers determine if employees are being paid unequally?

• Conduct pay audits: Regularly review your pay structures. Compare the pay of men and women performing equal work. Look for any pay gap and investigate the reasons behind any differences. Clear reporting on these findings is good practice.

• Job evaluation: Implement a transparent and fair job evaluation system. This ensures that roles are graded and co­mpensated consistently based on objective criteria, not gender.

• Transparency: Be open with your employees about your pay policies. An employee has the right to ask for information to determine if there is a pay disparity. Providing clarity can reduce the risk that an employee will make a formal claim. For more details on your legal obligations, check out our guide on Employment Law.

If an employee believes they are not receiving equal pay, they have the right to make a claim. As a responsible employer, you should have a clear process for handling such concerns. This should typically involve:

1. Informal discussion: Encourage the employee to discuss their concerns with a manager or HR.

2. Formal grievance: If the issue cannot easily be resolved, the employee may raise a formal grievance. The employer must respond by investigating all claims thoroughly and impartially.

3. ACAS early conciliation: Before an employee can make a claim to an employment tribunal, they must first notify ACAS (the Advisory, Conciliation and Arbitration Service). ACAS will then offer advice and conciliation to find an agreement and resolve the dispute.

Legal recourse and employer defence

If an employee’s pay claim is not resolved, they can take their case to an employment tribunal. A claim can be made at any time while employed and up to six months after leaving the employment.

In a tribunal, the employee must identify a ‘comparator’ employee, for example, of the opposite sex, who is doing equal work but is paid more. If the employee establishes they are doing equal work for less pay, the burden of proof shifts to the employer. The employer’s defence must show that the difference in pay is due to a ‘genuine material factor’ that is not related to gender, or any other discriminatory factor.

A material factor defence could include, for example, differences in qualifications, experience, or performance. However, the employer must prove this factor is the genuine reason for the pay gap, and is not tainted in any way by discrimination. Importantly, among possible factors, a simple ‘agreement’ to be paid less cannot be a valid defence.

Equal pay law can be quite complex. It is therefore always advisable to seek professional legal advice. Here are some resources that can provide further information and support:

• ACAS: Offers free, impartial advice on workplace rights, rules, and best practices.

• Equality and Human Rights Commission (EHRC): Provides guidance and information on the Equality Act 2010 and your responsibilities as an employer.

• Legal advice: For specific legal queries or complex cases, it is essential to consult with a qualified employment law solicitor.