Research by the Office for National Statistics (ONS) shows that in the UK, women earn on average only 87 pence out of every pound paid to men. Article by Jessica Corsi who is a partner and employment law specialist at Doyle Clayton.

In broad terms, these statistics support the findings of the Doyle Clayton 'Age before Beauty?’ report which I co-authored with Tina Wisener. The report findings confirm that discrimination in the workplace is alive and well. UK laws dealing with inequality in the workplace are now contained in the Equality Act 2010.  The law protects employees from discrimination at work, ensures equal employment terms for men and women and protects against discrimination in relation to opportunities for promotion, training and recruitment.

When it comes to ensuring equal pay, the Act outlines how men and women are entitled to be paid equally for work of equal value. It is unlawful to pay anyone less money on the basis of their gender if they provide work which is of equal value to that performed by someone of the opposite sex, unless there is a good, non-discriminatory reason for the difference, known as a material factor defence. All contractual terms are covered, not just pay, so men and women doing equal work are entitled, for example, to the same holiday entitlement, as well as to the same contractual bonuses and other benefits.

An employee can compare their pay package against the individual components of the package of a colleague of the opposite sex.  If they consider that they are not being paid the same, they can question their employer about the reasons for this. This is an advisable course of action before an employee takes their case to an employment tribunal, as it will help them assess the strength of their case.  In addition, employment tribunals will be able to take account of whether and how an employer has answered questions when making their decision on the claim.

The current government publicly pledged to reduce ‘red tape’ and employment related constraints on businesses. It also acknowledged the widening pay gap. To bridge the gap between policy and life on the ground, new laws are being introduced later this year. They will require employment tribunals to order employers, who have been found to have breached pay discrimination laws, to carry out equal pay audits. 

From 1 October 2014, mandatory equal pay audits can be ordered if it is ruled during a tribunal that an employer failed to comply with equal pay laws or discriminated against an employee due to their gender in non-contractual pay matters. Employers will have at least three months in which to conduct the audit and provide a copy to the employment tribunal. Employers will also be required to publish such audits on their websites for three years and draw the audit to the attention of affected staff. As a result of an audit, the employer will be required to publish the following information.

– Relevant gender pay information.

– Any differences in pay between men and women.

– Reasons for any differences.

– Reasons for any potential contravention of equal pay law identified by the audit and;

– Explanation of how the employer plans to avoid breaches occurring or continuing. 

Employers, who fail to carry out an audit when ordered to do so, could be liable to pay a fine of up to £5,000. Equal pay audits can only be ordered in respect of claims presented on or after 1 October 2014.  Micro-businesses employing fewer than ten people and new businesses started up in the 12 months preceding the claim will be exempt.  The exemption for micro-businesses is supported by Doyle Clayton’s report which shows that employees of micro-businesses are less likely to perceive or experience unlawful discrimination than employees in medium sized businesses. 

Whilst the requirement for equal pay audits may go some way towards helping to reduce the pay gap in Britain, the fact that it only applies where an employer has already been found to have breached pay discrimination laws means that its impact is likely to be limited.  Further steps are likely to be necessary, either legislative or voluntary, if the pay gap is to be closed.