Specialist Lawyers Analyse Opposition Party's Plans

Labour has announced its intention to extend the rights to claim for equal pay beyond sex to include the protected characteristics of race and disability. Below, Céline Winham and Shah Qureshi, explore the proposed amendments and the potential challenges that broadening the scope of existing legislation is likely to cause, and assesses whether the proposals are worthwhile implementing.

The existing law: equal pay

Equal pay is currently a right for both men and women who are in same employment or are employed to do ‘equal work’ as set out in the Equality Act 2010 (EqA 2010) and European Court of Human Rights (ECHR) Statutory Code of Practice on Equal Pay 2016.

The mechanism through which this is achieved is by implying a ‘sexual equality’ clause into the employee’s employment contract.

To make an equal pay claim, an individual must show that their pay (including bonus, overtime pay etc) and/or conditions are worse than another employee of the opposite sex who is doing ‘like work’ or work of ‘equal value’ for the same or an associated employer (known as the ‘comparator’). Unlike general discrimination claims, claimants are not able to rely on a hypothetical comparator, the comparator must exist in reality.

What constitutes ‘equal work’ between the two roles falls into one of the following three categories:

• ‘like work’, the two roles involve similar tasks, require similar skills and there are no practically important differences;
• work rated as equivalent, rated under a fair job evaluation scheme in terms of how demanding the roles are; and
• work of equal value, roles requiring the same amount of effort, skill and decision making.

Currently, once an appropriate comparator is identified, the burden shifts to the employer to demonstrate that the difference in contractual terms is due to a material reason that is neither directly nor indirectly sex discriminatory.

In our view, identifying comparators is difficult in British culture as salaries are unlikely to be discussed openly. Any pay secrecy clauses in contracts can be overridden by the EqA 2010, but only for the purposes of identifying pay discrimination. An employee can enquire with their employer for general information about other people’s pay and contractual benefits (subject to the UK General Data Protection Regulation (UK GDPR)).

Changes proposed: including race and disability

The objectives behind the proposal are likely to include addressing intersectional discrimination in relation to equal pay. However, this does not come without potential challenges and hurdles that will require careful consideration.

Complexity and comparators

Extending equal pay claims adds complexity to the legal framework and the process of adjudicating claims. Determining comparators in and assessing whether individuals perform equal work are more challenging as they are not as easily quantifiable as gender which is binary.

Data availability and transparency

Currently, there is no pay gap reporting requirement relating to protected characteristics. Improving data collection and transparency around pay disparities based on these characteristics as well as sex is essential for addressing systemic inequalities in identifying any disparities that exist.

Compliance

Extending equal pay claims more widely may impose additional burdens on employers, potentially requiring investing resources into conducting audits, collecting data and mitigative measures to ensure that the employer is not falling foul of equal pay legislation. However, it could be argued that such measures are good practice and should be encouraged.

Cultural and organisational factors

Addressing wider pay requires addressing entrenched cultural and organisational factors that perpetuate inequalities. For example, ‘Race for Inclusion’ research by the Ethnic Minority Lawyers Division of the Law Society in 2020 highlighted the ‘stay’ and progressions gaps that affect Black, Asian minority ethnic solicitors, including unfair work allocation, a lack of sponsorship opportunities and the absence of an inclusion culture at some law firms.

Such efforts will not result in quick change and require consistent concerted effort. This may involve challenging biases and stereotypes, promoting inclusion and diversity initiatives and fostering a culture of transparency and fairness in pay practices.

Conclusion

While extending equal pay claims represents an admirable willingness to address systemic inequalities, in my view, significant challenges could arise not least in the identification of an appropriate comparator. The unintended consequence may be the disruption among marginalised groups who need unity rather than division.

In our view, equal pay law is already overly complex and, essentially, does not work as intended. The proposed amendments will only add to the complexity in pleading these cases and add to the existing backlog of claims. Equal pay claims are already typically expensive and unlikely to be feasible unless backed by a union. Justice is likely to be better achieved through existing discrimination legislation when it comes to race or disability.

This article first appeared in ELA Briefing in May 2024