Wake-up call: Is your business falling foul of equal pay law?
Equal pay may seem a simple matter, but there are complications. Emily Kearsey explains some of the pitfalls and how to avoid them
The problem
Your hotel is facing an equal pay claim from a female receptionist, who contends that her work is of equal value to the work of your male hotel porter and therefore her pay should be harmonised with his higher rate of pay.
The law
The law on equal pay states that men and women are entitled to equality in pay, treatment and other contractual terms for doing "equal work". An employee can enforce this law by bringing an equal pay claim to harmonise their pay with the comparator of the opposite sex who is being paid more.
It is possible for employers to pay one gender less than another for equal work in some circumstances. However, the employer must prove that any difference in pay is due to a "genuine material factor" (eg, seniority), rather than because of the employee's gender, and this can be an uphill struggle.
Expert advice
In light of the legal position, hotel management will be scratching their heads over two main questions:
- Does the receptionist's role involve equal work compared to the porter's role?
- If the work is of equal value, is the porter's higher rate of pay because of a genuine material factor?
When considering the first question, the hotel will need to bear in mind that the concept of equal work covers not only work that is the same (eg, protecting a female receptionist from being paid less than a male receptionist) but also where two roles are considered "like work" (ie, the same or broadly similar), with the work rated as equivalent under a job evaluation study, or of equal value in terms of effort, skill or decision-making.
If the receptionist's work is of equal value to the porter's, the hotel would have to consider whether or not they would be able to convince a tribunal that the porter's higher rate of pay was justified by a genuine material factor. Perhaps the porter's rate of pay reflects the fact that he has been working for the hotel for 10 years, while the receptionist is a relatively new joiner. If the porter is required to work night shifts, while the receptionist works only during the day, that may also justify the pay discrepancy.
To forestall equal pay claims, hospitality businesses would be well advised to conduct an equal pay audit to identify any problematic pay gaps and action them before a claim form arrives.
To-do checklist
- Review your business's pay structure and identify any concerning discrepancies in levels of pay between men and women.
- If a pay gap is identified, consider the background context. Should it be addressed or can it be justified?
- Take necessary remedial action in relation to any unjustifiable discrepancies in pay between men and women. Explain to your employees how their pay and any bonus structures are calculated. This is their legal entitlement, and being transparent can make equal pay claims easier to defend.
Beware
The recent case of Asda Stores v Brierley and others has highlighted just how high the stakes can be with equal pay claims. Asda is currently battling a collective equal pay claim by more than 15,000 claimants (mostly women), comparing their work in retail stores with employees (mostly men) who work in distribution centres, who were typically paid between £1 to £3 more per hour more. Asda could face a bill for more than £100m. Needless to say, the potential impact of equal pay claims on a business's reputation cannot be underestimated.
Emily Kearsey is a solicitor in the employment team at London law firm Goodman Derrick (ekearsey@gdlaw.co.uk)
