John Kelly: Equal pay audit could be worth it in the long run
The topic of equal pay was back under the spotlight recently when headlines carried the story of a Belfast solicitor being awarded over £270,000 after the Industrial Tribunal found she had not been paid the same as her male colleagues.
The tribunal found that several of the claimant's colleagues (notably, three men and one woman) were promoted to new roles with higher salaries but that the work they carried out in these new roles was comparable to the work she undertook and, therefore, did not merit more pay.
Accordingly, the tribunal found that the respondent had breached equal pay legislation. The firm at the centre of the case has stated its intention to appeal the finding.
Equal pay - what does the law in Northern Ireland say?
Whilst the Sex Discrimination (NI) Order 1976 and the Pensions (NI) Order 1995 also feature in this sphere, the key piece of legislation at play here is the Equal Pay Act (NI) 1970.
Essentially, this act gives all employees a right to equal pay with a person of the opposite sex (known as 'a comparator') doing like work, work of equal value or work rated as equivalent.
It's also worth noting that the definition of 'pay' in this sense is broader than employers might expect; it can include basic pay/salary, bonuses, premiums and performance related pay, for example.
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It should be said that the 'comparator' with whom an employee seeks to compare him/herself must be in the same employment as the claimant, ie they are employed by the same or an associated employer at the same location, or by the same or an associated employer at a different location but where common terms and conditions apply.
While employers have several lines of defence against equal pay claims (the most well-known being the genuine material factor defence, ie where the employer can prove that the difference is genuinely due to a material factor which is not in itself discriminatory), defending equal pay claims can prove both expensive and time-consuming.
Therefore, we would recommend that appropriate steps are taken at an early stage by employers to avoid claims arising in the first place.
One such method of limiting exposure is for employers/businesses to consider carrying out an equal pay audit.
While there is not (yet) an obligation on employers in Northern Ireland to report on pay, it is worth noting that the Equality Commission here does encourage it as a recommendation of good practice.
The benefits for a business which chooses to carry out an equal pay audit include:
- The ability to identify and, where necessary, eliminate pay inequalities;
- The potential to create or maintain fair and transparent pay arrangements; and
- The means to demonstrate to employees, would-be employees and customers, the company's commitment to equality.
An equal pay audit could ultimately allow your business to identify inequalities in pay at an early stage and to take appropriate action to remedy these discrepancies in order to ultimately avoid being on the receiving end of future equal pay claims.
- John Kelly is a solicitor specialising in employment law at Worthingtons. For further information on this topic or for assistance with any employment law query, John can be contacted by telephone on 028 9043 4015 or by email at email@example.com