What is the Equal Pay Act 1970?
In 1970, the Equal Pay Act UK was introduced into Parliament by the Labour government. According to this act, men and women must be paid equally for doing the same work, unless there is a valid reason for a difference in pay.
Before this act was established, it was common for women to be paid less than every other employee in the workplace, including unskilled men.
In 1968, 850 female employees at the Ford Factory in Dagenham went on strike after discovering they were receiving 15 per cent less pay than their male counterparts in the same job.
It is widely accepted that this strike triggered the introduction of the Equal Pay Act of 1970.
- What is the Equal Pay Act 1970?
- Requirements of the Equal Pay Act
- Coverage Under the Equal Pay Law
- Differences in Pay Allowed under the Equal Pay Act
- Enforcement of the Equal Pay Act
- Wages Regulation Orders Under the Equal Pay Act
- How Does the Equal Pay Act Relate to the Gender Pay Gap?
- Case Law On Equal Pay
- Why is Equal Pay Important?
- What are the Benefits Of Equal Pay?
- How Can IAS Help?
- Frequently Asked Questions
Requirements of the Equal Pay Act
The Equal Pay Act states that men and women who are performing the same roles, equivalent roles, or roles of equal value to a company, must be paid the same.
This applies to the salary that the employees earn, but also any contractual terms. For example, access to pension schemes, performance-related benefits, hours of work, travel allowances, sick pay, company car, redundancy pay, etc.
- Same role – This requires the jobs to be the same, or very similar. It is not obligatory for the job titles to be identical.
- Equivalent role – Jobs that are evaluated to be equivalent must result in the same remuneration for men and women.
- Role of equal value – Roles that bring equal value to the company must be paid the same for men and women. This value is determined by the level of effort, skills, and decision-making expected of the employee.
Coverage Under the Equal Pay Law
The Equal Pay Act protects:
- People in full-time, part-time and temporary contracts
- Self-employed people
- Agency workers
Both men and women are protected under this act, which means women cannot be paid more for performing the same work as men.
Differences in Pay Allowed under the Equal Pay Act
In some instances, it is acceptable for men and women to receive a different salary for an identical or equivalent job. However, there must be a genuine reason for this that is not related to the difference in gender.
For example, if one employee works night shifts while the other works during the day or if the employees live in different locations (especially if one lives in London).
Enforcement of the Equal Pay Act
All employers in the UK are expected to meet the requirements of the Equal Pay Act. This includes avoiding managerial discretion over starting salaries, committing to transparency in job descriptions and interviews, and having just one grading system within the company.
It is recommended for businesses to have an equal pay policy, to demonstrate that they are obedient to the Equal Pay Act. Large companies (of 50 or more staff) can also perform an equal pay audit, and smaller organisations can implement an equal pay review.
If an employee believes they are being discriminated against in terms of pay, they should first meet with their employer to attempt to resolve the issue. If raising the issue informally, and then formally, does not work, they can follow the Acas Early Conciliation Procedure.
To begin with, Acas will speak to both the claimant and the respondent, in an attempt to resolve the equal pay issue. This service is free of charge. If a conclusion is not reached, the claimant is free to file a complaint to an employment tribunal. They must do this within three months of identifying the pay difference.
If you are unclear about your next step contact you may want to consider getting advice from an employment expert.
Wages Regulation Orders Under the Equal Pay Act
Wages regulations orders are factors that increase or decrease an employee’s pay. This can include:
- Wage deductions
- Cost of living increase
Companies must follow the Equal Pay Act when adjusting the pay of their staff, so men must not be paid more than women in terms of overtime, bonuses, or any other wage regulation order (unless there is a genuine reason provided).
How Does the Equal Pay Act Relate to the Gender Pay Gap?
The Equal Pay Act legally obliges employers to pay their staff the same wage for the same job. On the other hand, the gender pay gap explores the differences in pay between men and women overall, which includes different roles.
The gender pay gap is measured by calculating the average hourly salary of men and women. In April 2022, the gender pay gap was recorded at 8.3% for full-time employees.
Companies with more than 250 employees must commit to gender pay gap reporting, but it is not illegal to have a gender pay gap. On the other hand, if the company is not following the Equal Pay Act, this is against the law.
Case Law On Equal Pay
An example of an equal pay case that was not successful for the claimant is the 1977 Eaton Ltd vs Nuttall case. The female claimant was a production scheduler who was earning a lower salary than her male counterpart.
However, it was determined that there was a material difference between their jobs, as the male employee was dealing with higher value products, and therefore he possessed more responsibility.
The 1976 case of Atkinson & Ludlow vs Tress Engineering Co. Ltd was much more successful for the claimants, who were tea ladies earning 81p per hour. Their comparant was a male labourer earning 88.8p per hour.
The jobs were eventually deemed equivalent, and this led to the women being offered the same wage as the male employee.
Why is Equal Pay Important?
Equal pay is necessary in order to establish a fair workforce that does not discriminate against women (or men).
If a company does not comply with the Equal Pay Act, they are risking losing money to damages and compensation, losing staff, and deterring potential applicants.
It is also important for employees to know that they are working for a company that values equal pay, even if they would not be a likely victim of pay differences. When an organisation values its staff equally in terms of sex, there is a strong chance that it will avoid discrimination in general, including against race, disability, and sexuality.
What are the Benefits Of Equal Pay?
Equal pay can contribute to productivity in the workplace. Companies with a fair equal pay policy are likely to draw in highly qualified men and women who want to work in a place that values their talent, regardless of their sex.
When employees feel valued, they tend to be more productive, as they believe their conscientiousness will be appreciated and rewarded.
It is also more likely that people who hold equality as a key value will be attracted to companies promoting equal pay, which could provide employers with an ethical personnel.
How Can IAS Help?
Our team of lawyers can help you with any issues you are having at work regarding equal pay. We can educate you on equal pay legislation, advise you on how to resolve the issue with your employer or employee and explain how you can make a complaint about unequal pay.
Last modified on May 10th, 2023 at 1:04 pm
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It is acceptable for differences in pay to arise in the context of pregnancy. For example, women must be entitled to one year of maternity leave, during which their pension contributions are protected. Currently, men are entitled to 1-2 weeks of paternity leave, and this must begin after the baby is born.
The main focus of equal pay tends to be salaries and contractual benefits. Yet, even when these factors are in line with the Equal Pay Act, there can be indirect sex discrimination.
For example, if a company does not offer part-time hours, and is inflexible with work schedules, it could result in women being paid less due to having childcare responsibilities.
This can also affect men who take on the role of childcare, though women are usually the victim in this scenario, given that they are more likely to give up work or reduce their hours for their children.
A comparator is an individual that the claimant compares themselves to, in order to demonstrate that they are being paid less due to their sex. This is usually a colleague that they work alongside, though it can also be the person who had the job before the claimant.
When an equal pay claim is made, the case is evaluated, and a final decision is made on whether an individual is being paid less for doing equivalent work to their comparant.
If it is determined that the pay is the same, or that there is a genuine reason for a pay difference, the claimant must accept the pay difference, or stop working for their company.
There are many cases of successful equal pay claims in the UK. This could mean that the claimant is offered new contractual benefits in line with equal pay, or that their salary is increased.
The claimant’s company must offer compensation for the pay difference. Usually, this is in the form of back pay, but it can also be money for damages.
It is recommended that pay structures are reviewed every year. This prevents businesses from inadvertently discriminating against their staff due to outdated systems.
When performing a review, the company should focus on starting salaries, contractual benefits, bonuses, and any other area that can lead to pay differences in the workplace. When a difference is identified, a justification must be provided for the variation.
Yes, two different roles can have the same value. For example, in the Atkinson & Ludlow vs Tress Engineering Co. Ltd case study discussed above, the verdict was that the tea ladies and the labourer were bringing the same value to the organisation, despite performing different duties.
When an employee is receiving a lower salary than another employee, and their job is equal in value, the company is not complying with the Equal Pay Act of 1970.