Westminster Hall Debate
Proposals for a new Equal Pay Act
18 March 2015
For more information, please contact:
Finola Kelly, 020 7832 7826
Finola.Kelly@equalityhumanrights.com
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Introduction
We welcome this debate on the important issue of equal pay between
women and men.
The Equality and Human Rights Commission (the Commission) is the
body mandated by Parliament to enforce the Equality Act 2010 (the Act),
promote awareness and understanding of rights under that Act and
monitor its effectiveness.
The Commission has a range of powers to enable it to fulfil those duties.
These include powers to issue Codes of Practice; to grant assistance to
individuals bringing court or tribunal cases; to bring or intervene in
proceedings in its own name; and enforcement powers which it can use
to tackle breaches of the Act.
Closing the gender pay gap is one of the Commission’s key priorities. In
recognition of this, our Business Plan for 2015/16 will launch a major
new project to address pay gaps in relation to gender, race and
disability. Drawing on existing research, we will set out our analysis of
the factors contributing to pay gaps, sectors where unequal pay is a
particular problem, and the effectiveness of existing interventions. This
work will provide the basis for developing a strategic approach to
tackling pay gaps in the future. We will also improve the guidance we
provide for employers on equal pay to ensure that it well understood and
implemented.
The Commission’s position on proposals for a new Equal Pay Act
The Commission welcomes the opportunity to contribute to this debate
on the effectiveness of the current equal pay provisions in the Equality
Act 2010.
The Commission recognises that the current equal pay provisions have
shortcomings which can be a barrier to achieving equal pay in practice.
In 2014, women in full-time employment earned 9.4 per cent less than
men in full time employment. The gap was wider for part-time work
where women part-time employees earned 37.9 per cent less than male
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full-time employees. For all employees, the gender pay gap was 19.1
per cent.
While there has been progress on closing the gender pay gap, 2013
figures showed a widening for the first time in five years, although the
gap reduced again in 2014. This may be due to changes in the labour
market during the recession and recovery which have had a particular
impact on women. The number of equal pay cases in the UK that reach
a tribunal are decreasing, but still remain high. There were 37,400 cases
dealt with in 2009/10, and 31,372 in 13/14.
We consider that, 45 years after the passing of the Equal Pay Act 1970,
and five years after the Equality Act 2010 came into force, it is
appropriate to review whether the equal pay provisions and the
mechanisms for enforcing equal pay are working effectively. Any
changes to the current provisions would need to be consistent with
European law and principles relating to equal pay between women and
men.
Explanation
A number of commentators have raised concerns about the
effectiveness of the equal pay provisions in the Equality Act 2010 (the
Act). In addition to articles published by Emily Thornberry MP, another
commentator on employment law matters, Darren Newman, has recently
suggested that it may be time to review whether a separate legal regime
applying only to pay discrimination due to gender continues to be
appropriate.
The Commission set out what we considered to be the shortcomings of
the equal pay provisions in the Act in our response to the European
Commission’s questionnaire on the implementation of European equal
pay law principles in domestic law (the Response)1.
The Commission recognises that some changes have been made since
we published the Response. In particular, we are delighted that the
1
http://www.equalityhumanrights.com/legal-and-policy/at-the-commission/european-policy/ehrc-response-toeuropean-commissions-questionnaire-on-equal-pay
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government is going to introduce mandatory reporting of pay gaps
between women and men in large companies, by implementing section
78 of the Act. Publishing this information will show that companies are
complying with equal pay legislation and will help them attract and retain
the most talented women in their workforce.
However, a significant number of the shortcomings identified in our
Response remain. The primary shortcomings are:
 The absence of the ability to mount a systemic challenge. The
vast majority of equal pay/equality of terms claims brought in the UK
arise from systemic pay differences, often resulting from occupational
segregation. The procedure that has to be followed, however,
requires an individual claimant and comparator. This can discourage
the bringing of claims as many of those in employment do not wish to
litigate against their employer. Even if individual claimants succeed in
their claims, there can be no guarantee that the terms of others in
their position that have not brought proceedings will be changed.
 The narrow scope for comparison. UK law requires the
identification of an actual comparator in almost all equal pay/equality
of terms cases. The exception to this is in a case of direct
discrimination in contractual terms where there is no actual
comparator. The Commission is not aware of any equality of terms
case brought relying on this exception. In contrast, in pay-related
discrimination in respect of any other protected characteristic, it would
be permissible to rely on a hypothetical comparator. There are also
complex rules about the scope of comparison allowed. Resolving
such issues can result in lengthy preliminary hearings before
employment tribunals and the appellate courts, with cases taking
many years simply to resolve these preliminary points.
 The difficulties posed by the absence of any lead-in time within
which employers can adapt their pay systems so as to provide
equal pay and avoid litigation. The Commission understands that
some employers are reluctant to begin addressing equal pay issues
(for example by undertaking job evaluation) for fear of a case being
taken against them. Consideration should be given to measures to
ensure employers who are actively addressing and implementing
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equal pay are not by doing so placed in a worse position than
employers who ignore the issue. Any such measures would need to
be compatible with European equal pay law and human rights and not
unfairly deny a remedy to women or men who have been denied
equal pay in the past.
 Secrecy in the workplace around pay and benefits. The nature of
pay secrecy means it is difficult to gather evidence from reliable
sources to measure the extent of pay secrecy. However, in the
Commission’s experience there has been a culture of secrecy around
pay and benefits in the UK. The Commission’s report 'Gender pay
activity in large non-public sector organisations: Baseline Report
2009' revealed that 18% of the sample responding to the consultation
discouraged or forbid pay discussions. Although section 77 of the Act
sought to remedy this by rendering pay secrecy clauses
unenforceable if an individual makes or seeks a relevant pay
disclosure in discussions with a colleague, the Commission is not
aware of any cases being brought under section77 to date. Further
research is needed to establish to what extent section77 has been
effective in changing the culture around the disclosure of pay.
 The time and money that some large employers devote to
fighting equal pay claims rather than proactively addressing pay
issues in their pay systems. Although employment tribunals can
order that interest be paid on awards made in equal pay/equality of
terms cases, there has in the past been little disincentive for an
employer in seeking to take every (often extremely technical) point in
such cases, thus lengthening the length of time it will take to resolve
the proceedings. Fighting equal pay litigation can ensure that the
employer does not have to engage with systemic equal pay issues for
far longer while (assuming that not all employees in the
disadvantaged group will be amongst those who actually submit
claims) still avoiding having to pay substantial back-dated arrears.
The Commission welcomes the recent introduction by government of
the requirement for employment tribunals to order an employer who
has lost an equal pay case to carry out and publish an equal pay
audit. This will contribute to pay transparency in those cases where
audits are ordered. Publication of audits and the information required
by section78 of the Act, when implemented, will enable the
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Commission to decide whether it is appropriate to use its enforcement
powers to ensure an employer is taking steps to address unlawful pay
inequality. However, there are exceptions from the requirement to
order an audit and it is not yet clear in how many cases the power will
be used.
 The length of time it takes for equal pay cases to be heard and
the large backlog of equal pay cases in the tribunal systems.
Statistics from the employment tribunals show that equal pay cases
have the longest mean clearance time (from claim issue to final
details of judgment) of any type of claim. For October to December
2014 the mean was just over five years (272 weeks), in contrast for
example to sexual orientation cases which had the shortest average
time at 39 weeks.
The Commission also considers that changes made to employment
tribunal procedures since our Response, though not specific to equal
pay cases, may give rise to practical barriers to those wanting to
enforce their right to equal pay under the Act. In particular:
 the introduction of fees for bringing employment tribunal claims
 the removal of the formal question and answer procedure which in
the past enabled an employee who believed that she was not
receiving equal pay to ask her employer to clarify the position.
The Commission considers that it is appropriate to review how these
shortcomings could be addressed. Any changes to the law will need,
however, to be consistent with relevant European law. For example,
any proposals to limit the back pay which can be awarded when pay
inequality is found will need to be compatible with the European law
principles, including the principle of equivalence which led to the
successful legal challenge of the previous 2 year limitation on back
pay2.
About the Equality and Human Rights Commission
The Equality and Human Rights Commission is a statutory body
established under the Equality Act 2006. It is an independent body
responsible for promoting and enforcing the laws that protect fairness,
2
In Levez v T H Jennings (Harlow Pools) Ltd (No.2) and Hicking v Basford Group Ltd (in receivership) [1999]
IRLR 764, EAT a case assisted by the Commission’s predecessor body the Equal Opportunities Commission.
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dignity and respect. It contributes to making and keeping Britain a fair
society in which everyone, regardless of background, has an equal
opportunity to fulfil their potential. The Commission enforces equality
legislation on age, disability, gender reassignment, marriage and civil
partnership, pregnancy and maternity, race, religion or belief, sex and
sexual orientation. It encourages compliance with the Human Rights Act
1998 and is accredited by the UN as an ‘A status’ National Human
Rights Institution.
Find out more about the Commission’s work at:
www.equalityhumanrights.com
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