Private Sector Warning: be prepared for equal pay claims

It is estimated that as many as nearly 600,000 supermarket workers could be entitled to bring equal pay claims. Solicitor Philip Loftus offers advice…

The ‘Big Four’ UK supermarket chains may have to pay the price for alleged lack of compliance with discrimination legislation, with recent reports suggesting that they could be facing a total bill of up to £10 billion due to new and ongoing equal pay claims.. It is estimated that as many as nearly 600,000 workers could be entitled to bring equal pay claims.

Now that equal pay issues have well and truly arrived in the private sector, it is important for employers in all industries to be aware of their equal pay responsibilities, especially at a time of heightened awareness regarding issues such as discrimination and equality.

An equal pay claim can be brought by someone of either gender who is or was “employed” under a contract to personally provide work. Generally speaking, workers are entitled to contractual terms that are as favourable as those of a comparator of a different gender who is in the same employment, carrying out the same or broadly similar work, or work that is different but “of equal value”.

In the supermarket cases, the claims appear to generally be characterised as predominantly female shop assistant workers being paid less than predominantly male workers who work in warehouses and distribution centres. The central issue that may need to be decided by the courts is whether the work associated with the two roles is “of equal value”. Work of “equal value” is work that places the same demands on two different workers, and is evaluated by reference to factors such as skill, effort and decision-making.

The claimants in the supermarket cases appear to suggest that, for example, female assistants who move cages or boxes of products and stack shelves are carrying out work of equal value to male workers who conduct similar tasks of moving and stacking products in a warehouse. The supermarkets have so far denied all allegations of discrimination, but have not yet indicated on what legal basis they will seek to defend the claims. They may perhaps submit that distribution centre work involves additional skills and/or an unsocial hours element that shop assistant work does not – and therefore the work carried out by the two sets of workers is not “of equal value”.

Should an equal pay claim be successful, the claimant may be entitled to payment of up to six years’ worth of pay arrears. Estimates as to the average repayment in the supermarket cases range from £5,000 to £20,000 per worker.

Practical suggestions for employers

Straightforward solutions to address possible pay disparities are few and far between but the most common methods are to conduct either of the following:

  • A ‘Job Evaluation Scheme’ (known as a JES): – This is an analytical process that an employer can carry out in order to ‘rank’ jobs in a way that avoids discrimination on the basis of gender. A JES identifies which roles are equivalent to each other for the purposes of salary and therefore can assist employers trying to detect and remedy potential disparities.
  • An equal pay audit or review is a similar, albeit less scientific, method by which an employer may identify gender-based inequalities in pay.

The risk for an employer is that by carrying out one of the above processes, equal pay issues that may not have otherwise come to light are uncovered. It is then potentially easier for current or previous workers to bring equal pay claims in respect of the previous six years. There is also the increased financial burden associated with equalising pay for all affected current workers going forward. However, given the increased awareness of the issue and publicity generated by the supermarket cases, a prudent employer would be wise to address the matter of equal pay sooner rather than later.

Philip Loftus (philip.loftus@weightmans.com) is a Solicitor in the Weightmans Employment team who advises both employees and employers on a range of employment issues.

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