In the wake of a ‘landmark’ legal ruling into equal pay, a local HR specialist is urging business owners across Shropshire to fully understand how the judgement could affect their affairs.
Last week [Wednesday 24th October], the Supreme Court ruled in favour of 174 female former Birmingham City Council workers who argued they had been treated unfavourably in terms of pay compared with their male counterparts, opening the doors to the prospect of many other employees or ex-employees who have suffered similar instances of pay discrimination taking their case to the civil courts.
Whereas previously, individuals only had six months to bring a case via an employment tribunal, they could now have up to six years from the date of their last payment to formally lodge a claim against their employer.
Following the ruling, Justine Vaughan, Founder and Director of Shrewsbury-based Triangle HR, has urged local businesses to review their policies and procedures to make sure they comply with the Equality Act 2010, especially in cases where employees have been transferred between employers as a result of TUPE – Transfer of Undertakings (Protection of Employment) – Regulations.
“The fact that a woman is paid less than a man doesn’t necessarily mean that she is suffering pay discrimination,” Justine commented. “But this Supreme Court ruling is a timely reminder for firms to make sure they are fully aware of the situation regarding pay discrimination, their legal obligations, and the steps they should take if a claim is made.”
Under Equality Act 2010 legislation, employers must ensure men and women are given equal pay for ‘like work’ – identical or very similar roles – ‘work related as equivalent’ – different roles that are given the same rating or pay grade due to the skills required – or ‘work of equivalent value’ – very different jobs where employees can claim a similar level of skill is required.
Justine continued: “While this ruling does potentially give employees and ex-employees a six year window to make a claim, as opposed to the previous limit of six months, it doesn’t alter the fact that they will have to provide evidence to prove their allegation of discrimination, as is the case currently. In cases involving TUPE, the incoming employer immediately becomes liable for all terms and conditions, meaning potential pay discrepancies also transfer across – it is obviously hugely important that the new employer addresses any pay issues as soon as possible, while it is also advisable to try and seek an indemnity as part of the initial contract negotiations.”
On a similar theme, Justine recommends any company in the process of bidding for a contract with a public body, such as a local authority, that would see the firm take over the organisation’s employees, should request as much information as possible regarding job roles and pay scales, as the potential liabilities will transfer to the new employer if a deal is agreed.
“If an employee or ex-employee makes a claim for unequal pay, businesses should manage the complaint in line with its standard grievance procedures and investigate accordingly,” Justine added. “While in situations where employers do not have structured salary bandings, but instead pay various rates depending on the employee’s different responsibilities, they should be aware they must be able to justify any different levels of accountability. We would highly recommend firms implement transparent job levels and pay structures to avoid any potential for confusion.”
Triangle HR offers a full consultancy service in all areas of Human Resources and People Management and provides a professional, cost-effective solution for businesses across the region.