The first point to note is that there is a difference between equal pay and gender pay issues. Equal pay involves the entitlement on the part of individual female employees to receive pay that is equal to that of comparable male employees, and vice versa. Contributor Lorraine Heard, Legal Director, transatlantic law – Womble Bond Dickinson.
Gender pay is a broader concept that looks at the difference in average rates of pay as between male and female employees within an organisation as a whole. A gender pay gap may, or may not, be indicative of pay inequality as there are many factors that influence rates of pay within an organisation. Not all factors that result in female employees receiving different rates of pay to those of male employees are the result of sex discrimination.
Employers are legally required to pay the same rate of pay to comparable male and female employees, unless there is a non-discriminatory reason for a difference in pay that can be justified, if necessary. The question of whether there is inequality in pay is not as straightforward as the criticism of the BBC tends to suggest. Employees doing the same job can expect to receive the same rate of pay, and employers generally recognise this. However the requirement to pay equal pay extends to employees who are doing different jobs but who are either employed on the same grade or doing work of equal value.
Whether two employees are employed on work of equal value is a difficult question to answer. The Employment Tribunal has a special procedure for equal value claims that includes the appointment of a job evaluation expert to assist with an assessment of the relative value of the jobs being considered. Even if jobs are of equal value there may be a good reason why one employee is paid more than another that has nothing to do with the difference in their gender.
If equal pay claims are pursued against the BBC it will have to address the question of whether its male employees do work that is comparable to that of its aggrieved female employees. If the jobs are comparable the BBC will need to explain, and perhaps also justify, any difference in pay.
Carrie Gracie’s resignation sharpens the focus of the criticism of the BBC by highlighting the differences in pay of a particular group of employees, that of foreign news editors, and the extent to which the females, in what appears to be a comparable group, are paid less than the male members of the group.
A claimant who succeeds in an equal pay claim becomes entitled to the same rate of pay as her male comparator in future, but is also entitled to be compensated for the difference in pay for up to six years before the date on which the claim is presented. Taking into account pension and tax adjustments and interest on the compensation payable, the BBC may face a big bill if it cannot justify its current pay arrangements.
The gender pay gap measures the average difference between the overall pay of male employees as compared with female employees. All employers who employ 250 or more employees are required to publish their gender pay gap details in March/April of this year (30 March is the publication date for public sector employers and 4 April for private sector employers).
It was the BBC’s decision to provide greater transparency in relation to the pay of its employees that has resulted in the current criticism of the pay of its female employees. This raises the question of whether employers at greater risk of equal pay challenges when they publish their gender pay gap information?
Certainly there is potential for equal pay challenges to develop if an equal pay issue is believed to exist. Ways of minimising this risk if you are an affected employer include: Ensuring that you are clear about what is required of you when publishing your gender pay gap results. Problem areas include the correct handling of salary sacrifice schemes; accounting for employees who do not have regular weekly working hours; and confusion regarding the handling of bonus payments as part of the gender pay gap figures.
Publishing correct information. The Financial Times has already noted that not all employers are publishing accurate results and publically criticised some employers who published ‘unbelievable’ results which later had to be revised. In addition the Equalities and Human Rights Commission (“EHRC”) has indicated that it will focus its attention in the coming year on employers that fail to publish their results. The question of whether the EHRC has the legal power to take enforcement action is debateable but becoming embroiled in this debate as an employer against whom the EHRC is taking enforcement action is not an attractive prospect for an organisation that is keen to avoid the ‘gender pay’ spotlight. Ensuring that the reasons for the gender pay gap are understood by means of the careful collation and analysis of relevant material; Taking suitable steps to address any issues that ought to be addressed; Producing a report that puts the figures into context and explains the results.
The spotlight on the BBC’s gender pay arrangements illustrates the potential for unwelcome publicity in what is rapidly becoming an emerging key theme in the employment arena.