Equality Act 2010 (Gender Pay Gap Information) Regulations 2017

On 6th December 2016, the Government published the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, which will require large private sector businesses to publish gender-based pay statistics each year.

These Regulations are likely to come into force (subject to parliamentary approval) on 6th April 2017, and will essentially require employers with 250 or more employees (within the private and voluntary sectors) to publish gender pay information on their company website on 5th April 2018 and thereafter on an annual basis. The information must remain on the website for not less than three years and they must also submit this information to the Government each year (a Government website will be created where the information will have to be published, however details concerning the Government website will likely be released nearer 5th April 2017.)

The above has raised a number of questions from employers such as which individuals need to be taken into account for these purposes, and, exactly what information do they need to provide?

Firstly, in terms of the personnel be taken into account, the Regulations state that such individuals must be undertaking work for the business in a personal capacity, therefore consultants as well as employees, must be accounted for.

Secondly, with regards exactly what information must be provided, the following guidelines are given:

the difference in mean pay between male and female employees
the difference in median pay between male and female employees
the difference in mean bonus pay between male and female employees
the difference in median bonus pay between male and female employees
the proportions of male and female employees who were paid bonus pay
the proportions of male and female employees in each quartile of their pay distribution

The information must be collated from data taken on 5th April every year, starting with 5th April 2017. The bonus information should be based on the preceding 12-month period, beginning with the 12 months leading up to 5th April 2017.

What happens if my business does not comply?

Comparators in Equal Pay claims

In the recent case of Brierly and ors v Asda Stores Ltd, a Tribunal has ruled that Asda store workers are able to compare themselves to distribution depot workers for equal pay purposes.

The facts of this case are that a group of (mainly female) Asda employees who were employed on an ‘hourly rate’ basis, argued that they were entitled to the same rate of pay as the distribution depot employees (the majority of whom were male). They claimed that their duties had historically been thought of as ‘women’s work’ and therefore worth less than the duties carried out by the employees working in the depot.

At the preliminary hearing, the Tribunal was tasked with deciding whether the store workers were able to rely upon this comparison. Section 79 of the Equality Act 2010 states that an equal pay comparison is only valid if the claimant and comparator are both employed by the same employer and work at the same establishment; or if they are both employed by the same employer and work at different establishments but ‘common terms apply at the establishments’.

The Manchester Employment Tribunal firstly considered whether the above comparison would be allowed under EU law. It stated that although it is not enough that the Claimant and proposed comparator are employed by a single employer (there must also be a single ‘source’ i.e. a body responsible for this inequality but that could restore equal treatment), in this particular matter the single ‘source’ test had been satisfied, thus rejecting Asda’s argument that the division of the Company structure into Retail and Distribution sectors meant that pay-setting authority had been delegated to separate bodies.

new for October 2014

Over the last few years a tendency has emerged for employment law changes to take place in April and October each year, with the main changes in April. 2014 is no exception but should nonetheless be aware of four changes that come into effect tomorrow, 1 October.
Antenatal rights for fathers and partners
Under the Children and Families Act 2014 (amending the Employment Rights Act 1996) fathers to be and partners of pregnant women can take time off for antenatal appointments. the right is to attend up to two antenatal appointments, each of which can last up to six and a half hours.

There is no qualifying period so the right is available to employees and agency workers from the commencement of employment.

The individual must have a “qualifying relationship” with a woman or her expected child, defined as:

you are the expected child’s father;
you are the pregnant woman’s husband or civil partner;
you live with the woman (whether in a heterosexual or same sex relationship) in an “enduring family relationship” and are not a relative of the woman;
you are one of a same sex couple who is to be treated as the child’s other parent under the assisted reproduction provisions in the Human fertilisation and Embryology Act 2008; or
you are the potential applicant for a parental order in relation to a child who is expected to be born to a surrogate mother.

Employers can require documentary evidence of an appointment which, if requested, must include a written declaration stating the qualifying relationship with the expectant mother or expected child, that the request has been made to attend an antenatal appointment, that the appointment has been made on the advice of a GP, midwife or nurse and the date and time of the appointment.
National Minimum Wage Rates
With effect from 1 October the standard national minimum wage increases from £6.31 an hour to £6.50 and hour. The youth rate (18 to 20) increases from £5.03 to £5.13, for under 18s it is £3.79 and the apprentice rate goes up 5p to £2.73. Further information is available here.
Mandatory Equal Pay Audits
If an equal pay claim has been submitted after 1 October 2010 and a tribunal find that there has been a breach an employment tribunal, pursuant to the Enterprise and Regulatory Reform Act 2013, it must order an equal pay audit unless an exception applies.

Equal Pay Audits: reducing inequality or simply heralding a rise in settlements?

The Government Equalities Office’s publication of a consultation on the scope of proposed regulations to bring in equal pay audits where a tribunal finds that an employer has breached equal pay legislation has re-opened the debate on whether these proposed regulations will promote a culture change with regard to the equal treatment of women or simply promote a rise in spurious tribunal claims (Equal Pay Audits: a further consultation). The regulations will be brought in by section 98 Enterprise and Regulatory Reform Act 2013 which inserts a new section into the Equality Act 2010 giving the government the power to make them.
The fear is this. The estimated cost, calculated in a regulatory impact assessment, of a mandatory equal pay audit is around £12,800. Add that to the legal costs (an estimated average of £6,556 per case) of defending a claim and the cost of any compensation (average compensation for breach of equal pay between 2000/1 and 2010/11 was around £18,500) and it begins to look more attractive to employers to settle cases than to fight them. With this in mind, employees will be more encouraged to bring spurious claims in the expectation that their employers will strike a deal before the claim gets to court.
What about publication of the audit? The government has indicated that it will not require the results of the audits to be made public yet it encourages employers to do so if they wish (whilst issuing a warning about data protection issues) but the audit results would have to be disclosed to employees covered by the audit, trade unions and the tribunal that ordered the audit.
Some commentators have sought to reassure employers that they need not be concerned about the Government’s proposed regulations since a tribunal could only make an equal pay audit order following a successful claim for unequal pay. With respect, this rather seems to be missing the point that the critics are making.

time barred equal pay claims get a new lease of life

The Supreme Court’s decision in Birmingham City Council v Abdulla is a significant development in equal pay law, opening the way for many cases which would previously been time barred. The time limit for bringing equal pay claims in the employment tribunal is six months, and unlike other types of discrimination claims, there is no scope in the tribunal rules for an employment tribunal to allow out of time claims on the ground that is just and equitable to do so. However, the mechanism used to implement the right to equal pay is to imply an equality clause into every employment contract – and of course the ordinary courts have jurisdiction to hear claims for breach of contract – for which the limitation period is six years not six months.
This is the route 175 claimants whose claims were time barred in the employment tribunal successfully took in this case. The respondent, Birmingham City Council, asked for their claims to be struck out under a power allowing the court to strike out claims if they can “more conveniently” disposed of by an employment tribunal.

newsletter – Equality Act 2010 – pay secrecy clauses

The official June 2008 White Paper on the Equality Bill said that it would “ban pay secrecy and ‘gagging’ clauses which stop employees discussing pay with their colleagues”. The idea, of course, was to remove one of the practical difficulties sometimes faced by employees (generally women) seeking to bring equal pay claims on the basis…