Equal pay claims

If you don’t provide equal pay for equal work then an employee may make a claim, which is usually dealt with by an employment tribunal.

It may be possible to resolve any issues through an internal grievance procedure before it reaches that stage.

This is your opportunity to review your pay decisions and rectify any pay discrimination, documenting meetings and decisions to show you are following the law or have properly compensated the employee.

If the grievance procedure doesn’t satisfy your employee and they decide to proceed to an employment tribunal, then they are required to notify Acas and follow the Acas Early Conciliation procedure.

There are important points you need to understand about what happens if an employee takes an equal pay claim against you.

A woman can claim equal pay with a man working:

• for the same employer or an associated employer (such as a parent organisation) at the same workplace
• for the same employer or an associated employer but at a different workplace where common terms and conditions apply, for example at another branch of a store

European Union law also allows a woman to compare herself to a man who is not in the same employment but where the difference in pay is from a single source with the power to fix the difference.

For example, in one case, nursery school employees were able to compare themselves with waste disposal collectors employed by the same council.

Although the two sets of employees were employed at different establishments and did not have common terms, the council had control over the pay and grading of both.

Choosing a comparator

When a woman claims equal pay, she must compare her pay to a man who she believes is carrying out equal work but is being paid more for it, known as a 'comparator'.

It is for the woman to select the man or men she wants to be compared with. She can also claim equal pay with more than one comparator.

Her employer cannot influence the choice of comparator and the comparator does not have to give his consent to being named in the equal pay claim.

A woman may be able to select a comparator by:

• using her own knowledge and experience of the work done by her male colleagues
• seeking advice from her trade union representative
• using information gained by going through her employer’s internal grievance procedure
• applying to the employment tribunal for the disclosure or discovery of information, including about comparator

The comparator can be:

• someone she is working with at the present time
• her predecessor in the job, however long ago he did the job - although the comparison will be limited to what he was paid when his employment ended and not  take into account any pay rises he might have received had it continued
• someone she used to work with in the same employment prior to the sale of the business, where the Transfer of Undertakings (Protection of Employment) Regulations 2006 apply.

The Equality Act 2010 prohibits certain pay secrecy clauses in employment contracts. Any clause which tries to prevent an employee discussing or seeking pay information to find any differences in pay linked to a protected characteristic will be unenforceable.

As a general rule, an equal pay claim must be lodged with an employment tribunal within six months of the date of the end of an individual’s employment with their employer. 

This means that:

• if the claimant is still working for you - the time limit has not started
• if the claimant no longer works for you - the six-month time limit started from the date they left

The time limit may be affected if:

• the claimant is suffering from an ‘incapacity’
• the employer has deliberately concealed the pay inequality
• the claimant has been engaged on a series of contracts
• there has been a fundamental change to the claimant’s contract of employment
• the business has changed ownership and the Transfer of Undertakings (Protection of Employment) Regulations 2006 apply
• the claimant is in the armed forces

Even where it is too late to bring a claim in the employment tribunal, the claimant may be able to bring a breach of contract claim in the civil courts within six years after the breach or five years in Scotland.

It is the claimant’s responsibility to ensure their claim is made in time. If in any doubt about the time limit, an employee should seek advice.

• Further details about how the time limits in equal pay claims work can be found at paragraphs 135 to 145 of the Equal Pay Code of Practice.

The burden rests on the claimant for some parts of an equal pay claim and on the employer for others. Whoever, the burden rests on must prove their case on a balance of probabilities, which means they must prove that it is more likely than not.

The claimant first has to show the employment tribunal that they are receiving less pay than a valid comparator doing equal work.

As an employer, you must then either accept the claim or prove to the employment tribunal that the difference in pay was due to a material factor which is not tainted by direct sex discrimination. If you do not prove this, the employee wins their claim.

If you do prove that the factor you relied on is not tainted by direct sex discrimination, the employee may still be able to show that it is indirectly discriminatory if it puts women at a particular disadvantage compared to men.

If the employee can do this, you will lose the claim, unless you can prove that you had a legitimate aim in doing so, and that your actions were appropriate and reasonably necessary to achieve the aim.

If the employee succeeds in their claim they are entitled to:

• an order from the employment tribunal declaring their rights
• their pay, including any occupational pension rights, being raised to that of their comparator
• any beneficial term in the comparator's contract but not in theirs must be inserted into their contract
• any term in their contract that is less favourable than the same term in the comparator's contract must be made as good as it is in the comparator’s
• equality in the terms of their contract for the future (if they are still in employment)
• compensation consisting of back pay (if the claim is about pay) and/or damages (if the complaint is about some other contractual term)

Back pay can be awarded up to a maximum of six years in England and Wales or five years in Scotland from the date that proceedings were filed with an employment tribunal.

The employment tribunal may also award interest on the compensation and can order the employer to carry out an equal pay audit.

The Equality Act 2010 protects employees from being victimised for:

• making a complaint or allegation about equal pay or sex discrimination (unless it’s both untrue and made in bad faith)
• giving evidence or information about such a complaint.

This means that employees are protected from being disadvantaged because they have raised a complaint.

The complaint doesn’t have to be a claim to an employment tribunal – it also includes any communication about the matter between you and your employee.

The protection against victimisation covers:

• the employee making the complaint
• any other employee who assists them, for example a comparator who gives information or a witness statement
• any trade union or employee representatives

This protection lasts even after the employment has come to an end if the victimisation is closely connected to the employment relationship. 

It is also unlawful to victimise an employee who seeks, gives or receives information about pay, if the information is being disclosed to find out if pay is connected to a protected characteristic.