27 June 2005

If you are on the waiting list for an operation in the Carlisle area you could be in for a long wait. The Carlisle and Whitehaven NHS Trust in Cumbria has recently agreed to settle the equal pay claims of 15,000 women who were able to show that the work they did was of equal value to the work of male employees such as craftsmen, joiners, building labourers and maintenance assistants. It is likely that the Trust will have to pay most of these women the difference between the pay they received and the pay of their male comparators. Some of the claims go back as far as 1991 and Unison believes that the cost of compensating the women could be around £300,000,000.

Whilst most employers won’t be facing such large claims, a recent case on equal pay shows how careful employers have to be when remunerating their staff. In Degman & Others v Redcar and Cleveland Borough Council a number of male staff employed as drivers, gardeners, refuse workers and road workers were paid a bonus and an attendance allowance on top of their basic pay. However, women who were doing work rated as equivalent, only received basic pay. The Court of Appeal concluded that the bonus payments and attendance allowances received by the male comparators should be added to their basic pay and then divided by the number of hours in a working week to give an hourly rate. If this was greater than the woman’s hourly rate, her rate of pay should be increased to eliminate the difference.

These cases demonstrate the importance of having an equal pay audit. By collecting and comparing the pay data of men and women, employers can identify any significant equal pay gaps and take steps to rectify any inequalities that cannot be justified. The review will need to be carried by someone in your organisation who has knowledge and understanding of the pay and grading arrangements, any job evaluation schemes and personnel information such as job duties and hours. It will be necessary to group together men and women doing equal work, eg like work, work rated as equivalent or work of equal value. If you have men and women within these groups who are being paid different amounts, you will need to find out why. Occasionally it may be possible to justify equal pay gaps, for instance because of market rates of pay or night shift payments. However, if the difference in pay is in fact discriminatory and there is no material reason for it, employers should examine their pay systems to identify the policies and procedures which are contributing towards the gender pay gaps. A plan should then be developed to correct/remove these.

It is not all bad news for employers. The EAT has recently confirmed that if a woman is found to have been paid less than a man, she cannot claim injury to feelings. The Act is concerned solely with financial losses she has suffered as a result of the pay inequality between the sexes.