Compensation Management [HR 302] 2010

EQUAL PAY

Introduction

The gender gap

• The gap between the hourly earnings for full-time men and women in 2008 was 17.1%.

• Robert Elliott commented: discrimination arises when equals are treated unequal

• Historically it has been generally accepted by men in a man’s world that women's place
was in home unless they were needed to carry out menial and underpaid jobs.

• Women’s work has been undervalued bcoz of the low rates of pay.

• It has been a vicious circle.

• Prior to the equal pay act collective agreements tended to have only one rate of pay for
women workers with no differentiation between grades of work or levels of skill

Reasons for unequal pay

• Gender discrimination in the ways in which jobs are graded and paid.

• Widespread occupational segregation by gender.

• Differences in the labour supply and labour market conditions that allow the differences
to be perpetuated.

• The unequal impact of women’s family responsibilities.

• The design and operation of pay structures.

• Wage-setting practices, eg following discriminatory market rates.

• Poor union representation.

• Career breaks.

The equal pay legal framework

The Equal Pay Act 1970

An employee is entitled to claim pay equal to that of an employee of the opposite sex in the
same employing organization in two situations:

KNVIBM Page 1
 Compensation Management [HR 302] 2010
• where they are doing the same, or broadly similar work, ie ‘like work’;

• where the work they do is rated equivalent under a job evaluation scheme.

The Equal Pay (Amendment) Regulations, 1983

• Women are entitled to the same pay as men (and vice versa) where the work is of equal
value ‘in terms of the demands made on a worker under various headings, for instance,
effort, skill, decision’.

Employment Act 2002

• An equal pay questionnaire can be used by an employee to request information from

their employer about whether their remuneration is equal to that of named colleagues.
Unions may also lodge these forms on behalf of their members.

Equal pay claims:Claims for equal pay, which may be supported by a completed equal pay
questionnaire, can be made to an employment tribunal on any of the following three grounds:

that the work is like work, meaning the same or very similar work;

that the work is work rated as equivalent under a job evaluation ‘study’;

that the work is of equal value ‘in terms of the demands made on a worker under
various headings, for instance, effort, skill, decision’.

If a tribunal finds that the work is like, equivalent or of equal value, it can invoke the equality
clause in the legislation and rule that the man and the woman should be paid the same.

• Gender equality duty 2007

The gender equality duty places a legal responsibility on public authorities in england,
Scotland and Wales to promote gender equality, eliminate sex discrimination and demonstrate
that they treat men and women fairly.

Achieving equal pay

1. Use an analytical job evaluation scheme that is free of bias.

2. Ensure that discrimination or bias does not occur in operating the job evaluation
scheme.

3. Design a grade and pay structure that is free of bias.

KNVIBM Page 2
 Compensation Management [HR 302] 2010
4. Ensure that the processes used for grading jobs in the structure are free of bias.

5. Check the policy and practice on positioning employees within a pay range in a graded
pay structure or on a pay point in a pay spine to ensure that bias does not occur.

6. Check the policy and practice on assimilating staff into a new grade and pay structure to
ensure that one category of staff is not favoured over another.

7. Check the policy and practice on progressing the pay of staff within a pay structure to
ensure that no category of staff is progressing faster up a grade or to higher points in a grade
without good reason.

8. Review policy and practice on upgradings and promotions to ensure that discrimination
is not taking place.

9. Conduct an equal pay review.

10. Ensure that line managers are aware of their responsibility for avoiding pay
discrimination.

Defending an equal pay claim

The two most common grounds for defending a claim are:

a. that the work is not equal;

b. that even if it is equal, there is a genuine material factor that justifies the difference in
pay as long as the justification is objective.

• Providing that the work is not equal

• Genuine material factor

• Independent experts

Conclusion

• Conduct an equal pay review

• Develop and apply a non discriminatory analystical job evaluation schemes.

• Ensure that the grade and pay structure is non discriminatory.

KNVIBM Page 3
 Compensation Management [HR 302] 2010
• Ensure pay system policies and practices in form of grading jobs

• Conduct an assessment of the risk of a successful equal pay claim

• Ensure that line managers are aware of their responsibility to avoid pay discrimination.

KNVIBM Page 4