Equal pay in the public sector

With the number of cases proceeding through Employment Tribunals since October 2004 rapidly increasing, equal pay has become a hot topic for all public sector employers and employees, and the recent rows over pay deals will only add fuel to the fire.

There has been a deluge of multiple claimant equal pay claims following detailed job evaluation schemes carried out a number of years ago, but in many cases, these have not been put into practice. In the health service, for example, literally thousands of tribunal claims have been issued, which has led to a detailed analysis of general pay inequality between men and women, and huge back pay claims have ensued.

Large-scale institutional employers such as NHS Trusts and PCTs are still seen very much as the main targets, particularly if they have not looked carefully at their pay structures in order to reduce the risk of inequalities.

There is a continuing volume of cases still being issued and coming to hearing in the North East.  However, some of the decisions in the region have now progressed to appeal stage, laying down some useful guidance and precedents and clarifying the law as it affects Local Authorities, both for employers and for employees.

The most significant recent development is the clarification of the so-called Genuine Material Factor defence (GMF).  This meansthat if there is any inequality in pay between a man and a woman, it must be for a reason that is not a sham.  For example, in Bainbridge and others v Redcar & Cleveland Borough Council (Nov 06), existing performance-based bonus schemes meant that male refuse collectors were receiving significantly more pay than the female employees who were bringing the equal pay claims. 

As a result, the employer was then required to introduce new bonus schemes for certain categories of workers for the purpose of achieving equality. However, the Employment Appeal Tribunal ruled that there was no principle that justified the courts making an employer manufacture an alternative means of paying the female claimants more.  It found that the refuse collector comparators were employed in work that enabled a productivity scheme to be adopted, whereas the employees in question were not.

A recent court of appeal decision in South Tyneside Borough Council vs Anderson has also now clarified an important issue relating to comparators in the education field.  Female employees engaged in one school, regardless of whether it is voluntary aided or run by an LEA, can compare their pay with male employees in other establishments where their terms and conditions are common – so if a male lunchtime assistant in a school in Leeds was earning more than a woman doing the same job at a school in Bradford, for example, she may be entitled to claim.

The Equality and Human Rights Commission (the former Equal Opportunities Commission) already provides a substantial amount of guidance to assist both employers and employees in making and defending equal pay claims.  Equally, there is a growing army of ‘no win no fee’ representatives willing to take on mass claims and help employers or employees with extensive infrastructure support.  There is no reason why public sector organisations like the NHS, Care Trusts and PCTs should not be just as well represented and equipped to meet any claims head on and, indeed, tackle them beforehand, particularly as employees who feel they have been done down in recent pay deals try to claim more money.

In February 2006, the Women & Work Commission published a report entitled ‘Shaping a Fairer Future’.  This report highlighted the startling statistic that, despite the Equal Pay Act having been passed more than 35 years ago, women who work full time earn between 13 per cent and 17 per cent less than men.  With this anomaly in mind, and with increased levels of litigation in this field, all public sector bodies need to look carefully and critically at their own internal system, just as employees should make sure they are being treated fairly.

However, the scope for action to prevent litigation is substantial.  The same report lists no fewer than forty recommendations for action at all levels to help achieve equality.  Of course, not all of these recommendations will have to be implemented and some may be unfeasible in certain circumstances, but the public sector will need to be aware of them so that they can plan their manpower requirements and terms more effectively.  Employees should also take a look at what their employer could be doing, as it is often pressure from workers that can drive change in an organisation.

Where inequalities offer opportunities for major change, the public sector has plenty of scope to introduce such change.  Adopting this approach now can help to keep it at the forefront of national economic development and looking carefully at pay structures may help to ease the anger over the below-inflation pay rises that many people see as insulting and unfair.

What is needed to assess and minimise future risks is a proactive strategy, culture and attitude to eradicating past inequalities.  This will help to reduce exposure to mass claims and also to defend existing pay bases where possible.  For employees, the press surrounding the latest pay deals may be the incentive that public sector employers need to look at their pay policies, making sure they reward good work and long service fairly.

For further information contact
Ronald Drake
Tel: 0845 404 1523
E-mail: ronald.drake@cobbetts.com

This content is for information only and should not be relied upon as a substitute for legal advice. 
Copyright 2008 Cobbetts - All rights reserved - Feb 2008