Pay equality – will businesses be paying a high price

Nov

08

Pay equality – will businesses be paying a high price

The recent case of Birmingham City Council v Abdulla and Others has created an increased risk for any UK business that hasn’t implemented and reviewed its equality policies.

Women’s right to receive pay which is equal to men’s has been a rule of law since the Equal Pay Act 1970 came into force. The basic right is that where work is the same, or rated as equivalent, the remuneration must be equal for workers of different sexes. The Equality Act 2010 has since codified discrimination legislation and retained the equal pay provisions.

Despite the length of time the law has been in place it seems that the UK has some way to go before it can be said that women are receiving equal pay to men, a fact which is most evident in light of the claimants in the case of Birmingham City Council v Abdulla and Others. The employee claimants in this case included 170 women and only 4 men, all of whom had ceased employment with the Council between 2004 and 2008.

Under the Equal Pay Act (and subsequent Equality Act) the claimant doesn’t have long to bring a claim; they must register the claim within 6 months of the last day of working for the employer. Most employment law disputes fall to the Employment Tribunal where they are brought and resolved very quickly by comparison to civil court procedures. However, the claimants in this case presented their claim to the High Court where the time in which to register the claim is much longer; the civil court process allows a time limit of up to 6 years.  Had the Court refused to hear the claim, leaving it solely within the Tribunal’s jurisdiction, every one of the 174 claims would have failed for being out of time.

On appeal the Supreme Court decided to allow the claimants to bring the claim through the court system which has resulted in the claimants’ right to be compensated for the difference in pay which accrued for their period of employment – despite the fact that the employment ceased up to 6 years before legal proceedings were issued.

On the face of it, it seems very likely that more and more people are likely to bring claims after their employment has come to an end. A great step in the right direction for addressing equality but a much higher risk for UK businesses.

Businesses should take heed and look carefully at their equality provisions within the work force. By focusing on correcting any unequal pay issues within the business now they may be able to avoid potentially costly litigation in the future. However, businesses must be aware that for any employees who have left employment within the last 6 years there is still a continued risk of a claim being brought.

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