A recent article in The Guardian suggests that Labour are looking at extending the right to equal pay from the current ground (sex) to other protected characteristics, essentially widening it to cover race claims.
A draft Race Equality Act is the description.
It will, the article suggests, also cover disabled people.
Can these protected classes currently be legally paid less?
No.
The law currently makes it illegal to pay anyone with a protected characteristic less on the grounds of that characteristic.
It would be discrimination. It is not legal.
If you are an employer, it’s really important to be fully aware of this.
Why are they suggesting the change?
It is genuinely difficult to say for sure, but the article suggests the rationale is to treat claims for equal pay from those other protected groups the same as those made by “women who, under the existing law, have more stringent protections”.
On the face of it, this all sounds as if it will provide more protection under the Act, making it easier for a wider class of those being paid less to seek redress.
Will the proposed change in fact help individuals bring claims?
Again, I think the answer is no.
Anyone who has in fact engaged with an Equal Pay claim under the Equality Act (or indeed its predecessor, the Equal Pay Act 1970) would query why extending these complicated provisions would be helpful, and would argue that the protections provided under the equal pay legislation is arguably not “more stringent” at all.
What do the equal pay provisions do?
Essentially, although termed equal “pay”, the equal pay provisions are all about contractual terms.
They apply only to the characteristic of sex (and it is important to note they are available to either sex, although it is very much the case that it is typically women who bring them).
Where someone believes that they are being discriminated against on the ground of their sex and this discrimination manifests itself as a contractual term, they must use the equal pay provisions.
This is important – a discrimination claim is not open to them.
How do you bring an Equal Pay claim?
These provisions are more complex, arguably than a simple discrimination claim.
- Firstly, there must be an actual comparator. For equal pay, there must be a man who is paid more (or has any other more favourable contractual term).
- Then they must show that the work being done by that man is “equal” – which is by no means simple (and too complex for this article to go into in detail).
- If the work is not judged to be “equal”, you lose. There is no gradual scale – you either show that your work is equal, or you do not. Even if your work is very nearly equal – and thus you might argue that the pay differential is therefore unfair or discriminatory – that is not covered under equal pay. You simply lose.
- To defend the claim, once the work is shown to be equal, the employer is essentially saying that there is a “material factor” – essentially a good reason. A good reason will not be a discriminatory one – so an employer needs to show that the reason is not because of the complainant’s sex, as alleged, but something outside of that. They will be arguing that the reason is an entirely different, neutral reason. If they win, then you lose the claim.
- If you win, you get up to six years back pay. Even if the condition has been in force for longer than that, you cannot go any further back than six years.
- And, really importantly, there is no injury to feelings award – it's all about the contractual term you complained about.
So, if you are paid less due to your race, what can you do?
Equal Pay only applies where the characteristic is sex, but that is not to say it is currently legal to pay less to those in the other protected groups mentioned on the grounds of that protected characteristic. Those groups could bring a claim for discrimination.
How do you bring a discrimination claim?
- You must show that your treatment is “less favourable” – so you need to show that the same treatment isn’t applied to someone without the protected characteristic you rely on. Helpfully, here you can use a hypothetical comparator – essentially, someone the same as you but without their protected characteristic. If the organisation doesn’t in fact have someone in place, that doesn’t stop you bringing a claim, as it would in equal pay.
- If your claim is direct discrimination – you are being paid less because of your characteristics and you show that – then you win. There is no defence to a direct discrimination claim. The employer would be arguing that it is not because of that ground, but due to other factors.
- The alternative claim would be an indirect discrimination claim – where a pay band, is, for example, applied across the board to a group of employees, but that pay band puts employees in that group of a particular race (for example) at a disadvantage, because it is lower, even though there are people within the band who are not of that characteristic. Essentially, this band of employees are paid less, and because they contain a high proportion of ethnic minorities it has a disproportionate impact on them, and they are therefore at a disadvantage when compared to another group of employees.
- The case will come down to very similar arguments as an equal pay claim that reaches the “material factor” defence – the employer will try to show the reason for the treatment is something outside of the protected characteristic – a “legitimate aim”. If they can show that they have a good, non-discriminatory reason and it’s reasonable or proportionate for them to have chosen to do what they did, they will win. But if not, the complainant will win – paying them less was in fact indirectly discriminatory.
- If they win, they get compensation AND injury to feelings. There is also no cap on discrimination compensation – no six-year backstop for example.
Is extending equal pay to other characteristics a good idea?
My view would be no, not as the law stands.
It is difficult to argue that Equal Pay is a “better” claim.
Those using sex as their protected characteristic currently cannot bring discrimination claims where the treatment they complain about is a contractual term. Might it be a good idea to look at the current situation where one characteristic has a different pathway to enforcing their rights? Yes, absolutely.
But the current proposals as stated in this article are arguably not going to be helpful to employees or employers. It is, of course, early stages and there will be consultation, so watch this space in terms of developments in Equality Law.