Should employees be paid equal pay for undertaking the same work?
Under the provisions of the Equality Act 2010, where employees carry out the same work, undertake similar roles or the work is of equal value, then there is a legal right to receive equal pay. This obligation does not require that the jobs have to be identical, as the factors to be considered require comparable skills, effort and decision-making processes.
Back on 28 August 2024, we prepared a news article on our website in relation to an Employment Tribunal decision where over 3,500 predominantly female retail consultants (shop assistants) employed by Next Retail Limited (Next) collectively brought an equal pay claim on the basis of equal value work against their employer, who paid higher salaries to operative warehouse workers, who were predominantly male workers.
The Employment Tribunal rejected Next’s argument that the pay disparity was justified by higher market rates for warehouse work because of market forces, retention pressures and recruitment difficulties.
Next appealed to the Employment Appeal Tribunal, who have recently partially upheld the appeal by confirming that:
“(1) The Employment Tribunal did not err in finding that the claimants had shown particular disadvantage because of the statistical differences between the claimant and comparator groups together with its other findings of fact.
(2) However, it erred in finding that the employer did not pursue a legitimate aim when setting different rates of pay. The aim, taken as a whole, of paying higher rates to warehouse staff included recruitment and retention factors which did not apply to the claimant group. It was not necessary for the employer to justify not increasing the claimants’ pay to the same level.
(3) Its alternative finding that the employer’s reliance on a material factor was not a proportionate means of achieving a legitimate aim therefore could not stand, and in any event, it erred in the assessment of proportionality when analysing the market forces factor, and in focusing on the reasons for the claimants’ lower pay and the affordability of increasing it rather than on the reasons for the comparators’ higher pay”.
Despite the decision of the Employment Appeal Tribunal, which is likely to be appealed, businesses are reminded that cost-cutting alone will not be perceived as a justifiable legitimate material reason to have a disparity in pay between men and women. There must be more compelling business reasons for such arrangements that go beyond simply making more profit.
The article is for informational and educational purposes only and should not be relied upon as legal advice. If you require any further assistance, please do not hesitate to contact our HR/Legal advice line team at 01455 852 028.
