Supplementary memorandum submitted by
the Equal Opportunities Commission
NOTE ON
EQUAL PAY
AND THE
DISCRIMINATION LAW
REVIEW
1. The Discrimination Law Review (the DLR)
is the Government's review of anti-discrimination laws. The review
is working towards a Single Equality Bill, which the Government
has committed to introducing during this Parliament.
2. The DLR is intended to address long-held
concerns about inconsistencies in the current anti-discrimination
legislative framework. The DLR is considering the fundamental
principles of discrimination legislation and its underlying concepts.
It will work to develop a simpler, fairer legal framework that
fits the needs of 21st century Britain. It is also considering
opportunities for creating a clearer and more streamlined legislative
framework, which, having due regard to better regulation principles
will be more "user friendly" for employers and employees
alike, as well as for the service providers and service users.
3. The DLR will shortly be publishing and
consulting on its proposals. In the meantime the EOC has been
working with the DLR team and with the Commission for Racial Equality
(the CRE) and the Disability Rights Commission (the DRC) on what
we would like to see included in the Single Equality Act. The
area of equal pay, however, is one in which the EOC has sole responsibility.
The EOC is also consulting a wide range of stakeholders, including
employers, service providers, unions, and the gender lobby.
4. As the experts in gender equality, the
EOC wants to see legislation that is purposive; grounded in a
set of agreed principles; sufficiently broad in scope to address
discrimination in all its forms; and which enables institutions
and organisations to move beyond compliance towards the achievement
of real equality—in other words, to opt for prevention,
rather than cure.
5. The current legislation is based on individuals
bringing individual legal action when they experience inequality.
This, on its own hasn't gotten the job done. There will
always be a place for individual rights but we think it's time
for a debate that takes us beyond putting discrimination right
after it's happened to preventing it happening in
the first place. With the implementation of the Gender Equality
Duty this is beginning to happen in the public sector, but the
gender pay gap—the key indicator of inequality for women—is
wider in the private sector than the public.
6. The EOC considers that the law should
adopt a proactive approach to closing the gender pay gap. The
precise way in which this would be done should be open to debate
with employers but our suggestion is that it should include giving
all employers, not just those in the public sector, the responsibility
to consider, in a preventative, light touch way, whether they
have a gender pay gap, perhaps through an equality check, and
if so to take such action as is needed, including, if necessary,
a full pay review.
7. The fact that the equal pay legislation is
no longer fit for purpose has been graphically illustrated by
the situation in local government, where some 50,000-60,000 thousand
equal pay claims have either been filed or are in the offing.
A further 10,000 claims have been filed against NHS employers,
and there is a possibility that claims may also arise in other
parts of the public sector. While there are a several reasons
for the upsurge in the number of complaints, we see the underlying
problem as being the difficulty in reconciling the individual
rights to equal pay, which are provided by both EU and domestic
law, with the fact that pay tends to be delivered though workplace
agreements.
8. In the context of the public sector such
agreements will most likely have been negotiated by a recognised
trade union, but even in the private sector it is still the case
that pay tends to be decided for groups of employees, and that
the kind of individualised solution obtainable through the Employment
Tribunal has the potential to hinder the implementation of equal
pay for a wider group of workers. These consequences were not
foreseen—nor could they have been—at the time that
the equal pay legislation was first introduced, but we hope that
the DLR will take the opportunity to lead an in-depth consideration
of how the tensions between individual rights and collective solutions
can be resolved.
9. In the meantime, the EOC is asking the
DLR to:
— Consider whether the existing
equal pay provisions should be brought within a new unified equality
act. This would be consistent with the need to simplify and modernize
equality law.
The separation of pay and other discrimination
claims militates against a solution-based approach that tackles
access to jobs, promotion, working hours etc as part of the reason
for unequal pay. The current distinction between equal pay and
sex discrimination claims raises unnecessary complications and
is out of step with the proposed harmonisation in European law,
where there are moves to apply the same principles of law to pay
and non-pay discrimination.
Article 3(1)(c) of the Equal Treatment Amendment
Directive 2002/74/EC (ETAD), which came into force on 5 October
2005, applies the amended principle of equal treatment to employment
and working conditions including pay as provided for in the Equal
Pay Directive. The definition provides for less favourable treatment
on grounds of sex than another is, has been, or would be, treated
in a comparable situation. This approach is also adopted in the
Recast Directive. Thus in European law there is provision for
a hypothetical comparator (see below).
— Ensure that the Single Equality
Act provides for the CEHR and other representative organisations
to take representative action on behalf of a group of individuals.
Representative action allows one representative
of a group of claimants to raise proceedings against a respondent
on behalf of that entire group. While it is only the representative
claimant who is party to the legal proceedings, all members of
the group are bound by the outcome of the case.
Representative actions would be taken where there
was an actual group of claimants entitled to individual remedy.
It should not be confused with "own-name proceedings"
(initiated by a statutory equality body), where no individual
victim or victims are easily identifiable. Representative action
should also not be confused with Test Cases (where one or more
cases are picked out as being typical of the issues being litigated,
but all the claimants are party to the proceedings—see below)
or Formal Investigations (where a statutory equality body carries
out an inquiry into alleged discriminatory practices—see
below).
Representative actions should also be distinguished
from class actions. In representative action, one representative
body (rather than a grouping of individual claimants) commences
litigation. In a class action (a US term) each claimant is required
to raise proceedings, which are then "grouped" together.
— Amend equal pay law to allow
claims for equal pay in circumstances where there is no actual
comparator doing equal work, but where there is prima facie evidence
of discrimination in the employer's pay practices.
Equal pay is currently the only equality jurisdiction
to require identification of an actual comparator, but cases taken
to the ECJ have shown that where there is evidence of indirect
discriminatory pay practices it is not necessary to cite an actual
comparator.
Amending the law in this way would bring it into
line with what is required under EU laws; it would bring equal
pay into line with other equality jurisdictions, and, most importantly
would help to narrow the gender pay gap by enabling discriminatory
pay practices to be challenged through the employment tribunal.
Examples of where such an amendment would be
of benefit include: bonus payments being paid only to male dominated
jobs above a certain grade;
contractual benefits—occupational sick
pay, occupational pensions; private health insurance; being paid
only to full time employees. All such payments contribute not
only to the women's take home pay but also to the overall gender
pay gap and their inequitable distribution needs to be addressed
if the pay gap is to be closed.
If the woman can show prima facie evidence
of pay discrimination, then we want the claim to be treated like
any other discrimination claim ie it would be for the complainant
to show evidence of a discriminatory practice applied equally
to women and men and it would then be for the employer to seek
to justify the inequity.
We think that the existing equal value apparatus,
including the job evaluation provisions, is useful and should
be retained for those situations in which a complainant has an
identifiable comparator, but is not necessarily capable of challenging
pay practices affecting groups of employees, such as pensions,
bonus payments or the treatment of part time employees.
— Amend equal pay law to provide
for circumstances in which employers could be protected against
equal pay claims whilst they implement changes to their pay systems.
Such protection would be contingent upon an equal pay review having
been carried out and an action plan for the implementation of
equal pay having been drawn up in consultation with the workforce.
This would benefit employers by enabling them
to implement equal pay in a well-managed and orderly fashion and
also to phase in the costs of implementation, but individuals
would also benefit by obtaining pay equalisation without the attendant
costs, delay and stress that bringing an individual claim entails.
We accept that implementing this particular amendment
poses particular challenges, but we see it as essential to enabling
organisations to make it to deliver equal pay systemically without
their actions being frustrated by individual claims.
9. We consider that our proposals are congruent
with the DLR's intention of developing a legal framework that
fits the needs of 21st century Britain. If implemented, our recommendations
would also help to shift the focus from what individuals can achieve
through the Employment Tribunal or Court to what the organisation
and the employer can do to tackle the gender pay gap.
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