31 May 2010
Despite the fact that equality of pay for men and women was enshrined in law 35 years ago, it’s still a long way from being a reality. Richard Leiper asks whether we have any reason to be optimistic for the future
Equal pay has hit the headlines. Following a judgment on liability against Birmingham City Council, it has been claimed that the Council will be forced to pay out sums as high as £600m (or ’just’ £30m on other accounts).
It is unclear quite why this case has so grabbed the attention of the press: equal pay claims with huge numbers of claimants have been ongoing since around 2003 both against local authorities and in the NHS. There have been numerous appeals, both to the Employment Appeal Tribunal
and the Court of Appeal. There have been significant payouts both following litigation and on compromise. But what has been the impact? For hundreds of thousands of individuals, the answer has been ’better off’; for many local authorities, ’on the verge of bankruptcy’.
It should, of course, be a given that women must be paid the same as men. That right has been in place since 1975 and yet statistics continue to show a significant failure to achieve equality, even after 35 years. Will the recent spate of litigation bridge that gap? There is no guarantee that it will.
One significant difficulty in any case is establishing equality. Except where the jobs are essentially identical, then the cumbrous equal value process must be used (involving cost, delay and uncertainty), unless the employer has initiated a job evaluation study (JES). The advantage of a JES is that it is a process that can be overseen by the employer and by employee representatives, without impinging on its objectivity and sex neutrality. Moreover, where a job is rated differently under a JES, that is a complete bar to an enquiry as to equal value. Thus, a JES both establishes equality and defines difference. Whilst rarely used in the private sector, such studies were often used in the public sector. Indeed, many of the successful claims have been based on studies establishing, for example, that carers and caterers (predominantly female) do equal work with refuse workers and groundsmen (predominantly male).
Employers are encouraged to apply a JES in order to secure equality for the future.
The historic position
However, recent cases have demonstrated that the studies also provide strong evidence of the historic position: if a woman is rated the same as a man for the future, this will indicate to her that she was probably doing work of equal value as that man in the past. This, in turn, leads to claims. Thus, there is an immediate and significant disincentive for an employer to undertake the study: while intending to right matters for the future, it exposes potential past transgressions. Immediately the equality-producing JES becomes unattractive.
Another tool for achieving equality for the future has been to use pay protection: when a new, equal pay system is introduced, it inevitably realigns the workforce. In an ideal world, no one’s pay would decrease as a result; there would only be gainers and non-movers.
However, no employer - certainly no public sector employer - can justify this and in fact there must be some who lose pay. In order to secure agreement to the new scheme, the pay of the losers is protected for a period so that they do not suffer any immediate loss in their take-home pay.
However, the Court of Appeal has determined that this is too simplistic: if a woman’s historic right has not been respected, then she may be entitled to the same pay protection as the man, even though she has not in fact suffered a loss in her take-home pay.
This in turn may make pay protection schemes entirely unaffordable. And without pay protection, the employer may have to impose the new scheme on an unwilling workforce.
The Court of Appeal has upheld a finding that a collective agreement by a trade union was itself discriminatory since it failed to have sufficient regard to the position of women. The effect of this has been to discourage unions from entering into any collective agreements for fear of being sued - yet another barrier to any consensual route to equality.
Many would argue that the time for achieving change through agreement has passed, and has passed in abject failure. The only viable mechanism is for the immediate imposition of a new, equal pay scheme. Certainly this will achieve equality, but it will also create a dissatisfied workforce and a significant pay bill.
This may be a necessary price for the public sector (although one paid for by higher tax and cuts in services). The real concern is the impact that these developments will have on the private sector: the costs of moving to a more transparent, equal pay scheme may simply be too great to allow it to be contemplated willingly.
Will the cost of public sector equality be the continuation of private sector inequality?
Richard Leiper is a barrister at 11KBW