When can you show that a gender pay differential is due to historical grading based on skills and experience and not discrimination?
- It is widely accepted that there is a pay gap between men and women in the workplace. Recently, it has been decided that the “historical reason” for a difference in pay received by a male and female who perform the same jobs is relevant when determining whether there has been a breach of equal pay legislation.
- Current equal pay legislation provides for equality of pay and other contractual terms between men and women in the same employment, where they are employed on "like work", "work rated as equivalent" or "work of equal value".
- Where a man and women receive different pay for the same job, there is a presumption of discrimination, unless the employer can prove otherwise. Currently, an employer must show that the difference in pay is due to a non-discriminatory factor or “material defence factor”.
- In a recent case an employer used this defence to argue that the male comparator’s additional skill and experience justified the variation in pay. However, the Claimant provided evidence to show that after the first year, she had enough experience to catch up with her male comparator.
- Initially, the employer’s defence was accepted in respect of the Claimant’s first year of employment however, it was decided that this ceased to exist after this point due to there no longer being a discrepancy between the skill level of the Claimant and the male comparator.
But, on appeal it was decided that:
o the point at which the employee starts on an incremental pay scale will, by the very nature of such a scale, impact on their pay in the future; and
o will determine when he or she reaches the top, relative to colleagues in the same job.
- In a similar case, an employer, due to financial constraints, placed a new employee on a pay scale at a point which it acknowledged was lower than she deserved. It was understood that, when the situation improved, she would be moved to the appropriate place on the scale, however this never materialised.
- So, if the reason for the pay differential was not time-limited, at the point the employers situation improved, the explanation for the differential ceased to exist in which case, it can relying on anomalies in historical pay grades alone will no be acceptable.
- In summary, given the economic climate it is unsurprising that employers have not harmonised pay. As the economy improves, there will be a time when the status quo cannot be accepted. Employers will need to promote a positive message and reinvest in their workforce if they wish to stay ahead in the marketplace.
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