Equal pay for equal work

October 26th, 2012

The refrain of ‘equal pay for equal work’ was the guiding principle of the Equal Pay Act 1970. However, what ought to have been a hallowed principle has rung rather hollow in the decades after the Act passed.

In 2010 the Chartered Management Institute produced research that male and female managers will not be paid the same until 2067! Even as a Fabian who believes in the power of incremental change, just under 100 years for legislation to take effect is hugely disappointing. This problem was particularly pronounced in the UK which was lagging behind its European competitors. Even if you disagree with the figures it was apparent that the gap between male and female pay was unacceptably large.

A claim by 174 former employees of Birmingham City Council has promised to change that. In a Supreme Court decision handed down yesterday, it was held that equal pay claims can in certain situations be bought in the civil courts and not restricted to the employment tribunal. So what? Civil courts have a 6 year limitation period and tribunals only 6 months. So what difference can this make?

A substantial one. Imagine you are employed for a big city financial firm. The likelihood is that there are many women who will have been employed at a lesser wage (including bonuses) than men for equal work. Many women decide not to make claims within the 6 month time limit because of reputational reasons. Often individuals assume that making a claim of this nature will disrupt their careers and make progressing up the career ladder more difficult. By providing up to an additional 5 ½ years to bring a claim, a lot of roadblocks to issuing are removed. Given the movement of staff between different organisations and increasingly diverse sectors, women will be freed to make claims without worrying about the implications for their careers.

Chris Benson, partner acting for the Claimants said: “This is a great day for equality and for all those women massively underpaid over many years within public and private organisations.” Whilst I would normally dismiss statements of this type as puff, he may have a point. Many firms are no doubt revisiting the viability of equal pay claims and this could have massive ramifications in well remunerated sectors like finance where the pay gaps can be very stark.

More importantly it is the threat of litigation on a grand scale that may encourage many employers to mend their ways. I mentioned this case to my mum in passing and she commented that the introduction of the Equal Pay Act caused her salary to rocket. I wonder if this may now be the case for many women who have been underpaid for the work they do. We can but hope.