The gender pay gap is an increasingly hot issue. In their manifesto, announced last week, the Liberal Democrats even unveiled plans to legally require employers with more than 250 staff to publish the extent to which they pay men and women differently.
The party said large companies would be expected to reveal the difference between the average pay of men and women in their employment – those who don’t comply could be fined up to £5,000.
Already, from 1st October, tribunals will be required to order an equal pay audit and publish the findings where an employer is found to have breached equal pay law, subject to certain exemptions. Compulsory publishing of pay data would take this to a new level.
Ahead of next year’s general election, it would be premature to suggest the Lib Dems’ proposal is about to be implemented. But its inclusion in the manifesto shows pay equality is an issue that is unlikely to go away any time soon.
So what are the implications for retailers?
Any industry where there are predominantly male or female workers carrying out certain roles of similar value is at risk of equal pay claims.
In supermarkets, check-out staff and shelf-stackers are mostly women. Employees working in the warehouses or distribution centres are likely to be men. So it is not surprising that there has already been media coverage about equal pay claims against a major supermarket chain. Publishing gender pay differences would only increase the likelihood of claims arising.
One of the biggest hurdles for employees seeking pay equality at the moment is the lack of evidence available to them. In the public sector, the implementation of job evaluation schemes has provided the evidence. This has led to organisations facing thousands of equal pay claims and huge liabilities. A requirement to publish details of the gender pay gap could open the floodgates for equal pay claims in the private sector.
For independent retailers, the risk may be reduced if there is not the gender imbalance identified above. But if there is, they could also be in the firing line.
As for what types of equal pay claims could arise, supermarkets are likely to receive ‘equal value’ claims, which can take a significant period of time to conclude.
And with the recent landmark ruling of the Supreme Court hearing involving Birmingham City Council, the time limit for equal pay claims has increased from six months to six years after leaving employment. This has opened up the floodgates for additional claims.
It is possible to justify pay differences, provided there is a gender-neutral reason for the difference in pay. This could be, for example, market increments, location or shift allowances.
If there is a gender imbalance between the claimants and their comparators, the supermarket will have to objectively justify any differences in pay. As many public sector organisations have found to their detriment, that is not an easy task!
Retailers – or any other major employer – that suspect there may be a gender imbalance and differential in pay between different roles should take the opportunity to obtain specialist advice to gauge whether there is an underlying equal pay risk. Steps can potentially be taken to mitigate any risk that does exist. The potential liability is too large to ‘brush under the carpet.’
Jawaid Rehman is a partner at Weightmans LLP