KNOWLEDGE

Introduction of equal pay rights covering ethnicity and disability - right idea but wrong implementation?

Morton Fraser Senior Associate Sarah Gilzean
Author
Sarah Gilzean
Partner
PUBLISHED:
12 February 2024
Audience:
Business
category:
Blog

The Labour party has announced proposed changes to discrimination law.

This week's announcement by the Labour party that they intend to allow equal pay claims based on ethnicity and disability on the face of it sounds like a good idea.  Women have been able to bring equal pay claims since the Equal Pay Act 1970 was brought into force, and statistics have repeatedly shown that ethnic minorities and disabled workers are also at risk of being paid less than the "going rate" for the work they do.  Recognising this issue and presenting proposals to address it is a positive, but is extending the right to make an equal pay claim the most effective solution?  And is it a better solution than the current right disabled workers and ethnic minorities have to bring pay claims as ordinary direct or indirect discrimination claims?

A brief history of equal pay….

The Equal Pay Act 1970 ("EPA") was an important step in recognising that women were being paid less than men when carrying out equal work.  It also works both ways (men can rely on it if they are not being paid equally for equal work being carried out by women, however historically the majority of claims have been brought by women). 

What we have learnt since the introduction of the EPA (which was replaced by the Equality Act 2010 ("EqA")) is that equal pay claims are complex, expensive, and often take a considerable length of time to resolve.  They are particularly difficult for individual claimants to pursue for these reasons, with the claims that do proceed often being brought on behalf of multiple workers with a union backing. 

That is not to say that some aspects of equal pay claims are not more beneficial to claimants than ordinary discrimination claims.  Equal pay claims do not require a claimant to prove that the reason for the pay difference is sex discrimination.  Once they can prove that they do equal work to their named comparator, the burden passes to the employer to explain the reason for the difference in pay.  There is therefore a rebuttable presumption that the reason for the pay difference is sex unless the employer proves otherwise. In an ordinary discrimination claim, it falls to the claimant to prove facts that, on the face of it, show that discrimination on the grounds of a protected characteristic has occurred.

However, as the history of equal pay case law tells us, proving that a claimant and a comparator do equal work is far from a straightforward process and can sometimes take years in Tribunal.  The comparator also has to be an actual person, rather than a hypothetical comparator and it is not unusual for there to be preliminary points taken at each stage of the process.  If a claimant is ultimately successful and is awarded compensation for loss of earnings, there is no scope to make an award for injury to feelings as there is in ordinary discrimination claims.

Adding complexity to a complex regime

Extending equal pay claims to the protected characteristics of race and disability is unfortunately likely to add even more complexity to equal pay claims.  The issue of identification of an actual comparator is an obvious example of where this might arise.  When pay inequality is based on sex then the comparator is someone of the opposite sex.  With both disability and race based equal pay claims one can foresee a number of issues arising in trying to identify an appropriate comparator - how will this be defined? Again, there could be huge scope for claims to get stuck at a preliminary stage on this point alone leading to increased uncertainty and cost for both employers and employees.

So where does that leave equality of pay claims based on race or disability?

In the face of having no reasonable alternative, the complexity of a system designed to ensure equal pay is not reason enough not to implement it.  But, recognising that the current regime has (significant) weaknesses, would it not be better to take the opportunity to consider how to construct a more straight forward user-friendly regime for making sex, race and disability based equal pay claims?  Or to consider abolishing the equal pay claim regime altogether and have all pay claims brought under the existing discrimination legislation instead?

Other proposals

The proposals on equal pay only form part of the announced changes put forward by the Labour party.  If Labour wins the next general election, a new Race Equality Act will be introduced, ethnicity pay gap reporting will become mandatory and the right to make claims based on dual discrimination will be enacted. 

The right to make claims of dual discrimination could be done simply by enacting the existing "combined discrimination" provision contained in the EqA.  This enables someone to claim direct discrimination based on a combination of two characteristics.  The increased recognition given to menopausal women in recent years has led to calls for this type of discrimination to be available, that being only one of many possible applications for it.  While the word "dual" does suggest an intention to limit the combination of protected characteristics to two, it would be possible to take this a step further and enact legislation allowing claims based on more than two protected characteristics, and also to extend the types of claim that could be made beyond the current limitation to direct discrimination.

The Labour party has confirmed that consultation will take place in advance of the introduction of equal pay claims based on race or disability.  They have also confirmed that, if they win the next general election, employers will be given time to prepare before the law changes.  It is to be hoped that the consultation will allow for consideration of all of the issues that could arise with an extension of the existing equal pay regime.

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