Equal pay - your responsibilities

Equal pay is about much more than keeping your staff happy. If you don’t offer fair pay you could face a costly tribunal that might mean the end of your business.

Staff can complain to an employment tribunal up to six months after leaving a job and there is no limit to the compensation you may have to pay. The most recent figures show that employment tribunals awarded compensation payments of £6.41 million for unlawful discrimination - an increase of 65 per cent.

Fair pay will help you to attract the best candidates for a job and to hang on to them. It will cut the time and money you spend on recruitment and boost morale and productivity. Being seen to be fair is good for your image with customers at home and abroad.

Equal pay means providing the same pay and conditions for both men and women whose work is:

• the same or broadly similar;
• is of equal value in terms of effort, skills, knowledge and responsibility.

A male warehouse worker, for example, could have the same level of skills and knowledge as a female clerical worker. Both need to understand how the company works, to have manual dexterity in handling goods or using a keyboard and both must be able to deal with customers. In a landmark case a canteen cook successfully claimed equal pay with craft workers in a shipyard.

Equal pay includes holidays, sick pay, pension contributions and other benefits and applies to both full-time and part-time staff. So, for example, if a female part-time worker is doing equal work to a male full-time employee she should get equal pay on a pro rata basis. In effect, they should both be on the same hourly rate.

Set up an equal pay review

The best way to find out whether you are a fair payer is to set up a pay review. This will reduce the risk of claims and can even form part of your defence at a tribunal.

An equal pay review makes good financial sense because it can give you an insight into how your business works, particularly your rewards system. It might also point to areas, other than pay, where either sex has a rough deal: perhaps you don’t have any female directors or male employees aren’t given the same opportunities for training.

It may highlight inefficiencies or tell you whether you are discriminating against employees on grounds other than sex, for example: