Equal Work should be rewarded by Equal Pay!

This is what we were told when the Equal Pay Act 1970 became law in December 1975. Now, 33 years later we are still grappling with this issue but a recent court decision makes it illegal to pay women less on the grounds of pay protection schemes,

It is difficult to understand how there is still disparity in pay so long after the Equal Pay Act became law. Some workers negotiated bonuses and productivity incentives for themselves which over the passage of time became part of their normal pay. The people with these incentives were, in the main, manual workers who were generally men. The effect of this was a substantial pay gap between men and women doing comparable work.

Local authority pay and working conditions are governed by collective agreements. In 1997 a working group was set up to create a single pay scale for manual workers and non – manual workers. This new arrangement had to ensure equal pay for men and women doing equally rated work. Job Evaluation Studies provided comparisons of different work done by the two sexes which could be treated as of equal value.

In order to implement the new agreement and ensure parity across the board, new pay grades were created which resulted in some people having pay cuts. The hardship, created by the reduction in earnings, was cushioned by a pay protection scheme known as “red circling”. This meant that their earnings were not in fact reduced, but new employees arriving on the same grade would be paid at the new lower rate. Needless to say, the people who benefitted from the red circling were men.

Legally employers can only pay men at a better rate than women for reasons unconnected with gender

The Court of Appeal recently handed down a lengthy decision in relation to claims for equal pay brought by women working in two different local authorities.

The employers maintained that pay protection was justified to avoid the hardship which would inevitably flow from a pay cut.

On the surface this was true, but the Court of Appeal looked at the historic reasons. The men suffered a pay drop because they lost their old bonuses. The women did not suffer a pay drop because they were never paid those bonuses. They were consistently underpaid during the period prior to the change over. The only reason for their under payment was they had been unlawfully discriminated against during that period. They had been entitled to the same pay as the men on bonuses and therefore the reason for the pay differential was directly related to sex discrimination.

The decision of the Court of Appeal on 29th July 2008 effectively outlaws the use of pay protection schemes to justify sex discrimination thereby forcing the local authorities to pay substantial damages to the women involved and to pay wages to them on equal terms with their male counterparts.

Contact Caroline Mitchell for further information or advice.

Published 11/08/2008. The author of this article is Caroline Mitchell