Defending an equal pay claim is time-consuming and costly.
The direct costs of a claim could include not only any equal pay award to the employee bringing the claim, but also the cost of time spent responding to the claim and the cost of legal representation. If a claim is successful, the tribunal or court may also require that a company undertakes a full equal pay audit.
If a woman makes a claim and succeeds, she can be awarded compensation consisting of back pay and/or damages for other contractual terms. Back pay can be awarded for up to a maximum of six years (or five years in Scotland) from the date that proceedings were filed with an employment tribunal. An employment tribunal may also award interest on this, which could be considerable.
There are many indirect costs, too, such as lower productivity on the part of employees who consider they’re not getting equal pay for equal work, and on the part of managers whose time is taken up in dealing with staff dissatisfaction and other repercussions. What’s more, staff dissatisfaction could lead to the loss of valued members of the organisation, low morale among employees and damage to employee relations and a company’s reputation.
It is therefore in everyone’s interests to avoid litigation. That’s why the Equality and Human Rights Commission recommends that all employers carry out an equal pay check or audit, and regularly review and monitor their pay practices.
The Code provides guidance on how to prevent or eliminate discriminatory pay practices, and explains why equal pay audits are the most effective means of ensuring that a pay system delivers equal pay for equal work.
Last updated: 19 Feb 2019