More than fifty years after the Equal Pay Act 1970 came into force, the government has launched a consultation on substantial reforms to equal pay law. Describing the current framework as excessively complex, costly and protracted, the proposals aim to modernise the system, proactively prevent pay discrimination and close the gaps in protection for certain groups.
The consultation proposes a two-phase programme of reform.
Phase 1 focuses on fixing the current system. Key proposals include:
- requiring employers to publish pay information in job adverts or, where there is no advert, to provide it in writing before interview;
- requiring Employment Tribunals to order an employer found to be in breach of equal pay law to conduct an equal pay audit, unless one has been completed in the previous three years; and
- reintroducing a statutory questionnaire procedure in pay discrimination cases, to help claimants obtain information about pay.
A central pillar of the reforms is the creation of a new Equal Pay Regulatory and Enforcement Unit with the power to “uphold pay equality for all” (rather than the burden resting on individuals to enforce the law by bringing claims). It is proposed that the new body would be given powers to obtain pay data and information before launching formal investigations, as well as powers to require employers to undertake an equal pay audit and/or job evaluation scheme. Where the employer has been subject to an inquiry by EHRC which has resulted in recommendations, it is also proposed that the new body would be given powers to require a response or update from the employer in respect of those recommendations.
Importantly, the government also highlights the need to improve the Employment Tribunal system by dealing with delays and backlogs, as part of the first phase of reform.
Phase 2 would broaden legal protections. The government is consulting on measures to make protections against pay discrimination on the basis of race and disability broadly equivalent to those available in sex equal pay claims. Proposals include:
- allowing Employment Tribunals to require that discriminatory contractual terms be modified in successful race or disability pay discrimination claims;
- extending the use of equal pay audits and job evaluation schemes to race and disability cases; and
- enabling race and disability pay discrimination claims based on "equal value" work.
The consultation also considers the use of outsourcing arrangements to avoid equal pay obligations. The government proposes a new duty requiring contracting parties to take all reasonable steps to uphold pay equality. The duty would be enforced by the new Enforcement Unit rather than through individual claims.
There is no doubt that these proposals are ambitious and would represent a significant shift in equal pay law, with wide-ranging implications for employers' pay transparency. However, employers should not expect change overnight. The government has made clear that Phase 2 reforms will only come once the current system has been improved and Tribunal delays have been addressed. Given the scale of those challenges, the Phase 2 reforms may still be some way off.
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