LABOUR HAS PLANS FOR EXPANDING EQUAL PAY LAW

Labour’s aim is to ensure workers’ rights are at the top of the agenda, if elected, with far reaching changes proposed. Key areas that would be addressed include pay, job security, increased protection from the first day of employment, discrimination laws, stronger family friendly and carers’ rights and greater trade union rights.

On the back of its plans, Labour has announced that it intends to extend equal pay rights to ethnic minority workers and disabled people.

Equal pay rights in the UK are governed by the Equality Act 2010. Currently, only men and women are protected. The law provides that someone of the opposite sex should not get paid less by their employer for doing work that is the same, similar, equivalent or of equal value. Put simply, men and women must be paid the same for doing the same work.

If Labour gets into power, it intends to introduce new legislation to extend equal pay rights beyond sex to claims based on race or disability. While there is no excuse for paying someone less for the same work due to their race or a disability, there has been a mixed reaction to the plan with many commentators, legal or otherwise, questioning why this plan is necessary. Equal pay claims based on disability and race (or any other protected characteristic) can be brought under the current discrimination law, which is also contained in the Equality Act 2010.

On the other hand, discrimination law does not have the same benefits as the current equal pay law. There is a longer timeframe for bringing an equal pay claim, the burden falls on the employer to explain the difference in pay, once a difference is established. In the case of a successful claim, there will be a permanent change to the contract to rectify the offending inequality and an employer may be subject to an equal pay audit.

There are some disadvantages to the current equal pay law as it stand, for example:

• A claim can only be backdated for six years. In comparison, financial loss for discrimination is uncapped and compensation for injury to feelings can be awarded.
  

• In an equal pay claim, the claimant must identify who they are comparing themselves to for the purpose of showing that they are paid less than someone else. The individual needs to be an actual current or former employee not a hypothetical person. In discrimination claims, a hypothetical comparator is permissible. The issue of who is the comparator for equal pay claims on the grounds of disability and race will need careful consideration. For example, will the comparator be a non-disabled person or someone with a different disability?
  

• Equal pay claims are notorious for being complex and time consuming; they can take a long time to be resolved. If Labour introduces all the legal changes it has in mind for the workplace, including extending the scope of the equal pay law, will the already overburdened tribunal system be able to cope with an influx of new legal challenges?
  

If implemented Labour’s plans will open up a whole new world of rights and obligations for both employers and employees; and undoubtedly create more grounds for legal challenges and claims. However, before any changes can take place, Labour will need to win the next election. Even if it does, it will need time to consult over and implement its new legislation. A promise has been made to bring in the changes gradually. Prudent employers may however want to get ahead and consider whether pay and terms and conditions would withstand scrutiny now or in the future, if challenged either under the equal pay or discrimination laws. Employers need to also bear in mind that given Labour’s plan has courted a significant level of publicity, workers may already be scrutinising how they and their colleagues are remunerated to see if they are being fairly treated.

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This update is for general guidance only and advice should be taken in relation to a particular set of circumstances.