The Equal Pay Act 1970 - Assignment Example

In light of recent research evaluate the extent to which a willing employer can evade the provisions of the Equal Pay Act 1970. What proposals for reform can be made? Chapter One - Introduction Equal Pay Act of 1970 has been introduced in order to protect women against possible discriminations regarding their payment for their work especially comparing to the remuneration given to a man working in the same firm and for work of similar value. Generally, it should be noticed that the particular Act helped towards the increase of remuneration of women in Britain through the years. In fact, in accordance with the study of Manning (1996) “the UK Equal Pay Act of 1970 resulted in a large rise in the relative earnings of women in the early 1970s”1. In accordance with a report published by the University of Oxford “under this Act, every employment contract is deemed to include an equality clause which guarantees both sexes the same money for doing the same or broadly similar work, or work rated as equivalent by a job evaluation study; such a clause operates unless an employer can prove that pay variation between the sexes is reasonable and genuinely due to a material difference between their cases”2. In other words, all employment contracts should include provisions for equal pay regarding the work of equal value. However, in many cases the provision of equal payment is not possible because there are certain factors (like the duties of the man involved) that have been encountered in order for the increase to the salary to be decided. Another issue is the fact that discrimination in payment is often non visible or easily identified because it can refer to the provision of other benefits (like free accommodation and so on) that are analyzed extensively below. Chapter Two - Equal Pay Act 1970 2.1 Aspects and characteristics of the Act The general terms of application of the Equal Pay Act of 1970 are included in the first article of the Act. In accordance with this article: 1(1) “If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include (directly or by reference to a collective agreement or otherwise) an equality clause they shall be deemed to include one”3 In other words, all employment contracts in Britain should include a clause related with equal payment. In terms that such a term is not included in the employment contracts, then employers can be ‘obliged’ to add such a clause within these contracts. In order to understand the role of Equal Pay Act 1970, it is necessary to refer primarily to the term ‘pay’ as included in the above Act. In accordance with a definition given by the Equal Opportunities Commission (2007) the term ‘pay’ can be refer not only to salaries and wages but also to the following benefits: “a) holiday pay/leave entitlements; b) profit related pay; c) profit sharing; d) contractual bonuses e) share options; f) subsidised loans and mortgages; g) company car and car/petrol allowances; h) telephone allowances; i) private medical insurance; g) life assurance and so on”4 (Equal Opportunities Commission, 2007). The type of the additional benefits provided to men within a workplace will depend mainly on the firm’s financial strength but also on the corporate culture. Another issue that should be noticed is the fact that the provisions of Equal Pay Act are applicable by the beginning of the employment and are irrelevant of the duration of the work (both in a weekly or a monthly basis).  On the other hand, the protection provided by the Equal Pay Act can be extended to the following categories of employees, including in accordance with the article 1 par. 6: “a) Employees; b) Ex-employees; c) Contingent claimants; d) Self-employed; e) Partners; f) Crown employees and Office holders; g) Users of employment agencies; h) Armed forces personnel; i) Trainees undergoing vocational training and g) Overseas employees”. All employees that belong to the categories mentioned above can bring a claim before the Court for protection in accordance with the provision of the Equal Pay Act 1970. However, it is not enough for the employees to belong to the above categories. There are also other requirements in order for the specific Act to be applied. At a first level, the employee must be a woman. Moreover, the claim brought before the court must refer to a discrimination in payment compared to the payment given to a man/ or men who offer work of the same value. Towards this direction, in accordance with the article 1 par. 5 of the Equal Pay Act 1970 it is stated that: “1(5) A woman is to be regarded as employed on work rated as equivalent with that of any men if, but only if, her job and their job have been given an equal value, in terms of the demand made on a worker under various headings (for instance effort, skill, decision) …”5. In accordance with the above provision, it is necessary that the work provided by the woman is of equal value with the work of the man who has been given additional salary/ wages/ benefits by employer. However, the identification of the issue of ‘equivalent’ as described in the article above is not always easy. In fact, the Court will have to examine thoroughly all conditions related with the work provided both by the woman and the man/ men involved in a relevant claim. 2.2. Disputes under the Equal Pay Act 1970 In case that a dispute appears regarding the application of Equal Pay Act 1970, then the Court will be asked to resolve it in accordance with the provisions of the above Act. More specifically, in accordance with the article 2 (1) of the above Act “Any claim in respect of the contravention of a term modified or included by virtue of an equality clause … may be presented by way of a complaint to an employment tribunal; 2(1A) Where a dispute arises in relation to the effect of an equality clause the employer may apply to an employment tribunal for an order declaring the rights of the employer and the employee in relation to the matter in question”6. The Employment Tribunal will decide on the applicability of the Equal Pay Act of 1970. At a primary level the existence of the requirements set by the law regarding the application of the particular Act will be examined. At a next level, the claims of employees will be thoroughly analyzed while the defense of the employer will be evaluated as of its significance. In fact there are many issues related with the application of the provisions of Equal Pay Act 1970. The limitations of this Act and the existence of an extended net of possible defenses used by employer could be regarded as the major weaknesses of this Act. 2.3 Limitations of Equal Pay Act 1970 Briefly referring to the limitations of the Equal Pay Act 1970 we should notice that the above Act cannot be applied if there are other issues involved in a particular claim. More specifically the following issues should be taken into consideration by Courts before proceeding to the examination of the case – the application of Sex Discrimination Act would be possibly decided by the Courts in a specific case: “a) the EqPA is about equal pay, not about fair pay; b) unlike claims under the Sex Discrimination Act 1975 (SDA), an EqPA claim can only be brought if an actual comparator of the opposite sex can be identified (a hypothetical comparator can be used only in very limited circumstances; c) the EqPA only applies to contractual benefits”7. In other words, Equal Pay Act is not the only legislative tool available to employees in order to be protected by possible discrimination related with their payment. In fact, the Sex Discrimination Act has been proved to be a useful legal text for the protection of employees against discrimination in the workplace. Also, in cases that one or more terms of the Equal Pay Act 1970 are not applicable, Sex Discrimination Act is likely to be applied instead. In any case the applicability of Equal Pay Act 1970 is thoroughly examined as all requirements that are strictly mentioned in the above Act should be met before its application is decided by the Courts. 2.4 Defense of employer Employer has many options in order to defend himself against a claim based on the existence of discrimination in accordance with the terms of the Equal Pay Act 1970. Moreover, in accordance with Greenlaw et al. (1993) “the law, which requires equal pay for equal work among men and women, provides a mechanism for aggrieved workers to present prima facie cases of discrimination before courts after which accused employers have an opportunity to provide affirma tive defenses, showing that no discrimination exists”8. In this context, it has been found that Job Evaluation Studies are often used by employees in order to prove that there has been no ‘inequality’ in payment regarding the relevant claim of a woman working in their firm. In fact, it has been proved that Job Evaluation Studies are very likely to be used by employers when facing with a claim based on the Equal Pay Act 1970. However, in order for this tool of ‘defence’ to be used, the Job Evaluation Study must: “a) be analytical; b) have objectively assessed the value to be placed on the work performed; c) have analysed both the claimants and the comparators jobs and d) have been carried out at the undertaking at which the claimant is employed”9. Apart from the above tool of ‘defence’ employers also claim that the particular job has to be paid “in accordance with the market rates for the specific job” (Equal Opportunities Commission, 2007). However, in practice the above tool is not always effective for employers. In fact, in the case of Ratcliffe and Others v. North Yorkshire Country Council [1995] IRLR 439 HL, it was been accepted by the employment tribunal that the relevant claim of the employer could not be acceptable. The base for this decision has been the fact that “the women fitted work around their childcare responsibilities and could not have found other suitable work within the labour market at more favourable rates of pay”10. The House of Lords also verified the above decision stating that the specific claim of the employer could not be regarded as a ‘defence’ under the provisions of the article 1(3) of the Equal Pay Act 1970. Apart from the above tools of defence, employers can proceed to a series of claims in order to defend themselves from a relevant claim of a woman – employee of their firm. In this context, employers tend to use the following defences when are called before the Employment Tribunal regarding the application of the Equal Pay Act 1970: “a) existence of grading schemes, b) budgetary constraints, c) performance pay, d) training and qualifications, e) hours of work and so on”11. All the above claims are thoroughly examined by the Courts as of their credibility and their role to the establishment of differences in payment of man and women within a particular enterprise. Chapter Four - Conclusion - Recommendations In order to understand the effectiveness of Equal Pay Act 1970 it is valuable to refer to the general framework in which this Act was designed and primarily applied. Towards this direction it is suggested that “legislation mandating equality of pay between women and men was among the earliest forms of sex discrimination legislation to be adopted in Britain; however, the model embodied in the Equal Pay Act 1970 is increasingly being questioned: the law is, at one and the same time, highly complex and difficult to apply, while apparently contributing little to the further narrowing of the pay gap”12. Another issue that should be mentioned here is the fact that “gender pay inequality declined sharply where women were employed in industries that had previously been dominated by men, but did not occur in industries that had traditionally been important areas of female employment”13. The examination of the provisions of Equal Pay Act can lead to the conclusion that women in British enterprises are rather unprotected regarding their right for equal pay for equivalent work compared to their male colleagues. In fact, it has been proved that employers can present a series of claims in order to defend himself in case of a claim based on the provisions of Equal Pay Act 1970. The existence of many possible defences to employers regarding the particular Act minimizes in practice the applicability of this Act. In this way, women are considered as not effectively protected against the possible violations of their right for equal pay. A series of measures would be necessary in order for the Equal Pay Act to develop its effectiveness for women in all enterprises: a) clear and specific terms of employment contracts, b) continuous monitoring of all enterprises regarding the application of the terms of Equal Pay Act 1970, c) amendments to the text of the Act adding special provisions that will impose monetary punishment to the employer that will not follow the provisions of the Act, d) establishment of intermediary judicial bodies that will be able to resolve fast all relevant disputes (even before reaching the Employment Tribunal). All the above proposals would help towards the increase of effectiveness of the provisions of Equal Pay Act 1970. References Deaking, S. (2007) The regulation of women’s pay: From Individual Rights to Reflexive Law? [online], available at http://ideas.repec.org/p/cbr/cbrwps/wp350.html Equal Opportunities Commission, (2007) [online], available at http://www.eoc-law.org.uk/Default.aspx?page=2723 Gazeley, I. (2007) Womens pay in British industry during the Second World War. The Economic History Review, available at http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0289.2007.00412.x Greenlaw, P., Lee, R. (1993) Three Decades of Experience with the Equal Pay Act. Review of Public Personnel Administration, 13(4): 43-58 Manning, A. (1996) The Equal Pay Act as an Experiment to Test Theories of the Labour Market. Economica, 63(250): 191-212 University of Oxford (2007) Equal Pay Act 1970, [online], available at http://www.admin.ox.ac.uk/ps/managers/recruit/legislation/equalpay.shtml Legislation Equal Pay Act 1970 (as amended) Read More