Wed, 1 Jun 2011

Lawyer slams ‘cosmetic’ equal pay audit proposals

Equal pay audit legislation proposed by the Government is unlikely to improve the pay gap between men and women and could potentially lead to more out of court settlements, an employment lawyer has claimed.

The proposed requirement for employers to conduct pay audits if they are found guilty of discriminating on pay in an employment tribunal is included in the Government’s current consultation on flexible working. The consultation was launched last month by the Department of Business Innovation and Skills.

But Selwyn Blyth, partner in the employment group at Pinsent Masons LLP, said the legislation is unlikely to improve pay discrepancies. ‘It’s cosmetic. Very few equal pay claims get all the way to a decision. The only way this proposed legislation would kick in is if you got a decision, the employer lost, and the tribunal thought it would be productive to have a pay audit,’ he said.

If the proposals are passed, Blyth suggested it may encourage employers who are aware they have discriminatory pay policies to settle out of court if a claim is brought against them. ‘You would think: “If I go all the way with this and lose, I could be ordered to do a pay audit and that would make the inequality very transparent,”’ he said.

Annette Gibbons, founder of payroll provider Think Payroll, said the proposal might place a burden on payroll departments. She said it was important that any legislation clearly detailed when the audit could be applied.

Office of National Statistics figures for 2009/10 show the pay gap for full-time employees is 10.2%, while for all employees it is 19.8%.