UK: Court of Appeal confirms broad approach to permissible equal pay comparators and procedural requirements

The Court of Appeal has given two rulings in the long-running equal value claim against Asda, in both cases ruling on preliminary points in favour of the store workers claiming equal pay with distribution depot workers. The claims will now proceed to determine whether the roles are of equal value and, if so, whether the employer has a ‘genuine material factor’ defence (ie, a reason for the pay difference which is not tainted by sex discrimination). Continue reading

UK: Discrimination – tax treatment of compensation, zero hours claims, and equal pay comparators

  • In Pettigrew v HMRC the First Tier Tribunal has held that settlement payments made by reference to underpaid past earnings arising out of a claim of discrimination against part-time workers were fully taxable as employment income. The appellant referred to the earlier case of Mr A v Commissioners for HMRC where it was held that a settlement sum representing underpaid salary and bonuses due to racial discrimination was not taxable, a decision which HMRC did not appeal. However, the Tribunal in Pettigrew did not accept this – noting in particular that the Tribunal in Mr A were not referred to the correct legal authorities and in particular the principles in Kuehne + Nagel (that for a payment to be an emolument, employment need not be the sole cause but only sufficiently substantial) and Mairs v Haughey (that a payment will usually take its taxable character from the payment which it substitutes). Both Pettigrew and Mr A are only First Tier Tribunal decisions and so not binding, but the case is a firm indication that HMRC is now likely to seek to fully tax compensation for loss of earnings arising from discrimination during employment.

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UK: EAT rules that clustering of women at low end of a pay grade was insufficient to establish indirect discrimination

The use of length of service as a criterion for pay may indirectly discriminate against women and therefore require objective justification to be lawful (particularly long pay scales are likely to face more of a challenge). However the mere fact that women are clustered at the lower end of a pay scale and men in the same grade are clustered at the higher end is not sufficient in itself to establish that an employer’s use of length of service as a pay criterion puts women at a particular disadvantage.  The EAT held in McNeill v HMRC that women were not put at a particular disadvantage as the average pay figures showed no significant differences between pay for men and women in the same pay grade.

The EAT also made clear its obiter view that old case law (Armstrong v Newcastle upon Tyne NHS Hospital Trust), which suggested that an employer could avoid the need to show objective justification if it could show a non-discriminatory underlying reason for any disparity, is no longer good law, following the Supreme Court ruling in Essop v Home Office. Once a claimant can show that a practice puts a protected group at a particular disadvantage, the practice in question must be justified and there is no need first to establish why the protected group is disadvantaged.  If followed in other cases, this would make clear that equal pay cases should be approached in the same way as other indirect discrimination cases.

UK: Gender pay gap reporting – EHRC threatens enforcement action for non-compliance

The 4th April 2018 deadline for publication of employers’ first year of gender pay gap data is looming, yet over 90% of employers covered by the new statutory duty have still not reported. Many may have deliberately chosen to publish close to the deadline, perhaps in the hope that in the early April deluge their data will slip unnoticed through the net of media attention. Whether this strategy will itself attract negative publicity may depend on whether the GEO goes ahead with its original plan to publish three lists of employers “in early 2018”: those who have reported, those who have “demonstrated that they are on track to report” by registering on the government website (possibly as at 31 January), and those who have not yet registered. Employers who are not yet ready to publish may want at least to register to avoid being on the third list.

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Germany: Act to Promote Transparency of Pay Structures (Entgelttransparenzgesetz)

On 30 March 2017 the German Parliament (Bundestag) passed the Act to Promote Transparency of Pay Structures (Entgelttransparenzgesetz). The objective of this act is an achievement of the pay equity between men and women, who perform the same work or work of equal value. It is expected that the act will come into force this summer (immediately on the day after its promulgation).

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UK: Gender pay gap reporting – revised final Acas/GEO Guidance published

A revised, final version of the non-statutory guidance by Acas and the Government Equalities Office was published on 3 April 2017, available here.  Although the GEO had indicated that no substantive changes were expected to the original draft published a few days before formal approval of the final regulations, in fact there are a few significant changes helpfully addressing some of the grey areas highlighted by commentators.  Employers currently preparing for the first data capture covering the pay reference period including 5 April 2017 should review the guidance urgently. 

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UK: Acas/GEO publish draft guidance on gender pay gap reporting

On 28 January 2017 Acas and the Government Equalities Office published draft guidance on the new gender pay gap reporting obligation, available here. Although in draft, we understand from the GEO that this is because it pre-dated the Parliamentary approval of the regulations and that no substantive changes are expected to the final version.  We also understand that Parliament formally approved the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 on 30 January 2017, without amendment to the final form draft regulations, but these have not yet been published. 

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UK: Final form regulations on gender pay gap reporting

The Government has published its long-awaited final form draft regulations on gender pay gap reporting. Subject to Parliamentary approval, the new requirements are due to apply to private sector employers with 250 or more employees from 6 April 2017.   A draft Explanatory Memorandum states that supporting non-statutory guidance will be published after Parliament has approved the regulations.

Key changes include:

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UK: Gender pay gap reporting regulations delayed, first data snapshot likely to be brought forward

The Government Equality Office has confirmed that the final gender pay reporting regulations (discussed here) are unlikely to be brought into force in October this year as originally planned. The hope is that the regulations will be approved this autumn and commenced in April 2017. The relevant provision of the Equality Act allowing the regulations to be made was commenced on 22 August.

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