Employers warned to ensure pay systems are transparent

An unusual equal pay case has been won by a former employee on the basis of comparison with her successor’s pay. In this Employment Tribunal case, a former accountant at manufacturing company API Group, Bridget Bodman, used her successor’s salary to bring an equal pay claim. more.

Ms Bodman joined the API group in April 2000 as a Group Accountant and was promoted to Financial Controller in March 2001. Ms Bodman became suspicious about the salary and benefits offered to her replacement, as Group Accountant, and requested the company fill out an equal pay questionnaire. Her successor, a male employee, was paid £8,000 more than her, received an £8,640 car allowance and additional benefits. 

This type of 'successor' claim was first established in the UK in 1996, in Diocese of Hallam Trustee v. Connaughton, but has since been used only a handful of times.

The tribunal found that the company had no defence for the difference in salaries. It said:
 "The absence of both clear criteria and process for determining pay awards and bonus payments creates a climate where pay discrimination on gender grounds can operate, consciously or unconsciously, unsuspected, undetected and unchallenged.”

The case was supported by the Equal Opportunities Commission (EOC), and the claimant was awarded £25,000.

Jenny Watson, Chair of the EOC said,
“This case demonstrates that equal pay is not simply about people working side-by-side being paid the same salary for doing the same job.  Employers can of course continue to conduct individual pay negotiations with new members of staff. But they must always have both good record keeping and a clear justification for the decision they reach if they are to comply with equal pay law. This tribunal decision sends out a clear message for employers to ensure that their pay systems are transparent, otherwise they leave themselves open to costly claims."

Rachael Dineley, partner at the Beachcroft law firm, commented: “We're seeing equal pay taking off in a major way now, and claims are becoming more common – it’s something employers need to think about.”

What the case highlights for employers: 

The need to ensure pay systems are transparent –one where employees understand not only their rate of pay but also the components of their individual pay packets. It avoids uncertainty, perceptions of unfairness and reduces the possibility of individual claims.

The need to identify high risk areas by carrying out an equal pay review – which will identify the differences in pay which are unjustifiable, and justifiable.

Posted by, Asif Yusuf




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