Government Launches Consultation on Equal Pay Reforms

Businesses, workers and trade unions are being asked for their views on plans to reform the equal pay system.

Why Is the Government Reviewing Equal Pay Law?

The government has launched a 15-week consultation after evidence suggested that existing equal pay law has become too complex, costly and slow, with some court and tribunal proceedings taking many years to resolve.

The evidence also indicated that pay discrimination continues to affect women, ethnic minority and disabled workers, as well as employees whose work has been outsourced.

The consultation will examine how equal pay protections can be strengthened and how claims can be resolved more quickly and cost-effectively. It will also consider extending the right to equal pay for ethnic minority and disabled workers and preventing employers from using outsourcing arrangements to avoid equal pay obligations.

Proposed Reforms

The first phase of the proposed reforms will consider:

• Increasing transparency of pay practices to prevent discrimination before it happens.
• Reviewing and reforming the process for pay discrimination claims to ensure they are faster, fairer and more cost-effective.
• Establishing a new Equal Pay Regulation and Enforcement Unit, with potential strengthened powers to uphold equal pay law.

A second phase will consider:

• Broadly levelling up protections against pay discrimination on the basis of race, disability and sex, to ensure that work pays.
• Requiring employers to take reasonable steps to uphold pay equality in outsourcing arrangements.

Improving Enforcement and Reducing Disputes

The government said the current system places excessive pressure on workers, employers and the justice system. It believes greater pay transparency and more effective enforcement could help prevent discrimination before disputes reach a court or employment tribunal.

The proposed Equal Pay Regulation and Enforcement Unit would involve trade unions and could be given stronger powers to ensure employers comply with equal pay law.

Outsourcing and Equal Pay Protections

The consultation will also examine whether employers should be required to protect pay equality when services are outsourced. This is intended to prevent workers from losing equal pay protections because they are employed by a separate organisation while carrying out comparable work.

The consultation will close on the 27th October, after which the government will consider the responses before deciding how to proceed with the proposed reforms.

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About the Author

Jackie Cuneen qualified in 1998 and spent 13 years in the City, working as a senior lawyer at CMS Cameron McKenna, K&L Gates and Starr & Partners, before joining Machins as a partner in 2013.

She advises businesses, HR teams and senior individuals on a wide range of employment law matters, and has a particular interest in disability discrimination, supporting both employers and individuals.