Pay Secrecy – What Can Employers Do?


It has been reported in the news that the Gender pay gap and the treatment of pregnant women has continued to be detrimental towards female workers and employees.

One thing the Government is trying to ensure is that the gender pay gap is reduced and this has been the Government’s intention since the 1970 Equal Pay Act was brought in.

It is now some 46 years old and yet still some employers will pay men and women different wages or put them on different contractual terms or even apply differently the terms of the Contracts to each person, whether on purpose or by accident.

What is also quite interesting is that a number of employers still seek to rely upon “pay secrecy” to try and ensure that their employees do not know what their fellow employees are paid.

It is possible for employers to require employees to keep their pay rates and terms confidential from those outside of the workplace, however the Equality Act 2010 makes it unlawful to prevent employees from having discussions to establish if there are differences in pay and contractual terms.

It should be noted that if an employer loses an Equal Pay Claim, the Employment Tribunal, since the 1 October 2014, have the power to force the employer to conduct an Equal Pay Audit and publish the results.

If such a situation does occur it is likely that the fallout for the employer will be significant and unlikely that any insurance that you have in place will cover the losses. As this type of claim is routed in Contract Law then the loss of earnings can stem back 6 years. Therefore not only will it be a blow for moral if there is an Equal Pay Claim that is successful against an employer, but also financially detrimental across the board in view of the powers the Employment Tribunal can utilise to force an employer to undertake an Equal Pay Audit which in itself, will be time consuming and costly.

The simplest way to ensure you are not caught out by this sort of situation or you are not faced with such claims, is to make sure your policies and procedures are clear, that you have an Equality Policy which operates throughout the business from top to bottom and that all contractual rates of pay are the same regardless of gender, race or any other reason.

The only reason for differentiating pay will be if the employer can establish there is a genuine factor i.e. experience, skill, qualification or similar factor, which would render the pay scales different regardless of sex.

This is a tricky area to navigate but not one that is impossible to get right and ensure you avoid being on the wrong end of an equal pay or discrimination claim.

If you require assistance or would like to discuss this further, please call one of our Employment Specialists on 01530 835041


Posted in Blog and tagged , , , .