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Equal pay and equality

Equality and equal pay is a growing issue and we have a few obvious gaps to address but on a tight budget. Can we, in the name of equality, reduce the salaries of some male employees to match the women at the same level and if so, how should we go about it?

It is possible to reduce a particular sex's salary for equality purposes. There are two main methods of reducing salaries which employers are undertaking on a wide scale basis.

One method is to dismiss the male employee and re-employ him on different terms and conditions. In practice, the only term which differs from the previous contract is lower remuneration and/or a reduction or cessation of benefits. This method has the ability to provide immediate equal pay for employees who are at the same level.

However, the male employee could present an Unfair Dismissal claim to an Employment Tribunal. Your effort to reduce equal pay issues in the current equal pay climate can provide a good defence. When dismissing an employee, always use the correct disciplinary and dismissal procedure.

The other and most popular method is to soften the blow for the male employees affected by the salary reduction. You could protect his pay for a set period, for example, 6 months, to allow the male employee to adjust to the new, lower salary. This method can perpetuate potential pay inequality for the protected period. Only after the protected period will male and female employees at the same level receive equal pay.

An additional method is to seek the express written agreement of the male employee to reduce his salary. You could explain that the reason for seeking his consent to reduce his salary is for equality purposes. Due to the perceived response to you seeking such agreement from the employee, many employers may not consider this option.

Regardless of the method you choose to implement lower salaries for males, it is possible that the female employees at the same level as the affected male employees could present equal pay claims to an Employment Tribunal for up to six years back pay compensation based upon you lowering the male salaries.

In addition, to the equal pay claim, the female could present a sex discrimination claim for you favouring a male pay protection arrangement. You would have to justify the arrangement to the satisfaction of an Employment Tribunal. Recent guidance from the Court of Appeal says that the Employment Tribunal must consider each pay protection arrangement on its facts and look at the employer's knowledge as to the potential pay inequality prior to implementing pay protection.

Equal pay law is complex and professional advice should be sought prior to instigating any action.

Christopher Baker

Solicitor

EAD Solicitors LLP