In brief

Equal pay for men and women has been enshrined in UK law since 1970. Since then, and particularly since the turn of the century, equal pay claims have tended to take the form of mass claims in the public and retail sectors. In recent years, however, there has been renewed focus on individual equal pay claims. We expect that the Financial Conduct Authority (FCA) will step up its scrutiny of equal pay and remuneration policies.

Key Takeaways

• The UK financial services regulators have a broader emphasis on non-financial misconduct, into which matters of diversity and inclusion (D&I) fit. D&I compliance, including equal pay, should be front-of-mind for regulated firms.
• Anecdotally, we have seen an increase in grievances involving equal pay across the financial and professional services sectors. There have been more reported equal pay claims in financial services and these almost always start with an internal grievance outline allegations of unequal pay. Equal pay grievances often lead to litigation, often with current employees.  Employers should consider carefully how to address equal pay grievances so that the process and outcome is satisfactory for both employer and employee.
• If an equal pay grievance is upheld, an employer should award back pay but even where no inequality is established, guidance suggests that employers should also consider whether an employee’s pay is “fair” (although this is not a statutory concept).
• A broader question is whether employers should conduct pre-emptive, or reactive, pay equity analyses or equal pay audits. These can be highly valuable exercises, but should be approached with caution and with legal privilege at front of mind.
• This briefing was first published by Thomson Reuters Regulatory Intelligence. Read the article online or click here to access a pdf copy. 

To discuss any of these issues further, please get in touch with your usual Baker McKenzie contact.