The number of equal pay claims reaching tribunal rose 6% year-on-year in the 12 months to September 2023 to 13,600 cases, up overall 30% since the Covid-19 pandemic year of 2020, analysis by money.co.uk found.
While the number of equal pay cases received by the Ministry of Justice is still much lower than at its 2017 peak of 30,000, the rise in cases has come during the same period as the UK’s progress on pay equality has largely stalled.
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With the exception of 2008-2009, the gender pay gap fell consistently from when records began in 1997 until the Covid-19 pandemic, when progress stalled: since 2020, the average pay gap has dropped just 0.6 percentage points; for full-time employees, the gap has increased by 0.7%.
“A key driver [of the pay gap] is the division and undervaluing of care work, both paid and unpaid,” explained Liz Sebag-Montefiore, director and co-founder of consultancy 10Eighty.
She told HR magazine: “Women who want to take on paid work outside the home often have little choice but to reduce their hours or leave the labour market entirely.”
But pay transparency leads to pay equality, Sebag-Montefiore added.
“It promotes fairness, enables fair comparisons and the identification of disparities,” she explained.
“Pay transparency can help employers to identify and address pay discrimination that might otherwise negatively affect organisational reputation.
“The downside for employers is that pay transparency may afford workers the information and evidence needed to negotiate pay rates and challenge potential pay discrimination.”
Data from multinational insurance broker WTW, also released yesterday (18 September) for Equal Pay Day, showed that around two-thirds (65%) of companies across Europe are either providing or are considering providing prospective candidates the pay rate or range for all locations, whether required or not by local regulations.
While British companies of more than 250 staff have to publish their pay gap, new EU legislation will require that European companies provide prospective employees information about the pay they could expect in role.
Three quarters of the 771 companies surveyed expected they would see more questions about compensation from their staff.
Read more: Majority of UK companies plan increased pay transparency
Tamsin Sridhara, pay equity lead at WTW, told HR magazine: “Until recently, the main focus has been on paying employees competitively and paying for performance. Increased regulation and large-scale equal pay claims are reminding employers that they need to deliver competitive pay and equal pay.”
Adding that “greater transparency forces companies to get their houses in order,” Sridhara pointed out that the rise in the number of tribunals was no good thing.
“It should not take years for an employee to win the right to equal pay, nor should it take years for a tribunal to decide it.
“All our research tells us that being paid fairly is fundamental to employee engagement. It may require time and resources to get your house in order, but the costs of not doing so are greater.”
