Go on, tell everyone how much you earn

Women working full-time earn 18.5% less than men and women working part-time earn 41% less than men – it's a fact. Clearly, all employers need to take a fresh look at equal pay rights. But with trade union Unison stating that it intends to target the housing sector in a stepped-up campaign on equal pay, registered social landlords must address the issue sooner rather than later.

The principal pieces of legislation relevant to equal pay are the 1970 Equal Pay Act and the 1975 Sex Discrimination Act, as amended. The former prohibits discrimination on contractual terms relating to pay in general, but does not apply to non-contractual remuneration or benefits. These are covered by the latter, which prohibits less favourable treatment on the grounds of sex generally, including issues related to the other treatment of workers, such as promotion.

The EPA applies to a large sector of the workforce: not just permanent staff but also casual workers, people on fixed-term contracts and contractors. It prohibits discrimination by implying an equality clause into the contract of employment. This means an employee is entitled to pay and other terms and conditions equal to those of someone of the opposite sex who is employed on like work of equal value.

The law: in theory and in practice
The EPA provides three ways to show work is of equal value – if it is "like work", "work rated as equivalent under a job evaluation study" or "work of equal value". The employee must also compare him or herself with an employee in the "same employment". This means the object of comparison must work at the same establishment for the same employer. Associated employers are excluded unless there is one single body in charge of setting pay for the different associated employers.

To defend a claim brought under the EPA, an employer must show that the job has not been rated as being of equivalent value under a recognised job evaluation scheme and that the variation is genuinely owing to a material factor that is not due to gender.

Equal pay law has long recognised the difficulties of secrecy surrounding the setting of pay. This, in turn, will often cause barriers to the bringing of claims by employees who are either unaware of the discrepancies or have no real proof to give them confidence to make a claim. However, the recent case of Barton v Investec Henderson Crosthwaite Securities Limited attacked this practice.

In the Employment Appeal Tribunal's view "no tribunal should be seen to condone a City bonus culture involving secrecy and/or lack of transparency because of the potentially large amounts involved, as a reason for avoiding equal pay obligations".

The equal pay questionnaire gives employees the right to request the salary details of a named colleague

The new right to know
In an attempt to ensure the EPA operates in a more effective manner, the government introduced the equal pay questionnaire with effect from 6 April 2003. It gives employees the right to request the pay details of a named colleague.

The hope is that the posing of questions and provisions of answers will, in a number of cases, either convince the employee not to bring a claim because he or she is satisfied that there is no claim – or no difference in pay – or convince the employer to remedy any inequality. The intention of the Department of Trade and Industry and the Equal Opportunities Commission is to minimise the number of cases going to tribunal. The equal pay questionnaire is a tool for the employees to use to raise a problem so the employer can discuss it with them before it escalates into a dispute or litigation.

However, an employer who volunteers this pay information may find itself in breach of the Data Protection Act. The DTI, which has been criticised for not tackling the issue, has now published guidance to help employers avoid this pitfall.

It recommends that where an employee is not willing to consent to the employer releasing his or her pay information, employers should give information on more general areas such as pay bands. It is clear, though, that however employers address the matter, a blanket refusal to provide any information at all will be to their detriment.

What should RSLs do now?
The clear message for employers is the need to demonstrate that they are committed to tackling equal pay. It goes without saying that if pay systems are open and transparent, employees are less likely to submit pay questionnaires.

In assessing whether you need to review your procedures in setting pay and benefits, consider the following:

• do you recognise equal pay in your equal opportunities policy?
  
• do you have a clear and consistent policy for setting salary for starting employees?
  
• how is salary reviewed? Is it linked to an assessment of employees' performance?
  
• is your grading system formal and structured?
  
• do you use a job evaluation system throughout your organisation?
  
• do you have a clear set of guidelines relating to pay progression and promotion?