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Equal pay – the law and best practice

Equal pay law overview

The principle that women and men are entitled to equal pay for doing equal work is embedded in domestic and European Union law. Pay is defined broadly under European Union law and includes pensions.

Article 4 of the recast Equal Treatment Directive requires that ‘for the same work or for work to which equal value is attributed, direct and indirect discrimination on grounds of sex with regard to all aspects and conditions of remuneration shall be eliminated’.

Equal pay legislation

In Northern Ireland the principle outlined in article 4 of the Directive is implemented through the following three pieces of law:

  1. The Equal Pay Act (NI) 1970 requires employers to pay men and women equal pay for equal work. It prohibits sex discrimination between employees in respect of their contractual pay and terms and conditions of employment.
  2. The Sex Discrimination (NI) Order 1976 prohibits sex discrimination in relation to non-contractual entitlements to benefits.
  3. The Pensions (NI) Order 1995 prohibits sex discrimination in relation to employees’ access to pension schemes, and in the way they are treated under the rules of such schemes.

All workers have a right to equal pay with a person of the opposite sex doing like work, work of equal value or work rated as equivalent.

The equal pay provisions in the Equal Pay Act (NI) 1970 apply to all contractual terms, not just those directly related to remuneration, such as holiday entitlement.

Although the law on equal pay may seem complicated, its purpose is simple – to ensure that where women and men are doing equal work for the same or an associated employer, they should receive the same rewards for it. Therefore, any references to a woman in this guide apply equally to a man claiming equal pay.

Equal pay does not exist in isolation from other equality areas and if an employer wishes to address unequal pay effectively, it has to be as part of a broader approach to equality.

It is worth noting that there are differences in the legal provisions that apply to sex discrimination in pay compared with discrimination in pay based on the other equality grounds. It is not the purpose of these guidance notes to focus on those differences but to summarise the key principles underpinning equal pay legislation.

Sex equality clause

A woman doing equal work with a man in the same employment is entitled to equality in pay and other contractual terms, unless the employer can show that there is a genuine material reason for the difference which does not discriminate on the basis of her sex.

Where there is equal work, the law implies a sex equality clause automatically into the woman’s contract of employment, modifying it where necessary to ensure her pay and all other contractual terms are no less favourable than the man’s.

Where a woman doing equal work shows that she is receiving less pay or other less favourable terms in her contract, the employer will have to show why this is the case. If the employer is unable to show that the difference is due to a genuine material factor which has nothing to do with her sex, then the equality clause takes effect.

These equal pay provisions apply to all contractual terms including wages and salaries, non-discretionary bonuses, holiday pay, sick pay, overtime, shift payments, and occupational pension benefits, and to non-monetary terms such as leave entitlements or access to sports and social benefits.

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