The law on equal pay is part of the Equality Act 2010 which applies to Great Britain. The law gives a woman the right to be paid the same as a man (and vice-versa) for work that is:

• the same or broadly similar, provided that where there are any differences in the work these are not of practical importance. This is known as ‘like work’
• different, but which is rated under the same job evaluation scheme as being work of equal value – ‘work rated as equivalent’. These could be totally different jobs which have been given the same rating as the result of an analytical job evaluation exercise
• different, but of equal value in terms of factors such as effort, skill and decision-making. This is known as ‘work of equal value’.

The equal pay provisions in the Act apply to all contractual terms not just those directly related to remuneration, such as leave entitlement, sick pay, overtime, shift payments, occupational pension benefits – the Act calls them ‘equality of terms’.

Where a woman, or indeed a man, doing equal work shows that they are receiving less pay or less favourable terms in their contract the employer will have to show why this is. If the employer is unable to show that the difference is due to a material factor which has nothing to do with sex, then the equality clause takes effect and there may be potential for a claim.

A material factor is a means by which an employer can justify pay differentials between employees of different genders. Such factors can be wide and varied and may relate to the job role itself and how it is performed, such as additional duties undertaken by individuals. External factors such as labour market conditions and the location of the role, for example a London weighting, may also be used to justify differences in pay. Care should be taken to revisit such factors periodically to ensure they are still valid, to prevent unnecessary pay differences and to limit the longer-term impact of reward decisions. For example, in awarding a higher reward package at a time of tight labour markets and recruitment difficulties it may be hard to justify a pay differential some years later.

It should be noted that a material factor will be directly discriminatory where it is based on treating women and men differently because of their sex. A directly discriminatory material factor cannot provide a defence to an equal pay claim, and it is not open to an employer to provide objective justification.

An individual who believes they are not receiving equal pay can write to their employer asking for information that will help establish whether this is the case and, if so, the reasons for the pay difference. Before making a complaint to the Employment Tribunal about equal pay, the individual should consider trying to resolve the issue with their employer informally and then via a formal written grievance.