In this article...

• What is equal pay?
• What is the importance of Agenda for Change?
• What does it mean financially?
• What does the future hold?
• Conclusion

What is equal pay?

The Equal Pay Act 1970 gives every employee a right to equal terms and conditions where she (or he) does the same sort of work as a fellow employee of the opposite sex, or their job has been rated as equivalent by a job evaluation study (AFC) or the work they do is of equal value to an employee of the opposite sex, unless the difference in pay is for some reason other than sex.

Equal pay claims are effectively sex discrimination claims. Female employees claim that they have historically received less pay than the men they compare themselves to and the only reason for the difference in pay is because they are women. In order to succeed with their claims female employees have to be able to point to a male employee, at the same establishment, who earns more than them.

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What is the importance of Agenda for Change?

The purpose of AFC was to try and remedy historical inequalities that had come about under the various Whitley Council agreements, or under local terms and conditions. However, the implementation of AFC was the trigger for mass equal pay litigation from thousands of female employees in the NHS. AFC is a job evaluation study and it is argued by claimants solicitors that if male and female employees have been placed on to the same band it means they must have been doing work of equal value previously and should have been paid the same salary.

Stefan Cross, a solicitor based in the north east of England who represents thousands of claimants on a “no win, no fee” basis, is thought to be dealing with about 30,000 equal pay claims, both local authority and NHS. Some of the NHS claims being brought by Stefan Cross allege that there was historic pay discrimination and all that AFC did was to perpetuate that discrimination and its implementation was flawed on a regional level and the new salaries, which were based on pre AFC salaries, did not reflect skills and knowledge of the employees evaluated.

The Cross challenge has meant that the DoH and the unions, who were party to the negotiation of AFC, have now been joined as defendants to those claims. At the same time, Unison, The Royal College of Nursing and the Royal College of Midwives face potential discrimination claims from their members, for whom they negotiated the AFC deal.

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What does it mean financially?

Claims can go back six years so the potential cost to the NHS is huge. The equal pay claims against local authorities, of which there are more and which have been going for longer, are estimated to cost town halls £2.8 billion. It has been confirmed that no extra money will be provided from central government either to pay for any awards or to assist with legal costs, either to local government or to the NHS, which means that trusts will have to find the money to pay not only the back pay awarded, which will also include pension contributions, but also any future additional liability, and legal costs from their existing budgets.

Whilst central government has refused to provide any direct funding for these claims it has devised capitalisations schemes for local authorities which will allow councils to borrow money against assets to meet the costs of the awards against them; in effect councils will be able to mortgage their town halls!

Although a determination that a woman should receive the same pay as a male employee will often mean her pay is increased that result could also be achieved by reducing the pay of the male employees, which has happened in some local authorities. If the pay of the successful female employees is increased, and no extra money from central government is provided, then this could, potentially, mean a cut in services. In some local authorities this has meant a reduction in the opening hours of libraries or swimming pools. In the NHS it could mean ward closures, reduced services or even redundancies.

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What does the future hold?

There are a number of key cases due to be heard, or re-heard on appeal, by the courts in the coming months. These include various challenges that have had solicitors and barristers poring over the wording of different aspects of the legislation, and past cases, to try and determine what the future may hold on such matters as the number of comparators that a claimant may rely upon; what information needs to be included in a grievance before the claim is issued; whether or not AFC perpetuated any previous sex discrimination, which if successful could form the basis for every NHS employee whose pay was affected by AFC to bring an equal pay claim.

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Conclusion

Without doubt, no employee should be paid less than another simply by reason of their sex, and the hoped for aim of AFC was to rid the NHS of old discriminatory pay deals that had come about over the years. The end to the equal pay claims presently facing the NHS, and no doubt the others that will come, is still some way off. Resolution of just claims will not be cheap. The NHSLA are helping trusts to handle the litigation process in many claims but there is no equivalent to the CNST or LTPS schemes. It must be right that any continuing pay discrimination should be eliminated, but how such settlements will be paid for is another matter, perhaps as contentious as the claims themselves. Please do not hesitate to contact Bevan Brittan’s specialist employment team or the NHSLA if you have any queries about equal pay claims.