Towards greater pay transparency

It was not uncommon pre 2010 to have a provision in an employee’s contract of employment which stated that it would be an act of gross misconduct for employees to discuss their rates of pay and/or bonuses with other employees. Section 77 of the Equality Act 2010 sought to address this in part by including a provision that a term in a contract which sought to prevent a person from seeking disclosure of information from a colleague about the terms of the colleague’s work is unenforceable in so far as that disclosure is a “relevant pay disclosure” i.e. made for the purposes of enabling the employee to find out whether or not they have been the subject of an act of discrimination. Further, Section 78 of the Equality Act 2010 provided that the Secretary of State could make Regulations which required employers of 250 or more staff to publish information relating to the pay of male and female members of staff.

This gave employees some transparency of pay but no Regulations under Section 78 had been made. In December 2014 the Government took one further step forward.

A private members bill was brought by the Labour MP Sarah Champion requiring the Secretary of State to make Regulations under Section 78 and it was passed on its first reading by the House of Commons.

As yet there are no draft regulations in place but we will keep you updated. The Bill is expected to have its second reading on 27 February 2015 but with the general election looming, it is unlikely to become law before the election in May. Nonetheless, it is an important development on the horizon that employers of 250 or more should keep up to date with and some thought should be given to what may be revealed by such disclosures. If obvious discrepancies are identified, they should be addressed now particularly given the rise of Equal Pay claims in the private sector.

If you would like further information on this topic or any other Employment or Immigration issue please contact the Edwin Coe Employment and Immigration Team.

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