Equal Pay Claims and Pay Discrimination Law

Equal pay law in England and Wales is designed to ensure that men and women receive equal pay for equal work. Despite this legal protection, pay disparities can still arise within workplaces due to direct discrimination, contractual structures, or unjustified differences in job evaluation.

Equal pay claims are primarily governed by the Equality Act 2010 and are typically brought in an Employment Tribunal. These claims focus on whether an employee is being paid less than a comparator of the opposite sex doing equal work, without a lawful justification.

This article explains how equal pay law works, who can bring a claim, how the legal test is applied, the tribunal process, time limits, and possible outcomes.

Legal Framework for Equal Pay

The main legal foundation for equal pay claims is the Equality Act 2010.

Under this legislation, every employment contract is treated as including an “equality clause”. This clause modifies the contract so that a worker is entitled to equal terms where they are doing equal work with a comparator of the opposite sex.

Equal work is defined in three categories:

• Like work: similar or broadly similar work
• Work rated as equivalent: jobs assessed as equal under a job evaluation scheme
• Work of equal value: different roles but equal demands in terms of effort, skill, and decision-making

If a pay difference exists in these circumstances, the employer must justify it with a lawful reason unrelated to sex.

Who Can Bring an Equal Pay Claim

An equal pay claim can be brought by:

• Employees
• Workers with employment contracts
• Some former employees (subject to time limits)

The claimant must identify a comparator of the opposite sex who is:

• Employed by the same employer or an associated employer
• Based at the same establishment or a comparable workplace
• Doing equal work under the legal definitions above

The comparator does not need to be named in advance at the start of proceedings, but must be identified during the claim.

What Counts as Pay Discrimination

Pay discrimination is not limited to basic salary. It includes:

• Basic pay
• Bonuses
• Overtime rates
• Pension contributions
• Allowances and benefits (e.g. car allowances, travel benefits)
• Sick pay and maternity pay enhancements

Any contractual term that is less favourable for a worker doing equal work may be challenged.

Importantly, equal pay law focuses on contractual terms, not general workplace treatment. Other forms of discrimination (such as harassment or promotion bias) fall under different parts of the Equality Act 2010.

How the Legal Test Works

An equal pay claim generally follows a structured analysis:

1. Establishing Equal Work

The claimant must show they are doing like work, work rated as equivalent, or work of equal value.

2. Identifying a Comparator

A comparator of the opposite sex is required. This comparator must be real (not hypothetical), although in some cases multiple comparators may be used.

3. Showing a Pay Disparity

There must be a difference in contractual pay or benefits between the claimant and comparator.

4. Employer Defence (Material Factor Defence)

If unequal pay is established, the employer can defend the claim by showing the difference is due to a material factor that is:

• Genuine and significant
• Not based on sex (directly or indirectly)
• Capable of objectively justifying the difference

Examples may include:

• Geographic pay differences
• Market forces affecting recruitment
• Seniority or experience differences
• Performance-based pay systems (if applied fairly)

If the factor is indirectly discriminatory, the employer must show it is a proportionate means of achieving a legitimate aim.

Equal Value Claims and Job Evaluation

Where roles are different but of equal worth, claims may rely on “equal value” arguments.

Tribunals often consider:

• Skill levels
• Responsibility
• Physical or mental demands
• Decision-making requirements

In complex cases, an independent expert may be appointed to assess job value. This is common in large public sector disputes and structured pay systems.

Time Limits for Bringing a Claim

Strict time limits apply in Employment Tribunal proceedings.

For equal pay claims:

• The claim must usually be brought within 6 months less one day from the end of employment or from the last discriminatory pay act
• Claims can often include arrears going back up to 6 years in England and Wales (longer in some limited contractual contexts)

Time limits are strictly enforced, although tribunals may allow extension in limited circumstances.

Before issuing a claim, the claimant must normally contact ACAS Early Conciliation, which pauses the limitation period while settlement is explored.

The Employment Tribunal Process

Equal pay claims are typically heard in the Employment Tribunal. The process includes:

1. ACAS Early Conciliation

• Mandatory first step
• Designed to encourage settlement without litigation
• Issues an Early Conciliation Certificate if no agreement is reached

2. Filing a Tribunal Claim

• Submitted using an ET1 form
• Must set out details of the claim, comparator, and pay differences

3. Employer Response

• Employer submits ET3 response
• May accept, dispute, or defend the claim

4. Case Management

• Preliminary hearings may identify issues and schedule evidence stages

5. Disclosure and Evidence

• Both sides exchange documents such as contracts, pay records, and job descriptions

6. Hearing

• Tribunal hears evidence from both sides
• May involve expert evidence in equal value cases

7. Decision

• Tribunal determines whether equal pay law has been breached

Remedies and Compensation

If a claim succeeds, possible remedies include:

• Back pay (arrears of pay differences)
• Adjustment of ongoing pay terms
• Declaration of rights under the Equality Act 2010
• Interest on arrears
• Compensation for financial loss

In many cases, significant back pay awards can arise, particularly where pay disparity has existed over several years.

Common Employer Defences

Employers frequently rely on the following defences:

• Market rate justification (skills shortage or recruitment pressure)
• Experience or qualification differences
• Performance-based pay systems
• Organisational restructuring or legacy pay systems
• Location-based pay structures

Tribunals assess whether these reasons are genuine and whether they are applied consistently and fairly.

Practical Issues in Equal Pay Claims

Equal pay claims can be complex due to:

• Difficulty identifying valid comparators
• Large volumes of payroll and HR data
• Technical job evaluation evidence
• Employer reliance on historical pay structures

Group claims may arise where multiple employees challenge systemic pay differences within an organisation.

Interaction with Other Discrimination Claims

Equal pay claims are distinct from other discrimination claims under the Equality Act 2010, such as:

• Sex discrimination (treatment in recruitment or promotion)
• Indirect discrimination
• Victimisation or harassment

However, claims may sometimes be brought alongside equal pay claims where multiple legal issues overlap.

Key Practical Steps for Individuals

A person considering an equal pay issue may typically:

• Review payslips and contractual terms
• Identify potential comparators
• Raise concerns internally or through grievance procedures
• Engage ACAS Early Conciliation if required
• Seek clarification of job evaluation or grading systems

Key Takeaways

Equal pay law under the Equality Act 2010 provides protection against unjustified pay differences between men and women doing equal work. A successful claim requires identifying a suitable comparator, demonstrating equal work, and showing a pay disparity. Employers can defend claims only where a genuine, non-discriminatory material factor explains the difference.

Claims are brought in the Employment Tribunal and are subject to strict time limits, but can result in substantial back pay and contractual adjustments where discrimination is proven.