The Tribunal can now order an employer to carry out and publish a pay audit if a finding is made against them in an equal pay or sex discrimination claim relating to pay.
From 1 October 2014, in the majority of cases where a Tribunal has made a finding that an employer has breached the equal pay provisions in the Equality Act 2010, the Tribunal now has the power to order that the employer carries out an equal pay audit.
The audit must identify pay differences that are gender related, include any reasons for pay differences identified and set out the employer’s plan to address these. The results must be published on the employer’s external website within 28 days and employees whose data is included in the audit must be told where they can view a copy.
Not only will the compilation of such data undoubtedly be quite a costly administrative burden, failure to comply without reasonable excuse could also lead to a financial penalty of up to £5,000 being imposed by the Tribunal. There is also the issue of both internal and public embarrassment for the company if equal pay breaches are identified in the published audit.
The introduction of pay audits highlights the importance that the Government and Tribunals place on complying with the Equal Pay legislation. Employers should seek legal advice if they are concerned that they may be in breach of equal pay rules in any way before that breach becomes the basis of a Tribunal claim. It may also be worth conducting an informal pre-emptive review of pay practices to ensure that best practice is being adhered to in pay decisions and risks are identified. Please do not hesitate to contact us if you require assistance with an informal, pre-emptive audit or if you require advice in relation to a claim, we would be happy to assist.