Creating a fairer Britain
The Commission's equal pay kit consists of a 5-step model that sets out the mechanisms for conducting an equal pay review:
The toolkit contains details of how to carry out the various steps and specifies the data that will be needed to do an equal pay audit.
In order to carry out an equal pay audit you will need to collate and analyse two broad types of information about each employee included in the audit:
You will need the following information:
Job and personal characteristics
Pay information
You will also need the additional data listed below (if applicable) for the employees covered by the audit:
You are also likely to need data on length of time in post or grade, length of service and starting salary.
The Data Protection Act 1998 sets out eight principles governing the processing of all personal data. Sensitive personal data is subject to additional restrictions in addition to these eight principles.
The basic principle is that all personal data shall be processed fairly and lawfully and, in particular, shall not be processed unless certain conditions are met. In the case of sensitive data, certain additional conditions must be met.
Yes. The principles apply to all employers who keep computerised files or structured paper files such as personnel records.
Yes. The Data Protection Act 1998 protects individuals with regard to the 'processing' of 'personal data'.
Personal data includes any data, which is held on computerised, and non-automated systems from which individuals can be identified. The pay and personal characteristics of an employee are classified as personal data for this purpose.
Information as to the racial or ethnic origin of employees is categorised as 'sensitive personal data' under the Act and is subject to additional safeguards (see below).
The definition of 'processing' is very wide. It includes obtaining, recording, holding or disclosing information or data, or 'carrying out any operation or set of operations on the information or the data.' Thus it covers not only the processing of raw data during an equal pay review but also the disclosure of data to third parties involved in the review and the publication of the results.
Not necessarily. There are circumstances in which personal data can be processed by an employer apart from where an employee has given consent.
According to the Data Protection Act 1998, the processing of personal data can take place without consent if it is necessary for:
Depending on the circumstances, processing personal data for an equal pay review meets at least one or more of these requirements:
Necessary for the performance of the contract.
For example, some organisations may have an equal pay or equal opportunities policy incorporated into their employees' contracts of employment (or statement of terms and conditions of employment) that commits the organisation to the principle of equal pay and to monitoring pay regularly. In these circumstances, it is arguable that processing personal data for an equal pay review is necessary for the performance of this term of the contract.
Necessary for compliance with a non-contractual legal obligation.
Alternatively, while an employer is not required by statute to carry out an equal pay review, it is arguable that only an equal pay review can ensure that an organisation is providing equal pay in accordance with its statutory obligations.
For example, under the Race Relations (Amendment) Act 2000 public bodies are required to monitor and promote race equality in all aspects of their duties. Arguably, this provision requires public authorities to monitor the effect of pay policies on different racial groups within the organisation, to see if there are differences between different racial groups, and investigate the underlying reasons for the differences. To ensure equality for ethnic minority women, it will be necessary to monitor by gender as well.
Necessary for the pursuit of a legitimate business interest.
Monitoring equal opportunities is clearly an accepted employment practice provided it is used to promote equality of opportunity.
Yes, unless the employees to be covered by the review have already given their consent. Personal data must be processed fairly which means an employer must ensure, so far as practicable, employees are provided with, or have readily available to them, information about who will have access to personal data and the purposes for which the data are intended to be processed. In addition, it may be appropriate to indicate the length of time the processed data will be held. Usually, information of this kind should be kept for at least six years – see below.
How and when notification will take place should be taken into consideration at the planning stage of a review.
It is not necessary to inform each employee individually. The information could be placed in a circular, put on a notice board, or put on a company's intranet site as long as it is readily available to all concerned. It would not be appropriate to disseminate the information by word of mouth.
Only information that is absolutely necessary for an equal pay review may be processed in these circumstances. A list of the data required for a review is set out above.
Yes, but only in very limited circumstances. An employee can require an employer to stop, or not to begin processing on the ground that:
The right to prevent processing is unlikely to apply in the context of an equal pay review. In particular, the right does not apply where:
It is possible that one or more of these exceptions will apply in the context of an equal pay audit.
If you prefer to obtain the employees' express consent to processing data in these circumstances, the simplest course is to incorporate a term in their contract of employment at the outset of their employment, signed by the employee, giving permission to process personal data. The contract should specify the purposes for which personal data may be processed, including for an equal pay review.
Employers seeking to rely on a employee's consent must bear in mind that it must be explicit and freely given. This means:
In most cases, consent will endure for as long as the processing to which it relates continues.
According to data protection principles, processed data must not be kept for longer than is necessary. Thus a key issue is what is 'necessary' in these circumstances?
Under the Equal Pay Act 1970 a claimant has the right to claim six years arrears of pay. In the circumstances, an employer will want to retain the data for at least this period in case it is required as evidence in a claim.
Is it permissible to process information as to the racial and ethnic origin of employees in the course of an equal pay audit?
Yes. Normally, certain additional restrictions apply to the processing of sensitive personal data such as information about racial or ethnic origin but an exception is made under the Act where it is necessary for the purposes of monitoring equality of opportunity or treatment between persons of different racial or ethnic origins with a view to enabling such equality to be promoted or maintained, provided it is carried out with appropriate safeguards.
Yes, but only in the limited circumstances described above. Otherwise the employee must have given his or her 'explicit consent'. This means the consent must be absolutely clear and include the specific details of the processing, the type or data to be processed, the purposes of the processing and any special aspects of the processing which may affect the individual. However, this should not be necessary in the context of an equal pay review
You need to consider whether you are going to involve trade unions or other employee representatives in the review. Involving the workforce can be beneficial for a range of reasons.
You may also wish to consider whether to bring in expertise from outside the organisation, such as from ACAS or an IT consultant to assist with the processing of the data or a pay consultant to provide advice.
Yes. The definition of 'processing' under the Act includes the disclosure of information to third parties (see the definition of 'processing' above).
The Data Protection Act 1998 is not aimed solely at employers and employees. It applies to almost anyone who processes or stores personal data. Thus trade unions, employee representatives, IT and pay consultants are required to deal with information in accordance with data protection principles. At the outset of the exercise, you may wish to seek an undertaking from third parties involved in the review that they will observe data protection principles at all times.
Unless employees have given their consent to disclosure of information in these circumstances, confidentiality must be maintained by disclosing information in an anonymised form. Most information can be anonymised, save in the case of specialised posts or small organisations where there may be only one or two individuals in certain positions or grades. In these specific circumstances it is recommended that having determined whether they are undertaking equal work, their pay should be described in relative as opposed to absolute terms. For example, in a small senior management team it is possible to describe the pay of individuals in the group as being 'more than', 'less than' or 'equivalent to' one another as appropriate.
There are many beneficial reasons for disclosing the results of an equal pay review to the workforce. It is permissible under the Data Protection Act 1998 to do so provided the results are in an anonymised form, unless the individuals concerned have consented to disclosure.
If you recognise an independent trade union and they have not been involved in the review, you may also receive a request for the disclosure of information relating to the review under s.181 of Trade Union and Labour Relations (Consolidation) Act 1992. Under this provision, an employer is required to disclose to the union any information necessary for collective bargaining or which it would in accordance with good industrial relations practice to disclose for the purposes of collective bargaining. This is likely to include information relating to an equal pay review. However, this provision does not override the Data Protection Act 1998 or an employer's common law duty of confidence and any information that relates specifically to an individual must be excluded from disclosure unless the individual concerned has given their consent.
Whilst every effort has been made to ensure that the advice given in this note is accurate, only the courts and tribunals can give authoritative interpretations of the law.
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