Creating a fairer Britain
The next part of this guide looks first at the general rules on avoiding unlawful discrimination when setting levels of pay and benefits. It then explains the specific rules on equal pay between women and men, what to do if someone says you are paying them less than someone else because of a protected characteristic, and the specific rules that apply in equal pay cases in the Employment Tribunal. It covers:
There are different ways you might decide what to pay a person and what benefits to provide, such as:
You must make sure that the way you work out and apply these criteria does not discriminate unlawfully.
Always remember that specific rules apply where pay or benefits are part of the workers contract of employment and women and men are being paid differently. If, for example, the jobs for which you are paying workers at different rates are mainly done by women or mainly done by men. Read more in Making sure you are giving women and men equal pay and benefits.
If you are an organisation that provides services, goods or facilities (which this part of the guide calls 'a service') to the public or a section of the public, you may give your workers access to that service either on the same basis as the public or on special terms, such as a staff discount.
Or you may pay someone else to provide your workers with a service.
There are five questions to think about in this situation:
You may be providing a service to your workers in exactly the same way you provide it to members of the public. For example, they can hire a function room from you on the same terms as a member of the public.
If this is the situation and a worker says you've discriminated against them in that situation, you should read the Equality and Human Rights Commission guide: What equality law means for your business when you are providing goods, facilities or services to the public or the equivalent guide for other types of organisations. The introduction to this guide tells you how to get hold of this information.
You may be providing a service to your workers in almost the same way you provide it to members of the public, but with special arrangements because the person works for you. For example, they receive a staff discount on the service.
If this is the situation and a worker says you've discriminated against them, this is the right guide for you to be reading.
Sometimes, you might arrange for someone else to provide a service to a group of your workers.
If the person or organisation providing the service discriminates unlawfully against one of your workers, it will be the service provider who is responsible. Your workers would have a claim in the county court (in England or Wales) or the sheriff court (in Scotland) against the service provider, just like any other member of the public using that service, and not against you.
But if it is your behaviour that amounts to unlawful discrimination, the worker's claim would be against you, and this is the right guide for you to read.
Some employers offer their workers insurance-based benefits such as life assurance or accident cover under a group insurance policy. Equality law allows employers to provide for different premiums or benefits based on sex, whether people are married or in a civil partnership, pregnancy and maternity or gender reassignment. However the difference in treatment must be reasonable, and be done by reference to actuarial or other data from a source on which it is reasonable to rely.
In this situation, it is you as the employer, not the insurer, who is responsible for making sure that provision of benefits under group insurance schemes is not unlawfully discriminatory.
An employer arranges for an insurer to provide a group health insurance scheme to workers in their company. The insurer refuses to provide cover on the same terms to one of the workers because she is a transsexual person. The employer, who is responsible for any discrimination in the scheme, would only be acting lawfully if the difference in treatment is reasonable in all the circumstances, and done by reference to reliable actuarial or other data.
Remember that special rules apply where the service you are providing as a benefit is part of the workers contract of employment and there is a difference between the benefits men and women get (for example, if the jobs in relation to which you provide the service as a benefit are mainly done by women or mainly done by men). You should also read the information in Making sure you are giving women and men equal pay and benefits.
Bonus payments are payments made on top of basic salary, and are usually designed to motivate employees by rewarding them for achieving particular targets or standards.
Sometimes, a bonus will be set out in a workers contract. Sometimes it will be up to you as the employer if a bonus is paid (this is often referred to as a discretionary bonus). Many schemes are a mixture of both types, so that a worker has the right to be considered for a bonus, but you have the final say as to whether to pay out.
This might mean, for example, making reasonable adjustments for a worker who is a disabled person.
A worker in sales takes every Thursday afternoon as unpaid leave for a disability-related reason. As a reasonable adjustment, their employer reduces their sales target to reflect their absence. Their teams target is also reduced by a proportionate amount.
Always remember that specific rules apply where pay or benefits are part of the workers contract of employment and women and men are being paid differently. If, for example, the jobs for which you are providing a bonus are mainly done by women or mainly done by men, or bonuses are set in a way that means generally people of one sex end up significantly better off than the other.
If you provide an occupational pension or work or company pension scheme to your employees (or one is provided on your behalf), those running the scheme must avoid unlawful discrimination in how they run it. This includes all the different types of unlawful discrimination.
A pension scheme that offers benefits to opposite-sex partners must give the same benefits to same-sex partners. If people have to be married to receive benefits, then the same benefits must be offered to civil partners. Not doing so would be discrimination because of sexual orientation.
The duty to make reasonable adjustments to remove barriers for disabled people applies to pension schemes. You can read more about making reasonable adjustments to remove barriers for disabled people.
Specific rules apply where membership of an occupational pension scheme is part of the workers contract of employment and women and men are treated differently by the scheme.
You can find out more about how equality law applies to occupational pensions in the Codes of Practice on Employment and on Equal Pay. If you are concerned about whether your occupational pension scheme may be unlawfully discriminating against workers, you should get specialist advice.
If you offer private health insurance to your workers as a benefit, you and the insurer must not exclude a worker who is a disabled person or offer them different terms, unless you can objectively justify any difference in treatment.
Make sure that all employees are made aware of any new benefits or changes to existing provision, including anyone temporarily out of the workplace, for example, who is on maternity leave or absent because of a disability.
Look from time to time at who is using which benefits. If people with a particular protected characteristic are not actually using a benefit, they may be receiving a worse benefits package. This may be indirect discrimination unless you can objectively justify it. Keeping track of whether benefits are being used and seeing if there are any patterns relating to protected characteristics (for example, through monitoring) will help you avoid this.
If you make changes to the benefits you offer your workers, think about whether it may be less valuable to people who share a particular protected characteristic than it is to those who don't. Unless you can objectively justify what you are doing, this could be indirect discrimination. Think about this in advance, and consider offering an alternative of equal value to the people who are unlikely to use a particular benefit.