From 1st October 2014 a new provision in the Equality Act 2010 (Section 139A) gives Employment Tribunals additional powers to compel employers to conduct equal pay audits where they have been held to have breached equal pay laws or to have discriminated because of sex in non-contractual pay, unless one of the exceptions in the Equality Act 2010 (Equal Pay Audits) Regulations 2014 apply, such as discretionary bonuses.
This new legislation is part of the government’s implementation of a strategy to close the gender pay gap in the workplace. The Regulations establish how the new law will operate in a practical sense. Where an audit has been ordered by a Tribunal the information must be returned for review by a specified date so that compliance may be assessed. If the employer unreasonably fails in their duty to conduct an audit, the Tribunal can impose a penalty of up to £5,000.
Although Tribunal claims have decreased, employers should be alert to the new rules as, when an equal pay dispute arises, employers should now be prepared to defend not only the claim but also to argue why a court should not order an audit. Penalties and settlement of these claims can frequently be costly and time consuming, therefore, employers should consider conducting a voluntary equal pay audit to pre-empt these issues arising.