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Employment Tribunals will have the power to order equal pay audits

The Government has announced its commitment to proposals to give employment tribunals the power to order equal pay audits. Lynne Featherstone MP has stated in a written Ministerial Statement that the Government intends to proceed with the proposal in the Modern Workplaces Consultation to allow employment tribunals to order employers to carry out equal pay audits.

Where a tribunal finds that an employer has discriminated on the grounds of sex in contractual or non contractual pay, a tribunal will be forced to order the employer to conduct an equal pay audit in cases where continuing discrimination is likely. However, an audit will not be required if the employer is a micro-business (i.e. has fewer than 10 employees), an equal pay audit was carried out in the last 3 years, the employer has transparent pay practices or the employer can show a good reason why it will not be useful. Failure to comply with a tribunal order for a pay audit will result in a financial penalty.

The precise details of how the audits will operate and the publication requirements are to be explored in a separate consultation later in the year. Depending on how the publication requirements are dealt with, the obligation to carry out equal pay audits could prove to be burdensome on employers, who could be faced with the heavy administrative task of a large-scale pay comparison exercise.

The Modern Workplaces Consultation was published in May 2011 and looks at flexible working, parental leave, working time and equal pay. The Government’s response is still awaited, with Ms Featherstone’s response relating only to the proposals on equal pay audits.

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