The Equality Act 2017 states that men and women must get equal pay for doing 'equal work'. That is work that the law classes as the same, similar, equivalent or of equal value.
This means that a man or woman must not get less pay compared to someone who is:
- of the opposite sex; and
- in the same employment
The Act implies a sex equality clause automatically into all contracts of employment. This is known as 'equality of terms' and covers all aspects of pay and benefits including:
- basic pay
- access to pension schemes
- benefits under pension schemes
- working hours
- annual leave allowance
- holiday pay
- overtime rates and allowances
- severance and redundancy pay
- sick pay
- performance-related pay
- non-discretionary bonuses
- company cars
- fringe benefits (i.e. gym membership or travel allowances); and
- benefits in kind
Equal pay applies to:
- agency workers
- full time, part time or temporary or casual contracts (regardless of length of service)
- self-employed people who contracts require personal performance of the work
By law, 'equal work' counts as either:
- 'like work' – work where the job and skills are the same or similar; or
- 'work rated as equivalent' – work rated as equivalent, usually using a fair job evaluation. This could be because the level of skill, responsibility and effort needed to do the work are equivalent; or
- 'work of equal value' – work that is not similar but is of equal value. This could be because the level of skill, training, responsibility or demands of the working conditions are of equal value
Some jobs can be classed as equal work, even if the roles seem different. For example, a clerical job and a warehouse job might be classed as equal work.
Differences in pay and other terms and conditions might be allowed in some circumstances for example because the person is:
- better qualified, if their skills are crucial to the job and hard to recruit
- doing night shifts, and the employer can prove that they can only cover night shifts by paying staff more
Getting paid more must have nothing to do with someone’s sex.
The principle of equal pay is simple. However the law is complex and you should take advice.
Much of the developed law in the UK is underpinned by EU law which does not apply in the Isle of Man, such as the concept of 'single source' where there are two legally distinct employers but there is only one employer responsible for the source of pay.
The Cabinet Office is due to publish a Statutory Code of Practice on Equal Pay later in the year.