Practical Law

For the employment lawyer, HR leader and finance director, large multiple equal pay claims are the perfect storm: legally complex, divisive for the workforce and potentially enormously expensive. They’re also rare; most employment lawyers will go through their entire career without encountering one.

All of which means that it’s often a sweaty-palms moment when the call comes in from a worried HR director: “A thousand equal pay claims just arrived. What do I do?”

Three types of equal pay claim

Most of what follows will be about equal value claims, in which an expert is appointed to evaluate the claimant and comparator jobs and advise the tribunal on whether they are of equal value. In a complex multiple, that can be an extremely long and costly business.

The other two kinds of equal pay claim are simpler:

• “Like work”are based on the assertion that the claimant and comparator’s jobs are essentially the same, so should be paid the same.
• Alternatively, if the employer has a pay and grading system based on a job evaluation scheme (JES), then a claimant can claim equal pay by relying on a comparator whose job, although different, is rated as equivalent (RAE) under the JES.

Like work and RAE claims tend to be rarer than equal value claims. This is because most employers will have addressed and resolved any issues about pay for employees doing the same work or equally rated work. The particular peril of equal value claims is that an unwary employer may never have thought about whether (for example) cleaners and refuse collectors, retail staff and warehouse operators, or nurses and maintenance craftsmen, do work that is of equal value and should be paid accordingly.

Practical tips for managing multiple equal value claims

• First and foremost – don’t panic! Large multiple equal value claims take a very long time to work their way through the employment tribunal. I’ve been dealing with one multiple case for over ten years (although that’s exceptional). Tribunals quickly recognise the scale of the task facing the parties and will, within reason, allow them time to prepare their cases and will deal with the issues in manageable chunks.
• Strategy is critical. You should assess the risk before any claims come in, then develop and regularly review a high-level strategy, with buy-in from the senior management team. You’ll need to manage cost, risk (including timing and the potential for further claims to arise within the business), employee relations and external reputation. Don’t be a slave to the linear process set out in the Equal Value Rules of Procedure. The standard route map involves:
  • identifying the claimants and comparators;
  • appointing and instructing an expert;
  • drafting job description statements;
  • dealing with factual disputes;
  • considering the expert report; and
  • hearing the claims.

Most cases throw up a number of preliminary or subsidiary issues, which won’t be dealt with in that basic scheme. Usually a single employment judge will be assigned to a large equal value multiple, to ensure continuity of case management by the tribunal.

• Use privilege. In the face of a substantial claim (or when considering the risk of possible claims), there will be a need for candid and confidential internal discussions to assess the risk and options. Employers and their lawyers should discuss how much of this work can and should be done under the protection of legal advice privilege. Just as important is making sure that everyone involved in that discussion understands how privilege can easily be lost if, for example, confidentiality is not strictly maintained.
• Capture the data. If your multiple is complex, with a number of different claimant and comparator pairs, find an HR analytics expert and get them to build you a database (not a spreadsheet, by the way, a database), which has the capability to generate reports on pay and benefits over a period of six years prior to the date of the claims. This will be the best investment you make in the process: good tools for managing the claim data and generating high-quality management information will make your life much easier.
• Prioritise and sequence the issues. If you have a knockout material factor defence to the claims, for example, you should be able to persuade the tribunal to hear that first, as a preliminary issue. If that defence succeeds, that will be the end of the case, saving massively on the cost and heavy lifting of the equal value process. Keen observers of equal pay claims (anyone?) will have marvelled at the inventiveness of respondent legal teams in generating preliminary issues ranging from the validity of the comparators, the correct forum for the claims, time points and others.
• Managing equal value evidence. If you’re a newcomer to expert job evaluation, the first thing you’re likely to learn is that it is “not a precise science”. The opinion of a job evaluation (JE) expert (and it is, in essence, only an opinion) is based on breaking down each job into elements and assessing those elements against the expert’s preferred factor plan.

At the first stage of the equal value process, the tribunal will appoint an independent JE expert, from an Acas list. Like most expert evidence, equal value reports can in principle be challenged, with leave of the tribunal. Although this is sometimes worth doing, the availability of good freelance job evaluation experts, who can produce equal value reports for the parties, is very limited. Even if you can get a good partisan report, it can be an uphill struggle to persuade the tribunal that your expert’s opinion should be preferred to the independent expert’s opinion.