Sweeping away unequal pay in the public sector

The recent equal pay decision against Birmingham City Council is remarkable for two reasons, writes business consultant Andrew May FCMI.
 
Firstly, the size of the award that, subject to appeal, will be payable to settle the case: Secondly, the lack of publicity that the case has attracted.

The settlement facing the council, estimated at £615m, could according to some press reports reach £3bn. The decision will award some 5,000 female employees up to £134,000 each for under-payment going back to 2000.

The tribunal found that some male employees in the same pay grade as women received up to four times more gross pay. The disparity resulted from a number of unequal payment arrangements including incentive bonuses awarded to binmen and street sweepers (predominantly male occupations) but not to female care assistants and cooks.

Job evaluation is in widespread use in the public and private sectors. Jobs are analysed into their component elements and comparison drawn across a number of factors such as the requirement for experience, training, physical effort etc.

Individual factors such as gender, religion, race and performance are irrelevant to the evaluation process. Every role covered is placed in a grade with an associated pay range.

There should be no room for discrimination against individuals or one group of jobs against others.  However, other factors may influence pay. For instance, a skill shortage might require an additional payment to recognise scarcity and be necessary to attract essential staff.  Performance incentives may be available to some job categories but not others. This may lead to significantly different gross pay for jobs in the same pay grade. Over a decade this becomes a large sum.

Birmingham is not alone in facing equal pay liabilities and many public sector organisations will be reviewing their payment practices. So too should private sector organisations, as they will surely face the question of pay inequality in the future.

Equal Pay legislation goes back 40 years and yet there is an estimated 18 per cent pay disparity between men and women.  Managers need to wake up and review their organisation’s job evaluation practices and remove pay and earnings’ anomalies. The only reason the Birmingham decision has not hit the headlines is that election fever masked the seriousness of the case. Over the coming few years it will prove to be a highly contentious issue.

Andrew May FCMI works as a consultant, helping companies find candidates for board-level appointments. He is also company secretary and director of a PR business and a member of the international advisory panel of Singapore private equity firm Shelterwood Pte, which invests in green energy start-ups in the Far East.

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