Compulsory pay audits for employers that lose at tribunal

Lose an employment tribunal claim over equal pay, and you will find yourself subject to an equal pay audit, in tough new measures drawn up by the government. Equalities minister Lynne Featherstone said firms would have to look at its employees’ salaries if the tribunal rules that it has discriminated on the grounds of gender.  

She said: “This will mean that an employment tribunal which finds that an employer has discriminated on grounds of sex in contractual or non-contractual pay will be obliged to order the employer to conduct a pay audit in cases where continuing discrimination is likely. An audit would not be ordered if an audit has been completed in the last three years, the employer has transparent pay practices, or the employer can show a good reason why it would not be useful.”

Micro-businesses with fewer than 10 employees will be exempt from the new rules. The proposals, which form part of the government’s response to the Modern Workplace Consultation could be in force by next year. However, legal experts predict that this move will increase out-of-court settlements – where employers prefer not to go public with their pay policies – and could lead to a rise in speculative claims.


By Karen Dempsey