trade union side single status › content › uploads › 2018 › 06 › njc-trad… · single...

£

££

£

££

£

SIN

GLE

STA

TU

S Trade union side

guide to localgovernment

grading and pay2005 Edition

15073.doc 13/9/05 10:59 am Page 2

Trade union side guide to local government grading and pay reviews

Introduction 5

The starting point for grading and pay reviews 6The guiding principles: single status; equal pay and equality; openness; jointness 6

Doing nothing is not an option 9

The recommended options for job evaluation (JE): why job evaluation;which JE scheme; how many JE schemes? 10

Nil cost is not feasible 12

Equal pay law and local grading and pay reviews 14Equal pay and single status 14

Equal pay legislation: why is it important? 15

Principles for developing grading and pay structures 16Having an equal pay policy 16

Negotiating guiding principles 16

When? 18

What sort of pay structure? 18

Key first stage questions 18

How many grades? 20

The trade off between number of grades and type of pay structure 21

To overlap or not to overlap pay scales? 22

Equal pay audits and Equality impact assessments 26

Developing detailed grading and pay structures 30Pay modelling packages 30

Grading/pay structure options for pay modelling 30

Under-valued or over-valued jobs 31

Don’t let the tail wag the dog: lowering the pay line; broad banding;partial implementation; phasing in 31

Protection issues 34

‘Career grade’ issues 37

Contents

15073.doc 13/9/05 10:59 am Page 3


Additions to Basic Pay 38Working arrangements and premium payments for non-standard hours 38

Payments for performance 39

Labour market supplements 39

Implementation 41Implementation steps 41

Key implementation issues: Equality Impact Assessment; compensation for arrears (back pay);consulting members; approving draft local agreements; practical options for dealing with common scenarios 41

Appendix 47Equal pay and sex discrimination legislation 47

What does the law say? Why is EU legislation important? The Equal Pay Act 1970 – who does it apply to? What is pay? Equal pay for equal work: what is like work? Work rated as equivalent? Equal value? Who can be a comparator? What does same employment mean? Same employment under EU law? The employer’s defence to an equal pay claim: what is the no reasonable grounds defence? Can using a JE scheme be a defence? What if the employer uses two JE schemes? What is the genuine material factor defence? What is prima facie sexdiscrimination? What does objectively justifiable mean? Cost as a defence? Equal pay awards.What happens if a collective agreement is discriminatory? Is there protection against victimisation in equal pay cases? What is the relevance of the Sex Discrimination Act to equal pay?

Legal issues – time limits; Transfer of Undertaking Regulations (TUPE) and time limits 59

Pregnancy and maternity leave 60

Other legislation that is relevant to local grading and pay reviews 60

Equal Opportunities Commission (EOC) Model Equal Pay Policy 64

Equality Standard for local government 64

Resource list 65

15073.doc 13/9/05 10:59 am Page 4

5


The trade union sides of the National JointCouncil for Local Government Services and theScottish Joint Council for Local GovernmentEmployees (UNISON, GMB and TGWU) arecommitted to achieving single status and equal payin local government through local grading and payreviews.

Although there are separate national agreements inScotland and the rest of the UK and different jobevaluation schemes, this advice applies equally inScotland. The legal principles underpinning theequal pay legislation are identical and thoseunderpinning single status pay and grading reviewsare also the same.

This guide aims to allow the Scottish Joint Council(SJC) and National Joint Council (NJC) tradeunion sides to approach pay and grading reviewsin the same way and share experience andknowledge in the process.

Wherever possible, the unions want to negotiateagreements in preference to taking legal actionagainst employers. Our strategy is to ‘educate,negotiate and litigate’, and to litigate only as ameasure of last resort.

For many union representatives, undertaking anauthority-wide grading and pay review will be anew and challenging experience. This guide takesyou through the key ‘technical’ decisions to bemade and the issues likely to arise in carrying outlocal grading and pay reviews. It aims to demystifythe process and explain the jargon. It sets out bestpractice and alerts union representatives to themain pitfalls in carrying out local grading and payreviews.

A key message is that while job evaluation andmodelling new grading and pay structures have atechnical side, it is important not to lose sight ofthe overall purpose of the local review. This is toremove pay discrimination and create a fair, equalpay-proofed structure for the future. Branches willneed to take a strategic approach to the

implementation of single status. Applying goodnegotiating and organising skills is just asimportant as understanding the technical issues.

This guide updates an earlier publication, the“Trade Union Side Guide to Local GovernmentGrading and Pay” (2001). It adds new sections onequal pay and related equality legislation, equal payaudits and equality impact assessments. Thesection on implementation has been expanded andoutlines important legal advice obtained by theunions on key issues such as payment of arrearsfor past pay inequality and consultation withmembers. The updated guide also draws onauthorities’ experiences of undertaking localgrading and pay reviews.

Note: the guide does not cover how to carry out ajob evaluation exercise. Separate guidance has beenissued on the approved job evaluation schemesand best practice in evaluating jobs. Technicaladvice notes have also been issued on the NationalJoint Council (NJC) Single Status Job EvaluationScheme (JES) by the joint national Job EvaluationTechnical Working Group. Please see your union’sweb-page and the Employers’ Organisationwebsite (for England, Wales and Northern Ireland)for more information and lists of publications.1

While the grading and pay review is taking place(or after it concludes), negotiations may behappening on other aspects of implementingsingle status. The guide refers to some of theseissues but it does not cover them in detail. Furtheradvice and information should be sought fromyour regional officer.

1 www.unison.org.uk; www.gmb.org.uk; www.tgwu.org.uk; www.lg-employers.gov.uk

Introduction

15073.doc 13/9/05 10:59 am Page 5

6


The guiding principlesThe guiding principles of the National JointCouncil Job Evaluation Scheme (NJC JES) and theScottish Joint Council (SJC) JE Scheme are: singlestatus; equal pay and equality; openness andjointness. These apply just as much to developinggrading and pay structures as to carrying out a jobevaluation exercise.

Single StatusTo achieve single status, there must be a commonsystem for grading all jobs in scope of the nationalsingle status agreements to replace the differentmethods used for former manual andadministrative, professional, technical and clerical(APT&C) staff.

New grading and pay structures must beappropriate to the integrated group of ex-manualand ex-APT&C employees.

The national single status agreements are knownas the Green Book (the NJC agreement forEngland, Wales and Northern Ireland) and the RedBook (the SJC agreement for Scotland).

These agreements replace the former nationalagreements for manual workers and APT&C staff.They provide a national pay spine based on annualwages or salaries (in the case of the NJCagreement) and hourly rates of pay (in the case ofthe SJC agreement). These pay spines must beused by authorities which are parties to the Greenor Red Book as appropriate. However, the nationalagreements do not have national grades – newgrading structures have to be agreed locally.

Sticking with the old grading methods, or simplybolting the old manual grades onto the APT&Cstructures (by moving them into the bottomscales) would not only breach the principle ofsingle status, it would also be unacceptable for thefollowing reasons:

The APT&C grading structure grew out ofhistorical classifications of employees intoprincipal officers, senior officers and the rest—this

is outdated and not suited to a modern serviceproviding organisation. For example, it was veryhierarchical, providing, as it did, for two layers ofemployees (senior officers and principal officers)between clerical and administrative staff and chiefofficers - like ranks in the armed forces.Movement between the layers was extremelydifficult. And each of the layers was divided into alarge number of sub-layers or grades, betweenwhich movement was less difficult, but still limited,resulting in an inflexible structure. This was oftennot well-suited to the delivery of efficient services.

■ The APT&C structure was not based on jobevaluation and is almost impossible toreproduce without manipulating the results ofa modern job evaluation scheme.

■ The APT&C structure is not consistent withcurrent good practice in developing gradingand pay structures. It was designed to giveoutcomes which reflected post-war thinkingabout the hierarchical management of publicservices, life-time careers for white collar men,and the secondary role of women and malemanual workers in the workforce. Apart from anumber of nationally agreed gradingdescriptions, the grading of most APT&C jobshas been at the discretion of managementlocally.

■ The APT&C structure does not conform toequal pay principles (this is explained below).

Ideally, all local government employees should becovered by the local grading and pay review, eventhough they are covered by separate nationalagreements. This is because council staff couldcite workers from any of these groups in theirauthority as comparators in equal pay claims,especially craft workers who often receive bonuses.

Schools-based staff must be included in the localgrading and pay review. The nationally agreedprofiles for teaching support roles, or anyvariations agreed locally, can be evaluated in thesame way as other generic jobs. Model evaluations

The starting point for grading and pay reviews

15073.doc 13/9/05 10:59 am Page 6

7


have been published by the unions in guidance onthe school remodelling agreement but these mayneed to be adjusted to take account of agreed localconventions. The results of these evaluations canbe included in the rank order and modeled into thenew grading and pay structure in the same way asother jobs (see later sections of this Guide).

Equal pay and equalityThe national agreements state that ‘the pay andgrading of jobs must be fair and non-discriminatory, complying with equal paylegislation and associated codes of practice’.

They also state that ‘employees will be affordedequal opportunities in employment irrespective ofdisability, gender, race, religion, age, sexuality, andmarital status’, (and in the NJC agreement)parental status, caring responsibilities and hours ofwork’. In addition, councils ‘will ensure thatdiscriminatory practices are identified andremoved and non-discriminatory practicesintroduced in all areas of employment…’ Toachieve this, the unions maintain that employersmust carry out equal pay audits and equalityimpact assessments (see later sections).

The starting point for the local grading and payreviews is to recognise that the existing gradingand pay structures do not conform to equal payprinciples. This is why (with the exception of thenational pay spine) the national agreements onlyallow them to continue until local grading and payreviews are completed. Until this happens, therecan be no certainty that jobs are being properlygraded and paid in relation to each other, leavingthe employer vulnerable to equal pay claims (wherewomen and men are doing equal work but are notbeing paid the same).

Until the demands of these different jobs aremeasured and compared alongside each otherusing a common method (by using a jobevaluation scheme which complies with theprinciples of the NJC JES) it is not possible toknow which ones are of equal value and whetherthey are being paid more or less than each other.

Even if there was no necessity to compare ex-manual worker and APT&C jobs (for example,because an authority does not employ any manual

workers), it cannot be assumed that the previousnational grading arrangements deliver equal payfor work of equal value. The national APT&Cstructure had defined national grades for somejobs and local employer discretion in grading mostother posts. Typically, within authorities, therewere no common criteria for measuring thedemands of all APT&C jobs, so there is a dangerthat APT&C jobs of equal value have not beenidentified and are paid wrongly.

While the manual worker grades were based onequal value-based job evaluation introduced in1987, many jobs have changed markedly over timeso their worth or value is likely to have changed –relative to each other and relative to APT&C jobs.Understanding of what makes a job evaluationscheme fair and non-discriminatory has alsodeveloped since 1987. And a job evaluationscheme designed solely for ‘white collar’ jobs willnot be appropriate for evaluating manual jobs.

Some authorities used job evaluation in the pastfor APT&C posts, but where job evaluationschemes have not been reviewed recently with theunion to check that they conform to equal payprinciples and are agreed to be fit for purpose, itcannot be assumed that there is no equal payproblem.

OpennessOpenness is a key principle of the NJC and SJCjob evaluation schemes. In contrast to many jobevaluation schemes that have been used in localauthorities, the union approved schemes allowemployees to know how the scheme works andhow the score for their own job has been arrivedat. (See trade union side guidance for detailedadvice).

The principle of openness and transparencyapplies as well to the resulting grading and paystructure.

The European Court of Justice has ruled that paysystems must be transparent. To quote the EqualOpportunities Commission Code of Practice onEqual Pay, this ‘means that pay and benefit systemsshould be capable of being understood byeveryone (employers, employees, and their tradeunions). Employees should be able to understand

15073.doc 13/9/05 10:59 am Page 7

8


how each element of their pay packet contributesto total earnings in a pay period’ (paragraph 39).

Under the APT&C structure, methods of gradingand paying jobs were sometimes secretive. This isnot permissible with single status arrangements.

Once the review is completed, employees must beprovided with full information on their new gradeand pay point, assimilation arrangements, howprogression through the grade will work;arrangements for back-pay and protection (asappropriate), and any other proposed changes totheir terms and conditions. If the proposedcollective agreement on the revised pay andconditions package is the best that can be achievedby negotiation but falls short of what someemployees might reasonably expect to receiveshould they pursue equal pay or other valid legalclaims, this needs to be explained. Members canthen make an informed choice when they vote onthe deal. (Note: these issues are covered in moredetail in the implementation section of the guide).

JointnessThe Green Book agreement states ‘local authoritiesshould review their local grading structures....Inconducting such a review, representatives of therecognised trade unions should be fully involved’.The national unions take the view that locally theunions must be fully involved (as indeed the RedBook requires in Scotland). Under the terms of theNJC and SJC job evaluation schemes, jobevaluation must be carried out on a joint basis; andit makes no sense to curb trade union involvementat the next stage of modelling options for newgrades and setting the pay line.

Experience shows that those authorities whichhave completed their grading reviews successfullyhave done it jointly. For example, the joint team atWest Sussex County Council (the first county tocomplete the review) has publicly stated that jointdevelopment of their new structure was key toreaching agreement.

Outside Scotland, there may be authorities thatattempt to move away from the joint approachwhen it comes to converting job evaluation scoresinto a pay structure. They may want to exclude theunions from modelling different grading and pay

options. As modelling different options is part ofthe review, this is not acceptable. Alternatively,some employers may be willing to involve theunions in pay modelling, but exclude them fromdeciding the final pay line on the basis that, at theend of the day, the employer reserves the right todetermine pay. Our advice is to ensure thatjointness continues by arguing that the authority isunlikely to succeed in implementing a newstructure without joint ownership and inputthroughout the whole process.

Developing a grading and pay structure is atechnical exercise in which many options need tobe tested to achieve the optimal solution. Unlessunions are involved in this, they will not appreciatewhy certain options have been rejected or besatisfied that the final proposal really is the bestoption. If employers accept it is a joint exerciseuntil it comes to deciding the final pay line,exclusion of the unions at this late stage is boundto create suspicion and concerns that theemployers are unfairly manipulating the outcomesto suit their purposes. They may also be in dangerof opening themselves up to rejection of the offerand/or potential equal pay claims.

Grading reviews create uncertainty. It is importantthat union representatives are able to explain boththe process and outcomes to members. This isparticularly important where previous gradingexercises have been carried out solely bymanagement. Without being involved inidentifying and analysing the impact of variousgrading and pay structure options, unionnegotiators will not be able to assure members thatthe best one has been selected.

The principle of jointness has been reiterated andstrengthened by the NJC 2004 ImplementationAgreement. It states:

■ ‘both sides in individual authorities will enterinto negotiations, with a view to reachingagreement on new local pay structures andsystems by April 2006’ (para1)

■ ‘in keeping with the 1997 agreement, the NJCencourages a joint approach to pay reviews (para 2).

■ ‘the national agreement requires local

15073.doc 13/9/05 10:59 am Page 8

9


employers to produce comprehensive proposalsby a specified date; requires both parties tonegotiate towards a settlement by a date to beagreed and requires an agreed mechanism fordealing with situations where progress cannotbe made....Both sides of the NJC affirm theirpreference for negotiated outcomes at locallevel and agree to use their best offices topromote these’ (para 3).2

It is clear from the 2004 ImplementationAgreement, that jointness should extend beyondthe job evaluation exercise to modelling andfinalising grading and pay structures, as well as anyassociated changes to terms and conditions ofemployment; and that unilateral action by theemployer (or the union) is to be avoided.

Doing nothing is not an optionProgress has been slow in implementing localgrading and pay reviews since the national singlestatus agreements were reached in the late 1990’s.But the national agreements make it clear thatrecalcitrant employers (and, in some cases,branches) do not have the option of sticking withthe old manual and APT&C grading and payarrangements.

The new national implementation agreementnegotiated as part of the 2004 pay settlement forEngland, Wales and Northern Ireland states that‘local pay reviews must be completed andimplemented by all authorities by 31 March 2007’.

In Scotland, the joint circular SJC/13 states thatcouncils should have completed job evaluation by31 March 2004, with employees being assimilatedonto the national pay spine of hourly rates. As asignificant number of councils in Scotland had notcompleted the local grading and pay reviews at thetime of writing, the trade union side of theScottish Joint Council (SJC) is pressing theemployers to achieve implementation withoutfurther delay.

Doing nothing is not an option for employers orthe unions. Nationally, the trade unions havemaintained this message since the single statusagreements were signed. Following the report ofthe independent Local Government PayCommission in October 2003 and in the face of a

spate of equal pay challenges from no-win no-feelawyers in particular, the national employers havebecome more active in spreading the samemessage. In addition to earlier trade union advice,new joint NJC Part 4 advice has been issued onundertaking pay and grading reviews. Branchesshould ensure they obtain and act on this advice.

Branches should be aware that the Employers’Organisation (EO) issued its own guidance‘Reviewing and modernising pay frameworks’ inSeptember 2004, updating earlier guidance. Theunions have circulated the 2004 guidance along witha critique produced by the NJC Trade Union Side.

‘Reviewing and modernising pay frameworks’advised employers (in England, Wales andNorthern Ireland) to understand the impact of alocal pay review before committing themselves toany particular approach to it. Accordingly, the EOrecommended that ‘risk assessments designed toidentify equal pay hotspots’ are carried out as soonas possible.

A purely risk assessment approach is notsupported by the unions. Firstly, it is not a jointexercise. Secondly, there is a danger that someauthorities might assume they have no ‘hotspots’or there is minimal to low risk and therefore thereis no need to carry out a local review. Thirdly, itwill not necessarily lead to adopting a satisfactorymethod to ‘equal pay-proof ’ the pay structure.Where employers want to go down this route,branches should argue that it has been supercededby the NJC advice issued in spring 2005. This jointadvice is intended to provide guidance that bothsides can use when undertaking a pay and gradingreview together. It does not recommend the riskassessment approach.

The national trade union side position is that if apay structure has been implemented prior to the2004 pay settlement without an equal pay audit,then this should be undertaken as soon as possibleto ensure that the pay structure that has beenimplemented can be demonstrated as beingproperly equality proofed. Otherwise, it will not benecessary to conduct an equal pay audit at theoutset of the local grading and pay review – infact, at this stage, it would be time-consuming and

2 New implementation agreement, NJC Circular 4/04 14 July 2004

15073.doc 13/9/05 10:59 am Page 9

10


slow down the review. Also in local authorities, it isnot really possible to do an equal pay audit untilthe job evaluation exercise has been undertakenand pay modelling discussions are about to begin.

Undertaking an equality impact assessment ofeach proposed change and the final overallproposed pay package (including any changes toPart 3 provisions) before it goes out forconsultation should show whether there are anyequal pay problems with the proposed newstructure. If there are indications this is the case,negotiations will need to be re-opened on anyaspects of the proposed package shown to bediscriminatory or unfair.

The first equal pay audit should be carried outonce the new structure has been in place for a year(unless the local pay and grading review wascompleted more than a year ago, in which case itshould be done as soon as possible). However,authorities should be ensuring that systems fordata collection and analysis are put in place and areoperational as soon as possible, if this has notalready been done.

(The guide covers equal pay audits and equalityimpact assessments in more detail in latersections.)

Apart from the issue of equal value, doing nothingis not an option, because local authority paystructures are out-dated and not suited to thedemands of present-day service requirements.

For branches too, doing nothing is not an option.This has been affirmed and clarified by the 2004implementation agreement.

A frequently asked question is ‘during the nationalnegotiations on single status, why wasn’t a newnational grading and pay structure devised andagreed then?’ The answer is that at national level, itwould have proved impossible to decide, inadvance of evaluating all the jobs, where to putjobs on the pay spine. There could be noguarantee that jobs would have been paid on thebasis of equal pay for equal work – defeating a keyobjective of single status! In theory, it might havebeen possible to divide the spine into grades andto specify ‘points to pounds’ so each gradeequated to a prescribed number of job evaluation

points. But because it would have retained a formof national grading, this alternative was rejected bythe national employers’ side.

In any event, the employers refused to make itcompulsory for authorities to use the NJC JEscheme – so having a national ‘points to pounds’pay spine was not possible.3 The employersinsisted on having the flexibility at local level todecide the number of grades, whether to haveincrements or fixed rates of pay (or a mix), and themethod they would propose using to determinethe relative size of jobs.4 In response, the unionswon certain safeguards against unilateral action byemployers (for example, that the unions beinvolved in grading reviews and that protectionarrangements must be agreed); and ensured thatthe requirement that local grading and pay mustconform to equal pay and anti-discriminationlegislation is central to the national agreements.Joint advice on equal pay and grading was alsoincluded in the Green Book (NJC Agreement) andRed Book (SJC Agreement). But because thenational agreements allow for local flexibilitywithin these constraints, it is crucial that unionrepresentatives (as well as employers) understandthe principles of equal pay; what constitutes goodpractice in job evaluation and determining gradingand pay structures; and the pitfalls to watch outfor.

The recommended options for jobevaluation

Why job evaluation?There are no feasible alternatives to using a jobevaluation scheme as the basis for the single statuslocal grading review in most councils, given therequirement that the pay and grading structuresmust be fair, non-discriminatory and transparent,and must also accommodate the diversity of jobsin local government. Job evaluation establishes thevalue of jobs within a council in relation to eachother and therefore helps protect the council frompotential litigation if carried out properly.

Which job evaluation scheme?Nationally, UNISON, TGWU and GMB onlysupport the use of the following schemes whichhave been designed and/or approved by them at

3 However, the Greater London Provincial Council JE scheme has ‘points to pounds’ pay spines for Inner and Outer London which authorities

are recommended (but are not obliged) to use.4

Thisa should be job evaluation. The Green Book includes the NJC JES in Part 4. The Red Book Part 2 recommends the use of the JESdeveloped for Scottish councils.

15073.doc 13/9/05 10:59 am Page 10

11


national level:

■ The NJC Job Evaluation Scheme (included inPart 4 of the Green Book)

■ In Scotland, the JES developed for Scottishcouncils, recommended for use by the RedBook.

In Greater London, the unions have agreed to usethe Greater London Provincial Council Scheme(the GLPC Scheme) which was developed by theemployers’ side of the Provincial Council withsome input from the trade union side. Thisscheme adapts the former joint job evaluationscheme for APT&C staff. It includes a ‘points topounds’ formula for Inner and Outer Londonindicating grades for ranges of job evaluationscores. Nationally, the unions take the view thatthe GLPC Job Evaluation Scheme should not beused elsewhere in the UK.

Other schemes which have not been designedand/or approved on the above basis may beacceptable only if they meet the testrecommended by the Local Government PayCommission. The Commission stated in its report:

‘The presumption [that the NJC scheme will beused in England, Wales and Northern Ireland]should be retained but we also feel that moreflexibility should be shown where the principlesand safeguards which are found in the NJCscheme are demonstrably present in anotherscheme’.

Advice is available from the national JobEvaluation Technical Working Group on theprinciples of the NJC JES. If employers proposeother schemes they must meet these principles inorder to satisfy the Pay Commission’s test. If analternative scheme can be demonstrated asmeeting the principles of the NJC JES, the LocalGovernment Pay Commission held that unionrepresentatives should not oppose its use (or insiston the NJC JES) on those grounds.

Critiques of some other schemes are availablefrom union head offices.

The strengths of the NJC JES are:■ it was jointly developed by the trade unions

and the employers, in line with the principles of

single status

■ it was specifically developed, and tested, tocover the whole range of local governmentjobs

■ it was designed on the basis of ‘equal value’principles; and this is reflected in the factorplan and weightings (see the resource list forreference to the Technical Note of the nationalJob Evaluation Technical Working Group onthe JES factors and weightings)

■ it is an open and transparent job evaluationscheme (unlike some schemes which do notreveal all aspects of their design and scoringsystems to job holders)

■ it is accompanied by comprehensive jointlyagreed advice for users which includes equalityconsiderations (in the Green Book andadvisory Joint Circulars and Technical Notesfrom the national Job Evaluation TechnicalWorking Group)

■ it must be operated on a joint basis by tradeunion representatives and management locally

■ it is available for use in computerised or paper-based form

■ the scheme and the user manual are availablefree of charge to NJC authorities

■ it is the most commonly adopted job evaluationscheme by NJC authorities.

How many job evaluation schemes?A number of local authorities have proposed usingone job evaluation scheme for senior posts—oftenHay—while agreeing to use the NJC JES for allother jobs. This is inevitably the case where a localauthority uses the Hay job evaluation system forchief officers in line with the national agreementfor that group. The issue of using two jobevaluation schemes is covered in new NJC Part 4.9advice on pay and grading reviews. Paragraph 2.24states ‘where a local authority uses more than onescheme it will increase the risk of legal challenge,as well as presenting practical difficulties inapplication.’

The problems mainly arise where authorities seekto use the Hay system also for some or all ex-APT&C principal officer (PO) level jobs and in afew cases for senior officer (SO) jobs as well. The

15073.doc 13/9/05 10:59 am Page 11

12


difficulty with this option concerns jobs at theboundary between the two schemes. First, it isnecessary to agree a procedure for dealing withjobs which evaluate within a specified number ofpoints from the maximum of the NJC schemerange, which would normally be to evaluate thesejobs also using the senior job scheme.

However, this can be problematic, if the twoschemes give different weight to features of theboundary group jobs, so that, for example, somejobs scoring exceptionally well on the NJC JES donot score well on the senior job scheme. If thejobs affected are female-dominated, then thiscould give rise to equal pay claims.

The positioning of the boundary is important. Ifonly the most senior jobs (i.e. chief officer posts)are evaluated under a second scheme, then theproblem will be restricted and the risks of equalityissues arising limited. If, on the other hand, mostmanagerial and professional jobs are to beevaluated on the senior job scheme (for instance, ifthe boundary were at the lower PO grades on theold APT&C structure), then the boundary groupwill be large and probably mixed in gender—andthe problems described above could be significant.(This issue is discussed in more detail in the equalpay section of the guide).

While the large majority of councils using Hayhave restricted its use to chief officer posts, somehave sought to move the boundary between thetwo schemes much lower down for cost reasons.This has caused technical problems and raisedequality issues. Nationally, the trade unions haveissued advice to branches and regions that anysecond scheme should be restricted to chiefofficer posts and where the council wishes tolower the boundary much below chief officerlevel, this should be resisted vigorously. Adviceshould also be sought on the possible equal payconsiderations that may arise where this is done.(See below for more detail).

Nil cost is not feasibleSome local authorities have approached singlestatus with the view that it must be implementedat nil cost. While appreciating the cost constraintson many local authorities, it must be understoodthat this is simply not feasible, whatever job

evaluation scheme is used. If only a few jobs areupgraded relative to others, and any relativelydowngraded jobs are protected, then there is a costto the employer. If significant groups of jobs areupgraded relative to others - a probable outcomeof evaluating ex-manual jobs alongside ex-APT&Cjobs - then there is a significant cost. Even takinginto account any possible savings, in practice thereremains a significant cost implication.

At West Sussex County Council the cost wasestimated at 5% to 7% over the planned five yearimplementation period. At Solihull MetropolitanBorough Council the quoted cost was £4 millionover five years: this included £0.75 million forintroducing the 37 hour week for all employees,but also takes into account savings expected fromchanges to some Part 3 terms and conditions.

Employers should be warned strongly that robbingPeter to pay Paul (or Pauline), (eg) by loweringsalaries for professional and managerial jobs, inorder to fund increases for ex-manual and socialservices jobs, will invite disputes involving keystaff, and possible legal claims, for example, forfailing to consult the unions over terminatingcontracts of employment and re-engaging staff onworsened terms and conditions. It could alsodamage the ability of the authority to recruit andretain personnel.

A more common response has been for employersto seek to contain or claw back the costs ofimproved basic pay for groups whose jobs havebeen upgraded by attacking Part 3 terms andconditions. This issue was raised by the unionsbefore the Local Government Pay Commissionand the report of the Commission noted that part-time women workers were particularly likely to beadversely affected by cuts in enhanced rates of payfor weekend working and unsocial hours. TheCommission recommended the adoption ofequality impact assessment and the 2004implementation agreement has put this in place asa protective measure. As mentioned later in theguide, as a consequence of the 2004 NJCnegotiations, Part 3 has been strengthened to deterunilateral action by employers and to protectbranches from having to accept changes to Part 3in order to secure improvements for many (mainly

15073.doc 13/9/05 10:59 am Page 12

13


women) members whose jobs have been upgraded.

(There will be a national joint review of Part 3paragraphs 2.1 to 2.7 to report to the NJC by 1April 2007. Branches should resist agreeing toadverse changes at local level on the basis that theemployers nationally will be seeking changes afterthe conclusion of the local reviews in any event.To concede local changes while this is going onwill give employers ‘two bites at the cherry’ andalso weaken the bargaining position of thenational trade union side).

The recommended approach to handling the issueof cost, which is explained in more detail in therest of this Guide, is to develop sensible draftgrading and pay structures to suit the needs of theorganisation, then to cost the proposals and thento discuss how they can be implemented. Initialcostings may lead to refinements to the proposedgrading and pay structure, but it is important thatit is this way round and that the reasons for anychanges are clearly understood by all.

It is also important to identify separately the costsof implementation and the ongoing revenue costs.

15073.doc 13/9/05 10:59 am Page 13

14


Examining figures on earnings, the Commissionidentified a ‘gender pay gap’ in local government.In 2002, average female full-time weekly earningswere 81% of the full time male average weeklyearnings – a gender pay gap of 19%. A moreaccurate picture is given by the comparison ofhourly earnings because it takes into account thefact that, in general, men work more hours thanwomen. It also enables comparison of full andpart-time earnings. The pay gap between femalepart-timers and male full-timers was 39% (on thebasis of average hourly earnings) rising to 42%when it is calculated using median hourly earnings.

The Equal Opportunities Commission attributedthis pay gap to three main factors:

■ occupational segregation – part-time womenworkers are overwhelmingly located in jobstowards the bottom of the pay spine

■ the unequal impact of family responsibilities

■ tiscrimination in pay.

On the face of it, the causes of pay discriminationcan be hard to pinpoint largely because sex bias inthe way jobs are valued and paid is often hidden inpay structures put in place many years ago. Forexample, traditionally, the emotional demandsmade on those doing caring jobs have gone largelyunrecognised because of unspoken assumptionsabout them being in the nature of ‘women’s work’or ‘women’s natural abilities’, whereas heavyphysical effort – traditionally associated withcertain men’s jobs – has long been recognised as acomponent in the earnings of those workers.Knowledge gained through studying for anacademic or professional qualification has alwaysbeen valued in the grading and pay of seniorAPT&C posts (mainly held by men), while

Equal pay law and local grading and payreviews

Equal pay and single statusThe grading and pay of jobs must conform to all anti-discrimination legislation and equal pay law.

The guide focuses on gender-based pay inequality, but branches should also be alert to other forms ofunlawful pay inequality, based on race or disability, for example. (Anti-discrimination legislation issummarised in an appendix to the guide).

What is the evidence that there is an equal pay problem in local government?

An objective assessment has been provided by the independent Local Government Pay Commission. Itnoted that women comprised the majority of the workforce and that a high proportion (mainly women)worked part-time, as the following table shows.

Employees covered by the National Joint Council (NJC) 2002

Full-time Full-time Full-time Part-time Part-time Part-time Full-time and Full-timetotal Male female total male female Part time Equivalent

Headcount

700,359 309,850 390,509 872,250 80,617 791,633 1,572,609 1,026,126

44.5% 19.7% 24.8% 55.4% 5.1% 50.3% 100% 100%

Source: Table 2.7, Report of the Local Government Pay Commission, October 2003.5

5 The Report is at http:// www.lgpay.org.uk

15073.doc 13/9/05 10:59 am Page 14

15


knowledge gained through life experience orcomparable activities has not been recognised inthe same way, for pay purposes, in lower gradedjobs (mainly held by women).

Equal value-based job evaluation aims to eliminatesex bias in the way jobs are valued, but genderdiscrimination can creep back into the grading andpay structures unless negotiators take care – thepitfalls are outlined later in this guide.

No single measure will close the gender pay gap inlocal government – the unions recognise thataction is needed on all fronts; and issues such asoccupational segregation, access to training anddevelopment, family-friendly policies, work-lifebalance, are being addressed (for example) innational bargaining and through politicalcampaigning. Tackling pay discrimination alsoinvolves a multi-faceted campaign. This Guidefocuses on ending pay discrimination through localgrading and pay reviews.

Equal pay legislation - why is itimportant?Before starting the grading and pay review process,it is important that you understand equal paylegislation and some of the key cases oninterpreting the law. This will help you impressupon the employers the need to carry out thegrading and pay reviews, what we want to achieveand what rights have already been established.Knowing your way around the law will help you toprevent employers from cutting corners or tryingto include measures that undermine equalityprinciples. It can also help in explaining tomembers why certain options are acceptable ornot, in legal terms.

The section of the guide on equal pay law isincluded as an appendix. It sounds very technical,but please read it – it contains essentialinformation for union negotiators. It takes youthrough the law step by step, focusing on issuesthat are likely to arise in negotiations over thegrading and pay review. (Note: it does not covertribunal procedures and lodging tribunal or courtclaims as these are matters for which each unionhas its own protocols).

15073.doc 13/9/05 10:59 am Page 15

16


Having an equal pay policy The EOC Code of Practice on Equal Payencourages employers to adopt an equal pay policy.Branches should ensure that employers adopt anequal pay policy which would (among other things)commit the organisation to carry out equal payaudits and to monitor pay regularly on a joint basiswith the unions.

(The EOC model policy is set out in theappendix).

Having an equal pay policy is also a requirement ofthe Equality Standard for Local Government.(This is covered later in the guide).

Negotiating guiding principlesBefore the start of the pay and grading review, theunion side is strongly advised to propose a set ofguiding principles for this exercise to management.These should encapsulate what this review is reallyabout and what is critical about the way it is to bedone. By beginning the review with a dialogue andagreement over guiding principles it will help to:

■ identify joint interests as well as differences

■ draw out and surface each side’s agendas - notjust negotiating positions but also expectationsand concerns

■ flag up at the outset what might be “showstoppers” for each side, so that you can start tothink how these can be defused before theyblow up

■ provide clear joint direction for what is likely tobe a protracted and at times very technicalprocess (where there is a danger of “not seeingthe wood for the trees”)

■ lay down a sound basis for joint workingthroughout the review

■ provide an agreed yardstick against which bothsides can judge the validity or acceptability ofdisputed positions at whatever stage in the

review they might arise■ build trust in each other.Guiding principles are not detailed statements orprotocols. Here is an example from West Sussex:■ joint ownership of all phases of the work with

the union■ commitment to an open and transparent

process for deciding new grades■ recognition that both sides were committed to

finding a solution which would ensure thatequal pay for work of equal valueconsiderations were fully met

■ commitment that grades would be based, onrelative job size; and that market issues wouldbe addressed separately.

Be wary about importing bargaining objectivesinto guiding principles e.g. about nil cost. As thisguide argues, cost is an implementation issue, not aguiding principle. The underlying principles of thesingle status agreement provide a basis for pay andgrading review guiding principles. But, as with thereview itself, there is no “one size fits all” in termsof the wording .To carry weight, guiding principlesmust be owned at local level, by both sides. Thismeans that the wording needs to suit localcircumstances, as in the West Sussex example.They can be added to at key stages of the review,as sub-sets of the overarching guiding principles,but be careful to ensure there are nocontradictions.

You should not concede on points of principle,but in bargaining hard to adhere to a principle, youcan be open to options about how it can berealised. Without this “firm on principle, flexibleon possible solutions” approach, it is going to bevery difficult to complete the review with amutually acceptable outcome.

To carry out a pay and grading review successfully,both sides are going to have to work together

Principles for developing grading and paystructures

15073.doc 13/9/05 10:59 am Page 16

17


constructively, be imaginative, take risks andresolve a range of conflicts along the way.Openness and transparency should apply to theconduct of the review, as well as to what itproduces. In authorities where there is a climate ofdistrust and or little history of genuine jointworking, it will be even more important to startwith guiding principles. If both sides are unable to“get started” but are willing to commit to doing areview, outside assistance should be considered. Inany case, your regional officer should be workingwith you on the grading and pay review andtogether you will be able to draw on advice andsupport from your national office. In some cases,it may be agreed with the employer to getassistance from an accredited NJC (JES) associateconsultant.

When the NJC single status agreement was signedin 1997, joint union guidance was issued about theimplementation of the single status agreement,which covered pay and grading. The nationalemployers were reluctant to issue advice becausethey were adamant that local authorities should beas free as possible to negotiate their ownarrangements at local level. (The situation wasslightly different in Scotland and Greater London).In fact, inaction over single status at local level hascaused the national employers to revise theirstance to some degree, prompted by therecommendations of the Local Government PayCommission, pressure from the unions nationallyand the very real threat of widespread legal actionover equal pay.

The NJC 2004 Implementation Agreement givesmore guidance on what the review should andmust cover.6 This section highlights the newprovisions.

Both sides in individual local authorities mustenter negotiations, with a view to reaching anagreement on new local pay structures and systemsby April 2006.

Local pay reviews must be completed andimplemented by all authorities by 31 March 2007.(paragraph 1)

The 1997 implementation agreement still applies.It is supplemented by the following:

‘Local pay and grading reviews should include:

■ the approach to be used to determine the‘relative size’ of jobs to be included in thereview

■ proposals for protection

■ proposals for premium rates of pay

■ proposals for progression (through thegrade/s)

■ proposals for back pay (in resolving equal payissues)

■ proposals for appeal against assimilationproposals

■ an Equality Impact Assessment of proposedchanges to grading and pay and otherconditions

■ an Equal Pay Audit where local pay reviewshave been completed without such an audit

■ proposals for bonus and other performancepayments

■ proposals for any cost savings or productivityimprovements required to offset the cost ofimplementation of the new grading and payarrangements

■ a timetable for implementation by 31 March2007

■ resources necessary for the pay review andtheir estimated cost(paragraph 5).

These are the issues that either side can place onthe negotiating table. Employers cannot refuse tostart a review because (for example) there is nodemand for it coming from employees or becausethey do not want to commit resources to jobevaluation or because they do not believe there isan equal pay problem locally or they cannot affordit. Equally, branches cannot refuse to startnegotiations on the review because (for example)certain groups of members do not agree withsingle status or because the employer wants topropose changes to premium rates of pay. (Toprotect the interests of union members againstcuts to Part 3, safeguards have been negotiated aspart of the 2004 settlement. These are referred toelsewhere in the guide).

However, branches will need to take a strategic

6 At the time of writing, there was no equivalent agreement in Scotland.

15073.doc 13/9/05 10:59 am Page 17

18


approach to the negotiations overall and decidehow they will respond to the employer’s agenda(within the terms of the national ImplementationAgreement) and what positive proposals they willbe putting forward, not only on pay and gradingbut also on work-life balance, equalities at workand workforce development.

The Implementation Agreement also states that:

■ the local timetable will include a date at whichany outstanding issues will be referred to anassisted bargaining process (involving an agreedthird party)

■ local employers will propose a timetable forregular pay audits.

Further advice on the 2004 ImplementationAgreement is available from the unionregional/head office.

The process and principles of carrying out agrading and pay review are broadly the same,whatever job evaluation scheme is used, althoughsome schemes come with a ‘points to pounds’formula which provide ready-made grades. Equalpay audits and equality impact assessment shouldalso be carried out (at appropriate times) in allcases.

When?Although detailed grading and pay structureproposals cannot be produced until virtually all thejob evaluation results are available, it is essential tostart considering the options at a much earlierstage—even before the job evaluation exercise isunder way.

Job evaluation is only a tool for putting jobs intoan overall rank order. It is a means to achieve anew grading and pay structures. It is not an end initself.

A sensible approach might look like this:

■ outset of the exercise - consider principles, fornew grading and pay structures, for example,agreement to use the national spine, flat ratesalaries or pay scales, method for payprogression (see below)

■ after benchmark exercise—test main options;make ball-park cost estimates; move towardspreferred option

■ after evaluation exercise complete—refine andcost option(s) and draw up detailed proposals.

What sort of pay structure?Your employer may raise some of the followingquestions of principle:

■ is the local authority going to pay individualsaccording to going market rates only, withoutconsidering internal relativities (i.e. therelationship between salaries within theauthority)? This type of system is used in someprivate sector organisations. You should argueagainst this, as it is very difficult to operate andis unlikely to meet with ‘equal value’ criteria(this does not preclude ‘market supplements’, ifrequired —see below).

■ is the new pay structure going to be based onthe nationally agreed spine? A local authoritymight want to design its own pay spine insteadof using the national one. You should argueagainst this, as the authority would be breakingaway from the national agreement (andarguably breaching individuals’ contracts).

Key first stage questionsInitial proposals from the employer may alsoaddress the following issues:

■ fixed (spot) rates or pay scales? If pay scales,what sort of progression system?

■ how many grades in the new structure?

■ more, the same or fewer than at present?

Step 1:There are a number of pay structure options forconsideration. The first question is whether thenew structure should be based on fixed points orsalary scales:

(a) Fixed points (or spot salaries or rates): thisis the system historically applied to manualworkers in local government, where each grade isassociated with a single rate of pay (designated inpounds per hour, but could be a rate per week,month or year). There is no progression up to the‘rate for the job’ and no progression beyond it.

The perceived advantages of fixed point salaries are:

■ everyone is paid the ‘rate for the job’ from dayone, so it is the fairest and least discriminatorysystem

15073.doc 13/9/05 10:59 am Page 18

19


■ it is simple to understand and ‘transparent’.

The potential disadvantages are said to be:

■ there is no reward for the additional expertisewhich comes from experience in a job

■ employees may be de-motivated by the absenceof salary progression; this may affectrecruitment and retention

■ additionally, a fixed point system probablymeans not using all the available points on thenationally agreed spine

■ salary scales: this is the system historically usedfor most ex-APT&C employees, where thescale for each grade runs from a minimum to amaximum point on the spine, with a number ofscale points between up which the individualhas the opportunity to progress.

The perceived advantages of salary scales are thereverse of the disadvantages of fixed pointsalaries:

■ the system allows for acknowledgement thatexperience (and training) lead to higher levelsof expertise

■ the opportunity to move up the salary scaleprovides an incentive to employees to remain inpost, and thus assists with recruitment andretention

■ additionally, the national salary spine is of thetype, which comfortably accommodates a scalesystem.

The potential disadvantages are said to be:

■ it may take some years to progress towardswhat is understood as the ‘rate for the job’(especially if this is regarded as being themaximum point of each scale).

■ the system is less transparent than a spot ratesystem, rather more complex and open tochallenge on discrimination grounds(particularly where the scale is long).

The single status agreement makes clear that theold system of scales for APT&C employees andspot rates for manual workers is no longer tenable.The new structure must normally adopt one orother system, and there will need to be clearobjective justification for any exceptions to theoverall structure.

In general we recommend using incremental scalesrather than fixed points, and that these should notexceed four or five points. Many of the localauthorities, who have finalised their new structuresat the time of writing, have adopted short salaryscales of from three to five points per scale.

A number of authorities have introduced paystructures with varying numbers of incrementalpoints. The new grading structure at West SussexCounty Council, for example, has three substantivespine points for each of the bottom six grades, butfour spine points for the top six grades. AtGosport Borough Council, most of the 11 gradeshave four incremental points, but grades 7, 8 and 9have five points each. However, greater variationshave been suggested, for example, two spinepoints for the lower grades and six for the topgrades.

Taking a purist line, on equality grounds, suggeststhat all grades should have the same number ofpoints. This would avoid female dominatedgrades, or those with disproportionately highnumbers of black and ethnic minority employeestowards the bottom of the structure, beingdisadvantaged by having fewer incrementalopportunities than white male dominated grades atthe top of the structure. However, a pragmaticapproach would be to accept small variations innumbers of incremental scales, as at West Sussexand Gosport, in order to reduce the need forprotection, but not to allow larger variations.

An incremental scale with up to four or five pointswould probably be justifiable where it could beshown that up to four or five years service couldbe equated with the time it takes to achieve fullproficiency or competence in the job. But longerincremental scales could be indirectlydiscriminatory, in that women (and possibly othergroups) may have less opportunity to acquire thenecessary length of service to reach the betterpaid, higher levels of the grade, unless the lengthof time it would take to reach the top end of thescale could be justified by an objective reason.

Step 2:

There are a number of options for payprogression, which your employer may propose

15073.doc 13/9/05 10:59 am Page 19

20


and which it will be helpful for you to haveconsidered in advance of discussions:

■ incremental scales, where employees progressannually from entry point to maximum ofscale, so if there were 5 incremental points thiswould take five years. This is often thepreferred option because it allows minimal, ifany, discretion to line managers.

Most incremental progression systems haveprovision for increments to be withheld for lessthan satisfactory performance or acceleratedfor exceptional performance, although theseprovisions are very rarely activated. Someauthorities, which have adopted incrementalprogression for their new grading and paystructures, have sought to re-activate suchprovisions.

■ performance related progression (PRP), whereemployees progress if their performance isassessed as satisfactory or above, generally bytheir line manager and usually, but not alwaysagainst a set of published performance criteria.Institute of Employment Studies research hasshown that there are real risks ofdiscrimination with this type of system.Research has also shown that performancerelated pay systems can have a very detrimentaleffect on employee motivation and morale.Unions have generally opposed PRP because ofthe degree of discretion allowed to linemanagers. Fortunately, bad experiences withPRP systems in local government andelsewhere in the late 1980s mean that this is nota popular option with most local governmentemployers either. Better PRP systems are alsoexpensive to administer

■ competence related progression, whereemployees progress if their competence levelsare assessed as meeting either objective criteria(like NVQ/SVQ) or behavioural criteria.Competence related pay progression isrelatively new in Britain and there are not manyexamples of its successful implementation.However, this is an option being considered bysome local government employers.

■ contribution-based pay where progressiondepends on a combination of individual or

team performance and improvements inindividual competence. This is uncommon inlocal government because it requires theemployer to have a sophisticated system ofperformance management in place and it isexpensive and time-consuming to set up andadminister. Nevertheless, as part of the ‘totalreward management’ approach, it is gainingsupport in local government, especially withthe national employers, as central governmentpressures local councils to progressivelymodernise and make ongoing efficiency gains.The trade unions do not support this approach,believing that it is likely to lead to unfairdiscrimination

■ combined systems – for example, incrementalprogression for some parts of the pay scale,but competence or performance relatedprogression for the remainder. This is theoption agreed for the new Agenda for Changepay system in the National Health Service,where there are competence related gatewayassessments for progression at the bottom andtowards the top of the pay scale, but withstandard incremental progression for theintervening points

A simpler version of a combination approachmight be, for example, pay scales with a smallnumber of traditional incremental points plusadditional points dependent on competence (orperformance) assessment.

To be acceptable, any method of progressionneeds to be transparent, fair and non-discriminatory, with clearly stated criteria forprogression.

How many grades?There is no single right answer to this question. Anumber of factors should be considered, forexample:

(a) Absolute Numbers: Many large localauthorities currently have upwards of 20 grades(five or six ex-manual grades; six ex-APT&Cclerical grades; two Senior Officer (SO) grades;and anything from four to ten principal officer(PO) or management grades).

15073.doc 13/9/05 10:59 am Page 20

21


The trend in the private sector is to reducehistorical numbers of grades to reflect flatterorganisational structures. Public sectororganisations are moving in the same direction.Scottish Power Generation Wholesale Divisionmoved from a very large number of grades downto six to cover all jobs from cleaners to powerstation managers.

Reducing to five or six grades is probably too greata culture shock for most local authorities (exceptpossibly the smallest?). It would imply that thejobs of some supervisors/managers and thosethey supervise would be in the same grade; itwould seriously restrict promotion opportunitiesand it would inevitably mean moving away fromtraditional incremental scales, as these wouldbecome astronomically expensive.

However, a reduction from current numbers ofgrades, say to between 10 and 15, could beconsistent with a sensible single statusorganisation.

In coming to a view on a desirable number ofgrades for the new structure, it may be worthexamining some of the larger job families in theauthority (e.g. finance; residential care; housingmaintenance) to see how many layers thesecurrently have and to take a view on how manythey should have under single status and BestValue and Comprehensive PerformanceAssessment structures.

(b) Job evaluation implications: the decision onhow many grades may be influenced by the jobevaluation scheme adopted. In the case of theNJC JES:

■ The realistic range of total weighted scores isfrom 200-250 (because every job scores at leastlevel one on every factor) to about 750-800points for the full range of local governmentjobs up to but not including chief officerjobs(because no job scores at the top level onevery factor)

■ A recognisable difference in overall jobdemand would probably be represented by oneKnowledge step plus one Initiative andIndependence level plus one or twoResponsibility levels. This is equivalent to

around 40 to 50 points. These features incombination suggest 10 to 15 grades of 40 to50 point widths.

A possible grading structure based on a rankorder of evaluated local government jobs froma hypothetical council is set out at Table 1. (seepage 25) (Note: the scores are intended to bereasonably realistic but they should not be usedas a guide to what real jobs in local authoritieswith these job titles should score!)

The trade-off between type of paystructure and numbers of gradesAlthough the type of pay structure and number ofgrades are distinctly different aspects of the newstructure, there is an element of trade off betweenthe two. Other things being equal, the fewer thenumber of grades, the more likely it is that thelocal authority will wish to move away fromtraditional incremental scales.

The arithmetic to demonstrate this is simple. If,for example, six grades are agreed to be sufficient,then this implies seven or eight spinal points pergrade on the 46 point spine. If all employees haveaccess to all these points through incrementalprogression, the resulting structure will beextremely expensive in the short to medium term.There is then an incentive to employers to restrictmovement in some way, for instance, throughmaking at least some part of the progressionsubject to assessment of performance orcompetence.

If, on the other hand, it is agreed that 12 gradesare sensible, then these could be fitted onto thespine with three to five spine points per grade.Incremental progression on such scales is lesscostly, so there is less incentive to change. Diagram1 (see page 23) illustrates the different approaches.This seems to be borne out by experience to date.For example, the new West Sussex structure has 12grades, with three or four spine points each.Gosport Borough Council’s preferred option has11 grades, with from four to six spine points pergrade. In both cases progression will be bytraditional annual increments.

In contrast, Solihull MBC has a somewhat smallernumber of grades (10) with longer pay scales. In

15073.doc 13/9/05 10:59 am Page 21

22


this case, the authority proposed introducing a‘contribution’ related pay progression scheme.

To overlap or not to overlap pay scales?The obvious principle of a job evaluated paystructure is that more demanding jobs (with higherevaluation scores) are always paid more than theless demanding jobs in the grade below. This leadsto the theoretical conclusion that pay scales shouldnot overlap.

In practice, pay scales often abut, that is, themaximum of the lower pay scale is the same spinepoint as the minimum of the next higher grade.This is generally tolerated on the basis of theargument that an individual on the maximum ofthe lower scale has several years experience, whichprobably means that they are doing work of equalvalue to a new starter in the higher grade.

In some structures scales do not just abut, butoverlap. Diagram 2 (see page 24) shows abuttingand overlapping scales.

Overlapping pay scales raise the problem ofindividuals doing work of greater value, in thelegal sense, than colleagues in the lower grade, butpotentially being paid less. The problem is clearlymore likely, the greater the degree of overlap. Onepoint overlap may be acceptable, as relatively fewindividuals will be disadvantaged in this way at anyone time, and only for one year. A greater degreeof overlap, as in many broad banded structures(see below), is impossible to justify and may beopen to challenge under the equal pay legislation.

Our advice is not to have overlapping pay scales,but if this is absolutely necessary for otherreasons, it is important to minimise the degree ofoverlap.

This advice relates to permanently overlapping payscales. It does not preclude using overlappingscales as a temporary measure, as a means ofphasing in the new structure, as long as theoverlapping points are ‘rolled up’ on an annualbasis and thus eliminated over time. However, careneeds to be taken to secure the agreement ofthose affected by the phasing in, as this iseffectively delaying their achievement of equal payfor work of equal value.

15073.doc 13/9/05 10:59 am Page 22

23


Diagram 1: relationship between numbers of grades andnumber of scale points

A. 12x3/4 point scales B. 9x5 point scales C. 6x7/8 point scales

4948 1247 94645 644 114342 84140 103938 537 736 935343332 8 631 4302928 727 52625 324 62322 42120 51918 217 316 415141312 3 21110 198 27 165 14

15073.doc 13/9/05 10:59 am Page 23

24


Diagram 2: relationship between numbers of grades andnumber of scale points

A. 12x3/4 point B. 9x5 point C. 6x7/8 point D. 11x8 pointdiscrete scales abutting scales overlapping scales overlapping scales

494847 12 11 1146 11454443 11 10 10 1042414039 10 9 9 938373635 9 8 8 834333231 8 7 7 7302928 727 6 6 626252423 6 5 5 522212019 5 4 4 4181716 415 3 3 3141312 311 2 2 21098 27 1 16 15 14

Acceptable GenerallyAcceptable

Possibly Acceptable Not Acceptable

15073.doc 13/9/05 10:59 am Page 24

25


Table 1: A possible grading structureJOB TITLE JE POINTS POSSIBLE GRADE

Head of Trading Standards 763 I

Head of Support Services 724 HHome Care Service Manager 690 H

Leisure Centre Manager 611 GSenior Engineer 606 G

Senior Policy Development Officer 586 FSocial Worker 586 FHome Care Area Manager 585 FSolicitor 577 FResidential Care Shift Leader 568 F

Senior Residential Social Worker 542 EArea Play Development Worker 538 EBranch Librarian 529 EEnvironmental Health Officer 510 EBuilding Control Officer 510 EAssistant Leisure Centre Manager 502 EAdvanced Skills Teaching Assistant 499 EHousing Estates Officer 499 E

Day Centre Officer 473 DPlayworker 460 DSenior Home Care Worker 453 DResidential Social Worker 450 DIT Help Desk Technician 443 D

Creche Supervisor 430 CRehabilitation Assistant 427 CCook Supervisor Secondary 423 CCatering Supervisor Leisure Centre 423 CGardener Cemetery Attendant 421 CSite Manager Secondary School 417 CSenior Care Assistant 417 CGardener Greenkeeper 412 CAdministration Assistant 410 CHome Carer 384 C

Care Assistant 358 BLibrary Assistant 351 BCaretaker School 335 BGardener Driver 332 BAssistant Cook Secondary 325 BRefuse Loader 319 BGardener 319 B

Midday Supervisor 286 AKitchen Assistant 286 A

15073.doc 13/9/05 10:59 am Page 25

26


Equal pay awards (EqPA)The 2004 NJC implementation agreement statesthat local negotiations ‘should include an equal payaudit where local pay reviews have been completedwithout such an audit’. NJC guidance on equal payaudits was issued in spring 2005 and is available onthe Employers’ Organisation website and from thetrade unions.

In an ideal world, the equal pay audit would becarried out both before and after the grading andpay review to identify the problems and thenmeasure whether the new grading and paystructure has rectified them. However, for mostlocal authorities who have not previously carriedout job evaluation across all NJC jobs, it isgenuinely difficult to carry out the first substantivestep of the equal pay audit, which is to identifywhere men and women are carrying out equalwork.

When the job evaluation exercise has beencompleted, it is possible to identify equal work, butstill difficult to calculate average basic pay until thenew grading and pay structure proposals areavailable. Once new grading and pay structureproposals are on the table, it is possible tocalculate both average previous and proposedbasic pay for men and women doing equal work(that is, in the same proposed new grade) and tocheck that the gender pay gaps are significantlyreduced by the proposals. (This then takes theform of an equality impact assessment – coveredin the later sections of the guide).

After the new structure is put in place, it should besubject to regular joint monitoring and annualequal pay audits to check that no inequality has re-surfaced or been created. Annual audits shouldshow a steady decline in gender pay gaps.

It is important to note that a full equal pay auditshould eventually cover not only the single statusNJC group, but also all other employees of the

local authority. For practical and political reasons,it may be sensible to leave this full-scale audit tothe end of the NJC employees’ grading and payreview, in order to help identify what still needs tobe done to move towards equal pay for work ofequal value across the authority. However, thewider equal pay audit should be planned into theoverall work programme for the exercise. The NJCguidance indicates that equal pay audits should beundertaken across the authority.

The EOC recommends a five-step model forcarrying out an equal pay review. The term, ‘equalpay review’ means the same thing as an ‘equal payaudit’. The NJC uses the term ‘audit’ to distinguishthe checks involved from the grading and pay‘review’ itself.

The EOC model comprises:

Step 1: deciding the scope of the audit and thedata required

Step 2: determining where men and women aredoing equal work

Step 3: collecting and comparing pay data (that is,calculating average basic pay and totalearnings for men and women doing equalwork) to identify equal pay gaps

Step 4: establishing the causes of any significantpay gaps and addressing the reasons forthese.

Step 5: developing an equal pay action planand/or reviewing and monitoring

The EOC Equal Pay Review Kit and guidancenotes explain how to carry out an equal pay audit,using the model.

Branches are strongly advised to ensure thatcarrying out an equal pay audit (and equalityimpact assessment) is built into the unions’ andmanagement’s project plan for the local gradingand pay review.

Much of the information and data needed to

Equal pay audits and equality impactassesments

15073.doc 13/9/05 10:59 am Page 26

27


undertake an audit will be required for grading andpay modelling and costing proposals in any event,so its collection and analysis should not impose anadditional burden for the personnel/humanresources (HR) team.

Branches should be fully involved in the conductof the audit, as it will form part of the localgrading review. The actual data collection andnumber crunching can be carried out by HR, butthe union side should have access to the analysisand be fully involved in discussions on any gapsidentified, the causes and how the local review andsingle status implementation will rectify thesituation.

Equal pay audits should not be restricted tochecking only for gender-based pay inequality.Local authorities are obliged by the Race Relations(Amendment) Act 2000 to adopt a race equalityscheme which should ensure that the equal payaudit examines whether there are any pay gapsbetween workers from different ethnic groups aswell as the gaps between men and women’s pay.

In carrying out the local review and audit,attention needs to be paid to the position ofdisabled staff. The Disability Discrimination Act2005 imposes a new positive duty on authorities topromote equality of opportunity for disabledpeople and regulations expected to come intoforce in December 2006 will require publicauthorities to produce a disability equality scheme.(See the appendix for more information).

Consideration also needs to be given to the scopeof the audit in relation to age (age discriminationin employment will be unlawful from 2006) andsexual orientation (as it is termed in law) andreligion or belief (already covered by anti-discrimination legislation in the field ofemployment and vocational training). Mostauthorities are unlikely to have data on the payposition of employees on the basis of sexuality orreligion / belief and they may not have robustsystems in place for gathering and analysingdetailed pay information. Decisions will need to bemade on establishing appropriate monitoringarrangements.

In brief, the EOC model could be applied in localauthorities as follows:

Step 1: Deciding the scope of the audit andthe data required.

■ The equal pay review (i.e. audit) should coverall the employees of the local authority,including chief officers, craftworkers, burgundybook staff such as schools advisers, youth andcommunity workers and all schools basedemployees. As a first pass, the review might berestricted to cover employees in scope of theGreen Book (including schools-based staff,temporary and casual workers and staff whosejobs may be transferred/ outsourced). Considerincluding other workers who may be deemed tobe in the ‘same establishment or service’.However, eventually the review will need to beextended to cover any employees omitted at theoutset.

■ Pay information and related data shouldinclude: all elements of pay, including premiumand unsocial hours payment, bonus, allowancespensions and benefits (such as holidayentitlement) personal characteristics of eachemployee (gender, full/part-time, hours worked(and when and where these are worked),starting salary; length of service, role and timein grade and performance or competence orcontribution assessments and payments (ifapplied).

Step 2: Determining where men and womenare doing equal work.

A comparison of the results of the job evaluationexercise (i.e. the rank order of scores) with currentwages or salaries will reveal if and where any equalpay gaps exist on basic pay and on total earnings(including unsocial hours payments, bonus and anyother plus payments). When extending the audit tonon-Green Book employees, it will be necessary toevaluate at least a sample of their jobs to obtaininformation on where men and women arecarrying out equal work across these groups also.

Where the job evaluation exercise has been carriedout and grade boundaries identified, then thesecan be used as the basis for the pay calculations instep 3 below. (Where grade boundaries are not yet

15073.doc 13/9/05 10:59 am Page 27

28


agreed, it would be necessary to identify somesensible points ranges, for example, every 50points on the NJC JES, to be treated as delineatingequal work).

Step 3: Identifying equal pay gaps

This step involves comparing pay information formen and women doing equal work by:

■ calculating average basic pay and total earningsand

■ comparing access to and amounts received ofeach element in the pay package.

(The EOC guidance notes explain the differentstatistical analyses that can be used.)

Local government has a high proportion of part-time workers and staff working different patternsof hours. The comparison is best done by grossingup part-time workers’ hourly rates of pay to theirfull-time equivalent salaries. This provides a betterbasis than hourly rates for looking at the pro-ratarates for annual salaries and holiday pay, forexample.

Any gender pay gaps will then need to beidentified. It is important that unionrepresentatives are involved in this process andparticularly in deciding what pay gaps aresignificant enough to warrant further investigation.

The EOC says that gaps of 5% or more are to betreated as significant and further investigated, butalso that a pattern of gaps of 3% or more shouldalso be investigated as being potentially indicativeof systemic pay discrimination.

Step 4: Establishing the causes of anysignificant pay gaps and addressing the reasonsfor them. If the step 3 analyses identified asignificant pay gap between women and mendoing equal work, you need to establish:

■ in which elements of pay the gaps areoccurring – is it basic pay, bonus, amount ofovertime etc?

■ what is causing the gap in relation to basic pay:is it starting pay, performance assessments,market supplements? In relation to otherearnings, is it access to bonus, differences inacceptances of overtime opportunities between

men and women etc?

You can then assess whether the gap in justifiableand, if not, plan to close it (see below).

The EOC Guidance Notes provide a useful set ofchecklists for Step 4 covering:

■ overall pay structures

■ pay on entry, pay protection, mechanisms forpay progression

■ performance-related pay schemes

■ market factors

■ benefits

■ working time payments.

Many of the issues covered by the checklists arementioned elsewhere in this guide. However,branches are strongly urged to use the checklistsand to get the employer to use them. They are notdifficult to use and guide you through the processon a question and answer basis. If the employer isreluctant to use the checklists, branches shouldpoint out that the equal pay review model is setout in the EOC Code of Good Practice on EqualPay; and while the code is not legally binding, it isadmissible in evidence in any proceedings underthe Sex Discrimination Act 1975 and Equal PayAct 1970. This means that a tribunal may take intoaccount an employer’s failure to act on itsprovisions.

Once any unjustifiable gaps have been identified,the negotiations over the implementation of SingleStatus (i.e. the design and implementation of thenew grading and pay structure and any otherchanges to terms and conditions) should addresshow the gaps are to be closed or done away with.

While a fair and non-discriminatory job evaluationexercise will put men and women doing equalwork in the same grade, the common practice ofassimilating employees to the nearest point on thenew scale means that they are not necessarily inthe correct position on the scale for theirexperience or competence, so gender pay gaps arelikely to remain. Especially if large, these couldform the basis of equal pay claims, so theemployer needs to demonstrate that suchremaining gender pay gaps will be eliminated overa reasonable period.

15073.doc 13/9/05 10:59 am Page 28

29


Equality Impact Assessments (EqIA)NJC guidance on equality impact assessments wasproduced in spring 2005 and is available on theEmployers’ Organisation website and from thetrade unions. The trade union side recommendsthat an equality impact assessment on all the keyelements of the proposed package must becompleted before the offer goes out toconsultation. Effectively, this amounts to a two-stage process:

The equality impact assessment checks that theproposed new structures and terms and conditionsare free from past inequality7 and do not create anynew equal pay problems (in so far as they canreasonably be foreseen).

It is very important to note that EqIAs ofproposed changes to Green Book Part 3 workingarrangements and premium rates of pay aremandatory. As these conditions have been thefocus for cuts, the requirement to undertake anEqIA is intended to deter employers from pushingthrough changes which would impactdisproportionately and adversely on womenworkers, particularly part-timers, black workers anddisabled workers.

It should be noted that a job evaluation exercisecan be carried out in accordance with bestpractice, but the resulting grading and paystructures might be indirectly discriminatory.Particular care needs to be taken over the placingof grade boundaries; assimilation arrangementsonto the new grades; arrangements forprogression; protection and phasing-inarrangements; future arrangements for dealingwith bonus; the payment of market supplementsand access to benefits. Again, the EOC checklistsare very helpful in identifying potential problemareas.

At the time of writing, there was no explicitreference in the Scottish Joint Council Agreementto carrying out equal pay audits or equality impactassessments (EqIA). However, even where notspecifically required, they should be carried out.Audits should not necessarily entail considerableextra work as the information and data needed foran audit will have to be compiled for the grading

and pay review in any event. Having investedsignificantly in carrying out job evaluation and thelocal review, the employer should see the merit intaking steps to ensure that the new structures aresoundly based and ‘equal pay-proofed’.

Carrying out equal pay reviews and EqIAs is arequirement of the Equality Standard for LocalGovernment. (See the appendix for moreinformation on the Equality Standard. Note: TheStandard applies only to authorities in England)

7 Allowing for lawful short-term phasing in and/or protections.

15073.doc 13/9/05 10:59 am Page 29

30


Pay modelling packagesOnce the principles of the new grading and paystructures are agreed and sufficient job evaluationresults are available, then it is possible to look atdetailed options. Perhaps the best time to do thiswould be after the benchmark exercise is complete,and certainly when most of the results are in.

It will be necessary to examine a large number ofoptions to obtain the best overall balance betweenthe agreed grading and pay structure principles, theevaluation results, numbers of ‘gainers’ and ‘losers’and costs of implementation.

A pay modelling software package can assist in thisprocess, because it allows many options to betested and costed relatively quickly. It does not,however, take away from those developing the newstructure the need to specify the parameters forthe options to be tested. This is particularlyimportant in relation to cost parameters. Unlikespreadsheet pay structure development, where thecost is an outcome of the exercise, with paymodelling software it is possible to specify totalcost as one of the parameters. This has led someauthorities to specify a total cost ceiling and not tomodel any options costing even a little more thanthis, even when such options could significantlyreduce the number of ‘losers’ or were substantiallybetter in some other respect.

Particularly in large councils it is essential to use asoftware package to model options for grades andpay lines otherwise the exercise is in danger ofbeing unmanageable. The Link pay modellersystem, developed for use in conjunction with theNJC JES, has been used by a number of councilsand been found to be extremely helpful. Acautionary note is that it is necessary to havesomeone specifically trained to get the best out ofthe system - the trade unions recommend at leastone person from each side, as a minimum.Gosport Borough Council developed their own

pay modelling system and again found it valuablein developing their pay structure proposals. PilatUK Ltd, the company that developed thecomputerised version of the NJC JES, also has asimple version of a pay modeller, which can beused in conjunction with the NJC scheme. Thisversion is particularly useful early on whenconsidering what possible grade structures mightlook like rather than the more detailed options thatwill come later in the process.

We recommend that where pay modelling systemsare used, at least one and preferably moreemployer and trade union representatives aretrained in their use. You will also need to ensurethat the trade union side has access to the rawpayroll data which is going into the pay modellerand that all assumptions are fully discussed beforethey are input.

Grading/pay structure options for paymodellingThe Employers’ Organisation has produced fortheir members a number of grading/pay structureoptions for modelling. Clearly, without actual jobevaluation results and in the absence of localpayroll information, these can be neither modelledin detail, nor costed. However, they provide someidea of the options likely to be underconsideration by local government employers.

The models fall into groups:

(1) those with incremental scales and nooverlap between scales (next scales starts onespine point higher than the previous one), rangingfrom 16 grades of three increments to five gradesof 10 increments

Comment: these models provide an acceptablebasis for discussion from a trade unionperspective, although 16 grades is likely to be toomany.

Developing detailed grading and paystructures

15073.doc 13/9/05 10:59 am Page 30

31


(2) Those with incremental scales whichoverlap (where the next scale starts below themaximum of the previous one), for example, eightgrades of eight increments or seven grades of 10increments

Comment: some of these models, particularlythose with the greater degree of overlap, are opento criticism and possible challenge on equalitygrounds, as explained above

(3) Broad banded salary ranges (see below),with a set differential, for example, eight salaryranges based on a 20% differential gives rangeswith band minima at spine points 4, 10, 16, 23, 29,34, 41, 49 and 55

Comment: the 20% range model included amongthe options gives eight scales each with six, sevenor eight non-overlapping scales, so could provide abasis for discussion, depending on the method ofpay progression proposed. Salary range modelswith higher percentage ranges would inevitablyinvolve significant overlap, so would be subject tothe criticisms already identified.

(4) Broad banded structures based on‘reference points’ (effectively the rate for thejob), with one ‘development point’ below thereference point, two traditional increments above,with further upward movement dependent onperformance

Comment: these models are likely to be seriouslydefective because of the high degree of overlap.There is further comment on broad banding in thenext section.

(5) Spot systems using only selected points onthe national spine, with, for example, 11 or 14spots:

Comment: these models are not subject to thesame criticisms as those with overlapping scales,but are less acceptable than short, non-overlapping, incremental scales, not least becausethey do not make full use of the national payspine.

Under- valued and over-valued jobsFor many local authorities, the job evaluationexercise will reveal a sizeable minority of relativelyunder-valued jobs. This is most likely to be the

case for authorities with significant numbers ofex-manual jobs, which are known to have beenunder-graded in the past. It will also be true forthose authorities with large social servicesdepartments and other client-related services, suchas leisure, education and housing, where equalityaudits have never been undertaken and there havebeen no equal value claims.

Some authorities may have a significant minorityof jobs which have been well-graded bycomparison with the majority. This tends to occurwhere past grading decisions have been made in anunsystematic and inconsistent manner over timeand happens in district councils as much as inlarger authorities.

The extent of outlying jobs can easily be identifiedby plotting job evaluation results against previoussalaries (include bonus payments but not overtimeor unsocial hours payments for this purpose) andthen multiplying the outlying jobs by the numberof employees covered by the relevant jobevaluations. A pay modelling system can do thisautomatically and if suitably programmed, canidentify which of the under- and over-valued jobsare male- or female-dominated. Diagram threeopposite shows a scattergram with both under-valued and over-valued outlying jobs.

Don’t let the tail wag the dogMoving all historically under-valued jobs to the paylevels of the majority at the date ofimplementation of the new structure, whileprotecting relatively over-graded jobs, can beexpensive. Employers are suggesting a number ofways of dealing with this:-

(1) Lowering the paylineIn response to efficiency reviews and a need toupgrade significant numbers of ex-manualemployees, some local authorities appear to haveseriously considered lowering salaries generally topay for the increases. Often using salary modellingsystems, they calculate what reduction in salariesacross the board (‘lowering the previous payline’),or at particular parts of the structure, would givean overall nil, or minimal, cost outcome (‘alteringthe payline slope or gradient’)

This is an extreme example of allowing the future

15073.doc 13/9/05 10:59 am Page 31

32


pay structure (dog) to be determined (wagged) byinitial implementation issues (the tail).

It is inappropriate and short-sighted, for thefollowing reasons:-

■ unless salaries can be shown to be abovemarket rates generally, which is unlikely, thenlowering the payline will result in recruitmentdifficulties in the short to medium term.Authorities adopting this approach will not beable to recruit staff of sufficient calibre todeliver high quality services

■ in order to resolve recruitment and retentionproblems, authorities will be forced tointroduce labour market supplements (seebelow) to groups who are not in short supplygenerally, but for salary reasons only. Suchsupplements will prove expensive in themedium to long term, because it will be verydifficult to remove them

■ proliferating labour market supplements willalso become sources of grievance between

employees and of pay inequity. They could beopen to future legal challenge. They alsorepresent a major administrative burden

■ Lowering the payline will demoralise affectedstaff, be seen as unjust, and possibly give rise todisputes and legal actions such as breach ofcontract claims, claims of unlawful deductionsfrom wages and constructive dismissal

■ there may be ‘leap-frogging’ of staff betweenjobs in neighbouring authorities because pay isbetter (or worse) if there are several authoritiesin a relatively small geographical area. Thiscreates retention problems, is destabilising,potentially expensive and will affect morale ofremaining staff.

(2) Broad bandingThis involves setting overlapping wide pay scaleboundaries to accommodate all or most of thehistorical salaries and then assimilating employeesat their previous salary levels (except for extremeoutliers, whose salaries are increased to the

200 300 400 500 600 700 8000

5

10

15

20

25

30

35

40

Overvalued 'outlier' jobs

Undervalued 'outlier' jobs

JE Points

Sal

ary

£th

Diagram 3: Scattergram of je points against previous salaries, showing outliers

15073.doc 13/9/05 10:59 am Page 32

33


minimum of the broad band). This option looksattractive to employers: it appears to avoidlowering the payline, but provides a minimum costapproach to the introduction of a new pay system,because, in the first instance, the great majority ofemployees remain on their previous salaries.

This is an approach which has frequently beenadopted in the private sector and in the civilservice in the early 1990’s, where it also matchesthe generally more discretionary managementtechniques in use. However, from a localgovernment perspective, there are a number ofproblems:

■ because broad banding involves wide salaryranges, it is inevitably associated with amechanism to restrict movement up the salaryscale, for example, performance or competencerelated pay, or the introduction of qualificationor other barriers to progression. If thesemechanisms are applied rigorously, theybecome another way of lowering the pay linethrough the back door, and have all the samedisadvantages

■ broad banding is also associated with muchmore line management discretion than hashistorically been the case in local government,in relation to progression within the band andto the positioning of new recruits on therelevant scale

■ there is a real risk of perpetuating unequal paybetween female dominated jobs (oftenassimilated towards the bottom of the broadband because of their historically lower pay)and male dominated jobs (more likely to beassimilated in the middle or towards the top ofthe band)—unless there is a specificmechanism for movement towards equal pay,i.e. pay increases weighted towards those in thebottom section of the pay band

■ as explained above, there are also equalityissues in relation to those in a higher evaluatedband being paid less than those towards the top(perhaps for historical reasons only, unrelatedto experience or performance) of the lowerband.

(3) Partial implementationIn order to limit costs, some local authorityemployers have proposed implementing singlestatus only for certain groups of employees,generally ex-manual workers and employees in thelower ex-APT&C. grades, perhaps up to old scale3 or 4. Sometimes this is put forward as the firststage of implementation, with other groups ofemployees to follow at a later date. This may lookseem a practical implementation issue, but is morelikely to be have cost-containment motives.Whatever the arguments used, this is a high riskstrategy for union representatives as well as foremployers, for the following reasons:

■ it assumes that all the jobs to be covered by thepartial implementation are less demanding thanall other jobs (for example, that no ex-manualjobs are as demanding as jobs above the cut offgrade). While it may be generally true, there arelikely to be some exceptions and these couldgive rise to equal pay claims.

■ it does not deal with equal value issues among thejobs excluded from the partial implementation,which could also give rise to equal pay claims

■ it places an artificial ceiling on the exercise,which could give rise to appeals and grievances,not necessarily equality related, at a later date.

(4) Phasing inAn alternative to the previous options is todevelop an appropriate and acceptable grading andpay structure covering all employees and then todevise a method of phasing in any pay increases tospread the cost. Employers may be attracted tophasing in for this reason and obviously this islikely to be an acceptable option to members facedwith threatened cuts to terms and conditionsand/or services to ‘pay for’ single status. Crucially,it also avoids the outlier issue (tail) fromdetermining (wagging) the nature of the paystructure (dog).

There are a number of possible methods tophasing in, for example:

■ ‘green circling’: In this approach, the differencebetween the actual salary and the minimumpoint of the appropriate scale for the job isdivided by an agreed number of years (usually

15073.doc 13/9/05 10:59 am Page 33

34


two or three), with affected employeesreceiving half or a third of the difference eachyear (in addition to their annual settlements)until they reach the correct salary scale. Thisapproach would be particularly suitable if afixed (flat) rate pay structure is adopted

■ ‘rolling up’ incremental points: in this approachoverlapping incremental scales would initiallybe introduced, wide enough to accommodatethe previous salaries of all or most employees.Each year one increment would be ‘rolled up’(eliminated), as employees on it moved upincrementally, until the agreed number ofincrements per scale was reached. This is theapproach adopted by Solihull MBC. If thisapproach required very long scales, then itmight be necessary to give double incrementsto those on the bottom point and ‘roll up’ twoincrements per year to give a reasonabletimescale

■ the ‘West Sussex’ approach: This is a variationon the above, involving a four point‘transitional’ zone below each of the agreedthree or four point substantive scales, to allowincremental movement towards the substantivescale for the job. In this option, those belowthe transitional zone move immediately to theminimum point of that zone, giving animmediate cost, but regulating the transitionperiod to an agreed number of years.

It is important that members give their consent tophasing in by voting in favour of it and that, priorto a ballot, they understand how it would affectthem as individuals. There is no statutory guidanceon an acceptable period for phasing in a newgrading and pay structure to achieve equal pay.Technically, members entitled to equal pay couldtake a claim during the phasing in period becauseduring that time they are not receiving equal payfor equal work. However, if this is genuinely atime-limited, transitory arrangement, designed toenable equal pay to be achieved, and it has thesupport of the majority of members, it minimisesthe risk of a successful legal challenge. Phasing inshould occur over a short timescale – ideally oneor two years, so that affected employees can seeexactly when they will be paid on the correct scale

for their jobs. (It should also be remembered thatacceptable transitory arrangements do not cancelout entitlement to compensation (back pay) forpast pay inequality. This issue is fully discussed in alater section of the guide).

Proposals to phase in the new structure in waysthat would exclude certain under-paid groups forlong periods should be rejected, as this could giverise to equal pay claims. Phasing in arrangementsshould treat all employees equitably and not beused as a form of partial implementation of singlestatus.

The NJC 2004 Implementation Agreement statesthat local pay reviews must be completed andimplemented by all authorities by 31 March 2007.

Protection issuesIn any job evaluation exercise, there will be someemployees whose jobs have evaluated at a lowerlevel relative to other jobs than their previoussalaries indicated. This happens when the overalldemand of jobs, relative to others in theorganisation, has decreased. This could be as aresult of re-organisation of work or theintroduction of new working methods orequipment, or because the starting salary for thepost was set at a level which was out of line withsimilarly demanding jobs.

It is important to distinguish these genuine relativedown-gradings from the situation where theemployer is effectively lowering the pay line, wherethe number of jobs proposed for protection couldbe much larger. Genuine down-gradings should befew in number and restricted to situations wherethe reason for the relative down-grading can beeasily identified.

Paragraph 12.2 of the original implementationagreement of the Green Book states that ‘inconjunction with local grading reviews theauthority and the unions shall agree the terms onwhich there should be protection against loss ofremuneration’.8

Protection arrangements must be fair and non-discriminatory and in particular they must notbreach equal pay law. In this regard, the EOCCode of Practice on Equal Pay states:

8 It is also important to note that if there are no agreed arrangements for protection, it is unlikely that an employer can unilaterally impose the

new grading and pay structure onto employees (through changing their contracts of employment) without breaching the contract. This wassuggested by the Court of Appeal judgment in Griffiths and another v Salisbury District Council 2004 (unreported).

15073.doc 13/9/05 10:59 am Page 34

35


‘Any ensuing pay protection (red circling)should … be free of sex bias and should bephased out as soon as is practicable’ (paragraph58).

Pay protection should be:

■ applied to those jobs whose overall demand hasdecreased relative to other jobs. It should notbe used as a method for cutting the cost of theexercise or finding a ‘nil cost’ solution, byreducing salaries of higher paid jobs in order topay for the increases of upgraded employees.Such an approach would be very short-sighted.It would probably mean reducing salaries forsome jobs below their market rates, inevitablyleading to recruitment and retention problemsin the short to medium term - and the inabilityto deliver services of the required quality

■ agreed in principle at the outset of the exercise,although it may be appropriate to leaveconsideration of the details until a later point,when information about the numbers affectedis available

■ time limited - particularly in situations wherethe posts to be protected are held mainly bymen doing equal work with job holders whoare predominantly women.

There is no statutory definition of the maximumperiod for lawful protection. In local government,most transitional arrangements have beennegotiated for between two and five years.

The Scottish national agreement provides forprotection at assimilation onto the new spinalcolumn point for all employees, including bonusearners, for three years’ protection on a cashconserved basis. This means that the occupier of adown-graded post would receive the cash value oftheir pre-review earnings (wages/salary plusallowances and bonus) for three years, but nonational pay awards or incremental progression inthat period. At the end of three years, the postmoves onto the ‘correct’ spinal column point forthe job (as evaluated and graded by the review) butat the current basic pay for that spinal columnpoint (i.e. as uplifted by national pay awards overthe past three years).

The West Sussex agreement provides for an‘extension zone’ above the substantive scale foreach grade (to match the transition grade beloweach scale). Within the extension zone, no furtherincrements were payable after any due in the yearbeginning April 2000, but employees received allfuture pay settlements. The small number of postsabove the relevant extension zone had their payfrozen at 31 March 2001 until subsequent paysettlements brought pay to the top point of theextension zone or the protected post-holder tookon a more responsible role or left the authority.

Where no possible equal pay or sex discriminationissues might arise, there is no imperative to limitthe period of protection, apart from the fact that,it is generally contrary to good industrial relationspractice to prolong it for a very lengthy period orindefinitely. This is perceived as being unfair tonew starters and other non-recipients doing thesame or similar work for less money and couldgive rise to equal pay claims in the future if thegender pattern of the protected group changedover time.

Because local government grading and pay reviewsare intended to tackle pay inequality which willmainly affect groups of women workers, it ishighly unlikely that protection issues can beremoved from considerations of sex bias. This willneed to be explained to members who may notreadily appreciate why long-term or life-timeprotection is not an option. If, for example, jobsheld mainly by men score the same as lower paidjobs held mainly by women, the women have atechnical right to equal pay immediately, andprotection arrangements must not have the effectthat the women’s pay can never catch up, or thatthe pay gap remains in being for a lengthy period.Women staff must be able to see when their paywill equal that of the men’s jobs.

All staff must be fully informed about theproposed phasing and protection arrangementsand how they will affect them; and the proposalsmust be put out to consultation (see theImplementation section of the guide).

There is very little case law to guide localgovernment negotiators in the scenarios they may

15073.doc 13/9/05 10:59 am Page 35

36


encounter.9 The EOC Guidance Notes state thatred-circling should not be used in such a way thatit amounts to sex discrimination. In any casesbrought before them, tribunals would ‘have tomake a careful study of the circumstances of eachcase, taking into account:

■ the length of time the red circle has been inoperation;

■ whether the initial reason for the paydiscrepancy remains justifiable;

■ whether the employer acted in accordance withgood industrial relations practice and

■ whether their actions were based upon anydirect or indirect sex discrimination’.

The gender pattern of the protected andunprotected groups should also be examined.

The EOC guidance notes suggest the followingquestions for negotiators:

■ how many jobholders have had theirwages/salaries red circled or personallyprotected?

■ how many of these are men and how many arewomen?

■ if the proportions of men and women aresignificantly different, can you justify this interms of the features of the job evaluationscheme and job demands?

■ in particular, if the numbers and proportionsof men whose wages / salaries are red circledor personally protected in the new salarystructure is significantly greater than thenumbers and proportions of women, can youdemonstrate that the red circling is not a meansof evading paying the higher rates to women?

The EOC Guidance Notes for the Equal PayReview Kit suggest the following options forprotection:

■ maintaining the current terms and conditionsof the job holder but when he or she leaves thepost it reverts to its evaluated rate (i.e. personalprotection) - provided this does not amount tosex discrimination

■ phasing the jobholder’s pay into line with therest of the grade (for posts with equivalentscores) by withholding or restricting future

wage increases (i.e. mark time protection).

The EOC Guidance Notes for the Equal PayReview Kit suggest that phasing the jobholder’spay into line with the rest of the grade (for postswith equivalent scores) by withholding orrestricting future wage increases (i.e. mark timeprotection) is an acceptable protectionarrangement.

Other variations which have been negotiatedlocally involve increasing the responsibilities of thepost (with the job holder’s agreement) so that theprotected salary equates to the demands of thejob; and providing opportunities for training anddevelopment to enhance protected job holders’opportunities for securing new posts at anequivalent salary to their protected post. (Note:care must be taken to ensure that suchopportunities are genuine and not simply a deviceto maintain pay for down-graded staff and thatsuch any arrangements are non-discriminatory interms of their operation and access to them).

More complex problems can arise where groups ofemployees currently enjoy protection by virtue ofpast agreements. The employer may argue thatthese arrangements amount to a genuine, materialfactor defence. As a general rule, if theyperpetuate sex discrimination in the new structure,these historic arrangements are not likely toprovide a genuine material factor (GMF) defence.

Staff who have been transferred to the authoritymay have protected terms and conditions underTUPE (the Transfer of Undertakings Regulations1981). If TUPE-protected terms and conditionsgave rise to unequal pay in the new grading andpay structure, the employer could argue thatTUPE protection provided a GMF defence. InKing’s College v Clark (EAT 05/09/03; 1049/02)the EAT accepted that TUPE transfers of 1993and 1998 did provide a GMF in relation to thedifference in pay between the claimant and hercomparator. Generally, a tribunal would need toconsider all the circumstances of the case,including the length of time the TUPE protectionhad applied and whether the TUPE term inquestion acted to perpetuate sex discrimination. Itwould not necessarily be the case that TUPEwould provide indefinite protection if that

9 The leading case, Snoxell and Davies v Vauxhall Motors Ltd. EAT [1977] IRLR 123 EAT dates from just after the implementation of

the Equal Pay Act in 1975. The employer used a red circle for men as a means of preserving the pay difference between them and women staffdoing equal work, when the women’s pay should have increased. The EAT held that red circling cannot be used as a defence if past sexdiscrimination is the cause of the difference in pay.

15073.doc 13/9/05 10:59 am Page 36

37


protection had the effect of breaching thefundamental principle of equal pay for equal work.

(See also the section on market supplements laterin the guide).

‘Career grade’ issuesA frequently asked question is whether the oldAPT&C ‘career grade’ systems can be continued,allowing employees in particular occupations toprogress through a number of grades andassociated pay scales as they undertake formaltraining (e.g. day release courses) and moreresponsible duties.

So, for example, a school leaver might beappointed to a scale one or two post in thehighways department, attend college on day releaseto acquire relevant City & Guilds, HNC and HNDqualifications and be given gradually moreresponsible work. The individual would progressthrough the APT&C scales from two, possibly upto SO1, SO2 or even Principal grades, over alifetime of employment with the local authority. Insome cases or over some grades the progressionmight be automatic. In other cases there might bepromotion bars, where it was necessary to gothrough a formal promotion procedure to verifythat the individual was suitable for the highergraded work.

The problem with such schemes, which resulted ina number of successful equal pay claims, was thatthe level of work undertaken by individuals didnot always match the periods of automaticprogression from one grade to another. So,individuals might be being paid on higher ‘careergrade’ scales than was commensurate with thelevel of work being undertaken.

The answer to whether career grade systems cancontinue is a qualified ‘yes’. The main qualificationis that the career steps must match the jobevaluation scheme outcomes, which may mean re-designing or re-calibrating the career progressionscheme to deliver appropriate levels ofresponsibility at each grade/pay scale. This meansthat all existing career grade systems must bereviewed in the light of the job evaluation results.

There are two other qualifications:-

■ each employee should actually be undertakingwork commensurate with the grade at whichthey are being paid, not just having the trainingto allow them to potentially undertake suchwork, as may sometimes have been the case inthe past

■ career progression systems should be availableto all comparable groups and not restricted tomale-dominated groups, as was previously truein some local authorities.

In fact, single status agreements should facilitatethe concept of career progression for a widerrange of occupations, for instance, in home careand grounds maintenance (where the divisionbetween manual and APT&C may have providedbarriers in the past), as well as in highwaysengineering and building control (see also Part 4.4of the Single Status Agreement Green Book forjointly agreed advice on this issue).

To be consistent with the emphasis of the SingleStatus agreement on training and development,there should be career progression systems in allareas where work is undertaken at a number oflevels within the employing authority, for example,in finance, libraries, school catering.

15073.doc 13/9/05 10:59 am Page 37

38


A key aim of a single status grading review is toconsolidate extra payments – sometimes known as“off structure” payments and allowances intobasic pay, as these have often been sources ofgrievance and pay inequities in the past. The onlysignificant potential continuing, additional “offstructure” payments are:-

■ working arrangements – premium payments fornon-standard hours (for example, overtimepremia; shift, weekend, night, on call payments,sleeping-in duty allowances)

■ payments for performance (bonus/productivity payments)

■ labour market supplements

■ schools – retainer pay and allowances. (Theunions have produced separate negotiatingadvice on school support staff issues. Branchesshould contact their union for details).

Working arrangements and premiumpayments for non-standard hoursJob evaluation, job grades and the associated basicpay relate to the job undertaken during ‘normal’working hours. It is perfectly legitimate to makeadditional payments to those required to undertakethe same job duties out of normal hours, both tocompensate the individuals for the inconvenienceand to provide an incentive to staff to work theunsocial hours. Above a certain level in anorganisational hierarchy, it is common for the basicsalary to cover such working hours as are requiredto fulfil the job requirements.

Employees who are required to work non-standardpatterns of work must be compensated as per thenational provisions in Part 3 of the Green and RedBooks.

The national Part 3 provisions apply unless theyare modified locally by negotiation, following theprocedures set out in the national agreements.

As a consequence of the NJC pay settlement in2004, there have been important changes to Part 3in respect of working arrangements and premium

payments. Proposals to change workingarrangements (and/or any of the payments listedin Part 3.2.3 to 3.2.5) can only be valid if they canbe shown to be required to deliver improvedservices. In other words, the case for any proposedchanges must be made out on this basis (not costcutting); and employers are obliged to:

■ seek to meet employees’ work-life balanceneeds

■ conduct an EqIA

■ ensure that part-time workers receive equaltreatment and

■ ensure that arrangements are consistent withequal pay legislation (Green Book Part 3.2.4).

‘Working arrangements’ includes remuneration i.e.premium rates of pay and enhanced rates of pay(see Part 3.2.3.for the full list). Part 3.2.2 makes itclear that where no local agreement concerningpremium rates is reached, the national provisionsset out at Part 3.2.6 and 7 will apply. In otherwords, in the absence of local agreement tochange the national premium rates, it would be abreach of the national agreement to impose anychanges and it would leave the employervulnerable to breach of contract and/or WagesAct claims.

Part 3 does allow for an inclusive rate of pay to bepaid as an alternative to premium payments andenhancements for working non-standard hours.Branches will need to consider whether there isany case for rationalising or simplifying suchpayments in an acceptable manner, for example, byconverting them into annual amounts forparticular working pattern arrangements, whichcould reduce administration costs. This shouldonly be addressed as part of a package whichincludes progress towards an acceptable gradingand pay structure - it should not be put as a pre-condition by the employer. Proposals for aninclusive rate of pay should also be subject to anEqIA, as they are usually put forward by theemployer as a cost-cutting measure or to fund

Additions to basic pay

15073.doc 13/9/05 10:59 am Page 38

single status and the affected employees may beworse off overall on an inclusive rate of pay.

Where the union wishes to propose changes toworking arrangements to improve employees’work-life balance, there must also be ademonstrable case that the changes will improveservice delivery. Any proposals must be subject toan EqIA as well.

Changes to working arrangements should alsoreflect NJC Part 4 guidance on local workforcedevelopment plans (including training anddevelopment for staff).

Note: this section gives outline advice only onworking arrangements and changes to Part 3 ofthe Green Book. Branches are strongly advised toobtain further information from the union office.Scottish branches should check the currentposition with the regional office in Scotland.

Payments for performance (bonus/productivity payments)Genuine payments for performance can justifydifferences in pay between individuals undertakingwork of equal value, even where those concernedare of opposite gender.10 However, the ECJ, inaccepting that performance differences couldjustify pay differences, said that over a reasonablenumber of employees doing work of equal value,average performance payments to women shouldbe expected to be equal to average performancepayments to men.

The problems with the old manual worker bonusschemes, which have been the subject of challengein a number of equal pay claims, is that many ofthem no longer pay for additional productivity andthey are often only paid to male-dominatedgroups. They are unlikely to be justifiable underthe new grading and pay structure arrangements.Methods of removing them were considered bythe NJC Technical Working Group on Bonus in1998. Essentially, these are:

■ consolidation, where possible, into new gradesalary rates

■ buy-out - of whole bonus or part of bonuswhich cannot be consolidated

■ current bonus payments to be subject to

protection arrangements for existing staff andphased out completely as new employees arerecruited.

New bonus or productivity payment schemes areonly likely to be justifiable if they meet each of thefollowing criteria – that they are:

■ accessible to all employees, or at least to allemployees in a comparable position, forexample, to school meals and home careemployees as well as to grounds maintenanceand refuse staff and to associatedadministrative and clerical support staff, as wellas to the front line service providers

■ directly related to output and/or quality ofservice, on either an individual or team basis:this would be reflected by variations inpayment between individuals/teams; possiblyvariations over the year; holiday bonuspayments calculated as an average of paymentsover an agreed preceding period

■ paid at a level which genuinely reflectsvariations in output and/or quality, so probablynot a major component of total pay

■ subject to ongoing monitoring of outcomes toensure that average bonus payments arebroadly equal for male-dominated and female-dominated groups

■ subject to regular review to ensure that thescheme continues to meet these criteria.

Labour market supplements:As described above, the new salary structureshould be pitched at a level which will recruit andretain employees to the great majority of jobs.Even where this is the case, there may be somejobs for which it is not possible to recruit andretain staff at the grade- related salary. Thishappens when the group is in short supply, eithernationally or locally. Examples of currentshortages include social work, homecare, planning,environmental health, trading standards officers,and communications systems specialists andmanagers. There are also local shortages in someareas of plumbers and electricians, cleaning andcatering staff

Historically, market shortages were oftenresponded to by upgrading the jobs in short

39


10 Handels-og Kontorfunktionaerernes Forbund i Danmark v Dansk Arbejdgiverforening (acting for Danfoss) [1989] IRLR 532 ECJ

15073.doc 13/9/05 10:59 am Page 39

40


supply, for example, systems programmers andanalysts in the early 1980s. Salaries determined inthis way were open to challenge at a later date,when the higher payment was no longer justifiedby the market situation.

The more sensible and recommended approach isto pay an off-spine labour market supplement(normally as an annual lump sum, which can bedivided by 12 for monthly payment purposes). Thelabour market theory behind such a supplement isthat the higher than average salaries will attractmore people into that occupation, thus relievingthe shortage and allowing the market supplementto be reduced or eliminated over time.

To be defensible in case of internal or externalchallenge, any labour market supplement shouldmeet all of the following criteria:

■ the need must be demonstrable at the time thesupplement is introduced, for example,evidence of inability to recruit at the evaluatedgrade salary range, national or local market datashowing higher salaries

■ the supplement should be regularly reviewed toensure that payment continues to be justified

■ the supplement should be paid to existingemployees (effectively as a retentionsupplement) as well as to new recruits (as arecruitment supplement), otherwise there is adanger that supplements are paid only to moremobile employees, which could be indirectlydiscriminatory

■ once the need for the supplement ceases,existing payments can be made subject toprotection arrangements, but new recruits ortransfers should not receive the payment.

The unions should be involved in deciding whichjobs should attract market supplements and inreviewing the need for supplements. There shouldalso be agreement as to the sources of labourmarket and pay data that will be used in theseexercises.

A difficult issue is whether labour marketsupplements should be taken into account incalculations for unsocial hours or overtimepayments and whether they should be pensionable.In theory, all labour market supplements should be

short-term, so do not need to count for otherpayments or be pensionable. In practice, someshortages, for example, of communications and ITspecialists may not be quickly remedied, so therecould be justification for including the supplementwith basic salary for other calculations.

Market supplements should not be used to restorethe pay of those jobs that have been down-gradedin the review, unless justified by the criteria set outabove. An annual equal pay audit should show ifthis happened and enable it to be put right.

15073.doc 13/9/05 10:59 am Page 40

41


Implementation stepsThe message of this guide is that development andimplementation of new grading and pay structuresshould not be based on irrational assumptions,such as ‘nil cost’, ‘minimal turbulence’ or ‘nochange’, but should be carried out jointly andfollowing a logical sequence. Early experiencesuggests that delegation of the exercise to‘someone in personnel’, without a corporateapproach, including the active involvement and co-operation of senior managers in all departments, isdoomed to failure.

Likewise, on the union side, the exercise needs tobe supported by a team (not lone individuals)working together in a planned and coordinatedway. It is also important that key councillors (suchas finance and HR committee members) are kepton board.

Branches should also share information with eachother on experiences and outcomes elsewhere inthe region and nationally. The unions’local/regional and head offices can assist in this.

In broad terms, the recommended key steps are:

■ consider principles and aims - at outset of thejob evaluation exercise

■ carry out job evaluation

■ model realistic options for a new grading andpay structure, which suit the agreed needs ofthe local authority

■ carry out an equality impact assessment

■ cost most feasible options

■ agree protection arrangements and finaliseproposals for payment of backpay

■ develop mechanisms to deal with assimilationissues, such as outlying jobs

■ consider phasing options and any otherconsequential issues, for example, bonuses,working time arrangements.

■ undertake an Equality Impact Assessment ofthe proposed new pay and benefits package (re-

negotiating on any elements shown to be likelyto have an unacceptable adverse impact)

■ consult members fully on the proposed deal,including an individual ballot.

Key implementation issuesEquality Impact Assessment (EqIA)EqIA looks at proposals for new grading and paystructures and any changes to terms andconditions, ie possible future arrangements, whileequal pay audits look at the past and existingarrangements.

In the UK, the concept of EqIA was first appliedin Northern Ireland and it was then adopted bythe Commission for Racial Equality as a tool forpublic authorities to use in checking that theirpolicies and functions were not having adisproportionate, adverse and possibly unlawfulimpact on any racial group. The concept was thentaken up by the Equality Standard for LocalGovernment and expanded to cover all theequality strands of the standard.

The new NJC implementation agreement 2004states that local grading and pay reviews shouldinclude an equality impact assessment of proposedchanges to grading and pay and other conditions.In addition, Part 3.2.4 states that ‘…Indetermining any new working arrangementsrequired to deliver improvements authorities will…(ii) conduct an Equality Impact Assessmentconsistent with the NJC model that will be set outin Part 4’. As mentioned earlier, this requirementalso applies to proposals in regard to premiumrates of pay and remuneration for working non-standard working arrangements.

The 2005 NJC Part 4 guidance on Equality ImpactAssessment should be read alongside the guidance.Its principles apply equally to negotiations inScotland.

What is EqIA?

EqIA is a systematic method of assessing (andrecording) the likely differential impact of

Implementation

15073.doc 13/9/05 10:59 am Page 41

42


proposed policies, initiatives or changes to servicesand the council’s practices and procedures ondifferent groups in the community and theworkforce covered by the council’s equalitypolicies or statutory duties.

The aim is to find out whether any proposedchange (for example, to the grading and paystructure) might have a differential and adverseeffect on a particular group, and if so, to amendthe proposals to deal with it. This process helps toprotect the authority (and the union) fromimplementing changes which could be detrimentalto particular groups and possibly unlawful. It alsoshows that councils are being pro-active in puttingtheir equality and diversity policies to the test bychecking on what is happening in practice. In thecontext of the grading and pay review, problemswith current practices re terms and conditions ofemployment should be picked up by the equal payaudit.

It is important to appreciate that EqIA covers allequality strands, for example:

■ gender

■ race

■ disability

■ sexual orientation

■ religion or belief

■ age

■ main occupational groups

■ full-time staff

■ part-time staff

■ temporary employees

For some strands, the authority may have little orno monitoring data (for example on sexualorientation or religion). This can hamper theprocess but the authority can also consult staffand relevant organisations to gather qualitativeinformation to take into account.

In brief, the EqIA has three main stages. Inrelation to the local grading and pay reviews, theTU Side recommends that the process beconducted on a joint basis, in keeping with theprinciple of jointness which underpins the nationalsingle status agreements:

Stage 1 – scope of the assessment:

■ what are the aims and objectives of theproposal?

■ how does the proposed change fit in with theauthority’s objectives ? Does it support theauthority’s objectives on equality? Or if itsupports some other objective, is thiscompatible with its equality policies?

■ how does the proposed change fit in agreedobjectives on single status, including therequirements of the national agreements?

■ which group or groups are affected by thisproposal?

Stage 2: assessment of impact:

■ what information on the likely impact of theproposal is available from current data?

■ what are the views of key stakeholders(employees, unions, managers)?

■ how is it likely to affect the ‘target groups’ i.e.groups covered by the equality strands?

■ is there any evidence that this proposal willdisproportionately impact on any of the abovegroups?

Stage 3: decision and recommendation:

■ is the impact adverse?

■ if so, can the proposal be changed to removeany adverse impact? (Note: if it is potentiallyunlawful, it must be changed unless it isjustifiable)

■ can the negative consequences be counter-balanced by other measures?

■ if not, are there alternative proposals whichbetter or more safely meet the policy objective?

■ if not, is there an acceptable justification forcontinuing with the proposed change?

■ if yes, for what reasons?

■ agree and record the decision on the proposalwith justification if required

■ make arrangements for jointly monitoring andevaluating the agreed proposal (assuming thatemployees have voted for the package) and itsimpact as part of regular audits.

It will be seen that this process was originallydevised as a management exercise, with input from

15073.doc 13/9/05 10:59 am Page 42

43


unions and staff as ‘stakeholders’. As grading andpay reviews should be jointly conducted, EqIA –as part of that process – must be jointly carriedout. For the union side, the value of EqIA is thatit requires the employer to expose its proposals toa structured, equality-led analysis of their likelyeffects, so it may act as a brake on harmfulproposals and open up the negotiating agenda toconsideration of better alternatives. Unions shouldinsist that all proposals, alternatives and allegedjustifications are carefully scrutinised. There maybe an argument that EqIA will be too time-consuming and can be dispensed with. Asmentioned earlier, carrying out EqIA needs to bebuilt into the project plan for the local review. HRshould be gathering information for the equal payaudit and EqIA at an early stage.

Compensation for arrears (back pay)As mentioned earlier, compensation for past paydiscrimination can be awarded up to a maximumof six years (five years in Scotland) from the datethat proceedings were filed with the employmenttribunal. Following a successful challenge in thecourts to the two year time limit, English law waschanged in 2003, to increase the maximum periodfor the payment of arrears to six years.11

In negotiations concerning equal pay, particularlylocal grading and pay reviews, the trade union sideshould try to secure the maximum compensationfor everyone it considers has a potentially goodequal pay claim. This will be evident from theresults of the grading and pay review where jobevaluation has been used. Jobs which have scoredthe same or similarly, i.e. that have been shown tobe of equal value, can be compared against thepre-review remuneration for those jobs. Where, inthe past, women job holders have been paid lessthan male job holders for equal work they wouldhave a potentially good claim if the matter waspursued to the tribunal.12

Strictly speaking, men who have been under-paidrelative to other men doing equal work only havelegal entitlement to compensation if they can finda female comparator. However, in the interests offairness and in light of the potential for validclaims from men (who could compare themselveswith women doing equal work who receive

arrears), the trade union side should seek to securecompensation for all affected workers, regardlessof sex.

As its opening position, the union side should tryto secure six years arrears (five in Scotland), to benegotiated as a compensation package as part ofthe agreement on the local grading and pay review.By addressing past and future pay discrimination inthis way, the employer and the union are trying toresolve all outstanding equal pay issues withoutemployees or the unions having to resort tolitigation.

Factors that can be taken into account in assessingthe payment of arrears include: whether thewomen and men have been doing equal work forthe entire period of six years (five in Scotland) or ashorter period. Is there any information whichwould indicate that the value of the jobs beingcompared may have differed over the past six yearsto the extent that they were unequal for some ofthe period? If there is a lack of hard evidence onthis point, there will need to be a reasonablyrobust basis for deciding the position, in order toassure individual employees that back pay has beencalculated on a fair and legally sound basis.(Information gathered for the grading and payreview will be useful in this regard, including dataon individuals’ length of service, date ofappointment / promotion to post.)

A settlement on compensation can take intoaccount the risk, difficulties and delays involved inlitigation. It may also take into account the benefitof receiving compensation upon the signing of theagreement (as opposed to having to await theuncertain outcome of a tribunal claim). In thisregard, it should be noted that under the statutorydispute resolution procedures, some delay is builtinto going to the tribunal as the first step in that a(current) employee must lodge a grievance withthe employer and wait 28 days for a responsebefore she is entitled to submit a claim to theemployment tribunal (so she will lose at least 28days back pay at the outset).

A careful assessment will need to be made of anyshortfall permissible in the payment ofcompensation to take account of the disbenefitsof litigation. Further advice and clearance should

11 Equal Pay Act 1970 (Amendment) Regulations 2003. (The leading case that led to the change was Levez v T.H. Jennings (Harlow Pools) Ltd

[1999] IRLR 36 ECJ). 12

While the employer may concede equal pay on basic rates, he may argue there is a genuine material factor defence in relation to any other unequal

elements of the remuneration package. As these issues will need to be resolved in order to implement a new grading and pay structure, they should not

hamper finalising an agreement on compensation.

15073.doc 13/9/05 10:59 am Page 43

44


be sought from your union’s local or regionaloffice on any proposed deal.

The operative date for the payment ofcompensation is negotiable. It would be logical touse the date on which the new grading and paystructure takes effect. If this is over a phasedperiod, payment of compensation should at leastcommence on the earliest date on which the newstructure in introduced i.e. when employees moveacross to the new grades even if for some staffthis is to a transitional pay point or grade

It is not advisable on tactical or legal grounds toput the issue of compensation to one side until theend of the negotiations on the grading and payreview. Firstly, it may leave the union side ‘boxedin’ whereas if the issue is dealt with during thereview, it leaves both sides more options to workwith. Secondly, it may cause a prospective draftagreement to unravel (owing to the need for re-costings) or cause the employer to panic and try toinstigate or impose drastic cuts. Unions should beable to show that they have put the compensationissue on the agenda and have sought to secure thebest possible settlement for members over thenegotiations.

Union negotiators will need to make a judgementabout whether the amount of compensationoffered if less than six (five in Scotland) years isthe best that can be achieved by negotiation. Forthe reasons mentioned above, some element ofshortfall is likely to be acceptable. However, if theproposed deal on the grading and pay fails toaddress the issue of compensation, the unions willgenerally wish to support members with potentialgood equal pay claims.

It has been suggested that if the union is complicitin agreeing a deal which excludes the payment ofarrears for equal pay, it may be exposed to claims fornegligence from members with good claims andpossibly also enjoined with the employer to a sexdiscrimination claim. Although this is open todebate, local representatives need to be aware of thisargument and should seek advice at an early stage onhow best to deal with proposals from employers toexclude payment of arrears for equal pay.

Consulting with membersMembers must be kept well briefed ondevelopments during the job evaluation exerciseand throughout the negotiations on the gradingand pay review.

Before reaching any agreement the unions mustfully consult their members, comprehensively andcompetently. Branches need to plan and preparefor how this will be done. The plan needs to takeinto account how the branch will communicatewith members (particularly non-activists) over thenegotiations and the proposed agreement. It willalso need to address any weaknesses in branchorganisation, such as pockets of non-membershipand under-representation of significant groupssuch as part-time workers, ex-manual workers andlower APT&C grades. This will be needed to bebetter able to resist ‘divide and rule’ tactics by theemployer and to manage the situation where thereare likely to be members who are downgraded(often from well represented, vocal groups) andmembers who are upgraded (often from under-represented, less powerful groups).

Each union has its own consultative procedures. Ingeneral, every member must be given everyreasonable opportunity to vote in secret on theproposed agreement in a consultative ballot. Caremust be taken to include members who are offwork on long term sick leave; staff onmaternity/maternity support or career breaks;those on secondments; tele-workers and membersworking in isolation; and members requiringinformation in special formats to meet theirparticular needs (for example, large print, Braille,in different languages).

The unions should be striving to achieve themaximum legal entitlement to compensation and‘levelling up’ for all workers so that no one isdowngraded in the grading and pay review whowill require protection. Where this is not possibleand compromise becomes necessary, the unionsshould be able to demonstrate to members thattheir starting point was to press for the maximumpossible under legislation and in its bargainingproposals.

It is important that the union side keeps goodrecords of its proposals to the employer and the

15073.doc 13/9/05 10:59 am Page 44

45


employer’s responses over the period of thenegotiations. This information will be vital inexplaining to members why the final offer is thebest achievable by negotiation. The details of theoffer must be fully set out and explained tomembers, spelling out the pros and cons.

Some employers may want to close down thepossibility of any further claims from individuals,by inviting each individual employee to sign a‘COT3’ or compromise agreement.13 Memberswho are being asked to enter COT3 orcompromise agreements as part of any settlementmust be advised of the value of any potentialclaim that they might have and the differencebetween that and the sum agreed as part of anysettlement. They should also be advised of theirright to seek independent legal advice.

If a majority of members accept any newagreement and compensation in a consultativeballot, the union would be entitled not to pursueequal pay tribunal claims on behalf of dissatisfiedmembers who do not accept the outcome and/orwho refuse to sign a COT3 or compromiseagreement. These members retain their individuallegal right to pursue a claim – domestic law doesnot permit the union or employer to sign awaysuch rights. In these circumstances, if a dissatisfiedmember asks the union for legal assistance, theunion should advise the member to seekindependent legal advice. Care must also be takennot to victimise any dissatisfied employees forintending to pursue or taking a claim.

Employers cannot impose new arrangementswhich are to the detriment of certain groups evenwhere protection may have been agreed when theyfail to abide by their legal duty to consult theunion over plans to dismiss staff and re-employthem on less favourable terms. Failure to consultthe unions will result in councils having to meetcompensation bills which could be substantial inlarge authorities. At the time of writing,Leicestershire County Council was facing a £1.5 to£4.5 million compensation bill as a consequenceof an employment tribunal decision over failure toconsult (subject to appeal).

Approving draft local agreements Each of the unions has its own arrangements for

the region and/or head office to scrutinise andapprove draft local agreements on single status(including the new grading and pay structures) andcompensation before they go out to members forconsultation. The region and / or head office willcheck the draft agreement to ensure it complieswith union policy and avoids potential equal paypitfalls and potential claims from members againstthe union. The vetting process will also enablegood practice to be shared and ‘health warnings’on employers’ tactics to be made available to otherlocal negotiators.

Union representatives are encouraged to consultregional and head office officers, as appropriate, atan early stage where negotiations run into majordifficulty, for example, where the employer isindicating that it will impose a settlement; or whereinfluential members are indicating willingness toaccept a potentially discriminatory settlement.

Practical options for dealing withcommon scenariosThe national single status agreements were neverjust intended as a grading and pay structuremechanism. One of the aims of the negotiatorswas to develop a tool which would facilitate theremoval of outdated working practices linked tothe old pay structures and the introduction ofinnovative ways of working to meet modernservice requirements. To date, it has mostly beenemployers who have taken the initiative in thisregard, often as a means to cut costs. Branches arestrongly urged to bring positive proposals to thenegotiating table. The scenarios outlined below(based on real situations) demonstrate how thismight be done.

Example 1

Scenario: Even with the revised job evaluationguidance on policy development and advisoryresponsibilities, local authority A finds that socialservices policy jobs evaluate lower, so should begraded lower, than field social worker posts.Previously, policy postholders have usually beenrecruited from among senior social workers.

First reaction: blame the NJC job evaluationscheme for being flawed in its design and startthinking about creating market supplements.

13 A COT3 is the name of the form used by an ACAS conciliator in finalising a legally binding full and final settlement. A compromise

agreement achieves the same end. It requires a solicitor’s advice or it can be signed off with advice from a trade union official.

15073.doc 13/9/05 10:59 am Page 45

46


More considered reaction: Reflect on thecomparative evaluations and consider whether thefield social worker post is not genuinely moredemanding overall, because of the high directresponsibility for clients plus emotional andpossibly physical and working conditions demands.More fundamentally, consider also whether policyand practice development might benefit frominput from direct service providers.

Possible solutions: consider alternative policydevelopment mechanisms, which may be moreeffective, for example, one or two year fixed termsecondments to policy development work withsecondees remaining on their substantive grade(thus also providing personal developmentopportunities for the relevant individuals); creatingproject teams, with appropriate release from fieldduties, for policy development activities; changingthe recruitment policy for policy development jobsand recruiting at the evaluated grade rate.

Example 2

Scenario: street cleaning jobs, previously towardsthe bottom of the manual worker structure, butsubject in local authority B to an attendance-related bonus, evaluate at levels which result insomewhat higher basic pay, but not sufficient forconsolidation of all of the bonus.

First reaction: street cleansing manager claimsemployees will not turn up for work without theattendance bonus; manager and employees believethat it will not be possible to recruit new staff atthe new basic rate without bonus and thatexperienced employees will leave before theirprotection expires.

More considered reaction: manager and union repsconduct joint review of street cleaning services,carry out customer survey.

Possible solutions: consider extending role toinclude, for example, reporting street lightingfailures, or checking on vulnerable members of thecommunity, which would also have implicationsfor the evaluation and grading of the job.Introduce National/Scottish VocationalQualifications (NVQs/SVQs) to promote careerdevelopment and absence management scheme tomaintain attendance. Re-evaluate the developed

role before the end of the protection period.

Example 3

Scenario: home care jobs, subject to intensecompetition last time the compulsory competitivetendering contract came up for renewal, evaluatesignificantly higher than their current grade rate inlocal authorities C and D.

First reaction: social services managers and electedmembers in both authorities say that the servicewill have to be outsourced, and that this is all thefault of the NJC job evaluation scheme and theunions who supported it.

More considered reaction: managers in localauthority C reflect that turnover levels in homecare have been high and recruitment very difficultrecently, especially in the area where a new retaildevelopment opened last year; in local authority D,in a less prosperous part of the country, themanagers conduct a survey of private sectorresidential and home care wage rates in the areaand discover that there is a difference, but not asgreat as anticipated (perhaps because of theintroduction of the statutory minimum wage).

Possible solutions: in both authorities, implementthe new grade rates and discuss possibledevelopments with union representatives. Oneoption might be to introduce NVQ training andassessment for home care staff, together with alonger term career progression scheme withinhome care or for social services more generally, toimprove or maintain recruitment and retention.An internal pre-review of home care provision, inadvance of Best Value review, recognising,especially in local authority D, that Best Valuemight have meant tough decisions, even withoutsingle status and the NJC job evaluation schemecould be another option.

15073.doc 13/9/05 10:59 am Page 46

47


This appendix provides background informationon:

■ equal pay and sex discrimination legislation

■ legal issues – time limits; TUPE and time limits

■ pregnancy and maternity leave

■ other legislation that is relevant to local gradingand pay reviews – Race Relations Act 1976, –Race Relations (Amendment) Act 2000,Disability Discrimination Act 1995, DisabilityDiscrimination Act 2005, Data Protection Act1998, Part-Time (Prevention of LessFavourable Treatment) Regulations 2000,Fixed-Term Employees ((Prevention of LessFavourable Treatment) Regulations 2002, FairEmployment and Treatment (NorthernIreland) Order 1998

■ Equal Opportunities Commission model equalpay policy

■ the Equality Standard for local government.

Equal pay and sex discriminationlegislationIt should be emphasised that this appendix givesgeneral guidance only. When dealing with specificissues and/or individual cases, branches andofficers are advised to obtain legal advice inaccordance with the union’s protocol.

As equal pay and anti-discrimination law oftenchanges over short periods of time, it is veryimportant to ensure that you obtain the latestadvice on the most recent judgments, particularlyon appealed cases, and up-to-date information onnew or amended legislation.

What does the law say?The principle that a woman (or man) is entitled toequal pay for equal work14 is set out in EuropeanUnion (EU) and UK legislation (sometimes calleddomestic legislation).

Why is European Union legislationimportant?As a member of the European Union, the UKGovernment must ensure that domestic legislation

conforms to the requirements of EU ‘directives’(or legally binding instructions to member states).The courts in the UK must interpret domesticequal pay and anti-discrimination law in light ofEU law, as it is interpreted and set out in thedecisions of European Court of Justice (ECJ).

The principle of equal pay for equal work is setout in Article 141 of the Treaty of Amsterdam1999. Article 141 (which was Article 119 of theTreaty of Rome) requires member states of theEuropean Union to ensure ‘that the principle ofequal pay for male and female workers for equalwork or work of equal value is applied’.

Article 141 (2) states that ‘pay’ means:

‘the ordinary basic or minimum wage or salary andany other consideration, whether in cash or inkind, which the worker receives directly orindirectly from his employer’.

Because the meaning of ‘pay’ is much wider thanbasic pay, in carrying out local negotiations onsingle status, union representatives must be carefulto consider all aspects of remuneration, includingless obvious elements of ‘pay’ such as carallowances and (contractual) paid time off fortraining and development. (A more extensive list isset out below).

For the purposes of equal pay and sexdiscrimination legislation, occupational pensionsare also treated as pay.

The Equal Pay Directive of the Council of theEuropean Communities 197515 spelt out in moredetail what was required of Member States toapply Article 119 (now 141). It is nowincorporated within Article 141.

Article 1 of the Equal Pay Directive states:

‘The principle of equal pay for men and womenoutlined in Article 119…means, for the same workor for work to which equal value is attributed, theelimination of all discrimination on grounds ofsex with regard to all aspects and conditions ofremuneration’.

Appendix

14 ‘Equal pay for equal work’ is used in the Guide (as it is in the EOC Code of Practice on Equal Pay) as a shorthand term to cover the different

bases for equal pay claims: ‘like work’, ‘work rated as equivalent’ and work of ‘equal value’. However, in Article 141, the term ‘equal work’ isdistinguished from work of ‘equal value’. This distinction was later to force the UK Government to amend the Equal Pay Act 1970 in 1983, to allowspecifically for equal value claims.

15 Council Directive 75/117/EC on the approximation of the laws of the member states relating to the application of the principle of equal pay for

men and women.

15073.doc 13/9/05 10:59 am Page 47

48


Article 1 added: ‘In particular, where a jobclassification system is used for determining pay, itmust be based on the same criteria for both menand women and so drawn up as to exclude anydiscrimination on grounds of sex’.

For example, this means that job evaluationschemes must be non-discriminatory in the waythey value jobs done by predominantly one gender.

Overall, the intent of the Directive was to requiremember states to abolish any discriminationcontrary to the principle of equal pay arising fromtheir laws, regulations and administrativeprovisions and to take the measures necessary toensure the principle is applied.

Article 4 required member states to take ‘thenecessary measures to ensure that provisionsappearing in collective agreements, wage scales,wage agreements, or individual contracts ofemployment which are contrary to the principle ofequal pay shall be, or may be declared, null andvoid or may be amended’. The implications ofArticle 4 are discussed later – the important pointis that the principle of equal pay (and equality) ismore powerful, in legal terms, than the principle offree collective bargaining.

What does the Equal Pay Act 1970 say? The Equal Pay Act applies in England, Wales andScotland. Northern Ireland has its own equivalentequal pay and sex discrimination legislation.

The Equal Pay Act 1970 provides for the right toequal pay for equal work. Although a man canmake a claim for equal pay, generally unequal payaffects women, so the guide assumes that thecomplainant (or “claimant”16 in employmenttribunal proceedings) is a woman, and the personshe is comparing her pay with (the comparator) isa man. The Act cannot be used to makecomparisons between workers of the same sex.

The employer can only pay a man more than awoman for doing equal work if there is a genuineand material reason for doing so which is notrelated to sex, that is, the reason must not betainted by sex discrimination. (A later section dealswith the defences available to an employer).

The Equal Pay Act requires men and women inthe same employment to be treated equally. If thewoman (or man) does not have an equality clausein her contract of employment, the Act inserts thisclause, so the contract of employment is deemedto include it.

If she is doing equal work with a man in the sameemployment, the Act entitles her to equality in payand other contractual terms and conditions ofemployment. This means that if she succeeds inher claim (through negotiation or through taking acase to the employment tribunal):

■ her pay, including any occupational pensionrights, must be raised to that of her malecomparator

■ any beneficial term in the man’s contract butnot in hers must be inserted into her contract

■ any term in her contract that is less favourablethan the same term in the man’s contract mustbe made as good as it is in his contract.

In addition, she is entitled to compensation in theform of back pay (for arrears of pay), if the claimis about pay, and/or damages, if the complaint isabout some other contractual term. It is veryimportant in negotiating new grading and paystructures that women who gain equal pay as aresult also receive compensation for having beenpaid unequally in the past. If this issue is not dealtwith properly, a woman could still pursue a claim.

Because a woman can compare any term in hercontract with that of her comparator, if her claimis about pay, each element of the pay package hasto be looked at separately. So, for example, awoman whose basic rate of pay was lower than hermale comparator could make a claim even thoughher total pay package was more favourable thanhis. (This was established by the House of Lordsjudgment in the case Hayward v Cammell LairdShipbuilders Limited [1988] IRLR 257 HL.)17 In amore recent case, the Employment AppealTribunal has ruled it is not possible to treat ‘sub-components’ of basic pay as separate terms for thepurposes of making the comparison.18 Whatconstitutes ‘basic pay’ will depend on the facts ineach case.

16 The term ‘the applicant’ has been replaced by ‘the claimant’ in all employment tribunal proceedings including equal pay claims. The term ‘judgment’ is

now used to describe tribunal decisions as well as rulings of the Employment Appeal Tribunal, Court of Appeal and House of Lords.17

Employment tribunal decisions do not set legal precedents. They can only be appealed on points of law to the EAT. The higher courts can overturnjudgments of the lower courts. So judgments of the EAT are binding on tribunals; judgments of the Court of Appeal are binding on the EAT andETs. (A parallel system operates in Scotland). (In Northern Ireland, there is no EAT). Judgments of the House of Lords bind all the lower UKcourts. Ultimate legal authority in employment cases governed by EU law rests with the ECJ.18

Redcar and Cleveland Borough Council and anor v Degnan and ors 0321/04 EAT

15073.doc 13/9/05 10:59 am Page 48

49


Who does the Equal Pay Act apply to? The Act applies to all employers regardless oftheir size and whether they are in the public,private or not-for-profit sector.

The Act covers:

■ all ‘employees’ (including apprentices) whetheron full-time, part-time, casual or temporarycontracts of employment, regardless of lengthof service and

■ other ‘workers’ (e.g. self employed) whosecontracts require personal performance of thework.

What is ‘pay’?The Equal Pay Act covers all aspects of the payand benefits package including:

■ Basic pay

■ Non-discretionary bonuses (as defined earlier)

■ Overtime rates and allowances

■ Payments for other non-standard workingarrangements

■ Performance related pay

■ Sick pay

■ Holiday pay

■ Car allowances

■ Hours of work

■ Severance and redundancy pay

■ Access to and benefits under pension schemes

■ Fringe benefits such as interest-free loans,travel concessions

Maternity leave is ‘pay’ within the meaning ofArticle 141, however the ECJ has held that womentaking maternity leave are in a special ‘protected’position, so their situation is not comparable withthat of men or women actually at work. Thereforethey are not entitled under Article 141 to full payduring maternity leave, although they must receivepay rises awarded before or during maternity leave.(Gillespie v Northern Health and Social ServicesBoard [1996] IRLR 214 ECJ). See the section inthe appendix on maternity leave for additionalinformation.

Equal pay for equal work The term ‘equal pay for equal work’ is used asshorthand for the different bases for a claim under

the Equal Pay Act:

■ ‘like work’ – the woman and her comparatorare doing the same or broadly similar work

■ ‘work rated as equivalent’ – the work of thewoman and comparator is different but is ratedunder a job evaluation scheme as beingequivalent

■ ‘work of equal value’ – the work of the womanand comparator is different but it is of equalvalue in terms of demands such as skill, effortand decision making.

If the woman and man are doing like work, orwork rated as equivalent or work of equal value,then she is entitled to equal pay (subject to theemployer not having a lawful defence).

What is ‘like work’?‘Like work’ means the same or broadly similarwork; it does not depend on the jobs having thesame job titles – they can be different, yet thework could still be broadly similar. Any differencesbetween the jobs are not taken into account if theyare not of practical importance in relation to termsand conditions. The EOC Code gives the exampleof a woman cook preparing lunches for directorsand a male chef cooking breakfast, lunch and teafor employees.

What is ‘work rated as equivalent’?‘Work rated as equivalent’ means that the jobs ofthe man and woman have been assessed under thesame job evaluation scheme as being of equalvalue, in terms of the demands made on theworker under various headings or factors such aseffort, skill, decision making. In practice, thismeans the jobs have scored the same number ofpoints or they fall into the same grade becausethey have similar job evaluation scores. Suchclaims could arise in a local authority where a manand woman score the same or around the same jobevaluation points but her job is assimilated to alower grade than his job.

This highlights the importance of branches andregional officers being centrally involved in the jobevaluation process and for the negotiators toobtain a list of the final points scores for theevaluated jobs, since they could provide a basis ofwork rated as equivalent claims if the employer

15073.doc 13/9/05 10:59 am Page 49

50


fails to reflect the job evaluation outcomes in thenew grading and pay structure, or refuses toproceed once the evaluation exercise has beencompleted. (The employer cannot lawfullywithhold this information from the recognisedunion where it is sought for collective bargainingpurposes or for pursuing equal pay claims). If anemployer wants to abandon using the NJC JESonce the benchmark sample of jobs has beenevaluated (because, for instance, the results suggestthe need for significant upgradings) and intends toor does use another scheme instead, there may alsobe scope for work rated as equivalent claims, forexample, where there was unjustifiable delay inusing an alternative scheme.

Following an equal value-based job evaluationexercise within an authority, care must be taken indesigning and implementing the new grading andpay structure to avoid the risk of work rated asequivalent claims. (Reference to ‘equal value-based’job evaluation means that the job evaluationscheme has been designed to measure the worthor value of different jobs, based on an analyticaland non-discriminatory assessment of thedemands made by those jobs).

The other situation in which there might be a‘work rated as equivalent’ claim is where thewomen’s job and man’s job have been evaluatedand graded the same with the same basic pay, butwhere other aspects of the pay package areunequal. This is how claims arise in relation tomale ex-manual workers whose jobs wereevaluated under the 1987 manual worker jobevaluation and received bonus payments inaddition to basic pay, who are the comparators forfemale ex-manual workers whose jobs evaluatedsimilarly received the same basic pay but no bonus.

What is ‘work of equal value’?‘Work of equal value’ means the jobs done by thewoman and her comparator are different, but canbe assessed as being of equal worth or value, bycomparing the job under headings such as skill,effort and decision-making. Usually, there will notbe a job evaluation scheme in place. (Or it may bethat the claimant’s and comparator’s jobs havebeen evaluated under different job evaluationschemes). Examples of successful ‘equal value’

cases include comparisons between speechtherapists and clinical psychologists; cooks andcarpenters; and nursery nurses and architectassistants

The unions’ clear preference is to resolve equal payissues in the context of single status throughnegotiation and agreement. Pursuing cases to thetribunal carries risks associated with delay anduncertainty as to the outcome. For the union andthe employer, dealing with individual equal payclaims is resource-intensive, laborious and time-consuming. However, should it prove necessary,the unions will be prepared take cases on behalf ofmembers. Where this happens, unionrepresentatives - lay and full-time officers - mustabide by the protocols applying within their unionfor taking tribunal cases.

Who can be a comparator?The claimant must have a comparator – a personof the opposite gender with whom she comparesher pay.

For an equal pay claim, the comparator can be:

■ someone (of the opposite gender) with whomthe claimant is working or has worked (in thesame employment) at the present time or in thepast

■ her predecessor, however long ago he did thejob, or her successor.

The woman can name more than one comparator.He cannot be ‘hypothetical’ for the purposes ofthe Equal Pay Act – the comparator must be a realperson

If her claim is successful, her pay is raised to thesame level as his – there is not a reduction in thecomparator’s pay and benefits

What does ‘same employment’ mean?A woman can claim equal pay with a man working:

■ for the same employer at the same workplace

■ for the same employer but at a differentworkplace, where common terms andconditions of employment apply. For example,the claimant and comparator work for the samecouncil covered by the same collectiveagreement (although their individual terms andconditions are not identical) at different sites

15073.doc 13/9/05 10:59 am Page 50

51


(she works in the office – he works from adepot)

■ for an associated employer, for example, sheworks for the parent company – he works for asubsidiary).

The second type of ‘same employment’ issignificant in local government because unequalpay is likely to be found mostly among men andwomen doing different jobs in differentworkplaces within the authority. The landmarkcase on the meaning of ‘common terms andconditions’ was Leverton v Clwyd County Council[1989] IRLR 28 HL, in which the House of Lordsallowed a nursery nurse to bring an equal valueclaim comparing her work with male clericalworkers working in different establishments wheretheir terms and conditions derived from the samecollective agreement, even though there weredifferences between their hours of work andannual leave.19 A subsequent House of Lords case,British Coal Corporation v Smith [1996] IRLR 404HL, confirmed that ‘common terms andconditions of employment’ means terms andconditions which are substantially comparable on abroad basis - not the same terms and conditionswith minor differences.

What about the meaning of ‘sameemployment’ under European law?Privatisation, new forms of joint working withother public sector bodies and differentapproaches to grading and pay reviews acrosscouncils raise the question of whether equal paycomparisons can be made across councils orprivate contractors and in-house staff.

Some (limited) scope exists for cross-employercomparisons where the terms and conditions ofthe claimant and her comparator derive from a“single source” i.e. from legislation or a commoncollective agreement or from commonmanagement of a corporate group. However, insituations where the claimant and comparator arein the same service (but with different employersor under different contracts of employment)recent case law is unhelpful and branches andofficers would need to take legal advice beforeattempting to make such comparisons in tribunalcases.

The ECJ has ruled that Article 119 (now 141)allows for a broader interpretation of ‘sameemployment’ in that it requires equal pay for ‘equalwork which is carried out in the sameestablishment or service’ (in Defrenne (No 2)[1976] ECR 455). While this enables a broadercomparison than was allowed by the Equal PayAct, by allowing equal pay comparisons acrossemployers in the same service, it is subject to strictlimitations.

In Scullard v Knowles & Southern RegionalCouncil for Education and Training [1996] IRLR344, the EAT permitted Ms Scullard, a unitmanager employed by a Regional Council, to nameas her comparators male unit managers employedby other such bodies, all of which wereindependent of the Secretary of State forEmployment but funded by the Department ofEmployment. This case, in particular, raised theprospect that ‘same employment’ claims mightserve to curb gender-based differences in pay forequal work arising from different outcomes oflocal grading and pay reviews in differentauthorities, though this possibility currently seemsremote as explained later.

In South Ayrshire Council v Morton [2002] IRLS256 CS, the Court of Session in Scotland ruledthat a female head teacher employed by a localeducation authority in Scotland was entitled tobring an equal pay claim relying on Article 141 tocompare her pay with that of a male head teacheremployed by a different local education authorityin Scotland. The Court decided the claimant andcomparator were in the ‘same service’ as they werein the same branch of the public service and weresubject to a uniform system of national pay andconditions set by a statutory body whose decisionis binding on their employers.

The ‘same service’ argument was deployed byUNISON to attempt to compare outsourced andin-house staff for equal pay purposes. Lawrence &others v Regent Office Care Ltd & others [1999]IRLR 148 EAT eventually went to the ECJ, wherethe claimants lost. The women workers - schoolmeals staff - were transferred from NorthYorkshire County Council to a private contractor.They ended up working on less favourable terms

19 The claim subsequently failed because it was held that the difference in the claimants’ and comparators’ annual salaries was due to and could

be explained by the difference in the hours they worked in the course of a year and had nothing to do with the difference in sex.

15073.doc 13/9/05 10:59 am Page 51

52


and conditions than men still employed by theCouncil whose jobs had been ‘rated as equivalent’in value to their jobs by the local governmentManual Workers’ job evaluation scheme. Theunion argued that even though the women wereno longer working for the council but for adifferent employer, they were entitled to equal paybecause they were still working in the same service– the provision of school meals.

The ECJ held that where differences in pay cannotbe attributed to a single source, equal pay claimswill not be in scope of Article 141. To put it moresimply, in the words of the original tribunal’sdecision, ‘the person who discriminates has to bein control both of the women’s wages and thecomparator’s wages’. In this case, the employersargued successfully that there must be a commonsource from which the terms and conditions ofboth the claimant and comparator derive (as whendifferent employers are required to apply the samecollective agreement, or where terms andconditions have been laid down by statute or aregulation).

Furthermore, it was argued that unless thedifference in pay can be traced to a single source,the employer who is accused of sex discrimination(because he pays women workers less than themale comparator’s employer) is not in a position toexplain the difference or to explain why thatdifference is objectively justified. The Advocate-General’s opinion (adopted by the ECJ) put it inthis way: ‘…Article 141 is addressed to those whomay be held responsible for [the pay difference i.e.]the legislature, the parties to a collective worksagreement and the management of a corporategroup…On the other hand, if differences in payarise [where] respective employers are separatelyresponsible for the terms and conditions …withintheir own undertaking or establishment, theycannot possibly be held individually accountablefor any differences in the terms and conditions…between those undertakings’.

Even if, as in local government, the women’s andthe comparators’ employers were party to thenational agreement, grading and pay would bedetermined by local collective agreements ratherthan a ‘single source’, suggesting that claims across

authorities under Article 141 would be ruled out.The situation might be different if the claim forequal pay was in relation to a contractual termderived from Part 2 of the national agreement, asit is binding on all NJC authorities. However, theECJ judgment in Lawrence does appear to rule outcomparisons between authorities that have optedout of national agreements and NJC authorities;and between local authorities and contractors.(However, this should not prevent brancheslodging claims as a protective measure or as adeterrent to outsourcing prior to an actualtransfer)

In Allonby v Accrington & Rossendale Collegeand Others [2004] IRLR 224 ECJ, the ECJ ruledthat a lecturer employed through an agency couldnot claim equal pay with lecturers employeddirectly by the college. This case dealt with thequestion: could a woman and a man, working atthe same establishment, but with differentemployers, be regarded as working in ‘the sameemployment’? Ms Allonby had been employedoriginally as a part-time lecturer on a series ofshort term contracts. As a cost-cutting measure,her contract was not renewed and she was re-engaged as a sub-contractor of an agency, as aself-employed person. Her fee and some otherbenefits were then reduced compared with directlyemployed lecturers. The fact that her fee wasinfluenced by the amount the college paid theagency was not held to meet the ‘single source’requirement – it was ‘not a sufficient basis forconcluding that the college and ELS [the agency]constitute a single source to which can beattributed the differences identified in MsAllonby’s conditions of pay and those of the maleworker paid by the college’.

In reinforcing the Lawrence judgment, the ECJseems to be shying away from the far-reachingeconomic consequences of allowing cross-employer comparisons in the similar (and oftenprivatised) services or industries as it could be seenas going beyond the interference with the freemarket as is currently permitted in EU law. TheAllonby judgment appears to limit the scope forsuccessful equal pay claims within an authority,where a contractor’s employee (or an agency

15073.doc 13/9/05 10:59 am Page 52

53


worker) is being paid less than a directly employedworker (of the opposite sex) for equal work.

In Robertson & others v Department forEnvironment, Food and Rural Affairs (2005EWCA Civ 138) the Court of Appeal upheld ajudgment of the EAT that a group of male civilservants were not entitled to compare their paywith women civil servants working in anothergovernment department. Technically, they have thesame employer (the Crown), but pay negotiation isdelegated by the Crown to each department oragency. The employment tribunal had decided thatthe Treasury had material control over the termsand conditions to such a degree that it couldproperly be regarded as being a ‘single source’.The EAT and the Court of Appeal disagreed. TheCourt held that working for the same employer isnot sufficient to establish common employmentfor the purposes of an Article 141 claim. Neitherthe Treasury nor the Cabinet Office was involvedin negotiations within different departments andthere was no coordination between the differentsets of negotiation. Therefore the Crown couldnot be said to be the body which is responsible forthe inequality and which could restore equaltreatment – thus it was not permissible to usecomparators from different governmentdepartments for the purposes of an Equal Pay Actor Article 141 claim.20

The Lawrence, Allonby and Robertson judgmentson the ‘same employment’ issue are a setbackbecause they will inhibit the use of Article 141claims to challenge gender-based pay inequalityacross authorities and between contracted-out andin-house staff.

Even if the door was open wide to such claims,there would be difficulties for unions in runningcases where, potentially, members would bechallenging the contractual outcomes of collectiveagreements negotiated by different branches ofthe same union or by different trade union sides.Any subsequent unravelling of agreements couldalso cause difficulties with members who hadvoted for the settlement.

The employer’s defences to an equalpay claimWhat is the ‘no reasonable grounds’defence?Until 1 October 2004, a tribunal could strike outan equal value claim where it was satisfied therewere ‘no reasonable grounds’ to determine that thework of the claimant and her comparator were ofequal value. The ‘no reasonable grounds’ defencewas removed by the Equal Pay Act 1970(Amendment) Regulations 2004. The tribunal hasother powers to deal with claims which are withoutmerit and there have been concerns that the ‘noreasonable grounds’ defence put an unnecessaryobstacle in the way of valid claims.

Can using a job evaluation scheme be adefence against an equal pay claim?A tribunal will strike out an equal value claimwhere the claimant’s job and the comparator’s jobhave been evaluated by an analytical job evaluationstudy and given different values, i.e. where the jobshave been rated as unequal.

To enable this defence to be run, the jobevaluation study or scheme must be ‘analytical’ i.e.the jobs are broken down into components orfactors and scores are awarded for each factor. Thefinal total gives an overall rank order of scores. Anon-analytical scheme does not provide a defenceagainst an equal value claim. (The EOC GuidanceNotes for the Equal Pay Review Kit and theNational Job Evaluation Technical Working Groupprovide further information on acceptablemethods of evaluating jobs to comply with theEqual Pay Act 1970 in this regard.)

The ‘job evaluation defence’ in the Equal Pay Act1970 has attracted employers to carry out jobevaluation in order to protect themselves againstequal value claims. A tribunal is obliged to rule outa claim if the jobs have been rated as unequal,unless the tribunal has reasonable grounds tosuspect that the evaluation is itself based on asystem which discriminates on the grounds of sexor (since 1 October 2004) if it is ‘otherwiseunsuitable to be relied upon’.

In the past, it has proved very difficult to challengeproprietary job evaluation schemes on the grounds

20 At the time of writing, a petition to appeal before the House of Lords had been lodged.

15073.doc 13/9/05 10:59 am Page 53

54


that they may be indirectly discriminatory or sex-biased to such a degree that they are unsound orwould fall foul of equal pay law; although someelements of job evaluation schemes have beenmodified following criticisms by the tribunal orconcerns expressed about their suitability on thepart of unions. In the absence of case law, at thetime of writing, it is difficult to assess what impactthe new route for challenging job evaluationschemes may have. It might be possible tochallenge a job evaluation scheme as ‘unsuitable tobe relied upon’ if it failed to meet key criteria setout in EOC Guidance Note No. 4: Job EvaluationSchemes Free of Sex Bias. For example, it couldbe argued that a job evaluation scheme designedspecifically for ‘white collar’ employees would beunsuitable to cover manual as well as APT&C jobsbecause the factors do not cover all the importantjob demands. This may apply to existing schemesthat are amended to be able to deal with formermanual jobs for example if the amendments fail toaccount properly for the demands of the manualjobs and under-value features of those jobsrelative to ‘white collar’ jobs.

What if the employer wants to use twojob evaluation schemes?Where two schemes are used to cover employeesin scope of the Green Book, there is an increasedrisk of an equal pay or sex discriminationchallenge. The ‘danger zone’ exists when the cut-off point on the spinal column between the twoschemes results in jobs predominantly being doneby women in a lower grade, or in an overlappinggrade on lower pay, where the women are able toshow that their jobs are of equal value to higherpaid jobs evaluated under another scheme. Inthese circumstances, the job evaluation defence isnot available to the employer where the claimantand comparator’s jobs have been evaluated underdifferent schemes. Another possible scenario isthat by acting to exclude predominantly women’sjobs from the scope of a job evaluation schemethat would have put their jobs in a higher gradeoccupied mainly by men, the employer hasindirectly discriminated against women.21 Providedit was accepted by the tribunal that this was primafacie sex discrimination, the employer would haveto meet the test of objective justification.

To avoid destabilising equal pay or sexdiscrimination claims, and in the interests offairness (in the sense of all the jobs being treatedthe same way for evaluation purposes), branchesshould resist the use of two schemes for jobs inscope of the national agreement, particularlywhere the employer wants to set a cut-off pointfor the NJC JES at the mid-to-upper end of thePrincipal Officer grades or lower. 22

If two job evaluation schemes have been used, itdoes not automatically follow that the resulting payand grading structure will fall foul of equal payrequirements. It may be that a better and faireroutcome could have been achieved using just onescheme, but it should be remembered that theEqual Pay Act 1970 cannot be used simply to get abetter outcome or the best outcome for women(or men) from a grading and pay review wherethere is no gender-based pay inequality. This noteof caution applies generally to the outcomes ofpay and grading reviews - the proposed newstructure may be seen as unfair or lessadvantageous than the unions’ preferred option,but if the job evaluation scheme/s used or theresulting structure are not unlawful, the Equal PayAct and the Sex Discrimination Act do not assist.

What is the genuine material factordefence?Where an employment tribunal finds that there is adifference in pay or terms between a woman andman doing equal work, it will then ask whether thedifference is due to sex discrimination or someother factor23 that does not amount to sexdiscrimination. An employer can pay a man morethan a woman doing equal work if the factor thataccounts for the difference is free from sexdiscrimination. This is known as the genuinematerial factor defence (or GMF defence).

In some cases, a tribunal might proceed toconsider this defence first, proceeding on theassumption that the work done is equal althoughthat question has not actually been determined.This is most likely where cases of equal value arebeing pursued that involve a reference to anindependent expert appointed by the tribunal.Proceeding to consider the GMF defence as apreliminary matter may ensure that there is not

21 Further technical advice on the use of two JE schemes is available from the national trade unions. .

22 For more information and examples of jobs where this problem arises, see UNISON circular ULG/92/2004

23 ‘Factor’ is used here in its general sense, not its JE meaning.

15073.doc 13/9/05 10:59 am Page 54

55


undue delay in resolving the issues in a particularcase.

Once a woman has proved she is doing equal workbut is being paid or treated less favourably, theburden passes to the employer to demonstrate anexplanation for the variation between her contractof employment and his that is not tainted withsex.

The courts have set out the requirements of theGMF defence as follows:

■ the reason or explanation for the differencemust be genuine i.e. not a sham or pretence

■ the less favourable treatment is due to thisreason (not some other reason)

■ the factor relied upon must be the cause of thedisparity between her pay and his; and it mustbe ‘material’ i.e. a significant and relevant factorin explaining the difference

■ the reason is not the difference of sex (directlyor indirectly)

■ the factor must be a ‘material difference’ (in alike work or work rated as equivalent case). Soa short term difference in pay while phasing ina new grading and pay structure might not beregarded as a material difference.

In a case where a woman is claiming that the twojobs are of equal value and that her job is done bya much higher proportion of women than thecomparator’s job, a prima facie (‘on the face of it’)case of indirect sex discrimination will have beenmade out where she produces evidence that thereis a significant disparate (adverse) impact onwomen. If the jobs are found to be of equal value,the employer will have to provide ‘objectivejustification’ for the pay difference between thetwo kinds of jobs.

What is ‘prima facie sexdiscrimination’? In the context of Single Status, it is imperative thatthe proposed new grading and pay structure ischecked to ensure that there is no prima facie sexdiscrimination, by checking that men and womendoing equal work have been placed in the samegrade and/or are receiving the same rate of pay.

Prima facie discrimination exists where, on the

face of it, there is indirect sex discriminationoccurring.

‘Indirect discrimination’ is defined by the SexDiscrimination Act 1975 (SDA). It occurs if anemployer:

‘applies to her [the worker] a provision, criterion,or practice which he applies or would apply equallyto a man, but –

(i) which is such that it would be to the detrimentof a considerably larger proportion of womenthan of men, and

(ii) which he cannot show to be justifiedirrespective of the sex of the person to whom it isapplied, and

(iii) which is to her detriment’. (SDA Part I section1(2) (b) )24

In checking for indirect sex discrimination, thequestions to ask are: do the statistics indicate anyadverse impact on women doing equal work withmen, that is, are substantially more women thanmen in the disadvantaged group? What is thereason for the pay disparity? If so, can thisposition be rectified by changing the gradeboundaries or pay line? Is it temporary in order tophase in the new structure? If not, is it objectivelyjustifiable?

What does ‘objectively justifiable’ mean? The test for objective justification has been held torequire the employer to show that:

■ the purpose of the provision or practice(causing the difference) is to meet a realbusiness need

■ the provision or practice is appropriate andnecessary as a means of meeting that need.25

The ‘business need’ must be real (not made up)and demonstrable – although it can be ajustification that did not figure in the employer’sdecision making processes at the time, i.e. ‘afterthe event’ arguments are permissible. The measuretaken which gives rise to an adverse impact onwomen must be fitting for the purpose – it mustnot be a sledge hammer to crack a nut, forexample, that results in more adverse impact thanis unavoidable to meet the business need. The test

24 As a consequence of the requirement to amend the SDA 1975 to implement the revised Equal Treatment Directive 2002/73, the definition

of indirect discrimination will be changed, with effect from 1 October 2005. The amended definition will bring the SDA into line with theprovisions on indirect discrimination in employment in regard to race, religion or belief and sexual orientation. Further advice on the changeswill be issued by the unions when the regulations amending the SDA 1975 are finalised.25

Bilka-Kaufhaus GmbH v Weber von Hartz [1986] IRLR 317 ECJ.

15073.doc 13/9/05 10:59 am Page 55

56


itself is prone to interpretation by the courts. Forexample, the Court of Appeal held in Cadman vHealth and Safety Executive [2004] IRLR 971 CAthat the test is whether the means used are‘reasonably necessary. In other words, it does notrequire the employer to establish that the measurecomplained of was necessary in the sense of beingthe only course open to him.

The House of Lords has held that if the employerproves the reason for the difference in pay is notthe difference of sex, it is not obliged toobjectively justify the pay difference. In otherwords, if the employer proves the absence of sexdiscrimination, it does not have to also prove a‘good’ reason for the pay disparity. (GlasgowCorporation v Marshall [2000] IRLR 272 HL.)

The ECJ has ruled that normally the burden ofproving the existence of sex discrimination in paylies with the worker. The onus shifts to theemployer to prove the difference is objectivelyjustified once:

■ the employee has shown that the measure ‘hasin practice an adverse impact on substantiallymore members of one or other sex’; or

■ where a pay system lacks transparency (i.e.where it is not possible for an employee toknow how her or his pay package has beenmade up and what each of its elementscomprises), the employee must establish ‘inrelation to a relatively large number ofemployees, that the average pay for women isless than that for men’; or

■ the employee must establish a prima facie caseof sex discrimination, on the basis of statisticswhich are ‘valid and appear to be significant’.

In the latter case, the ECJ held in Enderby vFrenchay Health Authority [1993] IRLR 591 that itis for the national court (including the tribunals) toassess whether it may take into account thestatistics produced in evidence, ‘that is…whetherthey cover enough individuals, whether theyillustrate purely fortuitous or short termphenomena, and whether, in general, they appearto be significant’. In Enderby, the ECJ found thatNHS speech therapists were doing work of equalvalue with hospital pharmacists and that‘significant statistics’ disclosed an ‘appreciable

difference’ between the two jobs, ‘one of which iscarried out almost exclusively by women (speechtherapy) and the other predominantly by men’.

In Home Office v Bailey and ors [2005] EWCACiv. 327 (renamed Clemens and Pollack v HomeOffice) the claimants were women higher executiveofficers (HEO’s) in the prison service and theircomparators were prison governors and principalofficers. It was accepted that they were employedon work rated as equivalent by a job evaluationscheme, but the employer argued (as the materialfactor defence) that they were in different gradesowing to historically different collective bargainingarrangements. The lower grade comprised men andwomen (including the claimants) in approximatelyequal numbers, while the higher grade (thecomparator group) was predominantly male.

Using the approach set out in the indirect sexdiscrimination case of Seymour-Smith,26 theclaimants identified a pool for comparison: allHEO’s and the comparator group. It was thenshown that the proportion of women within thepool who were disadvantaged was much higherthan the proportion of men who weredisadvantaged. This established a prima facie caseof indirect sex discrimination. The Court ofAppeal held that this statistical approach waspermissible in determining whether there wasprima facie discrimination (provided the tribunal issatisfied as to the validity of the statistics and theappropriateness of their use). In this case, thepresence of a significant number of men in thedisadvantaged group did not defeat the argumentthat there was prima facie discrimination requiringjustification by the employer.

Possible objective justifications for differences inpay could include, for example:-

■ reasonable transitional personal pay protectionand/or phasing of equal pay levels

■ differences in working patterns orarrangements (e.g. shift work premia, unsocialhours payments, overtime)

■ differences in performance or productivity

■ differences in length of experience, forexample, on a traditional incremental pay scale(provided it was not an unduly lengthy scale).

26 R. v Secretary of State for Employment ex parte Seymour-Smith and anor. ECJ 1999 ICR 447

15073.doc 13/9/05 10:59 am Page 56

57


However, it is important to note that such jobfeatures will only provide an objective justificationfor differences in pay if they are applied to allthose who meet the relevant criteria, which mustbe non-discriminatory in design andimplementation.

Cost as a defence to an equal pay claimBranches should be aware that there is nothing tostop an employer arguing that financial constraintsexplain or justify a pay disparity. And while it isclear from ECJ judgments that member states andregional governments cannot rely on budgetaryconsiderations alone to justify indirectlydiscriminatory pay structures,27 the position is notso clear cut for private respondents. The tribunalsmay attempt to do a balancing act betweenrectifying gender inequality on the one hand andaccommodating market principles on the other, bytaking financial constraints into account inconsidering the test of objective justification, forexample. For negotiating purposes, branchesshould argue that budgetary considerations alonecannot justify pay inequality, on the basis thatcouncils are public authorities (and emanations ofthe state) on whom the courts have bestowedhigher standards for complying with equalitylegislation.

However, branches need to be alert to thestrategies that employers are likely to adopt intaking into account the cost of compensation aspart of the overall settlement. It may lead someemployers to reduce their offer on protection as atrade-off; to ‘lower the pay-line’ for some or allgrades; or to attack Part 3 terms and conditions, orall of the above. Branches will need to beprepared to challenge these types of proposals innegotiations, for example, by insisting on equalityimpact assessments of proposals to test for anyadverse impact on women (or men), part-time andtemporary employees, different ethnic groups anddisabled staff. Such proposals are also likely to pitthe interests of different groups of membersagainst each other. In these circumstances,branches must ensure that all members have accessto information about the progress of negotiationsand make efforts to build organisation within thebranch so that a wide cross section of members

can participate in the branch’s decision makingstructures.

Equal pay awards If a woman succeeds in her equal pay claim, she isentitled to:

■ an order from the employment tribunaldeclaring her rights

■ equalisation of contractual terms for the future(if she is still in employment)

■ compensation consisting of arrears of pay (ifthe claim is about pay) and / or damages (ifthe complaint is about some other contractualterm)

■ in addition, the tribunal may award interest onthe award of compensation.

The very important issue of compensation forarrears (sometimes called ‘back pay’) for memberswho have been paid unequally in the past is dealtwith in the section on implementation in thisguide. However, it should be emphasised that theissue of payment of arrears will have to be put onthe negotiating agenda at an early stage – soalthough it is covered in the guide in theimplementation section, it should not be treated asan issue that can be left until near the end of thelocal review.

Arrears of pay can be awarded up to a maximumof six years (five years in Scotland) from the datethat proceedings were filed with the employmenttribunal. English law was changed in 2003, toincrease the maximum period for the payment ofarrears from two to six years.28 (These time scalesderive from English and Scottish civil law (ofcontract).

What could happen if a collectiveagreement is discriminatory?Branches and officers need to be aware of theserious consequences of signing up to collectiveagreements which perpetuate discriminationand/or pay inequality; or introduce new forms ofit, even inadvertently. If, for example, a key termor terms in an agreement on a new grading andpay structure were held to be discriminatory,striking out by the tribunal could cause the wholeagreement to unravel if not collapse, forcing

27 De Weerd Case C – 343/92 [1994] ECR I-571; Kutz-Bauer v Freie und Hansestadt Hamburg [2003] IRLR 368 ECJ; Jørgensen v

Foreningen af Speciallaeger [2000] IRLR 726 ECJ; Steinicke v Bundesanstalt für Arbeit C-77/02 [2003] IRLR 892 ECJ

28 Equal Pay Act 1970 (Amendment) Regulations 2003

15073.doc 13/9/05 10:59 am Page 57

58


negotiators back to the drawing board whilecontending with angry members.

A separate but related piece of legislation, the SexDiscrimination Act 1986, allows a person tochallenge a term in a collective agreement or anemployer’s rule if she considers that it ‘providesfor the doing of a discriminatory act’ and it mightat some time have effect in relation to her. Forexample, she might challenge an agreed protectionarrangement which gave indefinite protection todown-graded posts (now of equal value with hers)held mainly by men. If a complaint to theemployment tribunal in respect of a discriminatoryterm in a collective agreement is upheld, that termis struck down in its application across the board.29

By contrast, section 77 of the Sex DiscriminationAct 1975 which provides for declarations by thetribunal that a contractual term is unenforceable,permit such declarations only in respect of theclaimant herself, where she is a party to thecontract in question.

However, a successful challenge of a term orterms in a collective agreement does not result in‘levelling up’ that is, extending the benefit to thosedenied it on discriminatory grounds30. Forexample, a woman part-time worker couldsuccessfully challenge a term in a collectiveagreement that indirectly discriminated againstmainly women part-time workers. However,section 6 of the SDA 1986 would not extend themore beneficial term enjoyed by full-time mainlymale workers to the part-time workers. Section 6does not have the effect of changing the workers’contracts of employment. While thediscriminatory term in the collective agreement isvoid, it is not removed from individuals’ contractsof employment (where incorporated) until a newnon-discriminatory term is agreed and thenincorporated into the contracts of employment; oruntil women secure levelling up by takingindividual equal pay (or sex discrimination) claims.But in extreme cases, a challenge under the sexdiscrimination legislation might prevent employersimposing a discriminatory agreement.

Union representatives and employers need tocheck that proposed agreements are notdiscriminatory in any way. Sometimes this is called

‘equality-proofing’ an agreement. By carrying outan ‘equality impact assessment’ it is possible togauge the effect proposed changes in terms andconditions of employment will have on differentgroups in the workforce and to check whether anygroup might be affected adversely. Equality impactassessment is explained in more detail in the mainpart of the guide.

Is there protection against victimisationin equal pay cases? The Sex Discrimination Act 1975 protects workersfrom being victimised for making a complaint tothe employer about equal pay or sex discriminationor for intending to make a complaint to thetribunal. Anyone who assists her is also protected,notably the union representative and hercomparator.

The case of St Helens MBC v Derbyshire & 38others examined how, in anticipating an equal payclaim, the employer had deployed arguments oncost, and whether it amounted to victimisation.The claimants (school meals workers) had notaccepted the deal on offer to settle their equal payclaims (unlike most of the catering staff). Twomonths before the tribunal hearing, the employerwrote a letter to the claimants stating that theauthority could not withstand any immediateincreases in pay rates. The employer also wrote toall the catering staff commenting on the costs of asuccessful claim and the viability of the service. Itwould be forced to consider ceasing the service,only providing free school meals thus requiring ‘avery small proportion of the existing workforce’.

The claimants alleged they had been victimised –the letters had caused them distress and some ofthem had been reproached by other catering staff.They argued that the employer’s intention was tointimidate them into dropping their equal payclaims. After two tribunal and EAT hearings, it washeld that they had suffered a detriment and lessfavourable treatment than the staff who hadsettled their claims. The reason for less favourabletreatment was that the claimants were continuingwith their claim. The tribunal upheld their claims,and the Council’s subsequent appeal to the EATwas dismissed.

29 If, however, she challenges a discriminatory term in a contract of employment under the SDA 1975 (section 77), and is successful, the term

will be declared unenforceable only in respect of herself, where she is a party to the disputed contract).

30 There have been no precedent cases on the point in the UK but Kowalska v Freie und Hansestadt Hamburg Case C-33/89 [1990] ECR

I-25 has been mentioned by some lawyers as indicating that UK law falls short of the requirements of Article 141 in this respect.

15073.doc 13/9/05 10:59 am Page 58

59


The Council then appealed to the Court ofAppeal, which, by a majority of two to one,allowed the appeal. The Court of Appeal held thatthe council did not victimise the claimants bysending them a letter warning of direconsequences if their claim were to succeed. TheCourt held that sending the letter was ‘an honestand reasonable attempt by the council tocompromise the proceedings’. It was held that thecouncil was free to conduct its defence in anhonest and reasonable manner. At the time ofwriting, the case has been remitted for the tribunalto determine whether the council’s actions fellwithin the scope of that principle.

The Court of Appeal decision suggests that thereis a very fine line between what is to be regardedon the one hand, as an honest attempt tocompromise proceedings by a respondentemployer, and on the other, as a form ofvictimisation. It is therefore likely that each casewill very much turn on its own facts.

What is the relevance of the SexDiscrimination Act 1975 to equal pay?The Sex Discrimination Act 1975 (SDA)sometimes has a bearing on equal pay issues. Inthe field of employment and vocational training,under the SDA, a person discriminates against awoman if ‘on the ground of her sex he treats herless favourably than he treats or would treat aman’. This is known as ‘direct discrimination’. Togive a hypothetical example, if an employer gaveall male workers paid time off to watch a footballmatch but denied it to women workers, that wouldbe direct discrimination.

The definition of indirect discrimination is set outearlier in this section of the guide.

Unlike direct discrimination which is alwaysunlawful, indirect discrimination can be lawful if itis objectively justified. As outlined above, the ECJhas set out a test for objective justification – paystructures which have a disparate and adverseimpact on women are permissible only where they‘correspond to a real need on the part of theundertaking, are appropriate with a view toachieving the objectives pursued and are necessaryto that end’.31

An example of unjustified indirect discriminationwould be changing rostering arrangements toinclude early starts for staff which made itimpossible for single parents, the majority ofwhom were women, to continue working theirshifts; when the employer could have taken intoaccount the reasonable demands of the affectedemployees in changing working arrangements andnot incurred damage to his business plan.

It can sometimes be difficult to know whether totake a claim under the Equal Pay Act or the SDA.This is because the SDA covers non-contractualissues, including non-contractual pay matters;whereas the Equal Pay Act covers pay or benefitsprovided under a contract of employment. (Wherethere is doubt, claims can be drafted as beingpursued under both statutes in the alternative).

Non-contractual issues might include recruitmentprocedures, job selection and promotion criteria,training arrangements and access to a workplacenursery. (In local government, provisions of anycollective agreements which have beenincorporated into individuals’ contracts ofemployment would be covered by the Equal PayAct – otherwise they are covered by the SDA).The SDA also covers any payments which are notcontractual but are made at the employer’sdiscretion. It is possible for a claim to involve bothActs. For example, decisions made by an employerin appraising the performance of workers whichdiscriminated indirectly against women could bechallenged under the SDA, while the differences inpay that resulted and any contractual terms of theperformance appraisal scheme could be challengedunder the Equal Pay Act, where the men andwomen were performing equal work. (NB this isnot a matter which branch representatives wouldneed to determine. In considering any such claims(and how they might be drafted) advice must besought from your regional office who will conferwith head office in approving cases for submissionto the tribunal).

Legal issues - Time limits If the changes introduced in a single statuspackage are such to amount to the termination ofthe previous contract of employment and theintroduction of a new contract, then any equal pay

31 Bilka-Kaufhas Case C-170/84 [1986] ECR 1607

15073.doc 13/9/05 10:59 am Page 59

60


cases need to be lodged within six months of theimplementation of the single status package.Workers not covered by this situation must submitany equal pay claims they might have while theyare employed by the relevant employer or withinsix months of the termination of their contract ofemployment or of the ending of the employmentrelationship.32 (Note: sex discrimination claimshave a three-month time limit from the point ofdiscrimination, unless it is continuing). This hasimplications for some members (such as thosenearing retirement or being transferred out) wherenegotiations are in progress but where the unionmay have to end up pursuing tribunal claims. Toprotect these members’ position, it is necessary tolodge proceedings to prevent the union beingnegligent.

Time limits and term-time workersThe Equal Pay (Amendment) Regulations 2003address the position of term-time workers andtime limits for lodging equal pay claims. A claimantemployed under a ‘stable relationship’ can bring aclaim either during that relationship or within sixmonths of its end. When employed on a series ofnon-consecutive contracts, the six month timelimit will run from the end of the employmentrelationship.

TUPE and time limitsThe Court of Appeal has ruled that where therehas been a TUPE transfer, time begins to run forthe purposes of taking an equal pay pension claimagainst the transferor (the ‘old employer’) from thedate of the transfer, not the date whenemployment ends with the transferee (theorganisation the employee is transferred to).33 Thisdoes not affect equal pay claims which are notrelated to pensions.

Note: Each of the unions has its own protocolsfor seeking legal advice and lodging claims. Theseprotocols must be strictly observed.

Pregnancy and maternity leaveDuring the period of ordinary maternity leave, awoman’s contract remains in place and all of hercontractual terms and conditions must continue,except for her normal pay. When she is onadditional maternity leave, her contractual terms

cease to apply (with some exceptions), eventhough her contract remains in place. However,her entitlement to paid leave under the WorkingTime Regulations continues to accrue and in somecircumstances it may be contrary to the Equal PayAct or SDA to treat a woman on maternity leavedifferently from other workers. Detailed legaladvice should be sought on the particulars of anysuch case.

Other legislation that is relevant tolocal grading and pay reviewsThis section of the guide mentions someimportant pieces of legislation which are relevantto equal pay and local grading and pay reviews.However, it is not comprehensive and unionrepresentatives should seek further informationand advice on issues related to these laws.

Race Relations Act 1976

Less favourable treatment on racial grounds isdirect discrimination. Indirect discriminationoccurs when an employer applies to a person, aprovision, criterion or practice which he applies orwould apply equally to others not of the same raceor ethnic or national origins as that person, whichputs or would put those of same race or ethnic ornational origins as that person at a particulardisadvantage when compared with others; andputs that person at that disadvantage; and whichthe employer cannot show to be a proportionatemeans of achieving a legitimate aim.

It is important that proposed new grading and paystructures are checked for signs that there may bedirect or indirect discrimination occurring. Forexample, the reasons for these outcomes wouldneed to be investigated further:

■ employees from minority ethnic groups whosejobs scored similarly to white colleagues arebeing paid less because their jobs felldisproportionately into a lower or (long-term)overlapping grade

■ employees from minority ethnic groups wereassimilated to lower pay points in the samegrade as other colleagues whose jobs scoredsimilarly. (Note: the example above and thisexample could be regarded as prima facie racialdiscrimination)

32 This can be extended in certain circumstances in relation to concealment by the employer and disability (by virtue of the Equal Pay Act

(Amendment) Regulations 2003).

33 Preston No. 3 reported under the name of Powerhouse Retail Ltd and ors v Burroughs and ors EWCA Civ. 1281. Note: an appeal to the

House of Lords against the Court of Appeal judgment is listed for February 2006.

15073.doc 13/9/05 10:59 am Page 60

61


■ access to off-spine payments is not open to thesame extent for employees from a particularethnic group compared with others in the samesituation

■ employees from a particular minority ethnicgroup consistently score lower performanceratings and are awarded lower performance-related pay (PRP) than white colleagues in thesame grades. (Note: there is a statutory duty onauthorities to monitor PRP scheme outcomesby ethnicity). Competence or contribution-related schemes should also be monitored.

In making a claim of indirect race (or sex)discrimination, the claimant has to prove factsfrom which the tribunal could conclude that he orshe has been unlawfully discriminated against inthe absence of a reasonable explanation from theemployer. Firstly, the claimant has to establish thatthe ‘provision, criterion or practice’ in question hashad a disproportionate adverse impact upon herracial group (or sex). Nelson v Carillion ServicesLtd. [2003] IRLR 428 CA.

Race Relations (Amendment) Act 2000

The Act places a general duty on specified publicauthorities to eliminate unlawful racialdiscrimination and to promote equality ofopportunity and good relations between personsof different racial groups. The statutory Code ofPractice on the duty to promote race equalityadvises authorities to assess how all its relevantfunctions (including employment) and policiesaffect race equality. The process involved inmaking this assessment is often referred to as‘equality impact assessment’ and the concept hasbeen adopted by the Equality Standard for LocalGovernment to apply to the other statutoryequality strands.

In addition, most public authorities34 are subject tospecific duties on employment under the terms ofthe Race Relations Act (Statutory Duties) Order2001 (and the equivalent Order in Scotland). TheOrders impose a duty to carrying out ethnicmonitoring. In respect of pay, authorities (with 150or more full-time staff) are obliged to monitor thenumbers from each racial group ‘who benefit orsuffer detriment as a result of its performance

assessment procedures’.

Disability Discrimination Act 1995 (DDA)

Discrimination in relation to pay, means, withoutjustification, treating a person less favourably for areason related to his or her disability. Directdiscrimination is no longer capable of justificationand employers can no longer argue that a failure tomake reasonable adjustments can be justified. TheDisability Discrimination (Employment Field)(Leasehold Premises) Regulations 2004 revoked aprovision in the DDA which allowed differences inperformance-related pay in certain circumstances.Since 1 October 2004, a disabled person cannot betreated less favourably under the terms of aperformance-related pay scheme which makespayment wholly or partly dependent on a person’sperformance for all the staff covered by it, butwhich is not defined by reference to any disability.In other words, where the employer operates aPRP scheme which has no reference to disabilityin its rules, and the scheme covers the disabledperson and other staff, the disabled person cannotbe penalised where their performance is affectedby their disability.

Disability Discrimination Act 2005 (DDA2005)

The DDA 2005 makes important changes to thedefinition of disability and introduces a newpositive duty on public authorities in England,Wales and Scotland to promote equality ofopportunity for disabled people. The changes tothe definition of disability – involving mentalimpairment and progressive conditions – areexpected to come into force in December 2005.

Local authorities will have a specific duty toproduce a Disability Equality Scheme. Amongother things, this must set out how the authoritywill assess the impact of its policies and practices,or the likely impact of proposed policies orpractices, on equality for disabled persons. Theprovisions in the Act on positive duties areexpected to come into force in December 2006,however, 2005 NJC guidance on Equality ImpactAssessment advises authorities to cover disability,as does the Equality Standard for LocalGovernment, in light of existing obligations under

34 Schools are subject to separate provisions. The specific duties on employment do not apply to them, but to the education authority.

15073.doc 13/9/05 10:59 am Page 61

62


the DDA 1995 and local equality and diversitypolicies. At the time of writing, the DisabilityRights Commission had issued a draft Code ofPractice on the duty to promote disability equality.The Code is intended to give practical advice andguidance on the law.

Data Protection Act 1998

It is important that the conduct andimplementation of the grading and pay reviewcomplies with the authority’s policies on dataprotection and is compliant with the DataProtection Act 1998 (DPA) and the InformationCommissioner: Employment Practices DataProtection Code, particularly Part 2: Employmentrecords (2002) and Part 3: Monitoring at work(2003).

Under the DPA, pay is ‘personal data’. Personaldata can only be disclosed in accordance with dataprotection principles. Data that is ‘personal andsensitive’, such as ethnic origin, is subject tospecial safeguards. (The Code Part 2 sets out theprovisions on equal opportunities monitoring).

Details of an employee’s salary are likely to becovered by the DPA but information on the entireworkforce’s salary structure, given by grade, whereindividuals are not named and are not identifiablewould not be likely to be covered by the Act.

The ECJ has held that pay systems must betransparent. This means that pay and benefitsystems should be capable of being understood byeveryone. Employees should be able to understandhow each element of their pay packet contributesto total earnings in a pay period but an employeedoes not have an automatic right to know whatanother person’s job scored and what they arepaid.

During the local review, data protection issues willneed to be addressed at a number of stagesincluding:

■ gathering and analysing job information fromjob-holders

■ recording and holding information onevaluations of jobs

■ disclosure of scores on provisional evaluations

■ carrying out equal pay audits and equality

impact assessment

■ deciding what information to put out to jobholders on the proposed package forconsultation

■ arrangements for notifying individualemployees of their new grade and pay point,assimilation arrangements and any new termsand conditions

■ arrangements for appeals including access toinformation about comparator’s JE score andremuneration

■ arrangements for publishing information onthe outcomes and monitoring of the localreview

Part-time (Prevention of Less FavourableTreatment) Regulations 2000

The regulations give part-time workers (men andwomen) a right not to be treated less favourablythan full-time workers unless any difference intreatment can be objectively justified. Theregulations apply to all aspects of pay and benefits(contractual and non-contractual). The part-timeworker’s comparator must be a full-time worker(not an employee) and a part-time employee’scomparator must be a full-time employee. Thecomparator can be of either sex. But the scope forequal pay claims is limited to claims involving thesame or broadly similar work (not equal value) andthere are more restrictions than under the EqualPay Act. Given the gender disparity in part-timeworking in local government, a woman part-timeris more likely to find the Equal Pay Act and /orthe SDA provides a better avenue for protectingher rights if negotiation fails.

Fixed-Term Employees (Prevention of LessFavourable Treatment) Regulations 2002

The regulations apply to ‘employees’ not ‘workers’.They give fixed-term employees the right to thesame pay and terms and conditions ofemployment as permanent employees on broadlysimilar work, unless their less favourable treatmentcan be objectively justified. An employee can makea comparison with an employee of the same oropposite sex, but the range of comparators ismore restrictive than under the Equal Pay Act.Unlike the Equal Pay Act, the regulations allow

15073.doc 13/9/05 10:59 am Page 62

63


employers to justify a difference in treatment byshowing that overall the fixed-term employee’s paypackage is at least equal to that of the permanentemployee. Presumably this is because fixed termemployees have often received poorer benefits buta comparatively higher rate of pay (particularly inhigher grades jobs).

The regulations do not apply to agency workers.At the time of writing, the government was beingpressed to improve employment rights for agencyworkers. As mentioned earlier, an agency workercan be a ‘worker’ for the purposes of Article 141but in equal pay cases where the agency worker isthe claimant, there can be a problem identifyingthe body responsible for the unequal pay andrectifying it when the comparator is a man directlyemployed by the local authority.

Temporary employees (but not ‘workers’) areprotected by the local government nationalagreements in that they ‘must receive pay andconditions of service equivalent to that ofpermanent employees’. However, temporaryworkers (as well as employees) are entitled toprotection under equal pay and sex discriminationlegislation where they would qualify as a ‘worker’either under the domestic legislation or Article 141(see the section on the Allonby case).

The Green Book makes no reference to casualstaff. If they are ‘employees’, they will be coveredby the national agreements as temporaryemployees. If they do not have a contract ofservice with the authority, they will not be‘employees’ and will not be in scope of the GreenBook. If their employment status is not clear, anemployment tribunal would look at the evidence asto the nature of the employment relationship anddetermine whether or not there is an impliedcontract of employment.

The Fair Employment and Treatment (NorthernIreland) Order 1998 (FETO) The FETO appliesonly in Northern Ireland. It prohibitsdiscrimination on the grounds of religion orpolitical opinion. (FETO amends and consolidatesthe 1976 and 1989 Fair Employment Acts). Aspecialist tribunal, the Fair Employment Tribunal,was set up to deal with fair employment cases.

The Northern Ireland Act 1998 (NIA) imposes anobligation on public authorities, in carrying outtheir functions relating to Northern Ireland, tohave ‘due regard to the need to promote equalityof opportunity’ on grounds of sex, race, religiousbelief and political opinion, age, marital status orsexual orientation, disability and responsibility fordependants. Section 75 of the NIA puts intostatutory form the Policy Appraisal and FairTreatment Guidelines 1994 (PAFT). Their purposeis to ensure that the emphasis on equalities ismainstreamed, so that before decisions are takenon all policies and programmes, ‘an analysis ismade of the effects on protected groups’. Ineffect, this analysis is an exercise in equality impactassessment.

FETO and the NIA go further than the currentpositive duties on English authorities, in that thestatutory duty to promote equality of opportunityapplies to not only to race, sex and disability,religion and political opinion, age, marital status,sexual orientation and the presence or absence ofdependants. FETO also covers the provision ofgoods, facilities, services and premises as well asemployment. (At the time of writing, in England,Wales and Scotland, statutory positive duties onlocal authorities to promote equality only apply torace, with disability pending (see the section on theDDA 2005). A public sector duty in regard to sexdiscrimination was proposed in the Equality Billwhich fell just before the 2005 general election).Under FETO, the duty entails workforcemonitoring, and on a limited basis, contractcompliance and affirmative action.

The NIA also brought about the merger of theNorthern Ireland equality bodies (the FairEmployment Commission the EOC and the CREfor Northern Ireland and the Northern IrelandDisability Council) into the Equality Commissionfor Northern Ireland. (There is a separate HumanRights Commission).

Scotland and Wales

The Scottish Parliament and the NationalAssembly for Wales have taken steps to positivelyaddress inequality at the level of national and localgovernment. Advice should be sought from thehead offices in Scotland and Wales on the detailed

15073.doc 13/9/05 10:59 am Page 63

64


provision and how it might impact on theimplementation of single status.

Equal Opportunities Commission ModelEqual Pay PolicyThe following model policy is set out in the EOCCode of Practice on Equal Pay (2003).

“We are committed to the principle of equal payfor all our employees. We aim to eliminate any sexbias in our pay systems.

We understand that equal pay between men andwomen is a legal right under both domestic andEuropean law.

It is in the interest of the organisation to ensurethat we have a fair and just pay system. It isimportant that employees have confidence in theprocess of eliminating sex bias and we aretherefore committed to working in partnershipwith the recognised trade unions. As goodbusiness practice we are committed to workingwith trade union/ employee representatives to takeaction to ensure that we provide equal pay.

We believe that in eliminating sex bias in our paysystem we are sending a positive message to ourstaff and customers. It makes good business senseto have a fair, transparent reward system and ithelps us to control costs. we recognise thatavoiding unfair discrimination will improve moraleand enhance efficiency.

Our objectives are to:

■ eliminate any unfair, unjust or unlawfulpractices that impact on pay

■ take appropriate remedial action.

We will:

■ implement an equal pay review in line withEOC guidance for all current staff and startingpay for new staff (including those on maternityleave, career breaks, or non-standard contracts)

■ plan and implement actions in partnership withtrade union/ employee representatives

■ provide training and guidance for thoseinvolved in determining pay

■ inform employees of how these practices workand how their own pay is determined

■ respond to grievances on equal pay as a priority

■ in conjunction with trade union/ employeerepresentatives, monitor pay statistics annually”.

Equality Standard for Local GovernmentThe Equality Standard for Local Government(ESLG) is a performance standard on equalities inemployment and service delivery. It was developedby the EOC, the Commission for Racial Equalityand the Disability Rights Commission with theEmployers’ Organisation for Local Governmentand the Audit Commission. The standard becamea Best Value Performance Indicator for Englishlocal authorities in 2002. It is also supported bythe National Assembly for Wales.

The ESLG comprises five levels of achievement indelivering equality in relation to the statutorilybased strands of race, gender and disability, withsexual orientation and religion or belief to beadded in 2005. NJC guidance on equality impactassessments (EqIA) recommends that assessments(which are a component of the standard) shouldalso cover age, and the main occupational groupsand part-time staff (as the latter two groups arelikely to be made up of predominantly onegender). Authorities are also free to add otherequality strands covered by their policies. Thestandard is intended to be a tool to help authoritiesintegrate or mainstream work on equalities so thatgood practice becomes incorporated into everyaspect of their activities.

To achieve level one of the standard, authoritiesmust have a comprehensive equality policy and ademonstrable commitment to developing acorporate equality plan. They must make acorporate commitment to a fair employment andequal pay policy and to earmarking specificresources for improving equality practice. Theymust consult and involve staff and stakeholdergroups (including recognised unions) on all aspectsof equality policy and the development of thecorporate equality plan. They are required tocommit to workforce profiling and an equal payreview.

At each level of the standard, there are specificrequirements relating to employment and training.The requirements of each successive level build onthose below, so that at level two, for example, work

15073.doc 13/9/05 10:59 am Page 64

65


should have started on the equal pay review. Allemployment procedures (not just policies) shouldbe consistent with current legislation andassociated Codes of Practice. To achieve levelthree, the equal pay review should have beenconducted and plans should have been developedto correct any pay inequality identified by thereview. Equality guidelines should be in place onpay, for example on starting pay and pay onpromotion. To achieve level four, the authorityshould be using equality data to monitor the use ofall personnel procedures, to enable it to checkwhether there is an adverse impact on anyparticular group. To achieve level five, theauthority must be able to show that it is paying itsstaff equally for work of equal value. These are afew examples of the requirements of the standard– it is very comprehensive and detailed.

It is not a statutory requirement on authorities toadopt the standard, but as it is a BVPI, individualauthority’s action on it (or inaction) can affect theirComprehensive Performance Assessment.Branches in England should check whether theirauthority is using the standard and if so, what levelit has claimed to have achieved or been externallyaudited as having achieved. In some authorities,branches should be able to use compliance withthe Standard as a lever (carrot and /or stick) tomove the equalities agenda forward and morespecifically, to help overcome resistance (where itmay exist) to carrying out equal pay audits andaddressing pay inequality. Branches should alsocheck that authorities are not citing commitmentto carrying out job evaluation and a grading review(or doing it) as satisfying the requirement to carryout an equal pay review. As mentioned above, thetwo processes are closely related, but they are notthe same thing.

Resource List NJC Joint Guidance

NJC Green Book and Pay ImplementationAgreement 2004 (NJC circular 4/04)

NJC Part 4 guidance on pay and grading reviews

NJC Part 4 guidance on equal pay audits

NJC Part 4 guidance on Equality ImpactAssessments

NJC guidance on workforce development

NJC Guidance on work/life balance – Finding theBalance (being updated.)

Trade Union Side Guidance

Trade Union Guide to NJC JE Scheme

Trade Union Guidance on Bonus Schemes

Websites

GMB – gmb.org.uk

TGWU – tgwu.org.uk

UNISON – unison.org.uk

Employers Organisation – www.lg-employers.gov.uk Website includescomprehensive list of NJC JES documents.Administers NJC Associate Consultancy Schemeon behalf of the NJC.

Link pay modelling - www.link-reward.co.uk

Pilat pay modelling - www.pilat-hr.co.uk

EOC Equal Pay Review Kit – www.eoc.org.uk

EOC Code of Practice on Equal Pay–www.eoc.org.uk

Equality Standard for Local Government –www.lg-employers.gov.uk

EOC Code of Practice on Sex Discrimination -www.eoc.org.uk

Equal Pay Questionnaire Procedure -http://www.eoc.org.uk/eoceng/eoccs/advice/equal-pay-questionnaire.asp

CRE Code of Practice on the duty to promoteracial equality & the four non-statutory guides –www.cre.gov.uk/duty/index.html

DRC Code of Practice on employment andoccupation and DRC Guidance on matters to betaken into account in determining questionsrelating to the definition of disability – www.drc-gb.org/thelaw/practice.asp

15073.doc 13/9/05 10:59 am Page 65

66


Notes

15073.doc 13/9/05 10:59 am Page 66

67


Notes

15073.doc 13/9/05 10:59 am Page 67

££

£

££

£

££

£

www.unison.org.ukPrinted & published by UNISON, 1 Mabledon Place, London WC1H 9AJ.CU/September 2005/15073/Stock number 1937/UNP ref: 8348.

15073.doc 13/9/05 10:59 am Page 1

trade union side single status › content › uploads › 2018 › 06 › njc-trad… · single...

Documents