Equal pay in focus: managing legal risks and ensuring compliance
Women represented by the GMB Union, have secured more than £1 billion in settlements following long‑running campaigns addressing systemic pay inequalities in female‑dominated roles across UK local authorities. These cases included both equal pay claims – where women performing the same work as male comparators were paid less, and equal value claims – where women carrying out different, but equal value or equivalent roles to men (for example, carers, cleaners or catering staff compared with male‑dominated roles such as refuse collection), were graded lower or given inferior terms.
Following this series of landmark settlements, in December 2025, the GMB Union announced its plans to bring 10,000 new equal pay claims in 2026. Employers should note three things about this: firstly, the plans signal a renewed wave of litigation and a pressing need to review pay practices; secondly, equal pay claims can affect both the private and the public sector, with claims being brought against the retailer, Next, in 2024 for example; and thirdly, that this is a complex area of law, which employers should seek advice on, where possible.
The statutory framework
The Equality Act 2010 (the “EqA 2010”) requires that men and women performing equal work receive equal pay, not just in salary, but also in non-discretionary contractual bonuses, overtime and other contractual benefits. Despite this, recent Employment Tribunal decisions show that pay disparities persist, particularly in roles historically dominated by one sex.
As illustrated above, an employee can bring an equal pay claim in the Employment Tribunal under the EqA 2010 if they can identify a comparator performing work that is either: the same as the employee or different, but of equal value or rated as equivalent to the work of the employee.
An employer can respond to an equal pay claim by showing that the difference in pay is attributable to a “material factor” that is not based on sex, for example, London weighting. The burden then shifts back to the employee to show that the material factor is either directly or indirectly discriminatory and, if proven, the employer must objectively justify the difference in pay in order to defeat the claim.
Remedies can include equalisation of pay (if still in employment) and back pay for up to six years. Claims can be brought individually or collectively and the time limit to bring a claim in the Employment Tribunal is six months from termination of the employment. Employers should also note that equal pay claims can be brought by employees in the civil courts where the time limit is six years, even where the claim would have been outside the applicable time limit in the Employment Tribunal.
Areas of risk for employers
Historic pay arrangements that have not been updated to reflect current roles and responsibilities are a common source of risk for employers, which can lead to claims. In addition, the rise of remote and flexible working arrangements adds complexity to pay structures.
Practical steps to reduce risk
Employers should mitigate risk and demonstrate commitment to equality by conducting equal pay reviews to identify and address disparities before they escalate into claims. Practical steps as part of equal pay reviews could include:
- Reviewing job evaluation systems for fairness and clarity, ensuring that roles are assessed objectively and consistently;
- Clarifying pay and bonus criteria, to help build trust and reduce the likelihood of disputes;
- Training HR and management teams on compliance obligations, to help ensure that decisions are made with a clear understanding of the legal requirements; and
- Documenting decision-making processes to provide a robust defence in the event of a challenge, showing that pay practices are based on legitimate, non-discriminatory factors.
The importance of proactive compliance
Equal pay is not just a legal requirement; it is crucial to organisational reputation. Addressing pay proactively can enhance employee engagement, improve retention, and strengthen a company’s position in the market.
How we can help
Our Employment lawyers are experienced in helping employers navigate these challenges. If you would like advice on equal pay compliance or defending Employment Tribunal claims, please contact Bob Cordran or Imogen Higgins-Smith.
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