Navigating the Evolving Landscape of UK Employment Law: Equal Pay, Discrimination, and Mediation Insights by Michael Malone (Trinity Chambers).
Employment law is constantly evolving, with new challenges and emerging issues for both employers and employees. From the intricacies of equal pay and discrimination claims to the complexities of managing workplace dynamics in the age of remote work, understanding the legal landscape is crucial for legal practitioners, HR professionals, and business leaders. In this article, Michael Malone, a retired employment judge and experienced mediator, offers valuable insights drawn from his decades of work in employment law. He discusses key challenges in enforcing equal pay and discrimination laws, the evolving role of mediation, and the importance of staying ahead of emerging trends in the workplace. Through his reflections, readers will gain a deeper understanding of the practical challenges of managing workplace disputes and fostering a fairer, more equitable work environment.
Michael Malone
As a practitioner and then an Employment Judge, what insights have you gained about the practical challenges of enforcing equal pay and discrimination laws?
Enforcement is largely in the hands of individual claimants and their advisers. The Equality and Human Rights Commission (EHRC) has some statutory powers (for example, to carry out formal investigations), but the breadth of the Commission’s responsibilities and its limited funds mean that those powers are exercised comparatively rarely.
No fee is payable for starting a claim to an employment tribunal. In at least two respects, however, the practical challenges for an individual contemplating a claim are arguably greater than they used to be.
First, the former Equal Opportunities Commission (EOC) and Commission for Racial Equality (CRE) were willing and able to investigate and then fund numerous individual claims, whether or not a major point of principle arose. In the late 80s and 90s, I acted in numerous sex discrimination cases supported by the EOC. The EHRC (which replaced those Commissions and the Disability Rights Commission in 2006) does not have the resources to support claims on anything like the same scale. Multiple claims, like the supermarket cases which I mention below, and other high-value claims, can often obtain legal support on a contingency fee basis. Many claimants are union members and receive support from their union, but it can be difficult for other claimants to obtain suitable representation.
Secondly, until 2014, there was a statutory questionnaire procedure which could be used by claimants or potential claimants. Respondents were not obliged to answer, but failing to answer without reasonable excuse or giving a false or evasive answer could be held against them in subsequent proceedings. This statutory procedure, which made a real difference in many cases, was withdrawn in order to reduce ‘legislative burdens’ on employers. Questions can still be asked and should be taken seriously by employers (ACAS has published relevant advice) but in my view this ‘reform’ was a retrograde step.
Can you discuss the importance of mediation in employment disputes? Is mediation in equal pay disputes ever feasible, and if so, what are the potential advantages?
The three obvious advantages of mediation in any employment dispute are saving the costs that would otherwise be incurred at a subsequent stage of the proceedings, avoiding or mitigating the risk of adverse publicity, and ending the stress of being enmeshed in proceedings.
During the last three decades, there have been waves of multiple equal value claims: first against local authorities, then against NHS employers, and now against supermarket owners and other retailers. I doubt if many of those cases could have been settled, by mediation or otherwise, so long as issues of principle were still to be resolved. There are usually too many points of dispute and the stakes are too high.
I see every reason, however, why some of the more ‘traditional’ equal pay cases should be amenable to mediation. By ‘traditional’ cases, I mean those in which the claimant (usually a woman) is paid less than a colleague (usually a man) for doing substantially the same job. The three obvious advantages mentioned above apply. An early settlement can also reduce the risk of a ‘knock-on effect’ leading to further equal pay claims, though that risk cannot be wholly avoided.
There is a further reason for an employer to settle an equal pay claim, by mediation or otherwise, if at all possible. When an equal pay claim results in a finding of an ‘equal pay breach,’ the employment tribunal must consider whether to order the respondent to carry out and publicise an equal pay audit. There was an exemption period for certain small and new businesses, but that period expired at the end of September 2024.
What are some common misconceptions about pay discrimination law that you have encountered, and how can they be addressed?
Some common misconceptions are relatively harmless— for example, that independent experts decide whether jobs are of equal value. The independent expert does have an important role in those equal pay claims where equal value is one of the issues, but the actual decision is one for the employment tribunal. I chaired two equal value hearings in which we had evidence from an expert for each party, as well as the independent expert, and in one of them, we came to very different conclusions from those recommended by the independent expert.
Another common misconception is that the law is not concerned with any discrimination in pay apart from sex discrimination. That misconception is understandable because sex discrimination in pay (and other contract terms) had its own separate equal pay legislation (now embodied in the Equality Act 2010). No other protected characteristic had separate legislation on pay, but, for example, the Race Relations Act 1976 covered pay discrimination along with all the other acts of racial discrimination against employees. Pay discrimination cases under that Act were rare, but in 2017, the Supreme Court considered a case in which indirect racial or religious discrimination was alleged, and one in which indirect racial or age discrimination was alleged.
A more serious misconception is in regard to gender pay gap information. Most organisations with at least 250 employees are required to publish information every year. It is commonly assumed that an employer with a high headline pay gap is not meeting its equal pay obligations; and conversely, that a company with a low gap is doing well. The former companies are commonly vilified as ‘offenders’ in newspaper headlines. In fact, there is absolutely no necessary correlation. There are many valid reasons for a high headline figure. For example, ‘STEM jobs’ tend to be highly paid, and there are still more men than women applying to do them.
Probably the most serious misconception is that most equal pay cases involve employers who are deliberately paying women less than men for doing the same work. I am in no doubt that direct discrimination in relation to basic pay and bonuses still occurs, and that employees and their advisers can face real difficulties in obtaining information about pay disparities. I have already mentioned the (in my view regrettable) withdrawal of the statutory questionnaire procedure. However, the overwhelming majority of the equal pay cases in this century have been indirect discrimination cases— mainly equal value cases. Women contend that their jobs are of equal value to higher-paid jobs done mainly by men (often on a different site). If the women, although a majority in their jobs, have male colleagues, and the women succeed, these colleagues can pitch in with ‘piggyback’ claims.
The danger here is if employers share the misconception that it is only ‘bad’ employers who have anything to fear from equal pay claims. Employers need to be aware that good intentions and a desire to treat staff fairly cut no ice when facing indirect discrimination pay claims. They can be hit with compelling claims without having knowingly done anything wrong. A few decades ago, major employers thought that it was OK to pay part-timers a lower hourly rate than full-timers or to exclude them from pension schemes. It didn’t occur to them that this practice could amount to indirect sex discrimination. A little later, the incremental pay schemes to be found in most of the public sector came under attack in cases where men were generally higher up the pay scale, and it was arguably taking too long for women to catch up. Employers need to be alert to where the next challenge may be coming from.
In what circumstances, in particular, should employers and their legal advisers consider workplace mediation before any court or tribunal proceedings begin?
The most obvious example is the case where the parties wish to preserve or restore the working relationship. The chances of doing so are usually reduced once proceedings have commenced and the solicitors for the parties start to document allegations and counter-allegations. From my time as a judicial mediator, I can recall only two disability discrimination cases where discussions resulted in identifying reasonable adjustments that were mutually acceptable. Those cases were a tiny fraction of the mediations I dealt with. Usually, the employment relationship was irretrievably broken, and the only issues in the mediation were to agree on a settlement figure and sometimes a reference.
There are also sensitive cases where there are contract or shareholder disputes in the courts as well as an employment claim, and cases where it is in everybody’s interest to negotiate a confidential agreement in order to avoid reputational damage.
Religion and Belief Discrimination is a particularly topical area. What emerging trends or issues are you seeing in this field? What are the main potential challenges for employers?
There have been several important appeal decisions, including one judgment from the European Court of Human Rights. On the one hand, it has been established that only the most extreme views are "beyond the pale" and undeserving of protection. On the other hand, it is equally clear that there are some limits on the ways and terms in which particular views can be expressed, particularly to avoid harassment complaints.
The main challenge for employers is to avoid being trapped in the middle of a dispute and being attacked by both sides. In particular, penalising employees for expressing gender-critical views or making adverse comments about same-sex marriage or adoption could lead to complaints of religion or belief discrimination. However, doing nothing, when other employees suffer distress, could lead to complaints of harassment related to gender reassignment or sexual orientation.
It is important for employers to update their disciplinary policies, preferably in consultation with employees, to define in the clearest possible terms the constraints that may have to be placed on freedom of expression. It is also essential to back up the policy by providing training for managers and other employees. There is now a good deal of case law that can be used as part of the training to illustrate both good and bad practice.
If, despite the policy and the training, an employee complains about views expressed by another employee, that is a situation in which workplace mediation may be particularly helpful, given the risk that either taking action on the complaint or taking no action could lead to tribunal proceedings.
What are your main recommended topics for talks to legal practitioners and their clients and for training seminars?
A key topic for senior managers, HR professionals, and legal advisers is equal pay. We have seen, most recently from the supermarket cases, how a few claims can open the floodgates to further claims. It is possible, in the course of one talk or seminar, to cover the entire range of employment practices that could give rise to equal pay claims, and potential defences to claims, such as market forces.
A very specific issue that should be discussed in a session for senior managers, legal advisers, and HR professionals is job evaluation. In what circumstances is an organisation most at risk of equal value claims? Where there is no current grading system based on a job evaluation study (JES), could adopting a JES help protect against equal value claims? What are the potential disadvantages? Where there is an existing JES, what could make it vulnerable to a challenge? I delivered a judgment some years ago that rejected a challenge to a major scheme. I am also familiar with cases in which challenges were successful.
A further key topic is religion and belief discrimination, for the reasons already discussed.
What advice would you give to organisations looking to foster a more equitable workplace and mitigate equal pay and other discrimination claims?
First, stating the obvious, employers and managers need to understand and comply with the many obligations Parliament has placed on them.
Secondly, they need to understand their organisation’s existing pay and other employment practices and arrangements. I have already mentioned that an organisation’s headline gender pay gap figure does not give any useful information to outsiders. However, the detailed information compiled as part of the exercise can give a great deal of useful information to the organisation’s own managers. It is also important that the organisation’s records include detailed information about previous internal decisions relating to matters such as pay, recruitment, and promotion. Equal pay cases have been lost because managers simply did not know the reason for a difference in pay that had existed for some years.
Thirdly, employers need to be open to changes in employment practices and ready to extract advantages from them. Thirty years ago, it was lawful for employers to discriminate against disabled workers. Now, employers know that a very wide range of disabilities can be accommodated by making appropriate adjustments. Similarly, they see the mutual advantages of family-friendly employment policies.
Fourthly, equal opportunity policies must be supported by providing appropriate training.
Looking ahead, how do you foresee the landscape of discrimination law evolving, especially with the rise of remote work and changed workplace dynamics?
We already have laws on flexible working, including working from home, but remote working has become widespread, and reductions in the working week are increasingly being claimed or negotiated. The new Employment Rights Bill contains an important provision affecting such issues. At present, an employer who is refusing a formal application for flexible working must identify the ground(s) for refusal. The employee can complain to an employment tribunal that the decision to reject the application was based on incorrect facts, but clause 7 of the Bill would also enable the employee to complain that it was unreasonable to rely on the specified ground(s). This change could create a good deal of work for employment lawyers.
In addition, granting contract changes for flexible working to some workers and refusing it to others can result in equal pay claims, because equal pay legislation covers other contract terms as well as pay. Moreover, a reduction in contracted hours without any change in pay obviously increases the hourly rate of the fortunate employee, and that increase could generate equal pay claims from employees whose pay has remained at the lower hourly rate.
Other clauses in the Bill relate to steps to prevent the harassment of employees by third parties and equality action plans for larger employers, but these provisions are to be fleshed out in subsequent regulations.
Of course, a Bill can undergo major changes during its passage through the two Houses of Parliament and the various Committee stages.
About Michael Malone
Michael Malone is a non-practising solicitor, mediator, and retired employment judge. He is based at Trinity Chambers Newcastle and divides his time mainly between the North East and the North West. He has substantial experience as a former judicial mediator and is also CEDR accredited. He is a Fellow of the Chartered Institute of Arbitrators.
Michael writes and lectures for both professional and lay audiences on equal pay and discrimination law generally. His publications include Discrimination Law - A Practical Guide for Management (Kogan Page 1993). Subsequently, he was the joint author, with Martin Edwards, of two editions of Tolley’s Equal Opportunities Handbook. He currently updates, at quarterly intervals, the equal pay and pensions chapters of Butterworths Discrimination Law.
Michael did a great deal of equal pay work during his time as a salaried employment judge. The most high-profile case he chaired was a challenge to a job evaluation study covering approximately one million jobs (‘Hartley’). Tribunals that he chaired also considered market forces defences in that case and two other cases.
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