Recently I have been asked about two very similar situations in which, in each case, the roles in each company’s HR team were being compared with those in its Finance team. It’s a very common comparison. The problem was that the company’s Job Evaluation scheme (JES) wasn’t giving management the answers the company wanted.
It’s a situation that neatly follows on from my last blog on the ‘market rate’ factor in defending equal pay claims.
Is Finance worth more?
In these two particular cases, the employer’s JES had rated a number of HR roles as being of equal value with certain Finance roles. However, the (mostly male) Finance staff were being paid more than their (entirely female) comparators in the HR team and I was told that this was on the basis that it was believed that the Finance roles attracted a higher market rate in the current labour market. So the pay recommended by their JES seemed in conflict with the realities of the market.
If you work in HR, I’m guessing that you’re not falling off your chair with surprise.
Risky to ‘diss’ your JES outputs
My first response, in each case, was that if their JES is a reliable, modern scheme and its judgement of the roles being of equal value can be treated as being sound, then the business is certainly on the back foot and needs to act very defensively to protect itself against equal pay claims if it does not implement its output. An Employment Tribunal is going to take a fair amount of convincing that the JES output is ‘wrong’. And since HR colleagues tend to know more than most about equal pay, the risk of equal pay complaints and Tribunal claims from them could be said to be quite high here.
Check your data
I suggested a review of the data being fed into the JES: were they confident that all the responsibilities and skills, etc. held by the Finance roles had been taken into account by the JES? Had anything been understated? Likewise, had any of the factors relating to the HR roles been overstated? Assuming that no adjustment of the outcome of the JES was going to provide the solution, I said I would then question how the business had decided that these Finance roles definitely attracted higher rates of pay in the labour market. Who says? The businesses each needed to gather a decent amount of evidence from reliable sources to prove any argument about market rates, and for each of the roles in question.
They also needed to guard against paying (the mostly male) Finance staff more than their JES suggested they were worth simply because the Finance people negotiated hard (or indeed at all) when hired and/or during pay reviews.
The situation certainly seemed risky for each business and deserved more detailed legal advice. But ultimately if the ‘market rate’ defences available seemed to be shaky or unlikely to persuade a Tribunal then pay equalisation was going to be required if they wished to remove the quite clear and present risk of claims.
Being practical, I wasn’t necessarily advocating immediate pay adjustments (because I fully appreciate the cost can be too great to bear) but perhaps adjustments carried out over a number of years, balancing the need for risk reduction with the realities of what each business can afford.
If this situation is similar to something you are grappling with, do please get in touch and let me help. If you’re keen to learn more about improving Pay Equality in your organisation and protecting yourself from legal risk, come to our seminar in July – ‘Pay Equality: a brave new world. Claims, risks strategies and solutions’.
Can our Gender Pay Gap and Equal Pay services help you?
Take a look at our range of market-leading, fixed-price Gender Pay Gap and Equal Pay advice services, from a quick sense-check of your GPG calculations through to a detailed Equal Pay audit and help with restructuring your pay policies.