David Ludlow: Gender pay disparity is set to become more transparent

In March, the Small Business, Enterprise and Employment Act was granted royal assent. 


This means that in the next 12 months, large firms with more than 250 employees will have to publish the average salaries of both genders.

The measure will increase transparency and is likely to lead to an accelerated eradication of the gender pay difference, which currently stands at 20%, as employers seek to pre-empt legal challenges.

The Equal Pay Act 1970 pre-dated the Sex Discrimination Act 1975, both of which are now consolidated in the Equality Act 2010.

The Equal Pay Act was the first legislation aimed at addressing inequality in the workplace in the post-war period and, since then, most equal pay claims have been brought by women employed in the public sector.

Another development came on 1 October 2014, when employment tribunals were given the power to order employers to carry out and publish equal pay audits if they lose an equal pay or a pay discrimination claim.

There have also been significant developments in equal pay law relating among other things to claimants’ ability to bring back pay claims, which increases the stakes, and potential financial pay-outs, significantly.  

The combined effect of these changes could well be a tidal change and result in a lot more actions in the private sector, whatever the size of organisation.

It is foreseeable that the number of equal pay claims will increase in the financial services industry and the City is particularly likely to see an increase in such claims. 

In many City businesses, bonuses make up a large part of the overall remuneration so thought will have to be given to designing mechanisms such as objective criteria to justify bonus payments. 

David Ludlow is head of employment at law firm Barlow Robbins