Out-Dated & Obsolete? How Certain Job Evaluation Systems Are Failing to Stand Up In Equal Pay Claims

Accurate job evaluation is more critical now than ever before. As pressure to close the gender pay gap mounts, countries around the world are making equal pay and gender gap reporting legislative priorities. From Australia to Spain to the UK, the law is evolving and companies are finding themselves locked in fierce court battles to defend their wages. These cases have highlighted how a valid job evaluation (JE) scheme is an essential component to an equal pay defence. But, the big question is: what makes a JE system valid?

Equal Pay Claims

In recent years, we’ve seen multiple headline-hitting cases of big companies being subject to equal pay claims. In fact, last year UK supermarket heavyweight Tesco found itself in the European Court of Justice in response to an equal pay claim.

Around 6,000 Tesco shop floor workers, mainly women, brought proceedings against Tesco on the grounds that they did not receive equal pay when compared to their predominantly male colleagues in distribution and warehouse centres.

Whilst the case is ongoing, the claimants have made a series of groundbreaking legal wins. A positive outcome for the workers could result in millions being owed in back pay and huge ramifications for other UK retailers.

Crucially, in this case, the employment tribunal decided that the job evaluation scheme relied on by Tesco was not valid; it didn’t enable them to accurately establish equal work.

So, all this begs an important question: if a company as huge as Tesco isn’t getting job evaluation right, what does a valid JE system actually look like?

How Are Equal Pay Laws Evolving?

According to the European Commission, the gender pay gap in the EU stood at 13.0 % in 2020 and has only changed minimally over the last decade. It means that women earn 13.0 % on average less per hour than men.

Tackling this persisting inequality has become a key goal for legislatures across the globe, with many either implementing or strengthening equal pay laws in recent years.

In the UK, the Equality Act of 2010 legally enshrined the principle of equal pay for equal work not only for men and women, but also protected characteristics such as race, disability or age.

Similarily, in 2017, The German Bundestag passed the Act on Transparency of Pay, making direct or indirect wage discrimination based on gender illegal.

In 2021, Spain introduced new equal pay laws making it a legal requirement for businesses to collect and analyse the criteria used to determine employee pay to ensure jobs of equal value have the same salary.

It’s clear that equal pay is high on the legislative agenda for many countries worldwide. Equally, as we go into 2023, it should be at the top of any business’s priority list, too.

After all, businesses that don’t take this legal obligation seriously could be sleepwalking into costly employment tribunals and devastating reputational damage.

How Can Job Evaluation Help In a Tribunal?

To make an equal pay claim, an employee can compare himself or herself to another employee of the opposite sex in the same employment to argue that there’s a disparity between the remuneration received.

Therefore, a strong JE system can be an organisation’s first line of defence when it comes to justifying pay differences.

If there is a valid JE scheme in place that satisfies the requirements of s.80 (5) of the Equality Act 2010, the burden of proof passes to the employee; it is their responsibility to show that the system is discriminatory or otherwise unreliable.

So, What Does a Valid Job Evaluation Scheme Look Like?

In 2014, the Equality and Human Rights Commission laid out guidelines on what constitutes a compliant JE system.

It stated that, to provide a valid defence, a job evaluation system must be:

  • Analytical
  • Thorough and impartial
  • Reliable
  • Gender neutral

It made it clear that a JE scheme should evaluate each job by looking at the demands made on the worker under multiple factors such as ‘effort’, ‘skill’, and ‘decision making’.

Critically, this means that systems that evaluate on a ‘whole job’ basis simply don’t hold up in court. The scheme must analyse the various characteristics of each job, separating them into their constituent parts, rather than comparing and ordering jobs as a whole.

Therefore, so-called ‘slotting systems’ - JE that utilises an existing ranking of jobs and evaluates new jobs by assessing them in relationship to other jobs - are fundamentally obsolete when it comes to equal pay defence.

And even an analytical JE can be deemed ‘out of date’ by the court. That’s why it’s essential that companies assess and refresh their own JE system regularly to ensure it’s moving with the times.

The bottom line? Only a watertight up-to-date, analytical system that breaks down roles into constituent factors can offer a valid defence in a tribunal case.

And, worryingly, companies that use non-analytical slotting systems are leaving themselves wide open to potential equal pay claims and losses.

How Is gradar Changing the Game?

As we’ve seen, even some of the biggest companies in the world are simply not prepared for the ever-mounting pressure and legislation surrounding equal pay.

That’s where gradar comes in. With a fresh, cutting-edge approach to job evaluation, we’re arming companies big and small with a watertight JE system that stands up as a defence in an equal pay claim.

Moving away from obsolete slotting systems, gradar uses a sophisticated point-factor based approach that breaks down job roles into smaller components.

Considering a wide range of factors such as professional knowledge, specific responsibilities and interpersonal skills, gradar offers a deeply analytical and highly objective approach to job evaluation.

Even better, progressive features such as pay gap analysis give businesses confidence that they’re playing their part in building a more equitable society, all whilst protecting themselves from the devastating potential of an equal pay claim loss.

Sounds like something your business could benefit from? Get in touch with our support team today.