The Agenda for Change pay system, introduced in October 2004, was designed to ensure that pay in the NHS was consistent with the requirements of equal pay law.
Agenda for Change and its national job evaluation scheme complies fully with anti-discrimination legislation, as found by the Newcastle employment tribunal judgement in the case of Hartley and others v Northumbria Healthcare NHS Trust and others. Following the Hartley judgment, many claims have been withdrawn and the total number of claims in England now stands at around 6,500.
Although the employment tribunal found the scheme to be equal pay compliant, it is important to know that claims can still be brought against organisations locally if it is believed that the scheme has not been implemented correctly, leading to equal pay issues.
Dealing with equal pay claims
The responsibility for the resolution of equal pay claims is for local NHS organisations. Back pay and legal costs if they occur would fall to the NHS organisation. However, a consistent approach to handling claims should help to minimise total costs to the NHS and avoid the risk of local settlements that might cause unhelpful precedents for other employers.
NHS Employers encourages organisations to sign up to the assistance of the NHS Litigation Authority (NHSLA) on handling claims, whether or not they have any claims at present. The NHSLA is funded by the Department of Health and provides free advice and support to NHS organisations on the management of claims.
NHSLA seeks to co-ordinate activity on claims lodged against trusts, to ensure a consistent and streamlined approach across the NHS.
To support employers, NHSLA:
• has recommended a panel of solicitors with expertise in the field of equal pay
• has negotiated preferential and competitive rates for their legal services
• will provide advice on when to settle or fight claims
• offers access to learning from similar cases in other NHS organisations.
Receiving support from the NHSLA has several advantages. Individual trusts retain responsibility and sovereignty over their own claims, but are able to access free NHSLA advice, expert legal advice at discount rates, and up-to-the-minute intelligence on the progress of other equal pay cases, including test cases. The NHSLA may also provide financial support for the costs of any cases they support as national test cases.
Information on the NHSLA website also includes guidance on responding to equal pay Freedom of Information Act enquiries, equal pay grievances and the new tribunal protocol.
Equal pay project board
NHS Employers is represented on the Department of Health's equal pay project board. Membership of this group also includes representatives from strategic health authorities, the NHSLA and NHS organisations, including foundation trusts. The overall aim of this group is to manage and co-ordinate a national strategy to deliver efficient and effective outcomes across the NHS.
NHS organisations are also encouraged to keep in touch with their SHAs on the financial management of equal pay risks. SHAs have a nominated senior manager to lead on equal pay issues and these individuals work closely with the DH to ensure an informed and consistent approach is followed. NHS foundation trusts may wish to do similar with Monitor.
Record-keeping and financial support
NHS boards are reminded that any equal pay claim potentially backdates for up to six years prior to the date of the claim, so it is essential that NHS employers maintain accurate historical employment records of employees.
Read our good practice for keeping staff records.
To ensure that financial support is available to trusts should there be settlement costs, arrangements are being made for funding through loans arrangements, which would normally be repayable over two to four years.
Outstanding legal issues
The Hartley judgment did not resolve all the legal issues involved in equal pay claims. Outstanding legal issues include whether:
• ‘term by term’ comparisons are valid (see Brownbill v St Helens and Knowsley NHS Trust on our key legal judgements web page)
• in the period prior to AfC, the different Whitley Council terms and conditions constitute a genuine material factor defence. There will be a hearing before the employment tribunal of four test cases on this point from 9 May to 24 June 2011
• the methodology of an independent expert can be successfully challenged
• AfC constitutes a new contract for limitation purposes.
The advice of the DH and NHSLA remains that employers should not settle individual claims until these legal issues are decided. Most of the outstanding claims are for back pay where, it is claimed, assimilation to Agenda for Change has revealed past unequal pay that was based upon gender difference. They are seeking up to six years back pay.
Collective agreements
The Allan v GMB case heard by the Newcastle Employment Tribunal has led to uncertainty about whether collective agreements to settle equal pay claims, either at local or national level, are a sensible way forward at present. In this local government case, the GMB union reached a negotiated settlement of their equal pay claims with the employers, but given the process followed and outcome of the deal, the union was found to have indirectly discriminated against female members with regard to their right to receive equal pay. GMB appealed this judgement and won but the decision of the employment tribunal was subsequently restored by the Court of Appeal.
Employers should consult with their lawyers about claims that may be progressing, in full or in part, and make preparations with regard to disclosure of data as necessary.
Support, advice and further information
Where employers require further information on equal pay claims, enquiries should be directed to the NHS Litigation Authority website. Alternatively, email enquiries to EqualPayAdvice@nhsla.com or contact John Mead, technical claims manager on 020 7430 8821.
NHS Employers has also put together a set of frequently asked questions (FAQs)and a glossary of terms that may help when discussing and dealing with equal pay enquiries.