Background
Equal pay has been a statutory entitlement since the 1970
Equal Pay Act came into force. Successive Secretaries of State have endorsed
the principle of equal pay in the NHS which is Government policy.
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.
The majority of claims have been lodged because claimants
believe that either prior to the introduction of Agenda for Change and/or as a
result of assimilation onto Agenda for Change pay bands, they have previously
been or are being paid less than male colleagues undertaking similar or
comparable jobs.
There are currently nearly 14,000 equal pay claims in the
NHS in England as well as numerous grievances (which could become claims in due
course) suggesting the potential for significant numbers of further claims. Of
the nearly 14,000 equal pay claims, the majority have been lodged by a “no win
no fee” solicitor and the remainder by unions. Most of the claims are in the
North East and North West.
The Strategy
The Department has no wish to delay payment of justified
equal pay claims, however, there is a number of legal issues which must be
resolved before it is clear which, if any, claims are valid.
The NHS has a duty not to divert funds from patient services
to settle claims until any liability is properly established. In addition,
evidence from past settlements is that they cause tensions between staff, and
encourage more claims to come forward from those who feel they have “missed
out”.
The advice of the Department of Health, the NHS Management
Board, the NHS Litigation Authority (NHSLA), and NHS Employers is, therefore,
not to settle any claims until the legal issues are resolved.
NHSLA is seeking to resolve the outstanding legal issues as
quickly as possible, but pressures on the Tribunal Service mean that this will
take time. Some cases may then proceed to the Employment Appeals Tribunal,
Court of Appeal and, possibly the House of Lords.
The importance of testing the law before any settlement is
illustrated by a recent Employment Appeals Tribunal ruling, which contradicted
the misconception that common pay banding under a job evaluation scheme creates
a right to back pay.
This is not the only issue that needs to be tested. There
are numerous others – for instance whether an applicant in one trust can cite a
comparator employed at another trust, and what effects TUPE transfers have on
equal pay actions.
Trusts should sign up for support from the NHSLA. This 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.
NHS organisations should also keep in close touch with their
SHAs on the financial management of equal pay risks. NHS Foundation Trusts may
wish to do similar with Monitor.
Finally, NHS Boards are reminded that any equal pay claim
potentially backdates for up to 6 years prior to the date of the claim so it is
essential that NHS employers maintain accurate historical employment records of
employees.