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UK Equality Act: Impact on Pay Claims and Employee Turnover

Submitted by  on October 4th, 2010

With the newly proclaimed Equality Act coming into force in the United Kingdom on 1st October 2010, PricewaterhouseCoopers conducted a survey of 1,148 employees to find out their level of sensitivity to pay inequality. The new Act makes pay secrecy clauses in terms of employment unenforceable in cases where the employee seeks to determine if they are being discriminated against. Such “gagging clauses” will be largely or wholly ineffectual under the new Act.

The PWC survey found that around half of all employees would ask for a pay rise or look for a new job if they discovered that workers at the same level as them earned more. Women (at 52%) were less tolerant of pay inequalities than men (at 46%).

Although the research study surveyed employee intentions, and these may not be played out in actuality, the study clearly highlights how equity considerations play out in the thinking of employees. This finding is not new. However, what is clear is that employers in the UK will no longer be able to hide behind a veil of secrecy in order to guard themselves against employee dissatisfaction over discrimination and unfair pay scales. Now is the time to revisit your company’s remuneration scales with the intention of putting in a plan to level out pay inequalities over a predetermined period.


Posted in Communication, Research, Talent | Comments (0)

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