Equal Pay Proforma – Chief Officers

The following steps set out the process of Equal Pay risk management:

• Identify the risk – what process(es) does the council have in place to identify Equal Pay risks?
• Assess the risk – what is the probability that an Equal Pay risk may occur in the council and what is the potential outcome?
• Control the risk – what strategies, activities and/or interventions does the council have in place to nullify, reduce or mitigate the Equal Pay risk?
• Monitor and review – what governance infrastructure does the council have in place that monitors and reviews both the Equal Pay risk and control measures?

The Equality Act 2010 gives women and men the right to claim equal pay with a comparator of the opposite sex where they are doing equal work. A worker's work is equal to that of their comparator if it is ‘like work’ (essentially the same role), work rated as equivalent (under an existing job evaluation scheme) or work of equal value (as assessed but not yet under an existing Job Evaluation Scheme). A worker may assert their right to Equal Pay by raising a claim with an employment tribunal or in the civil courts. Where an Equal Pay claim is upheld, the tribunal/court will remedy the breach by inserting an equality clause into the worker’s contract of employment to provide for equal pay, including up to six years’ backpay, plus interest. This has the potential to incur significant liabilities upon the council. The right is not limited to equality of pay but extends to all benefits under the employment contract, including for example benefits under a pension scheme and annual leave.

Equal Pay is not concerned with whether pay is ‘fair‘ but only with whether discrimination between men and women is the reason for any inequality in contractual terms of employment. Although it is not a legal requirement, the Equality and Human Rights Commission (EHRC) – along with many other bodies, such as Advisory, Conciliation and Arbitration Service (ACAS); the Local Government Association (LGA); and the National Joint Council (NJC) – advise that the most appropriate method for an employer to adopt to ensure that its pay system delivers pay and benefits that are free from sex bias is to undertake regular reviews of its pay systems (pay and terms and conditions of employment).

Equal Pay is different from the Gender Pay Gap, which measures the differences between the average pay of male and female employees irrespective of job role, seniority or value of the work.

Equal Pay: Risk Management involves the process of identifying, assessing, controlling and reviewing those risks arising from inequality or inequity in pay and terms and conditions of employment that expose the council to financial, legal, strategic and reputational liabilities.

The impact of inequality or inequity in contractual pay and terms and conditions of employment arising from mis-management and/or mal-administration and/or otherwise could, in a worst-case scenario, expose the council to, and subsequently incur the council with, substantial financial, legal, strategic and reputational liabilities that may have significant implications on the council’s service provision, affecting residents, service users and the workforce.

An awareness and understanding of the risks arising from inequality or inequity in pay and terms and conditions of employment can help the council to effectively manage the risks by determining how best to identify, assess and mitigate the identified risks, and subsequently subject the control measures to monitoring, review and scrutiny.

The questions below are designed to support Chief Officers to effectively discharge their responsibility to manage the risk of Equal Pay.

Identifying the Equal Pay risk – What is the process of identifying the Equal Pay risk?

• Does the council’s leadership (Chief Officers) have a common and shared understanding of Equal Pay; and how Equal Pay risks are managed?
• Does the council’s workforce have a common and shared understanding of Equal Pay?
• Does the council embrace the spirit and purpose of its Pay Policy statutory obligation? Does the Pay Policy Statement incorporate the council’s policy on Equal Pay?
• How does the council identify its Equal Pay risk? Is Equal Pay recorded on the council’s Risk Register?
• How does the council’s Pay and Reward strategies align to its Equality framework?
• Does the council conduct regular Equal Pay Audits (EPA)? or as an interim measure does the council conduct annual Equal Pay desk-top reviews?
• What were the findings and recommendations of the council’s most recent EPA? Was it completed in accordance with EHRC (Equality & Human Rights Commission) guidance and within the last 2 years?
• How does the council demonstrate that it embraces the spirit and purpose of Gender Pay Gap reporting?
• Do residents, elected members and staff know the findings and actions of the council’s most recent Gender Pay Gap report?
• Does the council wholly own other entities and/or undertakings? If so, has the Equal Pay risk been fully assessed in terms of potential comparisons between the council and those bodies/between those bodies? Is an Equality Impact Assessment (EIA) in place and subject to review?

Assessing the risk – what is the probability that Equal Pay risks may occur and what is the potential outcome?

• How, and where, does the council’s leadership (Chief Officers) demonstrate and evidence that its Equal Pay frameworks and processes are statutorily compliant?
• How, and where, does the council’s leadership (Chief Officers) demonstrate and evidence that it implements and operates best practice in managing potential Equal Pay?
• Is the council’s leadership (Chief Officers) able to demonstrate and evidence that it is adaptable to changing legislative circumstances and developments that impact Equal Pay risks?
• Did the council’s most recent EPA identify any liabilities? Did the council’s leadership (Chief Officers) implement new or amend current control measures to address those liabilities? Are these control measures subject to review?
• Did the council’s most recent Gender Pay Gap Report identify differences in the average and median pay between men and women in the workforce? Did the council’s leadership (Chief Officers) implement appropriate actions? Are these actions subject to review?
• How robust is the council in its application of EIA’s relating to changes to policy or in decision making at all levels of the organisation that have the potential to impact pay and/or terms and conditions of employment? Are the EIA’s monitored and reviewed?

Controlling the Equal Pay risk – what are the strategies, activities and/or interventions in place to nullify, reduce or mitigate the Equal Pay risk?

• Does the council invest the necessary resources to manage and control potential risks arising from Equal Pay?
• Does the council’s leadership (Chief Officers) have a common and shared understanding of job evaluation as a control measure to manage the risk of Equal Pay?
• Does the council use a Job Evaluation scheme(s) (JES) to control the Equal Pay risk? If so, is this an analytical JES and does the JES have the agreement of the recognised Trade Unions?
• Does the council use more than one JES? Is the council aware of the risks of operating more than one JES and is there an EIA in place for the use of each of the JESs?
• Are all job roles within the council evaluated via an analytical JES? If not, why not? Is the decision not to evaluate all job roles within the council formally recorded and risk assessed?
• Is the analytical JES administered and operated in-house? If so, is the job evaluation process robust and free from bias?
• Does the council contract a Third-Party Supplier to provide a job evaluation service? If so, can the council evidence due diligence in the commissioning of the Third-Party Supplier? Is there a comprehensive Service Agreement in place that sets out the terms of service(s) commissioned – including responsibilities and liabilities?
• How often is the administration and operation of the JES(s) reviewed? Is there structure and clarity in the review process? Are the findings shared with the workforce?
• When was the most recent review of the JES processes undertaken? What were the findings of the review?
• Does the council’s leadership (Chief Officers) have a common and shared understanding of job evaluation inter-dependencies (see section below)?  
• Are the appropriate job evaluation inter-dependencies in place, and are the inter-dependencies functioning effectively and efficiently? Are the council’s job evaluation inter-dependencies aligned and regularly reviewed?

JE Inter-dependencies

Values and culture

• Is Equality incorporated into the council’s Values? Is the council able to evidence that it is embracing, embedding and operating equality values?
• Is job evaluation incorporated into the council’s equality values, and if so how can this be evidenced? Does job evaluation positively influence the council’s culture? How is this measured?

Strategies, policies and procedures

• Does the council have appropriate, relevant and up-to-date quality and workforce strategies in place?
• Has the council’s leadership implemented an up-to-date workforce strategy that addresses its requirements? If so, is it aligned with its service delivery plans?
• Is the council’s leadership confident that it has effective strategic workforce planning? How does this link with Pay & Reward and with job evaluation?
• Is the council’s leadership confident that job evaluation is reflected within the council’s Equality, Diversity & Inclusivity strategies and plans?
• Is the council’s leadership able to evidence that the workforce is effectively performance managed, that aligns and contributes toward the management of the equal pay risk? 
• How is performance supported and managed – is the council clear that the workforce adds maximum value and understands what this looks like? What measures are in place for this? 
• Does the council have processes and measures in place to understand and manage employment relations and industrial relations risks?

Structures

• Does the council’s leadership effectively communicate to Elected Members and the workforce the primary purpose of evaluating jobs and where responsibility lies for the evaluation of job roles?
• Are HR compliance and governance requirements being met throughout the line management chain of the council? And if not, why not and what is being done about that?
   

Systems

• Is the council’s leadership able to demonstrate and evidence that it knows exactly what pay and terms and conditions are being awarded to the workforce? Are these pay and terms and conditions statutorily compliant and reflective of the council’s Pay Policy and Pay & Reward strategies? For example, does the council know exactly the allowances (stand-by; on-call; overtime; etc); market supplements; retention and recruitment payments; etc being paid? How, and when, are these payments reviewed?
• Is the council compliant with the Equality Act 2010 with regard to both pay and terms and conditions? How often is this compliance measured and how is it reported?
• Is the council’s leadership able to demonstrate and evidence that its relevant systems (HR; Payroll; Finance; etc) and accompanying processes are operating effectively and that the respective systems align and contribute toward the management of equal pay risks?
• How and where is the above information captured and where is it reported? Is it clear who is responsible and accountable for agreeing resources to monitor and mitigate risk for employment related policies, practices and systems?

Leadership and communication

• Is the council’s leadership able to evidence effective communication that engages the workforce? 
• Is the council’s leadership confident that it effectively engages with the recognised Trade Unions and that there is a culture and practice of collaborative / partnership working that contributes toward the management of the equal pay risk?
• Is the council confident there is appropriate investment in capacity building in the council, including leadership development?

Staff and skills

• Does the council’s workforce have a common and shared understanding of job evaluation?
• Does the HR function have the capacity and capability to support the council’s workforce and service delivery needs? Is the HR function able to effectively support the council in ensuring that it has the right people, in the right jobs, on the right contractual terms, at the right time?
• Does the workforce have the required knowledge and skills to contribute toward the management of equal pay risk? 
• Have training needs (knowledge and skills) that contribute toward the management of equal pay risk been identified? Has training been delivered to meet these training needs? Has the training been reviewed and evaluated?

Monitoring and review – what is the infrastructure that monitors and reviews both the Equal Pay risk and control measures? 

• What governance framework is in place to manage the Equal Pay risk?
• Are there any gaps in the governance framework managing the Equal Pay risk?
• Is the governance timely and adequately resourced?
• Is the reporting and governance of Equal Pay open and transparent?
• Does the council’s governance infrastructure ensure that the Equal Pay risk is nullified; reduced or mitigated?