If a successful equal pay claim is made, the claimant could be awarded compensation for both past and future losses. Past losses will normally be subject to a six-year cut-off point, although where the employer has concealed certain relevant facts, or where the claimant is suffering from a disability, this six-year cut-off will not apply.
Unlike discrimination claims, no award can be made for injury to feelings.
There is, however, no limit to the amount of compensation that can be awarded by the tribunal, so the cost of such claims is potentially high.
There are defences employers can raise. For example, they might be able to argue that the man to whom a female employee is comparing herself does not do like work, or the work has not been rated as equivalent under a job evaluation scheme. But employers must be careful that the evaluation scheme is not in itself discriminatory.
Otherwise, if the tribunal is satisfied that the reason for the pay difference is genuine, material and unrelated to the sex of the employee, then the employee will not succeed in her claim. Examples of 'genuine and material' reasons might include budgetary constraints or having to pay prevailing market rates in order to retain the workforce.
However, there are steps that an employer can take to reduce the risk of claims being brought in the first place. A first step might be to introduce transparency into pay systems - by using grading and bands, for example, and disclosing to employees the range of salary within each band.
It is recommended that employers monitor pay within the organisation by regularly assessing the salary for each job and ensuring there is no direct or indirect discrimination. If changes are made to pay structures, consultation with employees is advisable to ensure transparency.
Employers can also reduce the risk of equal pay claims by following the guidelines set out in the Equal Opportunities Commission's Equal Pay Code of Practice.