Employment Law Update (September 2010)
Pay secrecy ban could 'boost discrimination
claims'
As of October this year, the Equality Act will place a ban on
pay secrecy clauses, leading legal experts to warn that a glut of
discrimination claims may be on the horizon for private sector
employers.
Employers will no longer be able to prevent staff disclosing
salary information provided it is to establish pay discrimination –
something which has been welcomed by diversity campaigners.
But the Act has the potential to create mass equal pay claims,
as it will allow workers to disclose salary details to anyone who
says their enquiry is based on establishing pay discrimination.
David Carmichael, partner at Pannone, said, “Many employers will
not realise anybody can ask their employees for information if they
are attempting to uncover discrimination. This could lead to a new
wave of claims by so-called 'equal pay specialists.'
“Recent years have seen these ‘equal pay firms’ target the
public sector – urging everyone from dinner ladies to teaching
assistants – to make pay discrimination claims. These firms have
now pretty much exhausted the public sector and the market has
reached saturation point," he said.
Mr Carmichael warned that the abolition of pay secrecy clauses
"will now pave the way for these firms to target big businesses in
the private sector, many of which may be vulnerable to equal pay
claims."
He attributed the possible rise in discrimination cases to
'strength in numbers,' saying, “Specialist equal pay firms contact
large numbers of people and have a reputation for bringing group
claims.”