It has been widely reported that hundreds of companies face legal action after failing to meet an extended deadline to report their gender pay gap.
More than 1,500 companies missed the deadline to report their gender pay gap figures, which for private and voluntary sector employers fell on 4 April 2018, leading to the Equalities and Human Rights Commission (Commission) sending warning letters.
Whilst the vast majority subsequently complied, it remains the case that almost one third of the companies that received the warning did not and now face the threat of enforcement action.
What will be the next step?
It is likely that the Commission’s first step will be to write again to the employer, this time making a formal request for information to establish that there has been a breach of the reporting requirements. The reporting requirement did not apply to all firms and there will be no breach if, for instance, the employer had less than 250 employees at the relevant time.
At this investigation phase the employer should take the opportunity to put forward its side and explain its actions as silence could result in a court order and the threat of an unlimited fine for failing to cooperate.
What if an employer is found to have breached the reporting requirements?
If the Commission conclude that the employer has breached the gender pay reporting requirements it will in most cases issue an unlawful act notice, which will demand that the employer prepare a draft action plan on how the breach will be remedied and further breaches prevented. If this is not delivered to the Commission within 14 days, an application to the county court could be made for an order that the employer produce the action plan.
Can an employer dispute the breach?
An employer can appeal against the unlawful act notice within six weeks of the notice being issued, either on the basis that they deny they have committed an unlawful act or that they contend the requirement to prepare an action plan is unreasonable. On appeal, the court may affirm, annul or vary a notice or a requirement in the notice and make an order for costs or expenses.
What if an employer’s action plan fails to remedy the breach?
The Commission may, within six weeks of receipt of a draft plan, either approve or reject it. If it is rejected it will issue a further notice stating that the action plan is inadequate and that a further draft is required within 21 days.
What if an employer does not follow the action plan?
The Commission will then apply to the county court for an order requiring the employer to comply with it. Continued non-compliance will be an offence and on conviction the employer will be liable to a fine which is not subject to any cap.
Can legal enforcement be avoided once it has started?
If an employer realises at any stage that there has been a breach, it may be possible to avoid further legal action by entering an agreement undertaking to comply with the reporting requirements retrospectively for the past reporting year within an agreed period, and for the current reporting year on time.
If the reports are produced by the time limits specified that should be an end to the matter. If they are not then the Commission may again apply to the court for an order requiring compliance.
Does this enforcement action just apply if no gender pay report has been submitted?
No. Whilst that is the Commission’s immediate target, employers who have submitted data that has not been calculated in accordance with the Gender Pay Gap Reporting Regulations may also be subject to enforcement action in the same way as those that published no data at all.
This blog post was written by Christopher Davies. For further information, please contact:
Christopher Davies, professional support lawyer, Employment
T: 0161 836 7936