EQUAL PAY AUDIT 2013-2014

1. Introduction

This equal pay audit involves comparing the pay of protected groups who are doing equal work in our organisation. Investigating the causes of any pay gaps by gender and ethnicity, or working pattern is the function of the audit.

This equal pay audit is concerned with an important, but narrow, aspect of potential discrimination in employment - unequal pay for equal work. It does not directly address other aspects of inequality, such as the glass ceiling, but such aspects - which may well contribute to overall pay gaps between, for example, men and women - may be highlighted by the pay audit.

Through carrying out this Equal pay audit the Trust is making a commitment to put right any unjustified pay inequalities and this means that the audit has had strong leadership from managers with the authority to deliver the necessary changes.

An equal pay audit is the most effective way of establishing whether the organisation is providing equal pay and rewarding employees fairly in practice.It is an effective demonstration of action to promote equal pay under the terms of the equality duties. It provides a risk assessment tool for pay structures.

2. Existing Equal Pay Legislation

Legislative provisions on equal pay aim to ensure that where women and men are employed to do equal work they should receive the same contractual pay and rewards for it. Legislative provisions prohibiting sex discrimination aim to ensure there is no discrimination because of sex in relation to any non-contractual pay and conditions. “Equal work” is defined in the Equality Act 2010 as work which is:

  • the same or broadly similar (known as ‘like work’);
  • different, but which is rated under the same job evaluation scheme as being equivalent work (known as ‘work rated as equivalent’); and,
  • Different, but of equal value in terms of factors such as effort, skill and decision-making (known as ‘work of equal value’)

The equality of terms provisions in sections 64 to 76 of the Equality Act 2010 apply to all contractual terms, including pay and other employment benefits

  • Wages and salaries, non-discretionary bonuses, holiday pay, sick pay, overtime, shift payments, occupational pension benefits
  • Non-monetary contractual terms are also covered, such as
  • Leave entitlements and access to sports and other social benefits, for example, company cars
  • The provisions in the Equality Act 2010 prohibiting direct and indirect sex discrimination at work cover non-contractual terms such as
  • Discretionary bonuses, promotion, transfer and training etc.

It is the employer’s responsibility to show that any difference in the contractual terms of a man and woman employed on equal work is due to a material factor which does not discriminate on the basis of sex. Differences such as additional duties, level of responsibility, skills, the time at which work is done, qualifications, training and physical effort could be of practical importance in determining this. A claimant has the right to claim pay arrears for up to six years in the employment tribunal where a breach of equal pay law has been established.

3. Benefits of Equal Pay Audits

An equal pay audit is a systematic investigation into the causes of any gaps in pay between men and women who work for the same employer and do equal work. The aim is to identify any pay inequalities that may exist between male and female workers and where the employer cannot satisfactorily explain the inequality by reasons other than gender, the employer should take all necessary steps to address the situation.

Equal pay audits are advantageous to employers because they:

  • Helpemployers reward their male and female employees without discrimination where they are doing equal work. This enhances motivation, reduces absenteeism, and is crucial in enabling employers attract and retain the best employees;
  • facilitate transparent pay systems and send a positive message to the workforce;
  • Help employers avoid equal pay claims being made against them; and
  • Show good management practices and facilitate the achievement of business objectives by increasing productivity of workers who trust their employers

4. The Audit

4.1. Methodology

The audit focuses on the analysis of aggregated data to identify any systematic risk arising from pay practice.

The primary data sources were the HR database (for gender and part-/full-time breakdown of staff population) and Finance’s record of actual payments for the period 2013/2014.

Finance also supplied additional data on starting salaries for new staff over the past two years. Another significant data source was HR files recording agreements and contractual elements of individual pay. Documents held in HR were reviewed to identify potential justifications for any differences observed.

These included pay agreements; memos to Finance; contents of personal files; documents supporting pay process (e.g. overtime sheets) and training materials for the system. It should be noted that there appear to be some gaps and inconsistencies in the records relating to pay held by HR and medical staffing. This, in itself, adds considerably to the Trust’s risk exposure on pay equality related issues.

Analysis involved comparison of data sets for male and female, part-time and full-time staff to identify patterns which might suggest inequality. Where potential inequality has been identified, data relating to individuals (contracts, personal files etc) need to be examined more closely to explore whether the data is accurate and whether any actual inequality might be justifiable on legitimate grounds. Where no justifiable material factor defence has been uncovered the case is considered to constitute a risk to the Trust.

Audit Methodology Summary

The framework of the five-steps in carrying out an equal pay audit advised within the EHRC’s Statutory Code of Practice on Equal Pay below;

Step 1:Decide the scope of the audit and identify the information required.

Step 2:Determine where men and women are doing equal work (like work, work rated as equivalent and work of equal value).

Step 3:Collect and compare pay data to identify any significant pay inequalities.

Step 4:Establish the causes of any significant pay inequalities and assess the reasons for them.

Step 5:Develop an equal pay action plan to remedy any direct or indirect pay discrimination.

The following process was undertaken as part of this organisation’s Equal Pay Audit:

Data Description / Data Output / Analysis / Output
Profiling of Staff / HR System,
Research and Development
Medical Staffing / Research and Development profile of staff by gender, band, Medical/Non - medical, part-time/full time / Baseline to assess variations in pay.
Breakdown in actual staff payments 2013/2014 / Finance
Medical Staffing / Comparison of average by gender, band, staff group, part-time/full time / Difference in actual pay 2013/2014
Document Review / HR System
Medical Staffing / Comparisons of contractual term: instructions to Finance: records of decision on pay; information on pay related processes and procedures / Any contractual justification for material differences in actual pay; potential sources of systemic in equality in pay process
HRODE sub committee / HR Team / Review of HR Practice and consistence check; interim review of findings and anomalies / Identify systemic sources of differences in pay, scrutiny of anomalies; check findings
Finance Meetings / Finance Team / Comparison of HR/ Finance perspectives; clarification of any anomalies / Identify systemic sources of differences in pay, scrutiny of anomalies; check findings
HR Data Check / HR Team / Review of Draft report / Quality assurance; intelligence checking and review of findings and actions
Finance Data Check / Finance / Review of Data and conclusions / Quality assurance on data and process

The outcome of an equal pay audit is that concrete measures are taken to address any unjustified pay inequalities. It is recommended that workplace representatives / trade unions are involved so that the audit can be validated and to ensure that the measures taken are successful in the longer term.

4.2. Statistics

All salaries compared for the purpose of this audit are done so based on full time equivalent values.

4.2.1. AfC Staff

Around 3,400 members of staff employed by the Trust are employed under Agenda for Change Terms and Conditions.

The pay system is designed to:

  • Deliver fair pay for non-medical staff based on the principle of 'equal pay for work of equal value'
  • Provide better links between pay and career progression using the Knowledge and Skills Framework
  • Harmonise terms and conditions of service such as annual leave, hours and sick pay, and workdone in 'unsocial hours'

Staff are placed in one of nine pay bands on the basis of their knowledge, responsibility, skills and effort needed for the job. The assessment of each post, using the Job Evaluation Scheme (JES), determines the correct pay band for each post, andas a result,the correct basic pay. Within each pay band, there are a number of pay points. As staff, successfully, develop their skills and knowledge, they progress in annual increments up to the maximum of their pay band

The pay system provides benefits for both staff and employers. For employersthe system provides greater flexibility to enable them to:

  • Devise new ways of working that best deliver the range and quality of services required, to best meet the needs of patients
  • Design jobs around the needs of patients rather than around grading definitions
  • Define the core skills and knowledge they want staff to develop in each job
  • Pay extra to address local recruitment and retention difficulties.

For staffthe key benefits include:

  • A system that is fair and transparent
  • Recognition and reward for the skills and competencies staff acquire throughout their career
  • Harmonised conditions of service.

When looking at staff within the Trust employed under the AfC condition the Key findings indicated:

4.2.2. Medical Staffing

Medical staffing pay structure is complex and includes a number of additional awards (e.g. responsibility allowances, band supplement, clinical excellence awards etc.). There are still 2 different types of contract for consultants, with different associated pay scales and 5 different pay scales for middle grades medics.

Historically the medical staffing pay structure was ad hoc and lacking in structure due to the lack of medical staff available across the market, and the need to attract the highest calibre into the organisation. This shortage left room for negotiations in the past whereby individuals could ‘negotiate’ better pay conditions on an individual basis. This practice came to a close when the new contracts where introduced.The new Consultant Contract was implemented in 2003 and the new Specialty and Associate Specialist contracts were introduced in 2008. This new contract left no room for negotiation and set clear rules and boundaries for any additional elements above and beyond the basic salary entitlement. A large percentage of our medical staffing group are now on the new contract however there are a few individuals remaining with these historical pay agreements still in place.

6. RECOMMENDATIONS

  • Explore in more detail the difference of pay in white and non-white medical staff
  • Conduct regular Equal Pay Audits, monitoring any trends/changes
  • Awards for clinical excellence for Medics should be linked to performance including patient feedback.
  • Current excellence should be the basis for Awards, not past performance – awards should be awarded for no more than one year locally and then reviewed
  • It is recommended that action is taken to simplify and clarify the full range of remuneration at the Trust and to place pay on a more consistent, transparent and equal footing.
  • Support the review of additional pay arrangements to ensure alignment.