Pay difference between staff doing the same work

It is not always unlawful, in fact it's quite common

I had a question this week in respect of pay and the fact that there were differing levels of pay for people doing the same work in the organisation. This is a fairly common issue I come up against and whilst many consider it unfair, it is not necessarily unlawful to pay staff different rates.

Here’s the question from John (not his real name)

I work for XXXXX which is "an arms” length civil service agency. Some of my colleagues are on significantly more money than me as they transferred from the prison service or similar agencies and kept their pay point. I've been told I cannot move to their pay point despite us now doing exactly the same job for the same length of time at the same port as I joined externally.  it feels really unfair and unequal.

In fact the issue is more in depth than this as others who joined externally were recruited on more money too and again I have been told that I cannot match their pay point either. I have tried to get answers from management union and hr but nobody seems to either know or want to tell me how or why I am not able to be paid the same.

Please could you help - it's so frustrating - and there seems to be a wall of silence at management level as I've been given partial non-committal answers and essentially been told they see the matter as closed. 

Does John have a valid claim against his employer?

No, and here’s why:

Staff are contracted with their employer under the terms and conditions of employment they agreed at the start of their employment. Each contract is individual to them, and with any type of contract there are two elements - offer and acceptance. John was offered his position on the terms set out by his employer and he accepted them. No issue there.

So that’s our starting point. If the prison service staff hadn’t TUPE’d over and no new staff were recruited John would be happy.

TUPE of prison staff

Dealing with the prison staff and any other staff transferred first. One of the main intentions of the TUPE legislation is to maintain the terms and conditions of employment upon transfer. Most TUPE claims arise because the new employer wishes to change those terms, more often than not to the detriment of those transferring. It is this legislation which protects them.

In this scenario the John’s employer could not reduce the transferees pay to match his - it would be in breach of TUPE. So we have the situation where the transferring employees are in the position where they earn more doing the same work. John is aggrieved at this - he wants his pay increased to match that of the prison service staff and that is understandable, but his employer’s hands are tied.

If, every time employees transferred into a business, all existing contracts were enhanced to match those incoming, it would probably lead to far less transfers and takeovers because there would be a constant race to the top.

At some point in time employers generally seek to harmonise employment terms within their organisation, but there is no legal duty to do so. In fact, many employers particularly in the services sector transfer staff in and out on a regular basis due to the tendering of service contracts. Sometimes they win and sometimes they lose those contracts and the staff are constantly shifting from one service provider to another. They often have many different variations of employment contracts at any one time.

So, this is why people doing the same work are often paid at different rates. It’s a legacy issue which John’s employer can’t change.

What about newly recruited staff?

In respect of recruiting new staff on higher pay to undertake the same role, the situation is similar. As competition heats up for a scarce labour force, inevitably pay packages rise too, so situations arise where new recruits are offered more than existing staff. In the current labour market it is not uncommon to read about significant bonuses being offered to tempt staff take up a particular role.

That is market forces at play; employers searching within an ever decreasing pool of prospective employees. Naturally it forces up wages.

Now, it must be particularly galling to work with people who are receiving higher pay for doing nothing more, but sadly that’s life! I have sympathy for John as I would be none too happy in his situation either.

What can he do about it?

Other than raise a grievance and appeal to his employer’s sense of fair play and ask for an increase - not a great deal. Of course, he has the option of resigning which could force the hand of his employer to come up with an increased pay offer to tempt him remain. After all, the costs of recruiting and training a new employee could far outweigh the prospect of increasing the pay of an existing member of staff.

What about discrimination?

I have many similar complaints as this with people saying it’s discriminatory, but it is only discriminatory if the disparity in pay is as a consequence of a protected characteristic, such as sex.

There have been well publicised cases against major supermarkets, where jobs of equal value attracted different pay scales between men and women. It generally involved men working in the warehouse who were earning more than their female counterparts on the checkouts. This was held to be discriminatory because the work in the store and the warehouse was considered work of equal value.

So, unless it can be shown there is a discriminatory element is the pay disparity with his fellow staff there is little John can do.

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