Employers are dealing with a record number of cases and, with the credit crisis, soaring household bills and an uncomfortable inflation rate straining the pocket, the pursuit of an equal-pay claim is tempting from a financial as well as a moral standpoint.

Employers need to address equal pay issues, tackling any potential problems and, hopefully, avoiding those costly tribunal claims in the first place.

• Carry out a thorough pay review that covers all roles within your business, making sure all elements of remuneration packages are assessed in the review. Look at any significant pay gaps and decide whether these are free from discrimination and sex bias.
  
  
• Consider the Equal Opportunities Commission's Code of Practice on Equal Pay.
  
  
• Make sure everyone is familiar with your pay policy, including any special conditions e.g. for bank holidays, extended leave, etc. Staff who understand their remuneration packages may be less likely to challenge them.
  
  
• Impose narrow pay bands, wherever possible, and clearly define progression between the bands.
  
  
• Be clear about what staff actually do, rather than what their job descriptions say they do. Keep job descriptions up to date.
  
  
• Ensure appraisals are well documented so employees are fully aware of their performance and its effect on their pay.
  
  
• Consider alternative pay protection arrangements (such as one-off lump-sum payments). You must be able to show that there is a carefully crafted and costed scheme negotiated and that it does not have discriminatory effects. The longer the period of pay protection, the harder it will be to justify.
  
  
• When deciding starting salaries for new employees, do not rely too much on their previous salary – otherwise you may be perpetuating a previous employer's inequality. Monitor starting and promotional pay rates.
  
  
• If you are in the process of purchasing a business or your business is involved in contracting/outsourcing and staff are transferring over, think about equal pay. Consider the precise wording of warranties and indemnities in your contract with the other business – they will be the key to your ability to pass costs to the other side. If not, transferring staff may be able to recover up to six years' back pay from you, even if their comparator did not transfer over.
  
  
• And, last but by no means least important, take expert legal advice at an early stage. It is always beneficial to seek an independent view about the prospects and implications of any claim. A lawyer with specialist expertise in the complexities of equal pay claims will be able to give an objective view.

It is vital for employers to address equal pay effectively. It may be time consuming, but it is less time consuming and less expensive than appearing before an employment tribunal.

About the author

Ross Meadows is a solicitor in the Employment and Human Resources Department at Mace & Jones. He can be contacted by telephone: 0151 236 8989, via email:ross.meadows@maceandjones.co.uk or visit Mace and Jones' website for further information: www.maceandjones.co.uk.