Government vows to keep EU equal pay protections

The specific provision, Article 157 of the Treaty on the Functioning of the EU (TFEU), was referenced in K v Tesco Stores Ltd, a 2021 equal pay claim considered by the European Court of Justice (ECJ).

The ECJ found that if pay can be attributed to a "single source", the work and pay of those workers can be compared, even if they work in different establishments.

The Government has said it intends to make regulations via The Retained EU Law (Revocation and Reform) Act 2023 that will ensure that the effects of Article 157 are retained.

A spokesperson for the Government said: “There will be absolutely no reduction in equal pay protections. The new secondary legislation will be laid before Parliament long before the end of the year.”

The move to retain the provision has been described as a "u-turn" by Labour's Shadow Women & Equalities Secretary, Anneliese Dodds, who also noted that the Government's announcement came hours after Labour announced its own commitment to keep equal pay rights for women.

Posting to X, formerly known as Twitter, Dodds added: "Labour will protect a woman's right to make an equal pay claim when their terms can be attributed to the same source."

In a comment provided to Personnel Today, Audrey Williams, employment partner at Keystone Law, said the announcement "essentially confirms that the status quo will remain as set out in the current Equality Act legislation and, one assumes, the related case law".

Williams added: "However, the status of case law from the European Court after exit day on the topic of single source (and other areas of employment law) is also complex.

"Equal pay claims are notoriously difficult to pursue (and defend) but reducing the protection would have been unwelcome when inequity in gender pay remains problematic. While it remains a relatively underused provision, the single source argument has been an effective line of attack with claims brought in the public sector and, more recently, against employers with complex group structures in the private sector.

"For example, where there may be multiple subsidiaries, ultimately owned and controlled by the same parent which is the decision maker when it comes to pay and benefits."

The news comes a month after Prime Minster Rishi Sunak said he would not bail Birmingham City Council out over the massive cost of equal pay claims dating back to 2012.

In June, Birmingham reported that it faced serious financial issues after a "refreshed" look at its accounts uncovered that it still has to pay up to £760m to settle the claims.

In an analysis on the “single source” provision and its role in the decision in K v Tesco Stores Ltd, Crossland Employment Solicitors said the “decision potentially makes it easier for equal pay claimants to compare themselves with employees working in different jobs in different locations”.

The firm also noted that the "single source" test is easier to apply than the ruling made by the Supreme Court in Asda Stores Ltd v Brierley [2021] UKSC 10.

"The EU single source test is even simpler to apply - claimants in the UK can now rely on it in all types of equal pay claim, so long as one single employer is able to rectify any pay inequality," the firm said.

Adam Carey