Equal pay U-turn - a victory for employees?


Employment law will be substantially affected by the Retained EU Law Act.  Although the controversial 'sunset' provisions were dropped, the Act still removes the supremacy of EU law in the UK.   This means that EU legislation no longer has "direct effect" in the UK, and there is no longer a requirement to interpret UK laws to comply with EU law. 

One area affected by this is equal pay law.  The European Court of Justice (ECJ) had previously held that equal pay claimants can rely on the EU Treaty having direct effect in the UK, in order to claim wider protection than is provided under UK equal pay law.  In particular, they could use this mechanism in a claim for equal pay for work of equal value, to compare their pay with that of male employees employed by another employer at a different location (or "establishment"), but whose contract terms derive from the same source as the female claimants' terms.  This is often called the "single source" test.   Under domestic law, they would not have been able to use those male employees as comparators.   This principle has allowed, for example, female supermarket checkout staff to compare their pay with that of men employed in distribution depots, and is the basis for claims by hundreds of thousands of supermarket staff. 

By removing the principles of supremacy and direct effect, the Retained EU Law Act would prevent claimants in equal pay claims relying on such comparators.   However, following proposals by the Labour Party to restore the single source test if elected, the Government has announced that it intends to pass regulations restating the test.  However, this is far from straightforward. The single source test has been refined by the ECJ over several years.  Condensing it into legislation will be a complex task and may still leave gaps in protection and areas of confusion. 

The announcement also raises the possibility that the Government may seek to legislate to replace EU-derived caselaw.   In the employment law context, this would be enormously complicated and create substantial uncertainty for businesses and staff.  At a time when the Government has had mixed success with its employment law agenda (with many initiatives seemingly stalled), the prospect of hurriedly-drafted regulations passing with limited scrutiny will cause concern. 

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