Employers warned: lose tribunals and you may face audits

Businesses which lose an employment tribunal claim over equal pay must review wages for all staff, the government has announced, according to the Press Association.

In the event of a tribunal ruling that a worker had been discriminated against because of their gender, Equalities Minister Lynne Featherstone said the firm would need to examine all employees’ salaries.

“This will mean that an employment tribunal which finds that an employer has discriminated on grounds of sex in contractual or non-contractual pay will be obliged to order the employer to conduct a pay audit in cases where continuing discrimination is likely,” said Mrs Featherstone.

“An audit would not be ordered if an audit has been completed in the last three years, the employer has transparent pay practices or the employer can show a good reason why it would not be useful.”

The plan to press ahead with the change comes as a response to the Modern Workplaces consultation, but Kevin Poulter, an associate at Bircham Dyson Bell, said such suggestions go against “everything else” the government has announced in an effort to promote the starting up of new businesses and to promote SMEs.

“This has meant they don’t have as much burden or risk in tribunals, such as extending unfair dismissal rights to two years, for example, or taking out certain regulations for micro-businesses,” he added.

“To suggest a tribunal could order by default almost that businesses have to do a potentially wide-ranging audit seems to go against all that. Obviously there will be a huge HR and time burden and significant financial cost to SMEs, as there would exponentially to large businesses.”

This entry was posted on Friday 29th June, 2012. Edit this entry.