Private sector employers should brace themselves for a wave of mass discrimination lawsuits following the abolition of a pay secrecy clause in the Equality Act.
According to law firm Pannone, when the Act comes into force in October, pay secrecy clauses will become unenforceable and organisations will be unable to prevent staff from disclosing salary information as long as it is provided to establish pay discrimination.
The move is intended to enable workers to seek pay disclosure from colleagues in order to stamp out salary discrimination in the workplace. But the right to request such information will also be open to anyone, including ‘equal pay’ firms and journalists, if they are attempting to uncover discrimination.
David Carmichael, a partner at Pannone, said: “Recent years have seen these ‘equal pay firms’ target the public sector – urging everyone from dinner ladies to teaching assistants – to make pay discrimination claims. These firms have now pretty much exhausted the public sector and the market has reached saturation point.”
But because the Equality Act abolishes so-called ‘gagging’ clauses with regard to pay, the way has now been paved for such firms to target big private sector businesses, many of which may be vulnerable to equal pay claims, he added.
Staff will be similarly protected if they divulge their pay terms to journalists attempting to discover discrimination.
“Employees often tend to do nothing if they are on their own. However, with these types of claims, there is an element of strength in numbers,” said Carmichael. “Specialist equal pay firms contact large numbers of people and have a reputation for bringing group claims, therefore private sector employers need to brace themselves for a wave of discrimination claims.”
