Companies could face a significant increase in the number of pay equality cases after legislation is introduced next year to bring more transparency to the issue, an Irish Business and Employers Confederation (Ibec) employment law conference in Dublin has been told.
Ireland has until June 2026 to transpose the European Union (EU) Pay Transparency Directive and Ibec’s associate legal director, Sinead Wallace, told the event changes to the legal position in the UK in relation to the issue had resulted in a number of substantial cases being taken, notably in the retail sector with companies including Next, impacted.
Some 3,500 shop workers at the clothes retailer, mainly women, were awarded about £30 million (€35 million) because they were paid less than warehouse workers.
“Employers will have to identify categories of workers who are performing the same work or work of equal value and that will involve a complex comparison of roles based on skills, effort, responsibility and working conditions, and indeed, any other factors that are relevant to the specific job or position,” she said.
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“And the directive also says that relevant soft skills should not be undervalued. So this is a huge exercise to be looking at these categories of workers asking: ‘Who is performing the same work? Who is performing work of equal value? Is it just people who have the same job title? Is it people who have a different job title and in a different part of the business? Do we value them as equal roles?”
“I’m not sure many employers would have turned their mind to that concept before, because it’s a vast evaluation of the roles across your business. And depending on what sector you work in, you may have different structures, different pay arrangements in place,” Ms Wallace said.
“So, when you immediately think about pay transparency, you think about revealing people’s salaries, but actually allowing people to bring equal pay cases in a more easy manner may result in more litigation.”
As to revealing people’s pay, she said employees would not be able to request detail on the earnings of specific colleagues but would have to be provided with the range of salaries being paid to people in a broadly similar roles.
She said tools and methodologies for making the required comparisons have been promised by Government and Ibec is pushing for these to be published well before transposition to allow employers to work out how the system will work.
Substantial changes to gender pay gap reporting will also be introduced, she said, with far greater detail required in relation to sections of the business with mechanisms for reviews involving worker representatives where gaps of more than five per cent that cannot be justified persist for more than six months.
In a poll of the human resources (HR) executive attending the event, 75 per cent said their organisation was not prepared yet for the Pay Transparency Directive.
