Equal pay audits
If an Employment Tribunal finds that there has been an equal pay breach in relation to claims presented on or after 1 October 2014, the Tribunal must, subject to certain exceptions, order a Respondent to carry out an equal pay audit pursuant to the provisions of the Equality Act 2010 (Equal Pay Audits) Regulations 2014 (SI 2014/2559).
Circumstances in which an audit must not be ordered
Regulation 3 provides an audit will not be ordered if a Tribunal considers that:
An audit conducted by the Respondent in the previous three years meets the prescribed requirements.
An audit is not required because the required action that needs to be taken to avoid equal pay breaches from occurring or continuing is already clear.
The nature of the equal pay breach gives the Tribunal no reason to think that there may be other breaches.
The disadvantages of an audit would outweigh the benefits.
Exemption for existing micro-businesses and new businesses
Existing micro-businesses and new businesses are exempt from the requirement to carry out an audit for ten years after the commencement of the Regulations as per reg. 1 of the schedule to the Regulations.
An existing micro-business is a business with fewer than ten full-time equivalent employees, which was such a business immediately before the date of the judgement in the case, as per reg. 2 of the schedule to the Regulations.
A new business is a business that commenced within a 12 month period ending with the date of presentation of the complaint.
Content of Employment Tribunal order for an audit
Regulation 5 provides that an Employment Tribunal's order must specify:
The persons about whom information should be included in the audit.
The period of time to which the audit must relate.
The date by which an audit must be received by the Tribunal.
Regulation 6 of the Regulations states that the audit should:
Identify relevant gender pay gap information.
Identify any differences in pay and the reasons for those differences.
Include the reasons for any potential equal pay breach identified by the audit.
Include the Respondent's plan to avoid equal pay breaches occurring or continuing.
Regulation 7 allows an Employment Tribunal to determine, on the papers, whether an audit submitted in time complies with the order, and if satisfied, to make an order to that effect and send a copy of the order to the Respondent.
If an Employment Tribunal is not satisfied, or the audit was received after the due date, the Tribunal must fix a hearing to determine whether or not the Respondent has complied with the requirements set out in reg. 6. Where relevant, a new date must be fixed for the submission of the audit. The relevant procedure is outlined in reg. 7(3).
In cases where an Employment Tribunal has determined, either on the papers, or after a hearing, that the audit is compliant, then the Respondent must usually place this on its website within 28 days of the determination, for at least three years, and inform those about whom relevant gender pay gap information was included.
If a publication would result in a breach of a legal obligation, the audit must be published with any revisions to avoid it breaching the legal obligation if this is possible. A Respondent must supply written reasons why publication would be likely to breach a legal obligation which will be considered by the Tribunal. The Regulations set out the procedure for determining whether a Respondent has complied with its obligation to publish the audit.
An Employment Tribunal has the power to order a penalty, not exceeding £5,000 in cases where the Tribunal has determined that a respondent has, without reasonable excuse, failed to carry out an audit or to produce a compliant audit. This penalty is payable to the Secretary of State.