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Suspected pay discrimination in the case of equal work duties (TAS 102/2018, issued on 10 December 2018)

Man A asked the Ombudsman of Equality to find out whether he had been discriminated against in accordance with the Equality Act. For three years, the employer had paid a lower salary to him than to woman B, who was performing the same or equal work duties. In his referral to the Ombudsman for Equality, A described, for instance, that A and B work in the same team and perform equivalent duties, although their job titles are different. The manager had justified the pay difference to A by saying that a higher salary had been originally agreed to B than what their duties require.

The provisions in the Equality Act

In Section 8, subsection 1, paragraph 3 of the Equality Act, the action of an employer shall be deemed to constitute discrimination prohibited under the Equality Act if the employer applies the pay or other terms of employment in such a way that one or more employees find themselves in a less favourable position based on their gender than one or more other employees in the employer’s service performing the same work or work of equal value.

Assessment of the case

When assessing pay discrimination in accordance with the Equality Act, it is necessary to find out whether the employee suspecting pay discrimination and the employee representing the other gender and receiving a higher salary, performed the same work or work of equal value. If the work duties were the same or of equal value, a presumption of gender-based discrimination is raised. When assessing whether the work is the same or of equal value, the decisive factor is not, for instance, the job title, but what kind of work the employers actually perform.

According to A, he and B perform largely identical work tasks, although their titles are different. The employer did not dispute the equality between the work tasks performed by A and B in a report submitted to the Ombudsman for Equality. In principle, the Ombudsman for Equality does not assess how demanding the work tasks are in a pay discrimination case, as evidence on the work tasks and how demanding they are is usually presented in the district court in connection with the action for compensation against the employer. In this case, however, the Ombudsman for Equality stated that, despite the different job titles and some differences in the work duties, the work performed by A and B seemed to be at least of equal value.

Even if an employer applies the pay terms in a way that places an employee or employees in a less favourable position because of their gender than one or several other employees doing the same or same level of work for the same employer, this may not necessarily constitute discrimination. The employer will not be considered as having violated the prohibition against discrimination if they can prove that there is an acceptable reason for the difference in pay. The draft of the Equality Act states that acceptable reasons for difference in pay may include a person's education, professional skills, initiative and suitability for more demanding duties.

In the report submitted to the Ombudsman for Equality, the employer justified the pay difference between A and B firstly by the fact that different collective agreements apply. In accordance with his previous statements, the Ombudsman for Equality stated that the different collective agreements applied for A and B do not constitute an acceptable reason for the differences in pay.

Secondly, the employer justified the pay difference between A and B by the fact that B’s role had originally been noticeably more extensive than what it currently is. Her work duties had thus become less demanding, but her pay had remained at the level corresponding to her previous duties. A government proposal (HE 19/2014) concerning the Equality Act, states that pay differences may, for special reasons, temporarily and for a limited amount a time, depend on the introduction of a new wage system or changes in the work duties. As changes in the work duties constitute an acceptable reason only for a limited amount of time, the employer is obliged to eliminate the pay differences caused by the special reasons, i.e. to harmonise the salaries, within a reasonable time frame.

The Ombudsman for Equality stated that, in order to rebut the presumption of discrimination, the employer should be able to prove that s/he has not been able to immediately remove the pay differences based on changes in work duties, but the removal of pay differences has required a transitional period. The Ombudsman for Equality also took the view that, on the basis of the information provided, the transitional period had already passed in this case, as the pay differences between A and B had continued for already three years. The Ombudsman called for immediate measures to be taken by the employer to eradicate the pay difference.