The future of pay transparency: insights from a recent equal pay case

The principle of equal pay for equal work, and work of equal value, has long been enshrined in the laws of EU member states. Despite this, its effective implementation and enforcement remains a challenge and lack of pay transparency has been identified by the European Commission as one of the key obstacles. Hence the adoption of the EU Pay Transparency Directive (the Directive), which contains far reaching rights to pay information on the part of employees and which must be transposed into Irish law by June 2026.[1]

The Directive will increase the profile of equal pay and pay transparency across EU member states and will inevitably lead to a rise in equal pay claims. 

Equal pay claims in Ireland are few and far between. However, in 2022, the case of Paula Reid v Teagasc made the headlines following Ms Reid’s successful claim before the WRC that she had been paid less than a male comparator. The WRC made an award, which included arrears of pay, along with compensation in the amount of €40,000. However, the WRC’s decision has now been overturned by the Labour Court.

In this briefing, we take a look at the background to this case, the contrasting decisions of the WRC and Labour Court, set out the key takeaways for employers and highlight the steps employers need to take to prepare for the implementation of the Directive.

What happened in this case?

Ms Reid worked as a statistician for Teagasc (the Irish Agriculture and Food Development Authority) since 1977. Ms Reid and Mr Grant were the organisation’s only two statisticians at the relevant time. Ms Reid worked in the food programme and Mr Grant worked in the production programme. They did not work together. In 2006 Mr Grant was placed on the Senior Research Officer grade of pay, while Ms Reid was on the lower Experimental Technician grade.

In 2021, she brought a complaint under the Employment Equality Acts that, although she performed like work with Mr Grant, she earned approximately €20,000 per year less than him. Teagasc contended that the difference in pay was due to Mr Grant’s grade, skills, experience and qualifications, and not gender, and disputed that Ms Reid and Mr Grant were engaged in “like work”.

What did the WRC decide?

In accordance with the Employment Equality Acts, once a complainant establishes facts from which it may be presumed that there has been discrimination, the burden of proof shifts to the respondent employer to prove the contrary. Unless the complainant can shift the burden of proof, their claim cannot succeed.

The WRC found the burden of proof test was comfortably met by Ms Reid. The WRC had regard to job descriptions on the Teagasc intranet for the two positions and found they were, not only similar, but identical. It also had regard to role descriptions in job advertisements. 

It upheld Ms Reid’s claim, finding that there was no objectively fair or rational basis why Mr Grant was on the senior research scale whereas she was on the experimental technician scale.

Teagasc appealed the WRC’s decision to the Labour Court.

What did the Labour Court decide?

In accordance with the Employment Equality Acts, a person is employed to do ‘like work’ if:

1. both perform the same work under the same or similar conditions, or each is interchangeable with the other in relation to the work
2. the work performed by one is of a similar nature to that performed by the other and any differences between the work performed or the conditions under which it is performed by each other are of small importance in relation to the work as a whole or occur with such irregularity as not to be significant to the work as a whole; or
3. The work performed by one is equal in value to the work performed by the other, having regard to such matters as skill, physical or mental requirements, responsibility and working conditions

In this case, Ms Reid asserted that she engaged in ‘like work’ that was the ‘same’ or ‘similar’ to that of Mr Grant. She did not assert that she was engaged in work of ‘equal value’.

Therefore, the issue in contention was whether Ms Reid was engaged in the ‘’same’’ or ‘’similar work’’ to Mr Grant.

The complainant relied on the fact she and Mr Grant had the same job title, job adverts, qualifications, reporting line and role profiles on the intranet.

In contrast to the WRC, the Labour Court heard extensive testimony from four witnesses and it found there was in fact no job description in existence for either position.

Upon reviewing the evidence, the Labour Court found the fact that Ms Reid and Mr Grant had the same job title, reporting line, intranet profiles, along with the fact they were both required to have a MSc in statistics were supportive of Ms Reid’s assertion that she and Mr Grant engaged in ‘like work’, but were not sufficient to shift the burden of proof.

The Labour Court’s comments on differences in grades are noteworthy. A difference in grade does not always provide a sufficient defence to an employer in an equal pay claim. In the circumstances of this case, where Ms Reid contended that her role evolved over the years into a more complex role such that she operated at a Senior Research Officer level, the Labour Court was required to assess the nature of the work undertaken and consider whether other factors could explain the difference in pay.   

The Labour Court examined aspects of the work performed by Ms Reid and Mr Grant, under headings such as research design and analysis, statistical training, peer reviewed publications, participation in large scale projects and external committees. Under all these headings the court found Ms Reid and Mr Grant were not engaged in the same or similar work. The Labour Court found the actual nature of the work undertaken by Mr Grant differed from that undertaken by Ms Reid. While there was a commonality in the type and nature of the statistical work undertaken, overall Mr Grant was engaged in more strategic and innovative work at a senior level than Ms Reid, which was attested by his research, publications and participation as a member of large-scale research projects. Having considered the nature of the work actually performed by Ms Reid and Mr Grant, the Labour Court found Ms Reid failed to meet the ‘’burden of proof’’ in establishing ‘’like work’’. Accordingly, Teagasc succeeded in its appeal. 

What are the key takeaways?

While Teagasc was eventually successful in the case, the Labour Court’s decision highlights the importance of clear documentation, transparency and fairness in the categorisation of employees’ roles. Addressing these areas will assist with mitigating the risk of equal pay claims and ensuring compliance with the Employment Equality Acts and ultimately the Directive. 

• Employers should ensure that job roles and responsibilities are clearly defined, documented and kept up to date. 
• The Labour Court noted a lack of transparency in the appointment of Mr Grant to the Senior Research Grade. Employers should ensure promotions and appointments are conducted in a transparent and documented process and that criteria are clearly communicated.
• Employers should endeavour to resolve any issues around grades and pay internally in the first instance, to avoid issues escalating into a formal claim.  

The impact of the EU Pay Transparency Directive

The Directive brings many new workplace rights, such as a right on the part of employees to request information on their individual pay level and on average pay levels broken down by gender for employees doing the same work or work of equal value. This information  will need to be supplied within two months of the request.

Gender pay gap reporting will involve a new requirement to provide details of the gender pay gap by category of employees to employees and their representatives. ‘Category’ means employees performing the same work, or work of equal value. “Work of equal value” means work that is determined to be of equal value in accordance with objective gender-neutral criteria, such as skills, effort, responsibility and working conditions. There will be a requirement to conduct a joint pay assessment in co-operation with employee representatives where there is a gender pay gap which (i) is at least 5% in any category of workers, (ii) has not been justified by objective and gender-neutral factors and (iii) has not been remedied within six months of the date of the gender pay gap report.

It is strongly recommended that employers prepare well in advance of the Directive’s implementation by conducting an equal pay review in their organisation. There are a number of approaches an employer can take to conducting a review process and some guidance can be gleaned from the IHREC code of practice on equal pay. A review will involve collecting data, including job descriptions or role profiles, analysing the data and evaluating the role.

The Code outlines that there are many different types of job evaluation models, and it is a matter for each organisation to choose the method best suited to it or to adapt a particular model as necessary. The Code notes that quantitative or factor evaluation would appear to be the model best suited to equality reviews. This involves assessing jobs on a factor-by-factor basis (for example, functional knowledge, training and experience, reporting level and accountability etc.) and assigning points to each factor. A weighting grid can be used to indicate the relative importance of each factor.

While there are no details yet of Ireland’s transposing legislation and it is expected that further tools or methodologies will be made available to guide an employer’s assessment of “work of equal value”, many employers are wisely putting measures in place now to examine pay disparities, identify gaps and take remedial action where necessary.

For further information in relation to this topic, please contact Triona Sugrue, Knowledge Consultant, or any member of the ALG Employment team. 

Date published: 22 October 2024

[1] You can read more about the EU Pay Transparency Directive in our briefing here.