In a recent court decision, Homes England was ordered to pay compensation, including back pay and interest, to a female employee. The dispute came about when she was promoted and discovered that she was earning less than a male colleague who she was now overseeing. Even at her new promoted salary, she was still earning less than him.

There are few people that would accept that as fair, but sadly even fewer that would challenge the status quo, and the ruling is a definite win for gender equality. As much as the company tried to defend its actions, the judge ruled that under the Equality Act 2010, Homes England needed to be able to defend their decision to pay the female employee less, and he found no material reason for this.

What’s the cost?

The damage for Homes England goes beyond the compensation they have to pay. It doesn’t take a rocket scientist or HR expert to recognise paying one person significantly less isn’t acceptable. And even worse, promoting someone and they still earn less than the people they’re overseeing. Thinking that no-one will ever find out is foolish. Hiding behind “company policies” even more so.

Hasn’t the case of equal pay been debated enough? Or are companies okay to ignore the facts because the person is just a woman and probably won’t make a fuss? Happy to promote her and gain the value of her skills, but not enough to compensate her equally.

With this approach and now that it’s in the public eye they’ll have difficulty attracting top talent. Nobody wants to find themselves in a similar position. Furthermore, existing employees will be questioning if the same has happened to them and they just don’t know it. You can be sure that other female employees will be investigating this. Consider the impact to internal culture and the level of distrust that now exists within the organization.

The silver lining

Despite the negative impact to the organization, there are definite positives that come out of the situation. It’s a warning to other companies in the industry to hire based on equal pay or risk paying a higher price later. It’s also validating that unequal pay is not acceptable. The Equality Act was passed in 2010, and yet 13 years later it still has to be leveraged to force companies to do what they should be doing anyway.