As we have mentioned in previous blog posts, having a gender pay gap does not mean in any way that an employer has necessarily failed to comply with its equal pay obligations under the Equality Act 2010. But this new obligation to publish pay information is likely to bring the issue of equal pay to the fore and some trade unions and employees may well start looking a bit more closely at your pay practices to see if they raise any potential equal pay issues.
If an employee decides to bring a claim against the company he or she may well try to get hold of some of the documentation created by the business in the course of complying with its gender pay gap reporting obligations, in the hope that this might support an argument that the company has breached its equal pay obligations. For example, there may be internal analysis documents created by the company as part of the gender pay gap audit which highlight any perceived equal pay risks. Unless such documents are protected by legal professional privilege they may well be disclosable as part of any Tribunal proceedings. Even pre-proceedings, an employer’s refusal to provide copies of this without good reason may lead an Employment Tribunal to draw (or at least be invited to draw) adverse inferences against it. Legal privilege would be a “good reason” for those purposes.
Legal professional privilege protects from disclosure certain confidential communications between clients and their legal advisers. It exists to ensure that clients are able to obtain legal advice in confidence. There are two types of legal professional privilege: legal advice privilege (which, as its name suggests, protects confidential communications between a lawyer and a client for the purpose of seeking and receiving legal advice) and litigation privilege (which applies where litigation has started or is contemplated, but not where it is merely a possibility).
A document will not become privileged simply because it is marked as such. Equally, not all communications between a lawyer and a client will be protected. There are strict criteria that have to be met in order for a document to be covered by legal professional privilege – it’s not simply a case of copying your lawyer in on all your correspondence!
Any employer about to embark on a gender pay gap audit should consider taking legal advice at the outset on the best way to carry out the audit in order to understand the rules on legal professional privilege, which documents may be protected, and to ensure it doesn’t do anything which may result in such protection being inadvertently waived.
In addition, of course, it should maintain strict internal discipline around the creation of documents which may be embarrassing (either actually or legally) if disclosed. The numbers and percentages, etc. which must go into its GPG report are factual and public anyway, so need for the care lies instead around the internal discussion of them – panicked emails from HR about how on earth are we ever going to explain this, or from senior management clearly fiddling while Rome burns, etc. The less unguarded internal comment there is around whatever the statistics show, the better.