AC 5.3 Explain the reasons for treating employees fairly in relation to pay

There are numerous perspectives on fairness at work. These may be in the form of pay, promotion, training and development. Regarding pay terms, and from an organisation’s perspective, Cotton (2019) identified fairness of pay, pay decision-making, and quality treatment of employees when procedures are implemented. Cotton (2019) argues that this organisational fairness is critical because it shows that all internal stakeholders are respected and valued. On the contrary, if employees think that an employer’s pay policy is unfair, they might not want to join or extend their stay with such an organisation. Additionally, unfair and unclear pay policies may reduce motivation.

 Cotton (2019) maintains that HR teams are important in establishing a fair pay policy. In the UK, unfair pay is illegal. In fact, concerns about unfair treatment, which have existed for a long, resulted in the Equal Pay Act of 1970. In specific, the law prohibits discrimination in terms of pay between men and women. The law is now part of the Equality Act 2010 that applies across the UK. Regarding pay, the Equality Act 2010 gives women and men the right to be paid the same amount when carrying out similar work or work of equal value. To ensure that all organisation comply with the statute, the UK government require all organisations with 250 and above employees to report their gender gap based on the data collected on the 5^th of April every year (Cotton 2019).