16-year employee wins equal pay and constructive dismissal claim over like-work disparity
An insurance account handler with 16 years' service succeeded in her equal pay and constructive unfair dismissal claims after her employer failed to address a pay gap with a less experienced male colleague doing like work.
1 min read · Last updated 19 May 2026
Case details
- #equal-pay
- #constructive-dismissal
- #like-work
- #material-factor
- #sex-equality-clause
- #small-employer
Key facts
- The claimant was employed as an Insurance Account Handler from 2005 to July 2021.
- The comparator, Robert Finlayson, was employed from December 2017 at a higher salary of £32,500.
- The claimant and comparator performed broadly similar work, with no practical importance in differences.
- The respondent's material factor defence (recruitment to transition MHA clients) ceased to apply by May 2021.
- The claimant resigned on 12 July 2021 after the respondent failed to address her equal pay grievance and was untruthful.
- The claimant succeeded in her constructive unfair dismissal and equal pay claims from 21 May to 12 July 2021.
Timeline
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Claimant started employment
Mrs N Khan began working for Eden Insurance Services Limited as an Insurance Account Handler.
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IVF treatment and reduced hours
The claimant underwent IVF treatment, took time off, and returned to work four days a week.
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Maternity leave and further reduction in hours
The claimant became pregnant, took maternity leave, and returned to work three days a week.
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Comparator started employment
Robert Finlayson (RF) started work as an Account Executive at a salary of £32,500, linked to a commercial agreement with Michael Hall Associates.
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Claimant raised pay concerns
The claimant queried her pay disparity with RF and received a £500 increase, but remained dissatisfied.
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Claimant raised equal pay issue
The claimant raised the pay disparity with Rachel Palmer, who rolled her eyes.
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Meeting with Richard Palmer
Mr Palmer offered a £2,000 pay rise, which the claimant declined, insisting on equal pay.
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Discussion with RF about salary
Mr Palmer discussed RF's salary, offering options to reduce pay or change working arrangements.
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Claimant submitted formal grievance
The claimant wrote a grievance letter seeking to resolve the equal pay issue amicably.
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Grievance outcome
Mr Palmer rejected the grievance, citing differences in roles that the tribunal later found not of practical importance.
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Grievance appeal and resignation
At the appeal, the claimant accused Mr Palmer of untruthfulness; the meeting ended abruptly. The claimant resigned the same day.
The legal issue
The tribunal had to decide whether the claimant was engaged on like work with her male comparator for equal pay purposes, and whether the employer's failure to address her grievance amounted to a fundamental breach of contract entitling her to resign.
The outcome
The tribunal upheld the claimant's complaints of constructive unfair dismissal and unequal pay. It found that from 21 May to 12 July 2021, the claimant was paid less than her comparator despite being engaged on like work, and the employer's material factor defence no longer applied. The claimant's resignation in response to the employer's untruthfulness and failure to address her grievance was a constructive dismissal. A separate remedy hearing will determine compensation.
Lessons & takeaways
- Equal pay claims can succeed even when the comparator was hired at a higher salary for a legitimate reason, if that reason later ceases to apply.
- Employers should regularly review pay disparities, especially when the original justification for a pay difference no longer exists.
- Failing to address a grievance honestly and promptly can amount to a fundamental breach of contract, supporting a constructive dismissal claim.
- Long-serving employees who have reduced their hours for family reasons should not be disadvantaged in pay compared to newer, full-time colleagues doing like work.
This case illustrates how an employer's failure to address a pay disparity can lead to both an equal pay claim and a constructive dismissal claim. The claimant, an insurance account handler with 16 years' service, discovered that a male colleague hired in 2017 was paid significantly more. Although the employer initially had a legitimate reason for the higher salary—recruiting the comparator to transition a specific client portfolio—that reason ceased to apply after May 2021. The employer's refusal to adjust the claimant's pay and its untruthful handling of her grievance led her to resign.
What the employer could have done differently
The employer could have avoided liability by reviewing the pay disparity once the original justification expired. Instead, it continued to pay the comparator more without any material factor defence. The tribunal also criticised the employer's response to the grievance, which included rolling eyes and a dismissive attitude. A timely and honest review of the claimant's pay, coupled with a fair grievance process, would likely have prevented the claim.
Why this matters for similar claims
This case confirms that equal pay claims can succeed even when the comparator was hired at a higher rate for a legitimate reason, if that reason later falls away. It also reinforces that constructive dismissal can arise from an employer's conduct in handling a grievance, not just from the pay disparity itself. For employees, it shows the importance of raising concerns promptly and documenting the employer's response. For employers, it is a reminder to regularly audit pay structures and address disparities proactively, especially when original justifications change.
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