Direct report makes more than me

It is discrimination if the reason someone gets paid less is due to their sex or other protected characteristic. It is not discrimination just because someone gets paid less.

It’s very hard to evidence intent though, I’d be making a formal grievance asking why a junior staff member was being paid more and let them explain the rationale in writing. Then I’d move to an equal pay claim - particularly if you have clear salary scales and pay points there’s no reason for someone junior being paid more than you but let them dig their own hole first.

Yes it is the same situation when a man gets paid less for doing like work if there’s no justification for it, why wouldn’t it be?
It doesn’t need to be obvious direct discrimination for a tribunal to find an equal pay issue. See Samira Ahmed vs BBC.

It doesn’t sound right that you’re a higher grade and are earning less so I’d definitely keep pushing it with your manager. I’m a civil servant so we have pay grades here, I wouldn’t be impressed if I was more senior, QA’ing their work, and earning less. Definitely not

This is likely to be an equal pay issue particularly because your line manager has given the reason that he started on a higher salary than you (at the same time in the same role) which has then impacted your salary down the line. There may be nuances eg particular skills he has that you don’t where they are able to justify it, however on the face of it he’s been doing “like work” to you on a higher rate of pay which is now having an impact on this restructure.
I would speak to your HR department and explain you think this may be an equal pay issue. As an HR Director this situation would give me shivers, we’ve paid loads of back pay to similar situations to women in my current org based on decisions like this made before I started. I can’t believe people are questioning “what law” it would come under. Of course it’s a legal issue and they need to justify it.

What about when a woman gets paid more than a man for doing the same (or a more senior) job, is that discrimination?

It is discrimination if the reason someone gets paid less is due to their sex or other protected characteristic. It is not discrimination just because someone gets paid less.

OP, you can launch a formal grievance, but that is not a "legal" question - you could launch a formal grievance over anything. Provided there is no discrimination - and you have not suggested that there is - then the company can offer you what it likes; it's up to you whether you accept it or go elsewhere.

The problem is that you were happy with your salary before you found out his; it's not clear from your posts if you are under-paid or he is over-paid. But again, there's nothing illegal about paying over/under pay bands, or new hires being paid more than others - "is it legal" is the wrong question. You can be unhappy regardless... However realistically, you're more likely to get more if you leave (or at least get an offer elsewhere to use as leverage).

Sounds like a potential equal pay claim to me. If OP is a woman and line report is a man and the job roles are identical apart from the fact that OP's role also includes line management responsibilities, I'd be surprised if a tribunal didn't see that as pay discrimination.

My dh earns less than some of his direct reports.

When I worked for the same company, I earned more than blokes doing the same job as I was externally recruited for a roll. It was a team of 22 and they had all been asked to do the roll I took, none of them wanted to as it meant travelling all of 10 miles from the office.
Oh, how bitter were they when they realised the customer paid for travel 🤣
A few of them tried to muscle in on the contract but weren't successful.

Discussing salaries in that company was frowned upon, probably because they varied wildly for the same roll. It was an IT service provider.

This

A friend once had this in her role - the org did a pay review and the women (as always this) got large pay rises and I believe back pay

This is commonplace.

I was an external consultant once and was hired temporarily to manage a team through a tough transition. It was such a difficult role and I had no support. By accident, I find out that one of the (not very good) men in my team ( or reporting to me) earned 20% more than me. I was so shocked I left a voicemail for my boss saying that we had to have a serious talk. I got an immediate 10% rise with the promise of another boost in 6 months.

it wasn’t enough though, it was the principle, so I looked elsewhere and got a 60% pay rise when I went external.

it’s always men who somehow earn more than women, and I wanted to vote with my feet. Go external , take this as the sign.

Equal Pay Act anyone.

Paying a man more than a woman for previously doing the same job and now doing a more junior job is sex discrimination.

Speak to HR and ask about the process for formally having your salary and job evaluated.

Don't just 'leave it' with your manager.

If no joy with HR call ACAS for advice on what to do next.

I earn more as an annual salary than the people I manage, but that's because I work more hours. They are on higher hourly rate than I am, and rightly so; their job is far more challenging than mine.

Presumably you were happy with your salary/had the opportunity to negotiate etc. before you found out about his?

I had a colleague that was fuming once because she wasn't paid as much as her counterpart. When we asked her what she asked for when she started (she was happy to take the lower band pay because she was so keen for the job and thought it gave her the edge) and what she asks for at pay reviews, she said she never argued what was being offered as it seemed reasonable... so she only had herself to blame. An employer isn't NOT going to pay out to your colleagues because "it might not be fair on so and so in the department". However, your employer should have been clever and ensured that you were not handling your colleagues pay paperwork.

I'd push back and say that unless you get more than him, you will consider leaving the job, it's time to play hardball. You can clearly demonstrate that you have more skills and more responsibility so why are they not paying you more than what they can clearly afford, for a lesser member of staff.

As far as hiring new external people that will get paid more, is this because they are self employed contractors? If yes, then they are usually paid more and its unreasonable to think you should get their wage.

I don’t think it’s a legal issue but it would piss me off enough to threaten to leave if they didn’t pay me more!

Why would it be a legal issue? What law are you thinking it falls under?

It's entirely legal, unless you're claiming discrimination. You can only keep bugging your manager and/or look elsewhere to either leave, or to demonstrate that you are under-paid and to negotiate up. Clearly there is budget available, if you're hiring people on more; so pester power, or leaving, will be your best options.