Gender equality and equal pay

Gender Equality & Equal pay

On 10 November 2016, it was Equal Pay Day, the day of the year on which women effectively stop earning money relative to men for the rest of the year. It varies each year depending on the size of the UK’s gender pay gap. This year, Equal Pay Day is only one day later than last year. When compared with other countries’ records on gender equality, the UK has slipped down the global rankings- it was the ninth most gender-equal country in 2006, but by this year, it has slipped to 20th place.

But what is the difference between gender pay and equal pay? The two are frequently confused. Recent reporting of the equal pay claims brought against Asda is an example of this.

So -what is an equal pay issue?

Essentially, it is where a person of one sex (more commonly a woman) receives less pay than a man for carrying out the same or a similar job. It concerns individuals or groups of workers performing the same or comparable work.

For example, in the Asda case the claimants argue that work done in retail stores has been perceived as “women’s work” and was paid less than the work in distribution depots, traditionally seen as “men’s work”.

What is a gender pay gap?

A gender pay gap is the difference between the average earnings of men and women over a period of time, irrespective of their role or seniority. It therefore captures any pay differences between men and women on a broader level.

For example, an organisation that is over-populated by men in senior roles and women in junior roles will have a gender pay gap.

What about the intention behind the two measures, -are they broadly the same?

Well, yes. Measures designed to ensure equal pay and those aimed at closing the gender pay gap have the overall objective of eliminating sex discrimination in relation to pay.

However, at its core, the intention behind equal pay is to ensure that men and women are not paid differently for doing the same or similar work. This, on its own, does not prevent a gender pay gap. Even if an employer has an effective equal pay policy, it could still have a gender pay gap if, for example, the majority of women are employed in lower-paid jobs.

What about the obligations and sanctions on employers in relation to the two different areas?

Well, the legal right to equal pay has existed for decades and is now enshrined in the Equality Act 2010. It applies to all employers, no matter how small. If an employer is found guilty, a claim can be made to the employment tribunal and compensation can be awarded for a maximum of 6 years prior to the date of the claim.

With regard to the gender pay gap, the requirement to report a gender pay gap comes into force in April next year, but will only apply to employers with 250 or more employees. It will require an organisation to publish specific data on its website, including the overall percentage difference in mean and median pay between male and female employees. Employers will have 12 months to publish the information, meaning that first publication will be required in or before April 2018.

There is currently no financial sanction though following an employer failing to publish the report on gender pay gap. However, reputational damage may well be a consequence if they don’t together with the prospect of those employers being publicly “named and shamed”, and the suggestion is even the government may name and shame on its website.

And what about smaller employers? Businesses with fewer than 250 employees can still volunteer to provide similar data to their larger counterparts, and one can only hope that once gender pay gap reporting is firmly established for the larger companies, that it will trickle down to the smaller businesses.

The Government could also consider implementing similar reporting diversity obligations for companies which on the basis of their recruitment, retention, promotion and pay. I wonder how many companies would want to comply with that?

Positive action

Firstly, the Equality Act 2010 did introduce new rules, specifically to allow an employer, when faced with two or more candidates of equal merit, at the recruitment stage, to select a candidate from a particular gender, where they are unrepresented in their workforce.  This is known as positive action.

This is different from positive discrimination, which of course, is unlawful in most circumstances, unless it is an occupational requirement- e.g. a female councillor is required to deal with young vulnerable women.

So, an employer can prefer a female candidate over a male one, if they can show there’s justification in taking this step to achieve diversity within their workforce.

Such positive action can also be taken at the recruitment stage, promotion stage, advertising job vacancies where, for example, they could specifically state that applications from female staff are welcome.  But, it is important to note that this is a power for employers to utilise, it’s not an obligation, they don’t have to, and we don’t know how many employers are actually using this, or even know about it.

Shared parental leave

Most people will be aware that shared parental leave came into force in 2014 which essentially entitles fathers to share in up to 50 weeks of leave following the birth or adoption of their child. Parents can take leave in their child’s 1st year at different times, or double up by taking leave at the same time. In theory, this is intended to give women greater flexibility in terms of when they go back to work, especially if they are the main or equal breadwinner. In practice, however, there hasn’t been a great take up by fathers. In a report by Xpert HR Benchmarking in June of this year, nearly three quarters of employers surveyed believed that some of their employees were eligible for shared parental leave requests, although only a third of those eligible employees made such a request over the year.

Why is this? The Xpert HR survey thought that affordability was one of the key factors that determined if a SPL application was appropriate, and certainly they appeared to be somewhat of a higher take up where employers were prepared to enhance the flat rate of £139.58 per week.

But there are also other factors – and these are likely to be slanted towards a lack of cultural norm for fathers to take extensive time parental leave. Experts also say the scheme is suffering from a lack of awareness by both employees and employers. In addition, many HR personnel struggle with the complexity of the rules, where perhaps its easier to steer clear of it.

Flexible working

New rules to ask for flexible working were introduced in June 2014 as long as you have 26 weeks service with your present employer. Let’s clarify first that it’s a right to ASK your employer for a flexible working arrangement- not to have it. The two are very different, and an employer doesn’t have to agree if they can provide a suitable business reason. In theory, the new flexible working arrangements (together with shared parental leave) is to encourage a more modern labour force that doesn’t stick to the 9-5 office hour traditions, which is clearly going to lend itself more to some industry sectors (such as technology) than others. Over time, when employers become more accustomed to requests, and there is a change in culture, employers may be more accommodating- which will especially help the female workforce who often have to juggle around childcare. It could even be offered a perk to staff.

Tribunal fees

What else can be done in the realms of employment law? Well, the government could scrap the tribunal fees that stand in the way of many women who can least afford such fees when considering whether to make a discrimination or equal pay claim? I’m sure everyone is aware of the recent introduction of tribunal fees, namely £250 to issue a claim and £950 for the hearing fee, which clearly has a disproportionate effect on women, many of whom may be on maternity leave or about to come back. There’s been a 70% reduction of tribunal claims being made since the introduction of fees in 2013, so we know its had a vast impact.


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