GOVERNMENT plans may not prove sufficient, writes Innes Clark
Forty five years after the introduction of the Equal Pay Act, a gender pay gap still exists in many workplaces. Data published by the Office for National Statistics states that the overall UK gender pay gap (measured as a differential in pay between men and women for both full-time and part-time employees and based on median hourly earnings) currently stands at 19.1 per cent. The full-time median pay gap is 9.4 per cent. Although this is the lowest since records began, it is still significant.
The Equality Act 2010 provides that the government can require private and third sector organisations with 250 or more employees to publish information about the difference in average pay between male and female employees.
The government is now taking steps to implement a mandatory reporting regime and recently consulted on a number of matters including:
• Whether 250 employees is the appropriate threshold for disclosure.
• Where gender pay gap information should be published – for example, prominently on the employer’s website – and how frequently.
• The extent to which employers are able to obtain information on gender pay differences from their current data and systems.
• Whether employers should be required to publish additional information to explain a single gender pay gap figure.
• The costs, risks and unintended consequences of mandatory reporting.
• How to ensure compliance.
The consultation closed on 6 September and it is expected the results will be published this winter, with draft regulations expected in early 2016.
Whether mandatory gender pay gap reporting will be effective remains to be seen. It is not intended that the regulations will require employers to reduce the gender pay gap. In the consultation document, the government said it believes that greater transparency of gender pay gap information will encourage both employers and employees to consider what more can be done. A requirement to publish information on the difference in pay is likely to lead to concern from many employers regarding reputational issues and this may motivate them to make the necessary changes.
It is also likely that publishing this information will lead to greater awareness and, in turn, this may lead to employers being called to account as a result of equal pay and sex discrimination claims brought by employees using the published data. However, even if the data published demonstrates a pay gap, to succeed with a claim, an employee needs to show an actual comparator of the opposite sex who is paid more than they are for doing the same work or work of “equal value”. At this stage, it is not known if the published information couldprovide employees with sufficient information to support a claim.
The government’s proposals apply to private and third sector employers. There are already similar provisions requiring public bodies to report gender pay gap information where they employ over 150 people. Equality is high on the Scottish Government’s agenda and it proposes reducing this threshold to20 employees.
Much of the success of discrimination legislation over the years has been to reflect the shifting views of society on what is or isn’t acceptable and to cement this in a legal context. With gender pay high on the agenda of both UK and Scottish governments, it may well be that after 45 years, this is, at last, the beginning of the end for the gender pay gap.
• Innes Clark is a partner and accredited employment law specialist with Morton Fraser LLP www.morton-fraser.com