PAY DISCRIMINATION
EOC urges government to introduce mandatory pay audits to combat gender wage gap
The Equal Opportunities Commission has told the government that it should be compulsory for employers to conduct equal pay reviews. Without such a move there will be little or no speedy progress in closing the 18% pay gap between men and women, says a new report drawn up by the EOC's equal pay taskforce.
Government ministers reject proposal for mandatory pay reviews
Speaking at the launch of the EOC report Just pay on 27 February 2001, Tessa Jowell, employment minister, accepted the task force proposal that employers should carry out pay reviews, but rejected the recommendation that they should be mandatory. In her view: Employers should be encouraged to carry out voluntary reviews. She said:
We are very interested in the idea of promoting and encouraging employers to carry out voluntary pay reviews. In particular, we welcome the EOC's intention to develop the model for pay reviews in partnership with business, unions and other key players. We want to ensure that pay reviews are both workable for business and effective for women.
Key findings of EOC report
Since the passing of the Equal Pay Act in 1970 the gap between average hourly earnings for men and women working full time has narrowed from 31% to 18%.
The EOC reckons that between 25% and 50% of the gender pay gap is due to wage discrimination — the other main contributors are occupational segregation and the unequal impact of women's family responsibilities .
Although making international comparisons is fraught with difficulties, the existing data indicate that the UK has one of the widest gender pay gaps in Europe, especially with respect to part-time workers.
Few organisations have adopted processes which actively target the achievement of equal pay. Says the report:
We were disappointed to find that the recommendation within the EOC Code of Practice on Equal Pay that employers conduct pay systems reviews has not been adopted to any noticeable extent . . . the overwhelming majority of employers think there is no gender pay gap in their organisation but have no evidence to support this belief. The continuing existence of the pay gap shows their belief to be ill-founded.
EOC recommendations
At the heart of the taskforce's report is the strong recommendation that employers be required to conduct equal pay reviews.
A suggested two-stage model for carrying out a pay review is provided in the report, deliberately designed to be simple, straightforward and proportionate to the size of the business.
A final word from the EOC . . .
Employers need to examine whether they have gender pay inequalities in their workplaces. The overwhelming evidence to date is that they will not do so unless required to.
Responses to the EOC report
Chartered Institute of Personnel and Development
www.cipd.co.uk
The Commission’ s call for a change in the law to require employers to review their pay systems will not achieve the changes, that are unquestionably required, in the quickest timeframe. CIPD research to be published shortly will show that legal action is in fact the least likely method to bring about change. In contrast, employee pressure and unions are the biggest drivers for taking action to redress equal pay imbalances. — Dianah Worman, adviser on equal opportunities, CIPD.
Confederation of British Industry
www.cbi.org.uk
The pay gap is a problem but the taskforce is directing too much of its firepower at the wrong target. Statutory pay auditing would have little impact and would be a real burden. Gathering analysing and understanding the data would be slow and complex. Many small firms would not have the resources or expertise. — Susan Andersen, director of human resources policy, CBI.
Equal Opportunities Review
www.irseclipse.co.uk
Equal pay legislation has been in force since 1975, but on average for every £ 1 earned by men, women still earn only 82p. More needs to be done, and mandatory pay reviews combined with a plan of action would be a major step towards closing the gender pay gap. In the absence of government willingness to back this key proposal, there is greater pressure on the EOC to make effective use of its formal investigation powers and conduct an investigation into an area where equal pay is a particular issue. — Gary Bowker, editor, Industrial Relations Services.
Trades Union Congress
www.tuc.org.uk
We are disappointed that the government is not to accept the taskforce recommendations that the law be changed to force employers to carry out gender pay reviews. We are pleased that the government is to give the EOC money to develop pay review models which all good employers will no doubt take up. But sadly there is nothing here to make the bad employers comply. — John Monks, general secretary, TUC.
Want to know more?
Title: Just pay: a report to the Equal Opportunities Commission.
Availability: The 88-page report together with an eight-page summary document can be downloaded free of charge in PDF format (you will need adobe acrobat reader) . . . www.eoc.org.uk. Or email info@eoc.org.uk.