Equal pay audits may be made mandatory

Background

The EOC's Code of Practice on Equal Pay says that an internal pay review is "the most appropriate method of ensuring that a pay system delivers equal pay free from sex bias".

While employers are not required by statute to conduct equal pay reviews, only a review can ensure that your organisation is providing equal pay.

According to the EOC, an equal pay review "involves comparing the pay of women and men doing equal work, investigating the causes of any gender pay gaps and closing any gaps that cannot be satisfactorily explained on grounds other than gender."

• EOC urges government to introduce mandatory equal pay reviews

Although many organisations claim that they do not discriminate through their pay systems, a report by the EOC's equal pay taskforce, published in 2001, found that this could not be confirmed as very few organisations had formally conducted pay analyses of their workforce by gender. The taskforce therefore recommended that organisations should be legally obliged to conduct equal pay reviews.

The report Gender Equality in Pay Practices can be downloaded from the EOC web site at www.eoc.org.uk/EOCeng/dynpages/research_pay.asp

• Government rejects proposal for mandatory pay reviews

Speaking at the launch of the EOC report Just Pay in February 2001, Tessa Jowell, employment minister, accepted the taskforce 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."

The 88-page report Just Pay together with an eight-page summary document can be downloaded from the EOC web site at www.eoc.org.uk

• Government unveils plans to cut gender pay gap

The Kingsmill Report subsequently supported the government’ s view that equal pay reviews should not be compulsory. In response, the government announced a package of measures designed to cut the pay gap between men and women, including a new measure to make it easier for women to obtain information from employers about equal pay problems.

To download a copy of the Kingsmill Report visit www.kingsmillreview.gov.uk

• Private sector slow to take action on pay equality

Only one in five employers in the private sector have undertaken an equal pay review, according to research by Incomes Data Services on behalf of the EOC. What's more, only 16% of all 385 survey organisations had completed an EPR by November 2003, 6% were in the process of doing one and 21% had plans to do so. As many as 57% of employers had no plans to carry out a review -- the vast majority stated that they believed they already provided equal pay.

Monitoring Progress on Equal Pay Reviews, by S. Brett and S. Milsome, IDS, published by the EOC is available at www.eoc.org.uk/EOCeng/dynpages/researchTopic_Pay.asp

What is the Women and Work Commission?

The creation of the Women and Work Commission was announced by the Prime Minister in July 2004. The Commission will investigate the pay gap over the next 12 months, meeting monthly, before reporting to the Prime Minister.

Membership

The members of the Women and Work Commission are:

Chair: Baroness Margaret Prosser of Battersea

Members:

• Sarah Anderson -- Chief Executive, the Mayday Group
• Chris Banks -- Chair of National Learning and Skills Council
• Kay Carberry -- Assistant General Secretary, TUC
• Naaz Coker -- Chair, Refugee Council & Chair, St George's Healthcare NHS Trust
• Debbie Coulter -- Deputy General Secretary, GMB
• John Cridland -- Deputy Director-General, Confederation of British Industry
• John Hannett -- General Secretary, USDAW
• Sally Hopson -- Retail and Managing Director (North Division), Asda
• Adeeba Malik -- Deputy Chief Executive of Quest for Economic Development
• Stella Manzie -- Chief Executive, Coventry City Council
• Julie Mellor -- Chair, Equal Opportunities Commission
• Christine Ray -- HR Director, The Rank Group
• Ruth Silver -- Principal, Lewisham College
• Liz Snape -- Head of Policy Development, Unison.

The gender pay gap currently stands at 18% for full-time workers. Although the gap has closed gradually over the last 30 years since the 1975 Equal Pay Act, the government has decided to investigate the underlying factors which mean that average pay for women is lower than that for men.

Terms of reference

The Women and Work Commission's full terms of reference are available at www.gnn.gov.uk/environment/detail.asp?ReleaseID=130626& NewsAreaID=2& NavigatedFromDepartment=False

More information about the Women and Work Commission will be available shortly from www.womenandequalityunit.gov.uk