GENDER PAY
Government publishes Equality Bill
The Equality Bill sets out "groundbreaking" new laws designed to strengthen Britain’s anti-discrimination legislation. It requires business to report on gender pay.
Nine major pieces of legislation and around 100 other measures will be replaced by a single Act written in “plain English” to make it easier for individuals and employers to understand their legal rights and obligations.
On 26 June 2008 Harriet Harman, Leader of the House of Commons, announced the new Single Equality Bill. On 27 April 2009 the government published the Equality Bill. The Bill is expected to come in to force from autumn 2010, subject to successfully passing through Parliament.
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Gender pay reports
“Inequality cannot be tackled if it is hidden. The Equality Bill will shine a spotlight on gender pay discrimination, workplace by workplace, so problems can be identified and action taken.” - Government Equalities Office.
The Equality Bill will contain a power to require reporting on the gender pay gap by employers with 250 or more employees. However, the government has committed not to use this power before 2013 and it will only be used if sufficient progress on reporting has not been made.
The Equality and Human Rights Commission will develop a set of metrics for gender pay reports in consultation with business, unions and others over the summer. The Commission will monitor progress on reporting within the private sector annually.
Public bodies (such as local councils, hospitals and police forces) with more than 150 employees will be required to report on gender pay, as well as other equality data such as number of disabled or Black, Asian and minority ethnic employees. Details will be consulted on over the summer.
Recent estimates suggest that nearly a quarter of employers ban their staff talking about their wages, with women more likely to be in the dark about colleagues’ pay than men. The Equality Bill will ban “secrecy clauses” so that work colleagues can compare wages if they want, and challenge employers who unlawfully pay them less.
Strengthening employment tribunals
Employment Tribunals can currently make recommendations to organisations to improve work practices – but only in relation to the individual who brought a case, who often ends up leaving anyway.
The Equality Bill will allow tribunals to make wider recommendations to firms, which can benefit everybody in the workforce and help prevent similar types of discrimination happening again.
Some reactions
Confederation of British Industry
www.cbi.org.uk
The CBI welcomed most aspects of the Equality Bill but warned that the gender pay gap could be misinterpreted and that a requirement for firms to publish average pay by gender could backfire. Katja Hall, CBI Director of HR Policy, said: “We support the clarity and simplification that the Equality Bill achieves. Businesses want to see more diversity at senior levels, and clear guidance on new positive action proposals will help. But we disagree with one element of the Bill because it could backfire."
She added: “The Bill proposes that firms could be made to publish their average female and male pay, which may sound like a good idea until you consider the consequences. Companies that have too few women in higher paid roles, and are trying to attract more, could be forced to publish a statistic that would deter female applicants and compound the problem."
Hall continued: “Consider a technology firm with engineers that are paid more, and support staff who generally earn less. At the moment most engineers are men, even though engineering firms are trying to attract more female engineers. The average pay statistic could easily be taken out of context and undermine recruitment initiatives by deterring female applicants."
“The gender pay gap can be misinterpreted. It does not compare men and women doing the same job. It reflects the fact that fewer women have higher paid jobs and the way to address that is not by comparing misleading average pay rates, but by improving opportunities for women via better childcare and careers advice.”
Chartered Institute of Personnel and Development
www.cipd.co.uk
It is dishonest of policy makers to suggest that gender pay reporting can be solved by a “magic bullet” of gender pay reporting aimed at employers, according to the CIPD. Charles Cotton, CIPD Reward Adviser, said: “Gender pay reporting is not the answer to the gender pay gap. The pay gap is a deep-seated and complex problem, as the government-commissioned Prosser review showed which made 40 recommendations to address the issue. Choices made at school, choices of what qualifications to pursue, careers advice and cultural norms have a far greater impact in pushing men and women down different career paths than discrimination in the workplace. And there are basic realities about career and life paths that mean the actual, like-for-like pay gap is not as great as some of the sensationalist headline figures suggest.”
He added: “Voluntary pay reporting, with the big stick of compulsory reporting looming in 2013, will do little more than create bureaucracy and fuel employment law claims.”
Cotton continued: “While we think universal pay reporting is unnecessary and counter-productive, we don’t believe that talking about pay should be treated as a dirty secret and banned. Open and transparent pay structures encourage employers and employees to focus on ‘why and how’ they are being rewarded rather than a crude and unhelpful over-focus on ‘what’ they are paid. Real equity in the workplace will be furthered more by a focus on the ‘how’ rather than the ‘what’. This means that more employers need to start adopting a strategic and holistic approach to reward and having a conversation with their staff about what values, behaviours, skills and performances are required by the business and how they will be rewarded and recognised.”
Equality and Human Rights Commission
www.equalityhumanrights.com
The Equality and Human Rights Commission “strongly welcomed” the Equality Bill. The Bill should help unblock some of the systemic problems that cause inequality and prevent people from achieving their potential. By simplifying legislation it should improve public service delivery and business performance, whilst extending equality protection to the wide range of groups that face discrimination.
Trevor Phillips, Chair of the Commission, said: “In Britain we know the value of talent, innovation and creativity. Our recovery and future success depends on seeking it out and making sure everyone has an equal chance to take part and is not discriminated against because of out-of-date ideas about what people can achieve.”
Equality issues will not be addressed by imposing unnecessary administrative burdens on business, according to the EEF, the manufacturers’ organisation. David Yeandle, Head of Employment Policy at EEF, said: "The Equality Bill brings together all existing discrimination legislation which should enable employers to better understand their legal duties and responsibilities particularly if this is supported by the provision of clear practical guidance on equality issues from the Equality and Human Rights Commission.”
He added: “However, the culture change needed in our society to encourage a more diverse workforce and address equality issues will not be achieved by imposing unnecessary administrative burdens on business such as the requirement to publish gender pay data. This will do nothing to reduce the gender pay gap and could undermine manufacturers' efforts to encourage more women to work in manufacturing."
Employers Forum on Age
www.efa.org.uk
The publication of the Bill has been met with disappointment by leading age campaigners including the Employers Forum on Age (EFA), as there is no sign that the government will commit to scrapping the default retirement age before the current review date of 2011.
Catharine Pusey, Interim Chief Executive at the EFA, said: “Today, with people living longer than ever before, the current rationale for continuing to enforce a default retirement age when people reach 65 is completely archaic. Every year thousands of people over 65 make huge contributions to the UK’s economy and heritage, yet despite being capable of continuing in work, many more individuals are involuntarily retired at 65.”
She added: “We had hoped that the civil service’s decision to remove this unfair and discriminatory practice of being able to insist their employees retire at 65, would have focused the government’s mind. It is just plain hypocritical that MPs and Peers are exempt from the DRA, and cannot be forcibly retired at a specific age.”
Pusey continued: “Businesses need to develop workplaces that are flexible and function in the long term - removing the default retirement age will help them do this by changing an outdated culture of 65 years old being a reasonable cut off time.”
The TUC welcomed the Equality Bill. TUC General Secretary Brendan Barber said: “Bringing together the dozens of acts accumulated over the last 40 years into a single Equality Act will make it easier for individuals and employers to understand the law. But this Bill is more than just a cleaning up exercise. It strengthens the law and gives important new protections to disabled people and their carers, as well as extending rights for older people.
He added: “We are disappointed that the government has fallen short of taking bolder steps to close the pay gap, particularly in the private sector where it stands at over 20%. However, we welcome the government's decision to work with the TUC, Equalities and Human Rights Commission and the CBI to work out more effective ways of identifying how best private sector companies can report on any pay gaps.”
Want to know more?
The Equality Bill will replace the Equal Pay Act 1970, the Sex Discrimination Act 1975, the Race Relations Act 1976, the Disability Discrimination Act 1995, much of the Equality Act 2006, the Employment Equality (Religion or Belief) Regulations 2003, the Employment Equality (Sexual Orientation) Regulations 2003, the Employment Equality (Age) Regulations 2006, and the Equality Act (Sexual Orientation) Regulations 2007 (where applicable, as subsequently amended), plus other ancillary pieces of legislation.
The Government Equalities Office site has full details of the Equality Bill, explanatory notes, and impact assessments: www.equalities.gov.uk.
Take a look at the government’s press release summarising the main measures included in the Bill: www.equalities.gov.uk/media/press_releases/equality_bill.aspx.
Read the text of the Bill on the UK Parliament site: http://services.parliament.uk/bills/2008-09/equality.html.
Follow the progress of this bill on the Office of the Leader of the House of Commons site: www.commonsleader.gov.uk/output/Page2657.asp.
Find out more about the history of the bill, from the government's announcement in February 2005 that there would be a review of discrimination law to its publication in April 2009: www.equalityhumanrights.com/en/projects/newequalityact/Pages/EqualityBillbackground.aspx.