Where Are We On Equal Pay Day 4 November 2016?
The creation of the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 is a step in the right direction. Unfortunately, the response to the consultation has identified that these draft Regulations produced in February 2016 are far from satisfactory.
While these regulations were designed to ensure that large private employers report on average pay within their companies, there are numerous loopholes which prevent transparency and positive change. This is because:
- Benefits in kind such as company cars and health insurance, are excluded even though they can be valuable.
- When reporting on pay, employers are required to include employees who are on family-related leave. This risks distorting averages as inherently most of those employees will be women on maternity leave, receiving only £139.58 per week for the majority of that time.
- Although average figures are provided, there is no evidence these will assist employees in bringing claims. They do not identify the necessary male comparators or pay components.
- The provisions are ineffective. There is no clear requirement on employers to actually tackle the pay gap and remarkably, there are no enforcement mechanisms if the employer fails to publish a report.
A final draft of the Regulations is yet to be laid before Parliament and it is anticipated that this legislation will come into force in April 2017.
This would require the very first statutory reports to be published in April 2018 – some seven and a half years since the introduction of the Equality Act.
Equal Pay Claims
The recent cases brought by employees, including the widely reported equal pay claims pursued on behalf of Asda employees, have been gaining momentum.
In October 2016, the Employment Tribunal decided two preliminary issues in favour of the Claimants. Firstly, that Asda had ultimate control over pay, despite its pay structures being localised. Secondly, the Claimants were entitled to rely upon male comparators who worked at other stores.
The Claimants – who predominantly operate tills and stack shelves – now need to prove that their work is of equal value in contrast to the predominantly male warehouse staff, who earn on average £4 per hour or more.
The Employment Tribunal will need to consider whether Asda can defend these claims by showing that the pay differential is justified by reasons such as market forces or geographical location, despite the large pay difference and clear gender segregation of the two job roles.
If these claims against Asda are successful, workers in other superstores are likely to bring claims against their employers because of the pay disparities that currently exist between customer service and manual roles across the country.
The most proactive effort we have seen to establish Equal Pay has taken place in Iceland.
On 24 October 2016 there was a “women’s walk-out” at 2.38pm. This marked the fact that there is still a 14% pay disparity between men and women. This means that Icelandic women effectively work without pay for 3 hours and 22 minutes each day. Their walkout signified their withdrawal of 14% of their labour to hit home the value of the work they do.
Swings & Roundabouts
Although Equal Pay is now at the forefront of many equality campaigns, the Government’s withdrawal of statutory Equality Act Questionnaires in April 2014 means it is now much harder to establish what our clients’ male comparators have been earning in order to prove unequal pay. Although this has been replaced by Acas non-statutory guidance asking questions about discrimination compliance by an employer is now only voluntary.
So, despite some steps forward, there have also been changes which have made it much more difficult for individual women to find out what their male counterparts earn so that they can even contemplate bringing a claim.
This is why it is extremely important that we end up with Equality Act 2010 (Gender Pay Gap Information) Regulations which require employers to provide meaningful information and take positive steps to tackle any pay gap. And if employers don’t comply with these duties, there should be penalties to ensure that employers pay fairly. Given the current lack of provision for enforcement, the draft Regulations are unlikely to resolve the Gender Pay Gap in the near future.