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Gender pay gap: still work to be done

By: Maggie Moodie, Partner and Public Sector Lead, Morton Fraser
Published: Thursday, November 26, 2015 - 12:27 GMT Jump to Comments

Although UK councils are in the process of paying out millions for successful equal pay claims, real gender equality in the workplace is still very much a work in progress.

In October, Fife Council agreed a multi-million pound settlement for around 2,000 workers - mainly low paid women - over equal pay claims. The council said it had reached an agreement on the historical equal pay claims, without the need for court action. Some workers will get back-pay dating as far back as 2006.

This is a key reminder that the gender pay gap still exists in many workplaces, forty-five years on from the introduction of the Equal Pay Act.

It is worth noting that the increasingly shrinking public sector workforce, which accounts for just under 20% of the UK’s total workforce, has a disproportionately female bias due to the employee make up of the health and education sectors. In Scotland, for example, 67% of local government and 81% of NHS workers are women. Only a third of chief executive officers are women.

Data published by the Office for National Statistics (ONS) states that the overall UK gender pay gap, which is 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%.

The statistics also show that the full time median pay gap is 9.4%. Although this is the lowest gap in pay between male and female employees since records began, it is still a significant difference.
If you examine these two sets of figures together, it underlines that the equal pay quest is particularly challenging for the public sector.

There has been quite a lot of noise recently about the fact that the UK Government is now looking to implement a provision in the Equality Act 2010. This will demand that private and third sector organisations with 250 or more employees publish information about the difference in average pay between male and female employees.

In advance of implementing a mandatory reporting regime, the UK Government consulted on a number of matters including:

• Whether 250 employees is the appropriate threshold at which to require this disclosure.

• Where the gender pay gap information should be published. The consultation document gives the example of publishing the data in a prominent place on the employer's website.

• 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 frequency with which employers should be required to disclose gender pay gap information.

• The costs, risks and unintended consequences of mandatory reporting and whether there is anything that warrants dropping or modifying the proposals.

• How to ensure compliance.

The consultation closed in September 2015. The results are expected to be published this winter and the publication of draft regulations is expected in early 2016. There are already similar provisions requiring public authorities to report gender pay gap information where they employ over 150 employees, although the Scottish Government is consulting on that threshold being reduced to 20 employees.

In late October, the UK Government announced further plans to require the broader public sector - rather than just public authorities - to comply with the reporting requirements. As with the voluntary and private sector, the intention here is that this requirement will apply to organisations with more than 250 employees.

Whether mandatory gender pay gap reporting will be effective in bringing women's pay on to an equal footing with that of their male counterparts' remains to be seen. Examples such as the Fife Council pay out, however, implies that there are moves towards equality.

It is worth noting that the regulations do not require employers to reduce the gender pay gap. The UK Government believes that greater transparency of gender pay gap information will encourage both employers and employees to consider what more can be done.

The requirement to publish information on the difference in pay is likely to lead to concern from many employers regarding reputation, and this may well 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 held to account. This could be the result of equal pay and discrimination claims being brought by employees using published data to help in establishing a claim.

To succeed with a claim, even if the published data demonstrates a pay gap, 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 what level of detail employers will be required to provide under the new regulations, and it may well be that the information available will not provide employees with sufficient information to support a claim.

That said, it will very likely prompt employees to ask questions and seek additional information.
It also begs the question as to how the procedure will work where there are minimal male employees to benchmark against. Those working in childcare and early year’s educators, for example, are predominantly women - as much as 97% in some areas.

Much of the success of discrimination legislation over the years has been to reflect the shifting views of society on what is or is not acceptable, and to cement this in a legal context. With gender pay high on the agenda of both the UK and Scottish Government, it may well be that after forty-five years this is, at long last, the beginning of the end for the gender pay gap.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

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