A gap in thinking on equal pay?

montage for Gender Pay Gap page

The beauty about leaving a job and starting a new one is the chance to be reflective, to think more clearly and to say one or two challenging things. So I want to begin with an issue that Fawcett has very much made its own over the years. What is equal pay and how do we achieve it?

When I first encountered this issue many years ago my response was one of incredulity. Surely it cannot be true that in the 1990s (and yes it was that long ago) women are paid less than men for doing the same job or work of equal value?  So here we are in 2015, the pay gap is 19% and we are asking the same question.

Only this time we have strong leadership from the Minister for Women and Equalities and a Prime Minister who has stated very strongly his commitment to closing the gender pay gap ‘in a generation’: he has pledged to enact the legislation which will require employers with over 250 employees to publish the gender pay gap in their organisations. On any measure that is major progress and we should strongly welcome it.

Defining the difference

But here is the rub. Equal pay and the gender pay gap are effectively two different things. That’s because the pay gap, the difference in pay between women and men, is an average figure, it smoothes out individual differences. Our equal pay legislation is primarily concerned with giving the individual woman a mechanism to pursue a claim if she can find a way to make a meaningful comparison. The gender pay gap is a measure of the difference between the hourly pay of women and men and has a number of causes.

An organisation that employs only women in junior roles and men in senior roles will have a large gender pay gap because of where each is concentrated in the hierarchy. But there may not be a case for individual pay discrimination.

On the other hand a company could report no pay gap but an individual woman could still have a case if she can identify another employee to compare herself with.

It is also possible for an employer to carry out a pay review and report a gender pay gap, but to fail to provide the information the individual employee needs to bring a pay claim.  This is likely to be the outcome if the regulations implementing Section 78 of the 2010 Equality Act are drawn sufficiently loosely.

For the legislation to have an impact, pay gap data must include pay across specific jobs as well as by other terms, such as bonuses, overtime pay and perks like company cars. So the answer surely is to require employers to be transparent and publish the data? Well, yes but it’s a tricky one for the simple reason that they could provide employees with the information to bring a claim.

Much more attractive for them is the option of transparency about the gap (without the data) and so with none of the risk of litigation, but perhaps with a strongly worded commitment to equal pay.

Defining the aim

This begs the question: what are we really trying to achieve?  For me it’s two things.  Firstly, the individual woman has to be equipped with the information she needs to challenge pay inequality.  Secondly, we need employers to be willing partners if we are to genuinely close the pay gap and root out pay inequality.

One way forward could be to require employers to publish the data but to combine it with a time-limited window of opportunity for them to put it right. Those willing to tackle the issue should receive support from government and from organisations such as Fawcett to change the way they work. But if they don’t address the identified pay inequality an employee would be free to bring their claim in the usual way. The employer could even face an additional penalty for failing to act?

At the very least the implementation of Section 78 should be consistent with the statutory code of practice on equal pay. We need a way forward that brings employers with us but we also need to focus on what achieving equal pay actually means for individual women at work.

Consultation on the proposal to publish pay differences in large organisations is open until 6 September. You can respond here.

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Sam Smethers
Fawcett Society Chief Executive