The Equality Bill is making its way through Parliament. Is it a priority in these troubled times? Solicitor Jasmine van Loggerenberg argues in favour of the Bill.
The new Equality Bill has been introduced by the Government ‘to harmonise discrimination law and to strengthen and support the progress on equality’. However, there is little harmony amongst employers since the introduction of the Bill, with many employers fearing that it will impose costly obligations upon them in an economic crisis. Are these fears well founded or just employers seeking a way to avoid their obligations?
Gender Pay Gap
One of the key objectives of the Bill is to reduce the gender pay gap. Disappointingly, nearly 40 years after the introduction of the Equal Pay Act 1970, statistics show that on average women in the UK still earn between 17% and 22.6% less than men. This figure is even higher amongst city workers where the difference in pay between men and women is a staggering 60% or 79% when taking into account bonus payments. The gender pay gap is a particular problem in the private sector which employs up to 80% of the UK workforce.
It had for some time been felt that the current legislation was not effective in addressing the gender pay gap, which remains a big issue for women in the workplace.
Equality Reporting Requirements
To tackle the gender pay gap problem the Bill has introduced a power to require reporting on the gender pay gap by employers with over 250 employees. However, this will not come into force immediately: the Government states that it only intends to make reporting a requirement if there has been insufficient progress in voluntary reporting by 2013. At present it is not clear what the reporting requirements will in fact entail and this is likely to be subject to much debate until (and if) the reporting requirement becomes a mandatory requirement in 2013. Therefore, the ball is now firmly in the employers’ court.
Many employers argue that now is not the time to introduce reporting requirements, given the economic crisis in the UK and worldwide, and that businesses will be hit with an unwelcome cost of implementing the new reporting requirements and dealing with potential equal pay claims. However, the Government argues that difficult times are no excuse for unfairness in pay schemes. In any event, at present, it is only large employers with over 250 employees which will be affected by the reporting requirements (except in the public sector where public sector employers with over 150 employees will be required to publish annual details of their gender pay gap). Therefore, a substantial number of smaller employers will remain unaffected by reporting requirement. So, has the Bill gone far enough to address the pay gap issue?
As for the charge that reporting requirements will prompt a deluge of equal pay claims: employers who have complied with the Equal Pay Act 1970 should have nothing to fear.
The Bill also introduces a ban on pay secrecy, so employers will no longer be able to require employees to keep details of their pay and benefits confidential. Clauses in employment contracts compelling an employee not to discuss their pay with colleagues or others will no longer be enforceable and if an employer seeks to discipline an employee for discussing their salary or benefits package, the employee may have a claim for victimisation.
It is important to note that the Bill does not compel employees to discuss their salaries or benefits package with colleagues, but provides employees with protection from disciplinary action in the event that they choose to do so.
The ban on pay secrecy is an important step forward in closing the gender pay gap. Transparency in respect of pay will bring employees comfort in knowing that they are being paid fairly and equally and will dissuade employers from paying their employees in any other way!
Positive action is perhaps one of the most controversial aspects of the Bill. It will allow employers to address under-representation of certain groups in the workforce. This will have a particular impact on women in business sectors which have been traditionally male dominated. For example, just 11.7% of women occupy positions on the UK FTSE 100 boards.
Positive action does not mean that women will be given jobs solely on the basis of their gender, but will allow an employer to choose a female applicant over a male applicant where they are both equally qualified candidates for the role and where women are under-represented. For the first time, employers will be able to take gender into consideration when recruiting, without risking discrimination, where the aim is to address under-representation.
In so far as its impact on women in the UK workforce, the Equality Bill is not about ‘having it all’, but about ensuring a fair and equal deal for all. Whilst the Bill has undoubtedly ruffled the feathers of many employers, there can be no excuse (even in an economic downturn) to justify the continuing gender pay gap and under representation of women in the workplace.
John Wright of the Federation of Small Businesses disagrees
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