The
Chairman: I will bring in Maleiha Malik, after which I
shall bring in the Minister and finally, Tim Boswell, because I know
that he wants to talk about public function and possibly multiple
discrimination. Maleiha
Malik: On the issue of conscientious objection, there
are provisions in the legislation through indirect religious
discrimination provisions to allow some accommodation of religion and
belief in areas such as the workplace. My
organisation is strongly against further accommodation of conscientious
objection, especially in the public sector for the following two
reasons. First, we are very strongly against it when the conscientious
objection in and of itself constitutes a breach of the constitutional
right not to be discriminated against by another person. That would be
the case, for example, of the Christian registrar—the Ladele
case—who wanted the right not to perform civil partnerships. The
case was decided in an industrial tribunal and we endorse the decision
of Mr. Justice Patrick Elias at the Employment Appeal
Tribunal, who held that, in fact, she had no right to conscientious
objection. Our pragmatic reason is that it is wrong, as a matter of
principle and practice, to send out a signal that there can be
segregated public services when public officials should, rather than
setting the tone of discrimination law, be at the forefront of
discriminating against users of public
services.
The
Solicitor-General: I wanted to ask about multiple
discrimination, but Tim was about to ask about
it.
Q
147Mr.
Boswell: The Government’s suggestion is that it
should be possible to provide for multiple discrimination protection
when there are multiple protective characteristics. Will that make the
law simpler or will it create further complexities, which will be
difficult to navigate other than through the courts?
Maleiha
Malik: The law is already very complex on that
because the different grounds of discrimination mean that people are
picking and choosing the grounds. It is actually being resolved. We
proposed two
things.
Q
148Mr.
Boswell: But is there an added benefit of looking at them
ensemble? Maleiha
Malik: There is an added benefit in the sense that
you capture certain types of harms that otherwise slip through the
cracks. It also allows a
greater degree of flexibility for courts in terms of remedies. The most
important area in which it is useful is, for example, when an
individual falls within race, gender and sexual orientation. That must
be the area at which the discrimination law is targeted
because they are the most vulnerable people whom the
discrimination law wants to
protect.
The
Chairman: Any further questions for this particular set of
witnesses? I have speeded you up a little too much. We seem to have a
minute left. If hon. Members have no further questions, I thank the
witnesses very much for coming along today and answering their
questions. I am sorry if I had to move them along from time to
time. I am now about
to ask the next set of witnesses to take their place during which time
my colleague, John Bercow, will take over as Chair of the
Committee. [John
Bercow in the
Chair] 11.31
am
Q
149The
Chairman: Good morning to the next five witnesses. My name
is John Bercow; I am the Member of Parliament for Buckingham and am in
the Chair for the next evidence session. We are due to hear evidence
from representatives of the Confederation of British Industry, the
Association of British Insurers, the Federation of Small Businesses,
the Chartered Institute of Personnel and Development and the Trades
Union Congress. Welcome to our meeting this morning. I ask each of the
witnesses, please, to introduce themselves to the
Committee—starting with Stephen, on my
left. Stephen
Alambritis: I am Stephen Alambritis, head of public
affairs at the Federation of Small
Businesses. Nick
Starling: I am Nick Starling, director of general
insurance and health at the Association of British
Insurers. Dianah
Worman: I am Dianah Worman, new diversity adviser for
the Chartered Institute of Personnel and
Development. Sarah
Veale: I am Sarah Veale, head of equality and
employment rights at the Trades Union
Congress. Katja
Hall: I am Katja Hall, director of employment at the
CBI.
Q
150John
Penrose (Weston-super-Mare) (Con): It is a pleasure to
have you in the Chair, Mr. Bercow, and at short
notice. I want to ask
each of the panel members quickly some questions about gender pay
audits. I was particularly struck by some of the estimates in the
impact assessment—the costs of a gender pay audit for companies
in the private sector. Pages 138 and 139 of the impact
assessment say that the one-off implementation costs of a gender pay
audit would be £92.24 per company and the ongoing, annually
recurring costs would be £15.38 per company. Do any of you have
views on how realistic those costs
are? Katja
Hall: We think that those costs are an
underestimation of the real costs involved. Possibly the reason for
that is that, in calculating the figure, the people doing the
impact assessment have not taken
into account what must lie behind coming to that figure. The truth is
that there is a lot of background work that needs to be done first by
companies, which is particularly true for small firms. Many of our
members have said that, in order to produce accurate statistics or
gender pay audits, they would need to use external consultants, for
example. Unfortunately, few of those charge £92 or £15,
so we think that the costs are likely to be much higher than
those in the impact
assessment.
Q
151John
Penrose: Do you have any idea, roughly, what order of
magnitude you would
expect? Katja
Hall: We do not have any statistical figures. We have
asked some of our members what they think the costs involve in doing
pay audits. The views range. One member said that they think the cost
is equivalent to having one employee working on nothing else for a
month or two. That was quite a small firm. A medium-sized firm with
about 700 employees—if I remember correctly—estimated the
cost of a pay audit to be £14,000.
Q
152John
Penrose: Does anyone else on the panel have a view on
this? Sarah
Veale: It is probably quite difficult to make
assessments. I assume that questions have been asked of companies that
already do it, which could produce a realistic figure and say,
“It costs us this much.” There are huge variables between
different sectors. A lot depends on how companies organise themselves.
A well-organised company with a good payroll system ought to be able to
identify such things relatively cheaply. If you have never done it
before, it will be front-end loaded. The first time you do it, it will
cost quite a lot, but as soon as you have got it into your systems, and
you are doing it regularly, it would not be a particular administrative
cost. For a smaller firm it is a different exercise. In a very small
firm, you can simply look around and you will know almost off the top
of your head who has paid what for doing
what.
Q
153John
Penrose: And the Government are only proposing it for
businesses with 250 employees or more, I think. The Government would
agree with you that it would cost more up front. They think the set-up
costs would be £92 and then £15 ongoing. Does that seem
reasonable to you? Does anybody else on the panel have any evidence?
Have any of their members been consulted on whether these are
reasonable?
Sarah
Veale: It seems reasonable to me if you agree with
the principle that you should eliminate gender pay discrimination. If
you are going to do that, you have to find out where it is going on.
You might find that it is not going on, in which case that is good for
your company.
Q
154John
Penrose: Sorry, I mean is the cost a reasonable estimate
of the true cost?
Sarah
Veale: As I said before, it varies so much from
company to company. You are always going to get a very crude analysis,
unfortunately, so I would not like to say.
Stephen
Alambritis: We are very relaxed about this aspect of
the Bill. As you know, it applies to companies with more than 250
staff. That is 9,000 companies in total out of a company ratio of 5
million in the UK. We have a pyramid system. We have millions of tiny
small businesses and just a few thousand very large companies. The vast
majority of small firms would be excluded from this, so we are very
pleased with that aspect. It could be that some of the costs would be
passed on through the fees from organisations like Sage and through the
accountancy profession. But small firms would be completely and totally
excluded from the imposition, and we are very pleased. We lobbied for
that and got it.
Dianah
Worman: I cannot comment on the costs. As Sarah said,
it probably varies from organisation to organisation, but where we come
from, it is just good business sense to know how you are spending your
money and how you are managing your pay bill. Your approach to that
ensures that people who work for you feel that you value them
appropriately. So our position is to encourage voluntary activity
because it is just a common-sense way of managing things. The costs may
vary, but why would you pay money out to people without knowing whether
it is effective? We encourage the voluntary approach—very much
so.
Q
155John
Penrose: Thank you. Can I move on to the broader issue of
the gender pay gap and how one addresses it? I expect and hope that
everybody here would agree on the principle and importance of trying to
deal with it. I am interested in how much of the gender pay gap you
believe can be sorted out within companies, as opposed to it
originating there and needing to be dealt with through action elsewhere
in society and the community as a whole. Equal Opportunities Commission
research says that 38 per cent. of the gender pay gap is due
to “other factors
associated with being
female”, which include
“direct discrimination”, and also a
variety of indirect factors and “systematic
disadvantage”. I am concerned that we might be looking at a
relatively small proportion of the gender pay gap in company activity
and action. Do any of you have views on whether that analysis is
correct?
Stephen
Alambritis: Firms in the UK small business sector
typically employ 10 or 20 people. The staff have a very close
relationship with the employer and talk to each other regularly. We
believe that the element of a gender pay gap within the small firm
sector is very tiny. I have used the word “sector”, and
the best way to address the gender pay gap is to look at it
sectorially. It is particularly such sectors as those involving
catering, supermarkets and part-time work that might require company
targeting. In terms of business size, we do not think that any exercise
within the small firm or research sectors would unearth huge gender pay
gaps.
Sarah
Veale: I would suggest that there are a number of
contributory factors, as is suggested by research
from the Equal Opportunities Commission. The TUC has never said that
the gap is due solely to the fact that employers are discriminating,
either indirectly or directly, but there is clearly a sex
discrimination element, which is why pay auditing is important. There
are other huge extraneous factors, such as the availability of flexible
working, and measures to facilitate women returning
from maternity leave and to provide the extra training that they might
need to catch up. It is a complex picture, and a lot will depend on
what the company does and what sort of people it is trying to
recruit. We would
still argue that sex discrimination—usually indirectly, but
occasionally directly—is an important factor, and something
within the employer’s control. That is why the TUC has been
concerned to ensure that measures are in place to work out what the
problem is and to promote workplace solutions. We are pushing hard at
the idea of developing people within the work force who can work with
employers to identify and deal with those complicated issues, and we
hope that the Government will support that. Union equality reps should
be given the statutory rights that other union representatives have to
help employers to work on equality issues and eliminate discrimination.
That would save the public purse a lot of money on often unnecessary
litigation, and it would solve systemic problems in the workplace,
which is where they need to be solved.
Q
156John
Penrose: I want to ensure that others have a chance to
answer that point, but I think that the Government’s estimate is
that there will be a 1 per cent. reduction in the number of tribunal
cases as a result of this. Do you think that that is a large
benefit—and is that figure right?
Sarah
Veale: I think that you can get far more than that
just on matters of equal pay, which is now one of the biggest
jurisdictions in the employment tribunals. If we can deal with an
unequal pay system, that would remove literally thousands of claims
from the tribunal system for a large workplace. As long as it is
pitched right, the training is available and people can have the time
off to do that training, we could effectively take a lot of cases out
of the system. I think that the number would be far
more.
Q
157John
Penrose: That is
useful— [Interruption.] I am sorry, I should
allow others to respond.
Dianah
Worman: As Sarah was saying, there are a lot of
issues that can cause problems. Poor management practice can lead to
issues of unfair or unequal pay, which is why the auditing process is
very important. Digging deep to find out the causes of the situation
would mean that an employer could manage their pay bill far more
effectively. This is
a complicated matter, and there are many issues that are not under the
direct control of the employer. There are issues about women preferring
to make decisions about what jobs to go for, and the trade-off
decisions that they might make in terms of access to part-time work
versus pay levels—that is very important—or the distance
they need to travel to work. Another issue might be the confidence
levels that women have regarding bargaining for pay in the first place.
Those complicated issues must be dealt with on all fronts, not just
left as the responsibility of the employer. Employers need to get their
act together, and it is common sense for them to do so, but we need to
work in partnership on this issue and not simply depend on the usual
defence of market rates. Market rates can have an inbuilt bias, and we
must be
conscious of those dimensions and ensure that we work together more
coherently to deal with the gender pay gap. Katja
Hall: We agree that the causes are complex, and if we
want to make progress, we must find a holistic solution that tackles
the education system, the choices that girls and boys make at school
and the fact that vocational training still has such a strong gender
bias. We must also look at child care and the choices that women make
to take time out of the labour market.
Employers also have a role and
they can—and should—do more to help women to progress in
the workplace. We suggest that more progress can be made by looking at
issues such as flexible working, particularly at senior levels within
an organisation. We should look at things such as leadership training
for women, and performance training for line managers in some cases, to
ensure that there is no bias. We should also look at things such as
networking and mentoring schemes that help women progress in the
workplace. Companies all have different challenges, and they need to be
able to find the solutions that work for them and deliver real
progress.
| 
