The
Chairman: Continuing the theme of gender pay audits and
equal pay, I will call Lynne Featherstone, followed by Nia Griffith,
Tim Boswell and Sandra Osborne.
Q
158Lynne
Featherstone (Hornsey and Wood Green) (LD): I have one
question each for Sarah and Katja. Last night I sat for two hours at
the meeting of Unison and the Fawcett Society. The room was full, and
every person who spoke said that the most important thing in the
workplace was to have mandatory pay audits, yet they have been left out
of the Bill. I wonder what Sarah thinks are the effects on
women’s poverty in perpetuity if we cannot amend the Bill and
include the
audits. Sarah
Veale: It would be regrettable if the Bill was not an
opportunity to introduce mandatory pay audits. We in the TUC have never
said that they are a panacea or that they alone will solve the problem,
but you will not be able to identify unequal pay until you carry out
systemic monitoring to find out where and why the discrimination is
taking place, and then hopefully work out workplace solutions for
addressing it. We have
had years and years of reviews—equal pay has been reviewed more
times than anything else. The Equal Opportunities Commission has done
it, and we have had the Kingsmill review and the women and work
commission. They have all said that it is essential to have pay
auditing if you are going to crack the problem. However, the trouble is
that they have all shied away from making it
compulsory. With the
greatest respect to Katja, employers are simply not doing it enough.
There are some who are doing it, admirably, who have found that it is
not the problem that they thought it was going to be and that it has
delivered huge benefits. However, there is a hard core in the private
sector—the public sector is different—that simply will
not do it. Until it is done, we will not be able to crack the problem,
which is why the TUC has been adamant about pushing that point. I would
add, however, that we do not think that that
alone will solve the problem, and I agree with the proposition that
there are a number of other extraneous factors, but you must do that,
and again we urge the Government to do
so. Q
159Lynne
Featherstone: It seems pretty much central to me, and we
have seen that with exposure, publication and comparison—when
people can see what is happening—you get it dealt with. That is
the case in point.
Katja, we have met, and I have
talked to the CBI, so we know where you are coming from: you do not
think that that is the answer. Cost and the recession are often brought
into the equation whenever this discussion occurs. The Government have
said that this will be voluntary until 2013, which is, without
question, four years too late. Two quarters of downward growth in
returns signifies a recession. Would the CBI think that it would be a
good move if I tabled an amendment to say that there should be two
consecutive quarters of growth to signify the start of mandatory pay
audits, so they would begin in either 2013 or after two quarters of
growth—whichever came
earlier? Katja
Hall: No, because mandatory pay audits would be the
answer only if the main cause of the pay gap was discrimination between
men and women doing the same
job.
Q
160Lynne
Featherstone: But how do we
know? Katja
Hall: We know that that is not the main cause based
on the women and work commission report and other research. Nobody has
been able to establish that it is a factor, or how much of a factor it
is. I am not aware of any research suggesting that that is the main
cause of the pay
gap. There is a place
for pay audits; many companies choose to do them on a voluntary basis.
We survey our members on the issue every year, and we know that more
than 50 per cent. of large firms now undertake voluntary pay audits,
and they do so as part of their package on diversity in the workplace.
Many of them find that useful. However, we also know that, in the vast
majority of cases, when they find a pay gap, it is not between men and
women doing the same job. We need to be realistic here: the audits are
expensive, time consuming and bureaucratic. For a company with limited
resources, there are often better and more effective ways of spending
money than on a pay
audit.
Q
161Lynne
Featherstone: In terms of equal pay for equal work, in
many companies the jobs of women are not the highest paid, and nor do
women reach the highest end of the grade. There is discrimination that
is about not equal pay for equal work, but what jobs are actually
available to women. We cannot see that without exposure of the whole
range.
Katja
Hall: I do not think you can say that the fact that
not enough women are in senior jobs in the United
Kingdom is to do with employer discrimination. If you want to look at
getting more women into senior positions, I suggest that you might need
to look at participation levels within different organisations because
pay levels would not give that information. If you want more women at
senior levels, I still think that one of the best things to do is to
encourage companies to offer more flexibility in senior
jobs.
Lynne
Featherstone: I am certainly not saying that there are not
other
issues.
Q
162Nia
Griffith (Llanelli) (Lab): I am picking up a certain
degree of negativity from the representatives from the CBI and the FSB
about a form of compulsory pay audit. What sort of reporting would you
regard as helpful for identifying pay gaps? Will you ask yourselves
whether you really are an organisation that takes diversity and
equality seriously? Most importantly, if you do not have some form of
reporting, how do you measure
progress? Stephen
Alambritis: With regard to the smaller business
centres, I have intimated that the boss or employer—increasingly
the female boss or the female employer—in the new archetype has
females over 35 as employees. Increasingly, that person knows exactly
who gets paid what, and good employers who want a good reputation and
to access local authority and public sector contracts will do all that
they can, and will probably have in place a structure through which
everyone is paid equally. We worked with the Equal Opportunities
Commission, as it was then, on equal pay toolkits for small employers,
which worked very well. We are relaxed and content about the threshold
and the acknowledgment that, for smaller employers, it is best to
vouchsafe them before bringing them on to a regulatory element, so that
they are free to employ more
people. One way
forward could be to talk to the major audit industries and the
Institute of Chartered Accountants to see whether they can provide a
solution. The large companies—the CBI members—are audited
annually by those in the industry. As for whether the audit on equal
pay can be carried out at a reasonable rate, the audit industry should
look at the cost
argument.
Q
163Nia
Griffith: The point of reporting is to communicate
something from one person or body to another. I am not sure how your
knowledge of this, that and the other, regarding a particular member of
your organisation, can rely on a descriptive method of saying what is
going on, rather than arising from something that is easy to see and
analyse. Stephen
Alambritis: Well, 3 million self-employed people do
not need audits—they do not have audits as such. We are talking
about 1 million companies doing statutory audits. As for including
businesses that do not have fiscal audits anyway in another audit, that
would have a fairly regulatory impact. We approve of the exemption and
the voluntary elements. If all that does not work, it is obviously up
to the Government to think about whether there should be a mandatory
element. I refer you to the equal pay toolkit that was devised by the
EOC along with the Federation of Small Businesses, which was a solution
to our members, and to think along those lines. The Equality and Human
Rights Commission might be one way forward to get the message
out.
Q
164Nia
Griffith: So you would be encouraging your members to look
at ways of
reporting. Stephen
Alambritis: To make sure that there are things out
there that can help them to double check that they are paying equally.
When asked the question,
the vast majority of my members do pay equally. They are so
small—with five staff—they would pay equally, and I
cannot see how they would not. In a small firm where everyone knows
everyone else, if you pay unequally, the resentment that is bred, as
well as the employment tribunal prospects, are horrendous for small
employers.
Nia
Griffith: I am still unclear about how we communicate that
in the small
print.
The
Chairman: Does anyone else want to come
in? Katja
Hall: Of course, there is a trade-off between a
simple metric figure, which would be easy to compare across
organisations but would risk being meaningless if taken out of context,
and a more descriptive or narrative form of reporting that might be
more meaningful, but would not be as easy to compare. Where the CBI and
most of our members come from on this issue is about what we need to
do. Of course we need to encourage greater transparency, and of course
companies need to have some idea of where they are in order to know
where they want to get to, but where we would like to start is by
finding out what works. I do not think that we have a clear idea at the
moment about what companies are doing out there, and about what they
find works and delivers progress. We know of companies that monitored
for years and years and made very little progress, but then they
introduced staff surveys and tracked the satisfaction rates of
different groups of employees, which has enabled them to make real
progress. For them, that has been a much more meaningful way of
reporting—or whatever you want to call
it. In the first
instance, we would like to find out what works and what does not. We
would see us—the CBI—as having a role in gathering that
information. On that basis, we think that there could be merit in
developing, in a sense, a basket of indicators that companies could
pick and choose from when it comes to transparency. That might be an
equal pay figure, but it might be such things as female levels of
participation, participation of women at different levels within the
organisation, take-up of flexible working and possibly even child
care—there is a range of indicators. What works in one company
and is meaningful in one company would not necessarily be meaningful in
another company. However, if companies first find out what works, then
we spread that message of good practice and, thirdly, give employers
the tools from which to pick and choose, we think that real progress
could be
made.
Q
165Mr.
Boswell: I would like to ask Sarah Veale—others may
want to contribute—a little more about part-time workers. My
first question is a sort of technical one, which is whether the
threshold would pose greater problems for employers who typically have
a large part-time or fluctuating work force. I think you are nodding,
but is that at least a potential—that setting a threshold for
audit might create
difficulty? Sarah
Veale: It is clearly much more difficult if you have
a work force that is peripatetic or working various or different types
of
hours.
Mr.
Boswell: And expensive, presumably.
Sarah
Veale: It would be more expensive but, again, the
costs are initial. Once you have worked out the metrics and whatever, I
do not see that it would be any more complicated. Employing part-time
workers often gives employers a greater degree of flexibility and there
is nothing wrong with that at all, but that greater degree of
flexibility sometimes comes with more demanding administrative
costs.
Q
166Mr.
Boswell: Thank you. I wanted to touch on the question of
the discrimination that may or may not be inherent in part-time work.
My suspicion would be that there is a structural imbalance between
part-time employees and full-time employees—in terms of their
remuneration—that is gender neutral. Secondly, there may well be
an indirect form of discrimination, because females tend to occupy more
of the part-time positions. There are two factors operating, both of
which in a sense are discrimination, but one of which is not
particularly inherent in the Equality Bill—it may be, but in a
different way, and it is not gender discrimination. Would you see that
as a reasonable interpretation? Do you think that you can differentiate
the factors arising from gender discrimination from what I might call
structural discrimination—by the nature of whether the
employment is full-time or
part-time? Sarah
Veale: One of the problems with the law is that
disentangling the two is difficult, because of how equal value is done.
The problem with part-time work is that the question may not simply be
one of possible indirect discrimination in the workplace. A lot results
from people’s lives outside work and the reasons why people work
part-time. The reason why more women work part-time is that they still
tend to be the prime carer at
home.
Q
167Mr.
Boswell: There could also be people with a mental health
condition, for example, or a disability.
Sarah
Veale: Absolutely, or older people who want to phase
themselves out of the workplace and do two or three years part-time as
they go. You would have to differentiate and weigh in some of those
factors. I do not think that makes the operation undoable, but as I was
saying earlier, it makes it slightly more complex. Certainly, the TUC
has always highly encouraged part-time work, but the problem with it is
that employers, and often society, do not value it in the same way as
full-time work, even if the person is doing exactly the same as their
full-time
equivalent. We know of
examples of job-share schemes where employers have taken on two or
three part-time workers to do a full-time job. If it is managed well,
you get huge benefits. You get one and a half times what you would get
from one person. Good managers will appreciate how to deal with what
are often societal demands for a more flexible approach to how people
do their job. I do not know whether that helps. The trouble is that
equal pay law is not really being touched in the Bill. It is immensely
complicated—more complicated than the laws affecting
discrimination against part-time workers, which are a separate but
linked issue—and probably a lot more work needs to be done on
it.
Q
168Sandra
Osborne: The legislation to date has not provided the
remedy that it should have provided after such a long period, and there
are all sorts of other complications that have been discussed, on which
progress has also not been made. It is also difficult for individuals
to seek redress in the current circumstances. What are the
panel’s feelings about the idea of representative actions, in
which groups of people could take action at the tribunals? Would that
make the system more efficient and possibly even cheaper? Would it
provide a better remedy for individuals and a more positive way
forward? Sarah
Veale: Do you want me to start? That is one of the
TUC’s propositions, although I am obviously very interested to
hear what everyone else thinks. We put it forward because, particularly
with the large multiple cases and specifically on equal pay, the
current system does not allow you to group together very efficiently
the common points of law that exist across a grade of staff against
whom you are alleging indirect gender pay discrimination. The joy of
representative actions would be that an organisation such as a trade
union, or maybe a citizens advice bureau, could be given a locus to
identify the key legal issues and run a representative test case, if
you like, to which all the individual women would have to sign
up. Our view is that
that would enormously expedite litigation. At the moment, we have cases
where women make a submission and, after it has gone through the
various appellate stages, it is not finally resolved for 11
or 12 years. One of our unions told us that, tragically, one or two of
the women they represented died before receiving the benefits of the
compensation that they were owed. Clearly, anything that expedites the
process would be enormously helpful, so we have put that forward. We
are grateful to the Ministry of Justice for looking into the issue and
seeing what might be done.
I emphasise for the record that
we are not talking about class actions. We are not talking about
allowing members of the public to sign up willy-nilly to any cause that
they might think affects them. The case would be specifically
marshalled, and the locus would be given only to groups such as trade
unions and perhaps the Equality and Human Rights Commission, which
could do it expeditiously and curtail it, and not expose employers to
wildcat litigation. We firmly recommend it—certainly to be
looked at—as a means of helping the process work more
efficiently and much more cheaply.
Katja
Hall: This is an issue where the CBI and the TUC
disagree quite strongly. We think that it is a myth that representative
actions would somehow streamline the system and facilitate the progress
of such claims. Whatever system you have, you cannot avoid looking at
each individual claim at some stage. The question really is whether you
front-load or back-load it. Whatever system you have, you still have to
assess the individual
claims. We think that
under the current system there is already the ability to look at claims
and group them together. We think that could be used much more widely
to speed up the processes involved. We also need to be realistic about
the other potential risks of representative action. Sarah helpfully
says that the TUC is not pushing for class action, which is welcome,
but I am not sure that the line between the two is always that clear. We
already know that employers—especially small firms—do not
have much faith in the employment tribunal system. There is a real risk
that representative action would lead to a more litigious society and
greater pressure on employers to settle cases even when they are pretty
sure that they would
win. Dianah
Worman: We can go almost full circle because the
process is back-loaded; it is a technique. Employers need to understand
why it makes sense to look at the concept of total reward and how to
better manage the pay bill. In that way they signal the fact that they
are valuing their employees. Looking at flexible working and part-time
working may, as a result of doing an audit, expose the fact that they
are not valuing those people in the right way—they are not
accessing bonuses and so on and so forth—and they are getting
disparities. It would be much more effective to front-load and educate
employers, give them the good practice guidance and build on the
expertise we have had over the years, but expand that through the
provisions that are allowed by the EHRC taking forward the guidance.
That is critical. You cannot do this stuff unless you understand what
to do. Simply being told that you have to do it in law is not the
answer. I am afraid that we have to spend a lot more time investing in
helping people to understand why the proposal is sensible. That is why
it makes sense to push the concept of the business case for diversity
so people get the message and their mindsets switch and they begin to
drive the agenda in a much more proactive
way.
| 
