The
Chairman: Thank you very much. We will have a very brief
interjection by Stephen Alambritis, then we will move to Evan Harris. I
should then like us to move on to some of the other matters that need
to be
addressed. Stephen
Alambritis: My members want access to justice
themselves. They get free legal advice on employment issues from the
FSB. If they take any action in contravention to that advice, we will
not support them in the run-up to an employment tribunal. Likewise,
staff deserve access to justice. I think that in the
early ’90s, there were 30,000 employment tribunal cases and the
latest statistics show something like 200,000, so there is an
increasing tendency for employment disputes to end up at employment
tribunals. What we do not want is vexatious applications that undermine
the confidence of employers, both large and small, in the employment
tribunal system. Some years ago—about four or five
years—we helped one of our members through an employment
tribunal case. The judge awarded £10,000, which is the highest
that can be awarded, against the worker because it was so vexatious and
litigious. We need to ensure that it is a fair system. Behind all those
stats, there are the areas to which Katja referred where there is an
agreement to close the case even though the employer is fully justified
in carrying on. We need to get that balance right. We need access to
fair justice for both
sides.
The
Chairman: Thank you. Evan Harris and then John
Howell.
Q
169Dr.
Harris: I just want briefly to clarify the CBI’s
position because I do not want it to be misunderstood. Hopefully, these
questions can be answered quite quickly. Do you accept that there is a
pay gap between men and women at the moment that is
unacceptable—for whatever
reason? Katja
Hall:
Yes.
Q
170Dr.
Harris: Okay. I think that you have accepted that part of
that gap, even if you do not think that it is the main part, is due to
illegal, gender-based pay discrimination—on average; not in
every
company. Katja
Hall: A very small part.
Q
171Dr.
Harris: Is your problem, therefore, that you do not think
that pay audits will solve the problem of dealing with this illegally
caused and unacceptable gap, or is it that you think that it is at too
high a price, or
both? Katja
Hall: We think that if an employer is discriminating,
it is unacceptable. We have a strong legislative framework in place
with uncapped compensation so that the employee can seek redress. But
if you want to make real progress on the pay gap, pay audits would be
barking up the wrong tree.
Q
172Dr.
Harris: So you do not think that they would be effective?
What evidence can you cite that the existing law, and/or the practices
of leadership programmes about which you have talked have made a
significant difference to reducing the pay gap? It may have kept it the
same—it has not got wider thanks to all these little
initiatives—but what evidence can you cite me, with a reference,
that suggests that our existing legislation is dealing with the problem
of the last 40
years? Katja
Hall: I think that I am right in saying that in 1970
the pay gap was 37 per cent., and it is now 13 per cent. if you look at
median earnings. So clearly, the pay gap is shrinking, but it is not
shrinking by as much as we would like and progress is not as quick as
we would like. But to say that there has not been progress
would not be
true.
Dr.
Harris: Sarah Veale, is that your
view? Sarah
Veale: I dispute those figures. I think that the
gender pay gap has been somewhat underestimated there, so I disagree
quite strongly. The fact of the matter is that it has been stubbornly
stark on what is a much higher figure for part-time workers, which, by
the way, is nearer to 40 per cent. I do not think that indicates that
40 years of a piece of legislation has worked on a voluntary basis and
with a few employers being kicked willy-nilly into the
tribunals. I think
that there is a problem with the individual basis of the law. You need
more collective solutions, but it is not working. Any other piece of
law that had not been working for 40 years would be a cause of national
outrage. It is illegal to discriminate, yet it is
happening.
Q
173Dr.
Harris: So all you can give me, Ms Hall, are some
contentious figures to show that what we have at the moment is good
enough. I am asking you for a
reference to some academic work that shows that what we have at the
moment—the current legal structure and practices—is
solving the problem, and that we will eliminate the unacceptable pay
gap, which we both accept, in five years’ time. Help me,
please. Katja
Hall: The figures compare the median earnings of
full-time and part-time employees. There is nothing wrong with them.
You may choose a different figure, for example, looking at only
full-time or only part-time. You may choose the mean instead of the
median, but there is nothing wrong with the figure
itself. As
to why there has not been more progress, to know that, we need to
understand the causes. As we have already discussed, they are
complex—they have to do with our education system, with child
care, women’s experience in the workplace and things such as
flexible
working.
Dr.
Harris: I do not want you to repeat everything that you
have
said.
The
Chairman: Thank you. Can I just say to colleagues and
witnesses that I would like to move on to other matters at 12.15 pm,
because there are other issues to be explored. I have just called an
Opposition Member, so I will now call Vera Baird and then John Howell.
It would be helpful if both questioners and witnesses could tailor
their remarks
accordingly.
Q
174The
Solicitor-General: Can I ask three quick questions? First,
Katja, do you accept that equality and diversity are good for business,
and not its enemies? Stephen and I are assuming that you do, because of
what you said. Let me ask that of you as well, Dianah. You have made
the position clear.
Secondly, you have talked a lot
about direct discrimination and how small you think it is. Indirect
discrimination can only really be disclosed by transparency, which
requires some process to reach. Perhaps we are talking not about
culpable employers, but about employers who do not know that they are
paying unequally because of some historic system—they have never
gone through it and done it in a systematic way. Do you
agree? Thirdly, you
were looking, a short time ago, at what you think would work for
businesses in terms of improving gender equality more broadly, but
particularly the gender pay gap. You were talking about a quest for a
basket of indicators, which would inevitably include pay. That is a
good proposition, is it not? That, I think is what the Equality and
Human Rights Commission is going to be asking the CBI to join in doing
with the TUC, precisely to look for those indicators. That can fit on
some metrics, and we can properly measure pay disparity—we seem
to be allied there about that—but do you agree further that what
is really important is that that should be done, and then everybody
should be asked, however involuntarily it is put to them, to comply
with disclosing those measures? That way, we can see, even if it has to
be done differently sector by sector, what companies A to Z are doing
about their pay. The point, surely, would be to get those metrics
worked out between employers and employees as a group, and then move it
into all of your sectors. Would you take responsibility, as the CBI,
for driving that disclosure through all your businesses?
Katja
Hall: Yes, of course I agree that equality and
diversity make good business sense and are important. Not only does it
enable employers to recruit from the widest possible pool of employees,
but we know that employers need to respond and serve the customers of
the markets in which they operate, and to do that effectively, their
workplaces must be diverse.
On your question about indirect
discrimination, I think that it is important that companies continually
look at their pay systems. There are a lot of ways of doing that. We
talk to members every day about the different ways in which they look
at their pay systems and make sure that there is not bias within them.
It is not just to do with different jobs and whether people are paid
the same. It is to do with things such as starting salaries, women
taking time out of the labour market, and, if you have an incremental
pay scale, making sure that women do not fall behind because of that.
Of course companies need to assess their pay systems and make sure that
they are fair. On your question about disclosure and transparency, the
CBI would definitely be keen to be involved in an exercise that shows
the different ways in which meaningful progress can be made to tackle
the pay gap.
Q
175The
Solicitor-General: I just wondered about the answer to the
third question. Will the CBI take responsibility once the metrics are
worked out with the rest of it for driving the requirement through its
membership to comply with disclosing those metrics?
Katja
Hall: We would absolutely encourage our employers to
use it if we come up with a system that works, but I have to be equally
clear that we do not support a legislative solution in this
area.
The
Chairman: I have had expressions of interest from
colleagues in asking questions about contract workers, agency workers,
disability and positive action. I do not know what John Howell wants to
raise, but he has been waiting patiently.
Q
176John
Howell (Henley) (Con): I would like to move on to a couple
of questions relating to age discrimination. The first one relates to
issues around the mandatory retirement age. My first question is about
attitudes towards that and whether you think that will help. The second
is to try to get a sense of where you see the balance in terms of
helping to end age discrimination. Is abolishing or decreasing the
mandatory retirement age going to achieve more compared with a lot of
other measures that can be introduced to encourage employment for
people in the 50 to 69-year-old bracket?
Stephen
Alambritis: The FSB is of the firm view that there is
no justification for any employer to discriminate on grounds of age.
Employers look to the Government to set an age for retirement that
would focus everyone’s minds. Small employers, in particular, do
not have the resources to try to decide a way through what should be
the retirement age of their staff, so a retirement age decided by the
Government is a focal point for small employers in particular. If one
of our members has a member of staff who is valuable, loyal and
productive, and there is a strong relationship with the business, they
would strive to do all that they
could to keep that member of staff on. We do not see any element of age
discrimination as a huge problem within the small business
sector.
Q
177John
Howell: What about the CBI?
Katja
Hall: We supported the age discrimination legislation
when it was introduced. We believe that it is right to have a default
retirement age. We supported the right to request postponement of
retirement. That system is working well. It is encouraging employers
and employees to have a discussion about retirement. Based on survey
evidence that we have conducted, the vast majority of the requests are
accepted. As far as we are concerned, the current system is
working well at the moment. We have accepted, though, that the
Government are committed to reviewing it in 2011 and we will respond to
that review, but we do not think that it would be right to get rid of
the default retirement age altogether.
Q
178John
Howell: I think I saw the TUC representative shaking her
head. Sarah
Veale: We have been around this course a few times
with the CBI. We find it very strange that you have a piece of
anti-discrimination legislation that has sitting within it almost a
green light to discriminate. The good employers will know how to manage
retirement properly. If you retain a mandatory retirement age, it
allows sloppy practices and it does not make employers think carefully
about whether the individuals are actually fit and capable and want to
carry on. The CBI has its evidence. We have evidence that suggests that
the meeting that you can have with the employer to discuss these things
is very weak. The employer is not obliged to give any response
whatever. The absence of complaints simply means that there is not a
process for putting those complaints through. We at the TUC would
encourage genuine flexibility of retirement, bearing in mind
people’s access to their pension schemes. That is another
issue—some people cannot afford to retire early while others
might want to do so for all sorts of different reasons. It is a complex
issue, and we welcome the review that will take place and will submit
our views. We feel that this provision must be taken out of the system,
as it is inherently wrong to allow for discrimination within
anti-discrimination legislation on such weak grounds.
Dianah
Worman: We never really supported the default
retirement age, which we felt was a compromise when it was introduced.
There is no real reason to have an end point and a mandatory retirement
age. Many organisations have abandoned mandatory retirement, and there
are strong arguments at national, organisational and individual levels
for having a more open-ended situation. If people can and want to work
for longer, and are able deliver value to an employer, they should have
the opportunity to do that. If the employer wants to carry on working
with someone, why set up a system that stops them from doing that
without jumping through unnecessary hoops?
This is not only a UK issue.
Changing demographics are affecting countries around the world and we
must change our mindset about when retirement might be. Do we need to
revisit the concept of retirement? Many people are living longer,
healthier lives and are still fit.
The concept of being 60 today is more like being 50 or 40—people
feel a lot younger than they used to 10 or 20 years ago. Having an end point does not
make sense. The problem is that people do not like dealing with
difficult situations and managing people. That goes back to the crux of
the argument about good people management, which has been behind all
the conversation we have had today. If we were better at managing
people—and we have lots of advice and guidance on how to do that
better—we would not have the difficulty of needing to set up a
legal framework that makes it more difficult to retain the talent we
need. We must ensure that we can manage the talent pipeline better,
both at the younger and older ends, or businesses will miss out on the
skills that are needed.
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