Equality Bill

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Lynne Featherstone: Forgive me, Mr. Benton, but are we not on amendment 258?
The Chairman: The Question is that clause 65 stand part of the Bill.
Dr. Harris: On a point of order, Mr. Benton. May I apologise? The reason for the confusion is that we tabled an amendment to leave out the clause, but that is not printed on the list. My hon. Friend’s intention is to speak briefly to clause stand part, because there is an argument to leave it out, if that would be acceptable—despite the double attempt to move that proposal.
11.45 am
The Chairman: One grows used to such things. To clarify, amendment 258 was not selected and therefore cannot be moved. However, I will allow a discussion on clause 65 stand part.
Lynne Featherstone: Thank you, Mr. Benton, you are very kind. I thank the Committee for its patience.
The threshold for bringing an equal pay case is higher than for direct discrimination—it is more difficult to bring a case. That is because a person must find a real comparator against which they can show that they are being discriminated against, which is not always possible, and a person who discriminates can use the material factor defence where one exists. Neither of those hurdles applies in direct discrimination cases.
Being paid differently because of gender is clearly a detriment. Rather than impose a higher threshold to be able to take a case to end pay discrimination, the Bill should make it easier to take action. The scale of pay discrimination against women should make us favour concrete measures that make ending such discrimination easier. Removing the clause would enhance protection for people who face pay discrimination because of their gender. Where they cannot find a real comparator, or the discriminator finds a spurious material factor defence, the door would still be open to take a direct discrimination case. On that basis, I wanted to argue against the clause.
The Solicitor-General: I do not know whether the hon. Lady seeks to remove the clause on the basis that it would change the existing law. The short answer is that it would not. That is our firm conviction, and I am happy to explain why. I do not wish to put her in a hot spot, but if she thought that the clause would change existing law, I can explain why it would not outside the Committee if that is quicker.
Dr. Harris: It is not our suggestion that the clause would change the existing law. We contend that the existing law has not worked. The fact that one has to go through this route to make the claim is one of the many reasons why it has not worked, and we know that the Government share our concern.
The Solicitor-General: Then I will set out how we think the provisions work. The sex discrimination provisions of the Bill do not apply where the equality clause or rule provisions operate. It is right to ensure that a remedy for a particular wrong is a single specified remedy rather than a matter of choice from a menu, and that is what the clause achieves. We have already discussed our general approach to equal pay in the Bill. Essentially, equal pay is contract-based, achieved by modifying or reading in a term of an employee’s contract of employment to ensure equality with a colleague of the opposite sex doing equal work. We have maintained that position in the equality clause provisions of the Bill.
In “A Framework for Fairness”, we consulted on whether to maintain that contractual approach, and a significant majority of respondents favoured it, although I recognise that some take a contrary view. We have tried to adjust the relationship between equal pay and the discrimination provisions to ensure that there is no gap by allowing claims of direct discrimination in respect of contractual pay. I think that I said that in a previous debate as well. As we have already discussed, we believe that doing away with the separate contractual approach could lead to considerable uncertainty and confusion.
The clause also maintains the distinction between the provisions for equality in terms of occupational pension schemes and the provisions that prohibit sex discrimination in giving access to such a scheme. It is worth pointing out that where a woman cannot identify a comparator doing equal work and wants to make a claim involving contract terms not relating to pay, such as promotion, the sex discrimination provisions will apply to such a claim. Again, the position is the same as before. I understand the change that the hon. Lady seeks, but the Government see the clause as an essential aspect of the functioning of the Bill. I hope that the Committee will therefore agree that it should stand part of the Bill.
Lynne Featherstone: It is extremely helpful to have such a cogent explanation of what the clause does and does not do, and what the law would probably say and not say in interpreting it in future, so I thank the Minister.
Question put and agreed to.
Clause 65 accordingly ordered to stand part of the Bill.
Clauses 66 to 71 ordered to stand part of the Bill.

Clause 72

Discussions with colleagues
Question proposed, That the clause stand part of the Bill.
John Penrose: The clause is important and I wish merely to put on the record my party’s support for it. As the explanatory note says, it is designed
“to protect people who discuss their pay with colleagues”
and to ensure that if any firm seeks to impose a pay secrecy clause, which might be a mechanism for covering up gender pay inequality, it does not work and cannot be applied. I state on the record my party’s thorough support for the clause. It will be particularly important when we come to discuss the wider issue of gender pay audits in clause 73. It is, in our view, a thoroughly sensible and proportionate way of attacking part of the problems of the gender pay gap. It is entirely reasonable and proportionate to the problem in hand. I just wanted to ensure that it was on the record that my party is thoroughly in favour of the clause and will support it.
Lynne Featherstone: I, too, welcome the clause. By introducing it, the Government will have rolled back some of the disparities and the secrecy that there has been around pay since time immemorial. That is one of the great inhibitors to individuals being able to know whether they have something to be aggrieved about. The clause is a start but, when we come to the next clause, we shall expand on the issue far more widely.
The Solicitor-General: I am grateful that both Opposition parties have said that they support the clause. The Government think that it is necessary and a good move forward, as they do. For the sake of clarity, I emphasise that the clause does not require anyone to disclose their pay if they do not want to. It does not stop employers preventing employees from discussing their pay with or disclosing it to competitors or other people who are not colleagues of the employee, so it should not have any unintended consequences. We think, as colleagues do, that the clause is a useful tool to promote pay transparency and hence equality.
Question put and agreed to.
Clause 72 accordingly ordered to stand part of the Bill.

Clause 73

Gender pay gap information
Lynne Featherstone: I beg to move amendment 248, in clause 73, page 55, line 19, leave out ‘250’ and insert ‘100’.
An amendment to reduce the number of people an organisation must employ in order to be subject to the gender pay gap clause requirements.
The Chairman: With this it will be convenient to discuss new clause 23—Gender pay gap information (No.2)—
‘(1) Subject to the provisions of this section, no less than every three years a designated employer shall publish information relating to the pay of its employees for the purpose of showing whether there are differences in the pay of male and female employees.
(2) The information relating to pay which a designated employer shall publish includes—
(a) the average hourly pay of male workers and the average hourly pay of female workers within its employment;
(b) in respect of each role within the organisation—
(i) the average pay awarded to workers engaged in the role;
(ii) the percentage of men and women engaged in that role;
(iii) the gap, if any, between the average hourly pay of male and female employees in that role; and
(iv) the average length of service of men and women engaged in that role;
(c) information identifying—
(i) any descriptions of activities carried out in the course of employment with the employer by any group of workers who are wholly or mainly women;
(ii) any descriptions of activities carried out in the course of employment with the employer by any group of workers who are wholly or mainly women;
(iii) the relative values of the descriptions of activities falling within sub-paragraphs (i) and (ii); and
(iv) in relating to descriptions of activities within sub-paragraphs (i) and (ii) which are judged to be of equal value to each other, the average hourly pay of male workers and average hourly pay of female workers carrying on those activities.
(3) For the purposes of this section, “pay” means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or kind, which the worker receives directly or indirectly, in respect of his employment, from his employer and includes the cost to the employer of—
Lynne Featherstone: The amendment is designed to probe the Government on the decision that they have made on the number of employees that an organisation must employ to be subject to the gender pay gap clause requirements when they arise. The Government refer to 250 employees in the private sector. I do not fully understand why that number has been selected. In our evidence session, reference was made to a reduced number. Women Like Us said that organisations with 100-plus employees often have dedicated human resource departments or facilities, so issues would not be too onerous as such departments should be able to contribute their experience of auditing. It was also said that the reference to 250 employees leaves out of the gender pay audit requirement a huge proportion of businesses in the United Kingdom. About half the people in the United Kingdom are employed in businesses with fewer than 250 members of staff, so huge sectors of the population would not be provided with protection under the Bill, when the regulations come into force. Given that 80 per cent. of the population are not employed in the public sector, will the Minister explain why the figure of 250 employees has been chosen?
I am saving some remarks to the end of the debate, but I now move to new clause 23. It would extend the period for publishing information to three years. That is a reasonable timetable. It would not be too onerous, nor would it be so irregular as to be out of date. Subsection (2) of the new clause deals with the information that must be published and would distinguish the differentials between male and female pay in an organisation. The information published under paragraph (c) would highlight discrimination in the types of work undertaken wholly or mainly by women so that we can see what is being done and by whom, how that work is valued, whether it is of equal value and whether the pay demonstrates an unjustified differential or a legitimate aim subject to the defence of a material factor.
In our evidence session, we heard from the Fawcett Society that, if we are to eradicate discrimination and unequal pay, we have to evaluate the skills and experience that are required for jobs and check whether individuals in equivalent jobs are being paid equivalent salaries. That is why new clause 23 proposes publishing both the levels and types of work. Women’s work is often undervalued and major cases have involved equal value in the public sector. That undervalue has delivered low pay for women for decades. It has not been adequate simply to have provisions that make that illegal, which is why pay audits are necessary they make sure that checks are in place so that people are not discriminated against.
It is only by seeing how people are treated compared with others at levels and types of work that we will ever be able to bring a case to a tribunal to right those wrongs. If we cannot find that out, the gagging clauses that we referred to earlier, while they are extremely welcome and helpful—for which I say, “Well done” to the Government—will not give the overall picture to enable an individual to make a judgment about a company’s relative pay or jobs.
The Conservative amendment of only imposing mandatory pay audits when there is a finding against a company will not work. It seems to be logical to punish when there is something judged to be punishable, but the reality is that such a policy will not address unequal pay because the individuals cannot get the evidence to bring the matter to a tribunal to get the judgment. As I understand it, the company would be required to publish mandatory pay audits thereafter. That will not address the issue in the first place. It will not provide the evidence.
12 noon
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