Memorandum submitted by Unison and Fawcett Society (E 42)
1. Executive Summary
1.2 The measures currently included in Clauses 72 and 73 of the Equality Bill are inadequate to address the pay gap. It is crucial that equal pay audits are introduced in the Equality Bill to ensure full and meaningful pay transparency. Enabling employment tribunals to make binding recommendations will also provide a further means of prevention. Representative actions and hypothetical comparators should be introduced to provide redress where pay discrimination occurs and to ensure women get speedy and fair access to law.
1.3 Clause 16 (7) of the Equality Bill would weaken protection for women against pregnancy discrimination in the workplace. It is crucial this is amended in accordance with proposals from the Equality and Human Rights Commission (EHRC).
2. About UNISON and the Fawcett Society
3.1 Measures that tackle the pay gap are urgently needed. Nearly 40 years after the Equal Pay Act was introduced women working full- time are paid on average 17% less than men and women working part time are paid 37% less. Progress in closing the gap has stalled and last year there was actually a slight increase. Further, gender disadvantage persists across the equalities strands with women suffering a pay gap, in many circumstances, compared to men of the same ethnicity, religious group, age, disability, status and sexual orientation. Equal pay law is in urgent need of reform.
3.2 It is estimated that discrimination accounts for up to 38% of the gender pay gap and as such is the biggest single cause. However, the current system puts the onus on the individual woman to bring a case after she has experienced discrimination. Therefore, rather than operating to protect women from discrimination, the current law requires a woman to first be able to identify that she is being paid unfairly, and then have the resources and capacity to build a case and source the support necessary to take action. If she does bring a case it can take up to 10 years to conclude and, even then, it will not benefit her colleagues facing the same or similar discrimination. There are currently tens of thousands of equal pay cases waiting in the tribunal system, and last year only 678 equal pay cases were upheld at employment tribunal. Equal pay now accounts for one in three of all tribunal claims.
measures currently proposed in the Equality Bill to tackle the gender pay gap
are inadequate. Clause 73 would introduce provisions for requiring private
sector employers to report on pay gap information. However the provisions cannot be implemented
before 2013. If legal compulsion was introduced after this point all employers
with less than 250 employees would be completely exempt from the
requirements. However, of the 4.7
million businesses in the
3.4 Clause 72 will ensure all employees can legally discuss their pay with colleagues in order to ascertain if there is any difference due to a protected characteristic. While we welcome this measure, it will have little impact on the gender pay gap. Employees will not be legally required to discuss their pay with colleagues, therefore women will not be guaranteed access to information about male colleagues pay rates. Furthermore, it is unfeasible that individual employees would have the resources and capacity to carry out a job evaluation to ascertain whether any differences they uncovered between their own and colleagues pay were due to discrimination or explainable by other factors.
3.5 In order to tackle the gender pay gap and improve women's access to justice it will be crucial that the measures outlined in sections 4, 5 and 6 are included in the Equality Bill.
4. Employers should be required to conduct equal pay audits
4.1 Mandatory pay audits should be introduced for all employers to identify any disparity in pay between men and women doing work of equal value and produce action plans to rectify the anomalies. A pay audit involves the following three steps: comparing the pay of women and men doing equivalent work; investigating the causes of any pay gap; and closing any gap in pay which cannot be explained by factors other than the employee's gender. Women will therefore be able to identify whether they are being paid equally to men.
4.2 There is substantial support for equal pay audits as an effective means of tackling unequal pay. The statutory Code of Practice on Equal Pay recommends equal pay audits as "the best means of ensuring that a pay system delivers equal pay", and the former Equal Opportunities Commission's Equal Pay Taskforce recommended in 2001 that a statutory requirement should be placed on employers to carry out equal pay audits. Recent polling for UNISON and Fawcett showed 83% of women and 74% of men maintain that pay differences must be closed regardless of the 'credit crunch'.
4.3 There is extensive evidence that the voluntary approach to equal pay audits is not working. In 2004, the Government set a PSA target that by April 2008, 45% of all large firms should have undertaken pay reviews. In 2008, only 17% of all firms and 32% of large firms (500+ employees) had actually completed a review with a further 5% of all firms and 15% of large firms having a review in process. Over three quarters (76%) of organisations had no plans to undertake an equal pay review. The EHRC research shows that small and medium sized enterprises and private sector organisations have been the slowest in taking up pay reviews. However, equal pay audits should not be seen as an additional 'luxury' item; all employers should know how much they are paying their employees and why.
4.4 Equal pay audits are an efficient and effective means of tackling pay discrimination. 94% of organisations who have conducted a review say they will continue to review their pay systems, most often annually. The most important source of support for the equal pay review process comes from in-house teams and while the use of consultants is certainly increasing over time, only 23% say that their most important source of support was a consultant. Lack of resource is rarely cited as a reason for not conducting a review. Research has also demonstrated that pay audits frequently have unanticipated benefits. They can be used to check on pay differentials by other equality strands (most commonly, disability and ethnicity). Organisations have reported a positive impact on employee morale, loyalty and relations. The NHS programme Agenda for Change resulted in improved consistency in clinical standards and addressed NHS workforce training and development needs.
5. Representative action should be introduced
5.1 The Equality Bill should enable groups of employees to take actions in discrimination cases, whereby trade unions or the EHRC bring a claim on behalf of identifiable groups of women in opt-out multi-party actions.
5.3 Much pay discrimination is systemic and collectively affects a group of women, yet courts still have to hear each case individually rather than hearing a group of cases together. Each individual woman making her own claim can suffer high emotional and financial costs. Further, the Equal Pay Act is a notoriously complex piece of legislation and it can take years and considerable cost before an equal pay claim reaches a tribunal hearing. Due to the complexity of the concepts involved, claims under the Equal Pay Act require specialist legal advice and representation. It is therefore extremely difficult for litigants in person to be able to bring such a claim. As a direct result of this many legitimate pay claims do not progress to court stage.
5.4 Furthermore, the tribunal process as a whole is unnecessarily protracted and financially burdensome for all parties. Representative actions would ensure that individual women would be less likely to be victimised while ensuring that the process is quicker and cheaper for all parties and would apply to all women affected not just those able to take the case. This measure would also ease the administrative burden on employment tribunals and on companies defending multiple claims.
5.2 Representative actions are advocated by the Civil Justice Council.
6. Hypothetical comparators should be permitted in equal pay claims
6.1 The Bill should allow the use of hypothetical comparators in equal pay claims where no actual comparator exists. At present women have to point to an actual male colleague who is being paid a higher rate in order to prove they are being discriminated against. This is particularly problematic for women in female dominated occupations or in small organisations. Part of the cause of unequal pay is the low value assigned to occupations with high concentrations of women (so we pay our plumbers more than child carers), so the absence of a male counterpart can prevent some women from making legitimate claims.
pay is the one area of
6.3 The proposed Clause 66 of the Equalities Bill is not adequate as it is restricted to a claim for direct discrimination. As a result, women who do not have an actual comparator will not have access to the remedies proposed under Clauses 61 and 62.
7. Enable employment tribunals to make binding recommendations
7.1 Employment tribunals should be given broader powers to make recommendations in discrimination cases, including equal pay claims. Such powers will be particularly valuable in dealing with systemic discrimination which at present is beyond the reach of the tribunals.
7.2 Such recommendations could include, for example, an order on employers to complete an equal pay or equality audit, recommendations on implementing equal opportunities policies, sending certain staff on training courses, and reviewing recruitment procedures.
7.3 EU law requires that tribunals provide sanctions against discrimination which are "effective, proportionate and dissuasive'. Binding recommendations would constitute a more dissuasive sanction than is available at present.
8. Protection against pregnancy discrimination in the workplace should not be weakened
8.1 Clause 16(7) of the Equality Bill provides significantly weaker protection against pregnancy discrimination in the workplace than the current law by making reference to treatment which is 'less favourable than is reasonable'. Legal advice suggests that the effect of the new clause will be to enable employers to defend claims of pregnancy discrimination by reference to costs, inconvenience and other factors. As a result, the protection against pregnancy discrimination would be weaker than for any other ground of discrimination. There is therefore also a danger that it will not comply with European law.
8.2 The amendment drafted by the EHRC should be supported. Their proposal is that the Equality Bill be amended by replacing the test of 'less favourable treatment' with 'unfavourable treatment' and deleting clause 16(7).
 Pay Gaps Across Equalities Areas, Research Report, EHRC, 2008
 Modelling gender pay gaps, Equal Opportunities Commission, 2005
 Code of Practice on Equal Pay, Equal Opportunities Commission
 Just Pay, A Report to the Equal Opportunities Commission, Equal Pay Task Force, 2001
 Fawcett Society & UNISON, November 2008
 Equal Pay Reviews Survey, IFF Research for Equal Opportunities Commission, 2006
 Equal Pay Reviews Survey 2008, Equality and Human Rights Commission
 Equal Pay Reviews Survey 2008, Equality and Human Rights Commission
 NHS Pay Modernisation in
 Improving Access to Justice through Collective Actions, Civil Justice Council, 2008