3 Equality legislation and equal pay
There is a need to change the culture around what
is appropriate pay for men and women. In order to change culture,
it is important to position the pursuit of equal pay above the
political, economic or business objectives and identify equal
pay as a core objective for business, as opposed to a mere add-on.
Gender pay gap
50. The quote above is from the Fawcett Society's
written evidence, and emphasises the issue of equal pay. The Equal
Pay Act of 1970 was introduced to tackle the lack of equality
in the terms and conditions of employment as between men and women.
According to the Office for National Statistics, the gender pay
gap is defined as the difference between men's and women's earnings,
as a percentage of men's earnings, based on median gross hourly
earnings (excluding overtime) for full-time employees.
The Employment Lawyers Association warned that "care must
be taken when vast quantities of complex data are reduced to a
single figure purporting to represent the definitive 'gender pay
gap'". However, it concluded that "the statistics clearly
highlight that a significant gender pay gap continues to exist
in the UK".
The Employers Network for Equality and Inclusion described the
gender pay gap as "stubbornly persistent, given that the
Equal Pay Act was introduced in 1970".
51. The Office for National Statistics' Annual
Survey of Hours and Earnings 2012 demonstrated that there remains
a significant disparity between the salaries of men and women;
the gender pay gap is currently at 9.6% (down from 10.5% in 2011).
The Employment Lawyers Association wrote that "the available
data varies significantly depending on the methodology used and
whether it is adjusted to take account of the number of women
working part-time, the age group, relevant section or region".
For example, the headline figure of 9.6% conceals variations across
different sectors, such as the fact that the gender pay gap for
construction professionals is just over 17%.
There are also variations between different areas of the country.
As Fair Play South West commented:
The trend is for the pay gap to be lower in areas
of low GDP, where wages are low for both women and men, and higher
in the relatively high GDP areas where it is clear that women
do not benefit in pay terms from the better performing economy.
52. Jemima Coleman, from the Employment Lawyers
Association, confirmed this variation, and told us that the Office
of National Statistics' figures show a 20% pay gap in the East
of England and the South East.
She also highlighted the effect of including part-time workers:
Men are equally affected by the disparity between
part-time work and full-time work. There is something like a 37.5%
differential between all part-time workers of both genders and
full-time workers. It particularly hits women because they are
about three times more likely to be working part-time.
53. We received specific examples of pay differentials
between men and women. For example, Directors UK wrote that the
Televisual Annual Pay Survey's report on average salary for male
respondents in the television sector in 2011 was £56,000
compared with £49,000 for women.
Also, evidence highlighted the fact that women in the private
sector are more disadvantaged than those in the public sector.
The Fawcett Society wrote "the comparable (full time) pay
gap figures stand at 13.2% in the public sector, versus 20.4%
in the private sector. [...] Thus as women move to work in the
private sector, women's pay will decrease and the pay gap may
54. According to the Fawcett Society, the gender
pay gap not only discriminates again women, but also contributes
to the country's lower productivity:
A levelling up of women's earnings has the potential
to bring gains to the Exchequer not only in increased revenue
from tax and national insurance, but also through a reduction
in the payment of benefits and tax credits. It is possible to
infer from national statistics that an average woman working full-time
until retirement age would lose £361,000 in gross earnings
over the course of her working life. Closing the gender pay gap
would improve the financial wellbeing not only of women but also
of their partners and children, and would reduce the likelihood
of women's poverty in retirement.
Eddie Gray, from the Women's Business Council, spoke
of the loss of women to the workforce in economic terms: "Part
of the reason I said yes to being a part of the Council was its
focus on the economic potential and the idea that there was lost
opportunity for the country here. [The Report will be] structured
to identify from the evidence base those critical stages of a
woman's life when we are either losing significant opportunities
and the potential to contribute to economic growth or we are losing
it from the system completely".
Indeed, the Equalities Minister, the Rt Hon Maria Miller MP, stated:
"Every single person in this country has a part to play in
making this country an economic success. We need to make sure
that we are allowing everybody to fulfil their potential in the
In order to address this, the Fawcett Society recommended:
A root and branch review of equal pay law to ensure
that it operates in the interests of women and employers. The
current legal framework is ineffective, does not deliver equal
pay and is wasteful of public resources".
THINK, ACT, REPORT INITIATIVE
55. The Employment Lawyers Association told us
that "the law alone cannot be a panacea for gender imbalance
across sectors nor achieve absolute parity of pay between the
highlighting best employment practice, which results in economic
benefits and equality between employees, is a powerful way of
encouraging change. In September 2011, the Government launched
the Think, Act, Report (TAR) initiative, the aim of which
was to raise the profile of the issue of gender equality in the
workplace. To date,
over 100 organisations have signed up to the initiative. Lord
Davies' follow-up Report on Women on Boards, extolled the
virtues of the initiative:
This joint government-business initiative provides
a simple framework to help companies think about gender equality
in the workforce. It asks them to report, monitor and take action
where needed on key issues including recruitment, retention, promotion,
and pay. [...] It is flexible and business-ledbusinesses
choose what measures are right for them, what to report and where.
To date over 80 major companies, with over one million
employees combined have signed up and are actively supporting
the initiative, including BT, Tesco, IBM, Fujitsu, M&S, GlazoSmithKline,
Morgan Stanley, National Grid, Ernst and Young, Eversheds, McDonalds,
BAE Systems and BP.
However, awareness of the initiative appears to be
patchy. The Institute of Physics wrote:
The Government should do more to encourage more science-based
companies to specifically become involved in Think, Act, Report
and such schemes could be extended to smaller companies.
Fiona Woolf, from the Business Women's Council, believed
that greater use of the data would help awareness:
The challenge is not just around whether it is mandatory
or not. The challenge for the Government Equalities Office is
what they do with the information: whether they report it and
communicate it and begin to use the organisations that are out
therewho would be very happy to partner with themto
embed the message that this is good practice for the new business-normal
environment they are in and, more importantly, the new war for
talent that they have.
56. It is possible that businesses which embrace
the programme are likely to be confident about their employment
practices and use the programme as a promotion of their good practice.
In response to this view, Ruby McGregor-Smith, Chair of the Business
Women's Council told us that, although voluntary, the scheme should
not be underestimated:
I do not think you have to have everything made mandatory
to ensure you get businesses to sign up to it. Business will absolutely
do the right thing around things that present them as a better
business. [...] If the bigger business adopt it, the smaller business
who want to be bigger businesses one day will aspire to want to
adopt that, too.
57. Eddie Gray, from the Women's Business Council,
argued that a greater level of commitment from the Government
I think it is very interesting when you talk to senior
people in business. You talk to chief executives who have strong
interactions with Government. They would tend to report back that
the issue of gender equality is here for a day as a message, it
disappears again and then it comes back and goes away. We need
a consistency and a drive from the Government level that says,
'This is important; we have expectations over time and we are
expecting all parts of the business community to work to make
58. Published examples of equal
pay best practice in the private sector would provide evidence
that equal pay is good not only for individuals, but for business.
We welcome the Government's Think, Act, Report initiative to improve
transparency on gender equality in the workplace. We urge the
Government, through the Government Equalities Office, to promote
the initiative more widely, and to use the evidence to prove that
good employment practice is good for business.
59. The gender pay gap is stubbornly
persistent. It is unacceptable that women are still systematically
paid less than men, over 40 years since the Equal Pay Act was
passed. We recommend a review of the Think, Act, Report initiative
in the Autumn of 2013, two years after its establishment, including
statistical analysis of pay differentials, to determine whether
it is helping to effect change.
Equal Pay Audits
60. The Equal Pay Act 1970 aimed "to prevent
discrimination, as regards terms and conditions of employment
between men and women" and the Sex Discrimination Act 1975
aimed "to render unlawful certain kinds of sex discrimination".
The Equality Act 2010 was introduced to replace existing anti-discrimination
laws with a single Act.
Section 78(1) of the Equality Act 2010 provides that:
Regulations may require employers to publish information
relating to the pay of employees for the purpose of showing whether,
by reference to factors of such description as is prescribed,
there are differences in the pay of male and female employees.
61. The process of gathering and publishing such
information is generally described as an 'equal pay audit'. Baroness
Prosser, from the Equality and Human Rights Commission, told us
that "equal pay audits lead to transparency, and that of
itself is a very good thing".
However, the Government has not yet introduced regulations under
section 78 of the Equality Act 2010, requiring employers to undertake
equal pay audits. The Fawcett Society told us:
Implementing, in full, existing legislation such
as the Equality Act 2010 that encourages workplaces to undertake
and publish gender pay audits, change attitudes, challenge stereotypes
and cultures that sustain unequal pay practices. This would help
dispel the myth that women deserve to be both paid less and valued
less than men.
62. Jo Swinson, Parliamentary Under-Secretary
of State for Women and Equalities, Department for Business, Innovation
and Skills, told us that the Government's intention was to empower
employment tribunals to require employers to carry out an equal
pay audit where they have found evidence of discrimination.
However, if the Government is serious about changing the treatment
of women in the workplace, it must support a requirement that
larger private sector employers (those with more than 250 employees)
undertake and publish equal pay audits. When asked whether there
should be a duty for private-sector organisations to carry out
equal pay audits, Fiona Woolf, from the Business Women's Council,
said, "Absolutely. I think equal pay audits are important".
She supported her view with some examples:
I was involved in an equal pay audit, which was done
by a new chief executive, somewhat to the surprise of the organisation.
They said, 'Well, we do not think there is anything that we will
find.' Of course, guess what? The result was indeed that there
were some gender pay gaps that were quite startling. I then become
President of the Law Society and we looked at the equal pay of
the legal profession as an issue and discovered that, after lots
of corrections for different types of work and different regions
of the country, we still had a 7.9% pay gap in the legal profession,
which was outrageous when you thought about the profession it
was. As you might imagine, I am quite a fan of it.
63. We welcome the Government's
proposal to give tribunals the power to require an employer to
undertake an equal pay audit when discrimination has been proved.
However, there is existing legislation addressing inequality in
pay that has not yet been implemented. The Government should introduce
regulations under Section 78 of the Equality Act 2010, to require
large private sector employers to undertake and publish equal
pay audits. That data could then be used to highlight where pay
organisations will already have that information to hand, so this
requirement is not a burdensome task for employers. It would also
highlight anomalies and therefore protect employers from potential
employment law cases. With
the introduction of regulations under Section 78 of the Equality
Act should come clear guidance from the Equalities and Human Rights
Commission (EHRC) on how to conduct an adequate equal pay audit,
and how that work can lead to constructive changes within an organisation
to the benefit of both employees and employers.
65. The Equality and Human
Rights Commission (EHRC) should make public those businesses that
are non-compliant under Section 78 of the Equality Act 2010 ,
as well that those examples of equal pay best practice in the
private sector, to show that equal pay is good for business.
Public Sector Equality Duty (PSED)
66. The Public Sector Equality Duty (PSED), set
out in Section 149 of the Equality Act 2010, came into force in
April 2011. It requires that public bodies (and businesses that
carry out public functions) have 'due regard' to the need to achieve
certain equality objectives, namely: the elimination of 'discrimination',
including inequality in pay; the advancement of 'equality of opportunity';
and the fostering of 'good relations between' men and women.
The PSED requires that public bodies consider all groups when
making decisions, introducing policies, and continuing practices,
when delivering services and when acting as employers. Sarah Jackson,
from Working Families, argued that the PSED could be applied "very
practically to enable an organisation to look at its practice,
understand the gap between policy and reality and then take steps
to make changes that will have an impact on women's ability to
enter the workforce".
67. In supplementary evidence, the Government
highlighted the fact that the EHRC enforces the PSED, and that
"it has unique powers to issue compliance notices to public
bodies which have failed to comply with the Equality Duty and
can also bring judicial reviews and intervene in court proceedings".
The EHRC was intending to produce a statutory Code of Practice
on implementation of the PSED, but has been prevented from doing
so because, according to the EHRC's website:
The Government feels that further statutory guidance
may place too much of a burden on public bodies. Although the
Commission has powers to issue codes, it cannot do so without
the approval of the Secretary of State, as we are reliant upon
government to lay codes before parliament, in order for them to
The TUC wrote about this development:
This has further deprived public authorities, public
service users, and employees of detailed and authoritative statutory
guidance on what is required to comply with the general duty.
[...] This downgrading of the code of practice also creates the
impression that the equality duty need not be taken as seriously
68. Evidence submitted to us suggested that the
PSED and the specific duties enacted under the Equality Act 2010,
for the purpose of enabling the better performance by public bodies
of the PSED, are
not being met. The Employers Network for Equality and Inclusion
The EHRC has published a [...] report in which it
examines how public authorities have met their transparency obligations
on equality. The report reveals that only half of the public authorities
assessed were responding fully to the requirements of the specific
duty regulations to publish equality information such as the diversity
of their staff and people who use their services.
Sheila Wild, an equalities consultant, also highlighted
the positive impact of monitoring:
One of the reasons why local authorities did so well
is that they were monitored. They were monitoring themselves and
they were being monitored by the Equal Opportunities Commission.
I do not know whether they are still monitoring themselves; I
do know they are no longer being monitored as effectively by the
Equality and Human Rights Commission as they were by the Equal
Brona Reeves, from the Employment Lawyers Association,
was equally concerned about the lack of statistics or analysis
on the impact of the PSED.
69. The Government has committed itself to reviewing
the Public Sector Equality Duty. In May 2012, the Home Secretary
announced a review of the PSED, as part of the outcome of the
Red Tape Challenge spotlight on equalities.
It is expected to report in the summer of 2013, a year after the
start of the review. Jo Swinson told us that:
If we do not review it, it is very difficult to say
whether it has or has not worked. That is the purpose of reviewing
it. We are very committed to the principle. We want to make sure
that the mechanism for delivering that principle is the right
one. Undertaking the review will help us understand how well the
Public Sector Equality Duty is indeed working in practice. It
fits in with the Government's wider approach to legislation and
policy, where, as a matter of course, regulation or rules will
be reviewed on a regular basis. I think that is a healthy way
to do government, so that you can take stock of progress and see
what is working well and what needs to be improved.
However, Ruby McGregor-Smith, Chair of the Women's
Business Councilset up and funded by the Governmenttold
us that she was "quite impressed with the Public Sector Equality
70. The Public Sector Equality
Duty (PSED) is a useful tool to ensure that public bodies take
steps to secure parity in pay, and in other terms and conditions
of employment. The Government is nearing the end of a year-long
review of the Public Sector Equality Dutyeven though it
was only introduced in 2011in the interests of removing
unnecessary burden on businesses and organisations. We do not
believe that the Public Sector Equality Duty is an unnecessary
burden on employers, but is a vital tool for the collation of
evidence and for ensuring that steps are taken with the aim of
achieving parity. The Government should send a clear message that
the PSED is valued. We urge the Government to retain the PSED
in its current form, unless a full analysis of its compliance
by public bodies has been carried out by the EHRC, and the results
of that analysis point towards the need for change. Published
statistical analysis should be at the heart of that review.
71. The Equality and Human Rights
Commission needs to improve its performance in relation to the
monitoring and assessment of compliance of the Public Sector Equality
Duty. It should use its powers to issue compliance notices to
those public bodies that have failed to comply with the PSED.
The Government should give a clear statement of support for the
EHRC in exercising these duties.
Equality Impact Assessments
72. Equality Impact Assessments are used to assess
the impact of the decisions, policies and practices of organisations
on certain protected groups, including women. Sarah Veale, from
the TUC, told us about the benefits of equality impact assessments:
Once you have got into the hang of them they are
quick and quite easy to do. You reap huge benefits from them.
A lot of businesses have done them, including small ones, and
have said 'Actually, having done one now we would not stop'. It
is quite important, because people do instantly and immediately
think these things are red tape, but as soon as you unthread the
red tape, as it were, and work your way through what it is they
are intended to achieve, you can actually suddenly experience
the benefits first hand.
The Prime Minister spoke about Equality Impact Assessments
at the Confederation of British Industry (CBI) in November 2012:
We have smart people in Whitehall who consider equalities
issues while they're making the policy. We don't need all this
extra tick-box stuff [...] So I can tell you today, we are calling
time on Equality Impact Assessments. You no longer have to do
them if these issues have been properly considered.
It is not clear how 'smart people in Whitehall' are
expected to consider equality issues without conducting a form
of equality impact assessment. The decision to 'call time' on
them does not mean that the Government has reduced the priority
it gives to equality issues. As we have previously said, the Equalities
Minister, the Rt Hon Maria Miller MP, told us that "every
single person in this country has a part to play in making this
country an economic success. We need to make sure that we are
allowing everybody to fulfil their potential in the workplace".
We are however concerned that, without analysing consistently
and objectively the policies and processes within the context
of equal opportunities, women will not be achieving their
full potential and will not be contributing to the economic success
of the country.
73. Equality Impact Assessments
shine a light on the differing impacts of decisions, policies
and practices adopted by large organisations, identifying those
which might help to advance gender equality, as well as those
which adversely impact on particular groups. Given the fact that
large companies have Human Resource departments that hold the
relevant data, they are relatively easy to undertake, and they
provide a positive context in which to work. We urge the Government
to reconsider its decision to 'call time' on the undertaking of
Equality Impact Assessments. This change in policy is in direct
contradiction with the Government's other measures directed at
achieving equality in the workplace.
Changes to the Equality Act 2010
EMPLOYMENT TRIBUNAL FEES
Maternity Action highlighted the changes that will
be introduced with regard to employment tribunal fees:
From mid-2013, women will face fees of £1200
to take a pregnancy discrimination claim to the employment tribunal.
There are currently no fees for employment tribunal claims. We
do not believe that these fees will have the effect of deterring
unfounded or vexatious claimants. As all discrimination claims
have an element of uncertainty, the fees will effectively deter
women with well-founded pregnancy discrimination claims from taking
action in the tribunal. Women's inability to afford a tribunal
claim will also reduce their negotiating position proceedings.
This point was echoed by Sarah Veale, from the TUC,
who told us that she believed the new fees would adversely affect
Women tend to be low-paid and will be much more likely
to be put off litigation simply because they cannot afford the
risk that they might not get those fees back".
74. Sarah Jackson, from Working Families, agreed.
She highlighted the work of the legal helpline the charity runs
for employees, the majority of whom are on family incomes of less
than £28,000 a year, and of her fear of women not pursuing
genuine discrimination cases:
These are people who are desperate to keep their
jobs. We try very hard to help them settle their dispute with
their employer before it gets anywhere near a tribunal, but for
those few who do go through, it will be a significant barrier
to them to have to find that sort of money. [...] Time and again,
we hear from women who say, 'I can see that this is illegal, but
I cannot afford to lose my job. I am not going to challenge it.
THE REMOVAL OF THE QUESTIONNAIRE
PROCEDURE IN DISCRIMINATION CLAIMS
75. The Government has decided to repeal the
provision allowing for the questionnaire procedure in discrimination
claims, under Section 138 of the Equality Act 2010, which enables
an employee to ask their employer to provide certain information,
if they believe they may have been unlawfully discriminated against.
Maternity Action questioned this decision, writing that "this
will reduce women's capacity to determine the likelihood of their
claim succeeding and further deter them from pursuing formal action".
The Employment Lawyers Association agreed, warning that "although
sex discrimination questionnaires usually impact [on] only one
individual they provide transparency at an early stage without
the need to progress to and win a Tribunal claim prior to the
employer revealing information on pay disparity and workforce
76. Karen Jochelson, from the Equality and Human
Right Commission (EHRC), told us that the removal of the questionnaire
in discrimination claims would be a negative step for both employees
The questionnaire gives both the employer and the
employee some guidelines about the appropriate kind of questions
to ask, how to present your information, and what you are going
to be called on to request. Without that, it makes it far more
unstable for the employer. That would be an example of where red
tape may be a positive thing that helps both our legal system
and our employment system function a lot better.
77. Reforms to employment legislation
may make it harder for women to tackle inequality in the workplace.
We urge the Government to remove the fee requirement for pregnancy
discrimination cases. Pregnancy discrimination, by definition,
affects women only and such a financial burden on those women
would be in direct contradiction with the Government's aim of
removing inequality in the workplace. The impact of the new fee
arrangements for other gender-related employment tribunal cases
must be monitored, and kept under review to ensure that genuine
cases of discrimination are not being stalled by the introduction
of fees. We recommend that the questionnaire procedures in discrimination
cases, which gives both employees and employers guidance about
what information will be asked in an employment tribunal, should
78. In order to address inequality, such as the
gender pay gap, there needs to be a clear and detailed understanding
of the underlying data. There is a need for transparency, without
making this a burden on businesses, especially SMEs. The Institute
of Physics highlighted the common reluctance of organisations
to release such information:
Companies are often reluctant to release data and
SMEs can prove particularly difficult to engage with, given their
small size and their need to focus on their priority of simply
continuing to exist and thrive. [...] We believe that more robust
data is needed to fully understand the extent of the under-representation
of women in physics, and whole science, workforce.
In supplementary evidence, Jo Swinson MP wrote that
"Greater transparency is key to ending the pay discrimination
on the grounds of gender and the Equality Act 2010 made a number
of important changes including banning pay secrecy clauses"
The Government should do
more to ensure there is consistent and regular data transparency
about women in all work positions, not just those in senior roles.
That data should capture part-time employees, what roles women
return to after maternity leave, and specific ages or periods
in the employment lifecycle.
The Government has already done
much to ensure data about women in senior positions is collated,
assessed and acted upon. However, as with the measures in place
for increasing women on boards, the prospect of regulation can
be a useful motivation for intransigent companies which fail to
engage with the Think, Act, Report initiative. Only when there
is consistent, reliable data on equality issues can progress be
planned, achieved and measured. The Government Equalities Office
should collate data on women in the workplace, including figures
on part-time employees, what roles women return to after maternity
leave, and specific ages or periods in the employment lifecycle.
73 Ev 193 Back
Ev 170 Back
Ev w30 Back
Ev 170 Back
Ev 141 Back
Ev w33 Back
Q 96 Back
Q 89 Back
Ev w27 Back
Ev 200 Back
Ev 193 Back
Q 421 Back
Q 440 Back
Ev 194 Back
Ev 169 Back
Ev 125 Back
Lord Davies, Women on Boards, April 2013 Back
Ev w46 Back
Q 431 Back
Q 429 and Q 431 Back
Q 433 Back
Ev 170 Back
Section 78(1), Equality Act 2010 Back
Q 385 Back
Ev 194 Back
Q 471. Also, by regulations under section 139A, Equality Act 2010.
See also the Government Equality Office, Equal Pay Audits:
a Further Consultation, May 2013. Back
Q 424 Back
Equality Act 2010, section 149 Back
Q 99 Back
Ev 131 Back
TUC, Public Sector Equality Duty Review: TUC Response to GEO
Call for Evidence", 19 April 2013, para 2.10 Back
Section 153, Equality Act 2010. Back
Ev w31 Back
Q 4 Back
Q 99 Back
Q 442 Back
Q 423 Back
Q 140 Back
Speech by the Prime Minister to the Confederation of British Industry
conference, November 2012, quoted in the TUC document, Public
Sector Equality Duty Review, April 2013 Back
Q 440 Back
Ev w67 Back
Q 141 Back
Q 101 Back
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Q 392 Back
Ev w46 Back
Ev 131 Back