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Baroness Turner of Camden moved Amendment No. 203:
- After Clause 42, insert the following new clause—
The noble Baroness said: I rise to move the amendment standing in my name and that of my two noble friends. On Friday 8th March, I attended a conference organised by the Equal Opportunities Commission; I was for some six years a commissioner. The EOC is concerned that, despite 30 years of equal pay legislation, there is still a substantial gap between the pay of men and women. Women earn 80 per cent of full-time men's average hourly earnings, while men's average income is almost twice that of women's. The noble Baroness, Lady Miller, has already referred to those statistics.
The effects of unequal pay and income on women include reduced economic independence, greater likelihood of low pay while working and greater likelihood of poverty in old age. Reasons for unequal pay include gender segregation in employment, different patterns of working among women, discrimination within payment systems and under-valuation of women's jobs.
In 1999 the EOC launched a major campaign on equal pay. Among its aims was to persuade employers to examine their pay systems for sex bias, to raise awareness of equal pay issues among the public, to enable those in employment more easily to access their legal rights and to promote the case for legal reform.
The EOC appointed a taskforce which included senior figures from the private and public sectors, from employers to trade unions and experts in pay equality and gender issues. The taskforce took evidence from a wide range of individuals and organisations and produced a set of recommendations.
Although it is clear that the existing legislation, including access to tribunals, has been of great assistance in reducing gender inequality, there are problems about the legislation. Why should it have taken 13 years, for example, to deal with the equal value pay of speech therapists?
There is a continual problem that it is not possible to take class actions; that is, for a union to take a case to a tribunal for a whole group of employees. Test cases of individuals have to be mounted. Therefore, as well as seeking to promote changes in legislation, which is also part of EOC policy, the EOC is endeavouring to promote activity within the workforce by employers and by trade unions.
Hence the campaign for equal pay reviews. This approach involves partnership between recognised unions and employers. I understand that the Government welcome this approach and have nailed their own colours to the mast by deciding to initiate equal pay reviews in government departments.
Many employers welcome the approach as well. In fact, major employers were represented at the conference on 8th March. My own union has started a
The amendment is intended to assist this process. I believe it is in line with Government policy, so I hope that the Minister will feel able to accept it, though I must say that we are by no means wedded to this wording at all. My noble friend Lord Wedderburn was responsible for drafting it and he told me this afternoon that he is not committed to this wording. However, if the principle is accepted, we would like to see something rather similar forthcoming from the Government on Report. I beg to move.
Lord McIntosh of Haringey: It is obvious from what I said in response in the previous debate that I am very much in sympathy with the thinking behind the amendment. The noble Baroness, Lady Turner, says that there is a gap between the pay of women and men, women earning only 80 per cent of men's full-time pay. When I was working in the area in the 1970s, the figure was 73 per cent, so there has been progress but very little or inadequate progress. I had better lend the noble Baroness, Lady Turner, a copy of my book as well. Alas, it is not for sale. Anyway, it is Government property.
Of course, we recognise the good intentions behind the amendment. The trouble is that our understanding of the amendment is that it would require all employers to undertake mandatory pay reviews. However, it is, in line with all of the things that the noble Baroness, Lady Turner, has said, Government policy to encourage and help employers to do so on a voluntary basis. The amendment would allow any employer who had replied to an equal pay questionnaire to request that the Secretary of State consult with the EOC about whether employers should be required to observe pay review procedures set out in the equal pay code. Any trade union recognised by the employer would also be able to make such a request.
There is no threshold requirement, no discretion. As soon as a single employer or one relevant trade union made the request, the Secretary of State would be obliged to consult the EOC. That would take the matter out of the Secretary of State's hands. If the EOC recommended that one or more pay review procedures contained in the equal pay code should be obligatory, the Secretary of State would be obliged to make regulations to require employers to do a pay review.
The pay review model (or one of a variety of models) would therefore become obligatory for all employers. Although the amendment refers to the Secretary of State consulting with interested parties before making these regulations, it seems that the Secretary of State would be obliged to make the regulations even if a large proportion of people consulted were not in agreement. Thus, we would land up making pay reviews through a very unsatisfactory process, where the reply of just one employer, or the request of one employer, could force the Government to require all employers to carry out pay reviews.
We just do not believe that is the right way forward. Equal pay reviews must be carefully and sensitively done. Employers need the tools to carry them out properly—the noble Baroness, Lady Turner, would no doubt agree that many of them do not do so—and we have therefore given the EOC an extra £100,000 to work with employers to develop a pay review model and software to help employers with computerised pay systems to conduct pay reviews. The EOC is piloting this new pay review model with a number of companies and will be publishing guidance before the end of the year. There has been no equal pay review model until now.
The pay review system must be shown to be workable for business and effective for women. It is important that the model takes business into account, its voluntary use is promoted and its impact is fully tested. Without developing the voluntary model and testing its impact, we think it is difficult to assess whether pay reviews are proportional to the problem of unequal pay and whether they will deliver practical benefits.
We consulted on the questionnaire and that received widespread support, with nearly 90 per cent of respondents supporting it. To link the questionnaire with a mechanism that would lead to mandatory pay reviews would risk damaging its credibility. I hope that in the light of the description of what we are doing and the progress that is being made, the amendment will not be pressed.
Baroness Gibson of Market Rasen: Before the Minister sits down, perhaps I may clarify something with him. I should declare that I was an Equal Opportunities Commissioner for eight years prior to coming to your Lordships' House. The Minister said that he was sympathetic towards the aims behind the actual amendment and I take his point about the EOC pay review model. However, if we are going to have to wait for the EOC pay review model, would that not be closing the stable door after the horse has gone; that is, after we have debated the Employment Bill? Is there not a way of putting something on the face of the Bill to show the sympathy of the Government towards this kind of review model? If we do not include a provision in this Employment Bill, we may miss the boat because what exactly can we do when we receive the report from the EOC?
Lord McIntosh of Haringey: We do not know what conclusion the EOC is going to reach as a result of the development of the pay review model and testing it with companies. I do not think we should assume that the result will be a recommendation that there should be a mandatory pay review for all companies. If what we are doing is encouraging a voluntary pay review in those companies where it is necessary—and I do not think we should assume that it will be necessary or desirable in all companies—we will not need legislation in order to implement what the EOC does. Therefore, we have not missed an opportunity if we have not included it in the Bill.
Baroness Turner of Camden: I thank my noble friend for that very full description of the Government's position. That is extremely helpful and I am very glad indeed to have that in Hansard. I note that the main problem with our amendment is its mandatory nature; that the Government agree with what we are trying to do but do not want it to be made compulsory. I note what the Minister said about that and I will have to consider it between now and Report stage. Perhaps I will also consult colleagues at the EOC who currently have this campaign in hand. In the meantime, I am grateful for the explanation that the Minister has given, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
"EQUAL OPPORTUNITIES COMMISSION
(1) Where, in the light of the answers given by the employer to a question put under section 42, an employer or one or more recognised trades unions recognised by him requests the Secretary of State to do so, the Secretary of State shall consult the Equal Opportunities Commission (the "Commission") concerning the desirability of requiring employers generally to observe the Commission's Code of Practice on Equal Pay in so far as it relates to the pay review process.
(2) Where the Commission so recommends, the Secretary of State shall, after consulting all parties with whom he considers it appropriate to consult, make regulations requiring employers to observe a recommended, or one of the recommended, pay review procedures."
4.45 p.m.
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