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In the old days, before the Government of the noble Baroness, Lady Thatcher, came in, there was at least the Central Arbitration Committee, which was there as a collective mechanism to eliminate sex discrimination from pay agreements. That was abolished. There is now no effective collective mechanism. What the Government are doing is, in heaven's name, about as modest as one could conceivably think of. I know the reason. It is not because the right honourable Harriet
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Clause 78, as it stands, requires the Minister to make regulations about mandatory pay audits. That will only be exercised, as I read it, if there has been insufficient voluntary publication by employers by 2013. That completely unnecessarily delays making the changes that are needed now to address the gender pay gap. Also, the Bill fails to indicate how much detail employers are expected to be required to publish. Instead, that is apparently to be decided after publication of recommendations of the ECHR. The Bill provides no certainty that employers will be required to publish information in sufficient detail to address the gender pay gap.
My amendments, which I am speaking to as part of the group, require a Minister to make regulations requiring private sector employers with at least 100 employees in Great Britain to publish information about differences in pay between their male and female employees. The purpose of that is to identify discriminatory differences in pay so as to encourage employers, as I say, to eliminate sex discrimination in pay by knowing-as they should already know-what their pay systems are, whether they have an adverse impact on women and what can be done, through negotiation or otherwise, to address the situation.
Many years ago when we had the pay freeze-some who are a bit old like me may remember-there was always an exception made to secure equal pay. Now we are in economically straitened times. I think that we would all agree-I hope we would all agree-that because the country is at the moment in such difficulty, it is no excuse to go on exploiting women as a source of cheap labour. I had wished that the EC Commission would have found the energy some years ago to bring further infringement proceedings against this country for failure to comply properly with the principle. I still hope that it will do so, because I can see no other way-with this Government, or whoever wins the next election-of ending this scandal. I am sorry to use such moderate language. I wish I could find stronger language, but I have to say to the Government that, in my view and that of my party and that of women in general, this does not do.
Baroness Turner of Camden: My Lords, I do not want to add anything to what the noble Lord has just said. I would like, however, to mention his Amendment 91, which suggests that "250" be left out and be replaced by "100". Quite recently, I was approached by a number of employees who work in private companies working for the NHS. They told me that they suffer very much from inequality, but that they would not be able to utilise the provisions of this Bill, because the companies they work for are quite small, relatively, and they would not have the 250 employees which make it
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I agree with a lot of what the noble Lord, Lord Lester, has said about the provisions in relation to equal pay generally, but I would like to say a few words about that when we come to discuss Amendment 93.
Lord King of West Bromwich: My Lords, as it stands, this clause is only about the gender gap, and subsection (1) only places a duty on employers to report on gender. I believe that this is not sufficient, as this does not expose pay gaps among employees of different ethnic groups, employees of different ages, and employees with or without disability.
It is extremely important that this information is made available, and my Amendment 89A places a duty on the employer to do that. My second amendment, Amendment 91A, places a duty on the employer that information published under subsection (1) shall be made available to the whole workforce and other interested stakeholders.
As the clause stands, there seems to be no such duty and, more often than not, such information stays hidden away in committee meeting minutes. This information needs to be publicly available, so that it can be used to provide equality for all, which, after all, is the aim of this Bill.
The Chancellor of the Duchy of Lancaster (Baroness Royall of Blaisdon): My Lords, with permission, I will speak to Amendments 87 and 89, proposed by the noble Baronesses, Lady Warsi and Lady Morris, before turning to Amendments 88, 90 and 91 from the noble Lord, Lord Lester, and Amendments 89A and 91A from my noble friend Lord King.
The noble Baroness, Lady Morris, has a fine record in relation to the gender pay gap. We all, throughout this Chamber, agree on the iniquity of the gender pay gap. What we do not agree on is the means by which to narrow the gap, which is something that we absolutely must do.
Amendment 87 would introduce a new clause similar to a provision in the Equal Pay and Flexible Working Bill, introduced in this House by the noble Baroness last year. It would require only those employers found to have breached the equal pay provisions of the Bill to conduct a pay audit and publish the results. As the noble Lord, Lord Lester, said, it is rather like a punishment clause. We believe that in practice this amendment would make very little difference in closing the gender pay gap because very few equal pay claims succeed at tribunal. More are lost and many more are settled or withdrawn before reaching a tribunal. The latest figures from the Tribunals Service show that, out of the 20,148 equal pay claims disposed of by employment tribunals in the year to 31 March 2009, only 36 were successful at tribunal.
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Furthermore, Amendment 87 would not affect in any meaningful way obligations on the private sector, in which the vast majority of people in work are
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Finally, the requirement imposed by Amendment 87 is indiscriminate. It would apply equally to small employers which may not have the resources to conduct a pay audit and to larger ones that do. As the noble Baroness said herself, there is no great enthusiasm in the business world for the proposals in the amendment, and I certainly urge her to withdraw it.
I now come to Amendment 89-again, tabled by the noble Baronesses, Lady Morris and Lady Warsi. This amendment would make Clause 78 unworkable. I note the intention of the noble Baronesses to oppose the Question that Clause 78 stand part of the Bill, and I shall therefore explain briefly why the clause should stand part. The Government are committed to doing more to close the gender pay gap, but we can only effectively do so, particularly in the private sector, when regular publishing of pay gap information by individual employers produces greater transparency. To address the issue, we must first shine a light on it, and that is how the clause may come into play. I say "may" because the Government hope that we can get greater transparency through voluntary publishing arrangements.
The Equality and Human Rights Commission has, at our request, been working with representatives from the business community, trade unions, the voluntary sector and other stakeholders to help to develop workable arrangements for gender pay publishing by non-public sector organisations, to be promoted on a voluntary basis. Its consultation seeking input from employers, unions and others about their preferred approach began in August and closed on 28 October last year. We expect publication imminently. I deeply regret that the commission has been unable to follow its press release of today with a report, and I shall certainly be seeking clarification on the reason for the delay. It is fair to say that the Government asked the EHRC to undertake the project, but the commission, with its stakeholders, has owned the project from its inception. I respectfully point out that the commission is an executive non-departmental public body and therefore it is an arm's-length body. Of course, the Government were given an opportunity to comment on the draft report, along with all key participants, but decisions about the contents of the metrics report ultimately rest with the EHRC.
The commission's proposals include a range of measures in relation to the gender pay gap from which employers will be encouraged to select in the way that best suits their circumstances, while enabling reasonable comparability for the future. Employers will be able to choose from three quantitative measurement options: an overall single figure; the starting salaries of male and female staff; or the differences between male and
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I hear the concerns expressed by my noble friend Lady Turner of Camden, who has a fantastic record on these issues. We have taken those concerns into consideration, but it is not something that we can meet at the moment. However, as employers get to grips with the information requirements and begin to publish their data, the Government will carefully monitor the extent to which employers are publishing in accordance with the commission's guidelines. If employers start to embrace greater transparency on pay, progress on recognising and challenging patterns of pay inequality should follow naturally, step by step.
The Government do not intend to use the reserve power in Clause 78 before 2013, to give voluntary arrangements time to work. It would then be used only in the event that insufficient progress on voluntary reporting had been made by that time. The power enables a Minister to make publishing arrangements mandatory through regulations, which would identify which employers were required to publish what information relating to the pay of which employees, and in what form and manner the information should be published. Regulations would also detail the time of publication, which could not be more frequently than annually. Any regulations would have to be consulted on and then debated by Parliament.
We expect that employers will meet their publishing obligations. They should know whom they employ, whether their employees are men or women and what they pay them. However, clearly there need to be proportionate sanctions that may be brought to bear in cases of non-compliance. Any criminal sanction would be pursued only in the most serious cases, and would entail a fine no higher than £5,000.
The noble Baroness, Lady Morris, asked what we were doing in the public sector. The Government propose to use the power in Clause 152 to require all public sector employers with more than 150 employees to publish annually details of the gender pay gap in their organisation. This is one of the proposals for a set of specific duties to support better performance of the new equality duty in the Bill. The proposals are set out in the consultation document published on 16 June last year. The closing date for responses was 30 September. We are considering what people said and we will respond very shortly. When the noble Baroness criticised the Government for not paying former Ministers for Women, I would say we are bang to rights.
I now turn to Amendments 88, 90 and 91, tabled by the noble Lord, Lord Lester. Amendment 88 would mean that voluntary arrangements were not given any time to work. It would reserve the power to make
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Amendment 90 would implicitly require employers to have analysed the data they had collected to establish the causes of any pay gaps identified before publishing information only about those caused by sex discrimination. Such an analysis is a key element of a formal pay audit. The reserve power in Clause 78 could be exercised in a way that required employers to determine where men and women were doing equal work, or work of equal value, and to collect pay data to identify gender pay gaps. These are also elements of a formal pay audit. However, the power could not require employers to analyse the data to establish the causes of any gaps identified. Not every gap will be because of sex discrimination. We know, for example, that many men and women enter the labour market with different skills and qualifications. However, once the data had been published-which is what transparency is all about -employers could be more exposed to claims if the data disclosed a significant pay gap. It would therefore usually be in the employer's own interests to analyse the data in order to ascertain the reasons for the gap.
Amendment 91 would apply the clause to employers with 100 or more employees, instead of those with 250 or more. This would increase the number of employers in the scope of the clause by over 146 per cent, but it would increase the number of employees by only 16 per cent. We chose the 250-employee threshold as employers with fewer employees are classified as small and medium-sized enterprises. In addition, employers generally invest in the kind of sophisticated IT, payroll and HR systems that would enable easy collation and presentation of gender pay gap information only when their headcount reaches around 250 employees. Smaller employers will of course be free to publish information about their gender pay gaps, and we would strongly encourage them to do so if they wish. I add that a threshold of 100 employers would be lower than that which the Government propose to apply in the public sector. We propose to use the power in Clause 152 to require all public sector employees with 150 or more employees to publish annually details of the gender pay gaps.
I turn finally to Amendments 89A and 91A, tabled by my noble friend Lord King-
Lord Lester of Herne Hill: I hope that it is convenient for me to speak now. I have two main points. First, the Government's position shows no understanding at all of the history. The Equal Pay Act was enacted in 1970 and employers were given five years before it came into force to move their pay so that there was equal
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I have listened carefully to the Minister but, with respect, the second reason why what she says is not convincing is because of the CBI's own brief. If the CBI had written a brief saying that it welcomed the Government's proposals and that it would ask its members to give them effect, it might be a different matter. We are trying to change the culture of discrimination, which is more than 40 or probably more than 100 years old.
It beggars belief, but the CBI in its briefing says that,
- "forcing companies to report on their gender pay gaps would not help to tackle the root causes of inequality".
It opposes Clause 78, saying that it is too simplistic, it could tar employers, it is short-termist and that there should only be voluntary initiatives and so on. If the CBI, which as I have said in the past was not like this, is now taking this as its official position, what hope is there in a plea to voluntarism all these years after the Equal Pay Act and the European equivalent came into force? It will not happen. It will not happen even if this Government win the next election, and it will certainly not happen if they do not. That is why when we come to Report I intend to push for some beef. My wife, who is a vegetarian, will forgive me for using that phrase.
Baroness Royall of Blaisdon: As a fellow vegetarian, I say that of course we are disappointed with the attitude displayed by the CBI in its briefing, but that does not mean that individual employers should not nevertheless take up the proposals and do whatever they should be doing. We are giving them three years and if after that time they do not comply with the voluntary system, enforcement will come. At this stage in our history, notwithstanding the fact that the noble Lord thinks we are ignoring history, we are in different times and we want to close the gender pay gap. We have reflected on these things for many hours and we believe that this is the best way forward and the best way to see progress. I note what the noble Lord says about Report and the beef, and I look forward to discussing this with him at a later stage.
I now turn to the amendments tabled by my noble friend Lord King, which would mean that employers could also be required to publish and make available to their workforce and unspecified others information about their race, age or disability pay gaps, as well as their gender pay gaps. The Government have seen no evidence of a significant race or age pay gap. The gender pay gap is also much bigger than the disability pay gap, which now stands at 6.4 per cent, and we think that the way to reduce it is to get more disabled people into work.
Publishing gender pay gap information means making it generally known, and the form and manner in which this should be done will be a matter for any regulations made under Clause 78 following public consultation.
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Baroness Morris of Bolton: I am most grateful to the Minister for her careful consideration of these amendments. The noble Baroness says that our amendments are a punishment, but the Government's own proposals would seek to impose an unnecessary duty on good employers. The Minister also said that our amendments were discriminate because they would impact on small firms, but that then leaves women who work for small firms with less protection than those who work for large organisations.
The noble Lord, Lord Lester, said that he thought our amendments were incoherent. I think we have a fundamental disagreement; we do not think that they are at all incoherent. We feel that our amendments are good because they do not penalise or put extra administrative burdens on good employers, but send out a strong signal to employers who discriminate against women in pay that, if they do not comply, they will have to have a compulsory audit. I agree with the noble Lord, Lord Lester, that encouragement is better than punishment, and our amendments are indeed intended to encourage good practice. I also agree with him about women not being paid badly, as fodder for low pay, as cheap labour, in bad economic times. I said that, whatever the economic times, the issue of equal pay is one that we should always address.
I am terribly sorry that I did not address the amendments tabled by my noble friend, Lord King when I spoke initially. I thought that they were coming in the next group. There is an interesting case to be raised here. The Government say that they do not expect equal pay audits to be a seriously onerous burden on business in terms of cost or administration and, if that is the case, why should the Government not wish to expand the provisions to disability, age or ethnicity? I hear what the noble Baroness said-that, should that be a problem in the future, the Government will look at it. I am not saying that it is what should happen, but if you are doing it for one, it seems strange not to do it for another.
However, I feel that we are miles apart on this, which is sad, given that we want the same outcome, and it seems a pity that we cannot will the same means. Given the hour, I beg leave to withdraw the amendment.
Clause 78 : Gender pay gap information
Amendments 88 to 91A not moved.
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92: After Clause 78, insert the following new Clause-
"Representative actions in equal pay claims
(1) The Secretary of State must make regulations to permit the Equality and Human Rights Commission or a registered trade union to apply to a court or tribunal as appropriate for a representative action order in relation to a defined class of persons ("the class") who would benefit from the litigation of rights, or common issues in relation to rights, that members of the class may have as a result of the provisions of this Act.
(2) The regulations shall make rules in relation to the making and termination of a representative action order and its conduct.
(3) Such rules shall provide for hearings to be conducted in private when it is necessary for the issues between the members of the class and the Equality and Human Rights Commission or a registered trade union to be resolved and those issues are subject to legal professional privilege shared by members of the class.
(4) Such rules shall make provision for the hearing of any issue as defined in subsection (3) to be undertaken and managed by a different judge or tribunal from the judge and tribunal that have the responsibility for determining the rights or common issue in relation to rights of the member class."
Lord Lester of Herne Hill: I say straight away that Amendment 92 is defective and will therefore need to be reconsidered. It is defective because it deals with representative actions only in equal pay claims, whereas it ought to deal with representative actions in all discrimination claims, and certainly those involving sex discrimination as well as equal pay.
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