Employer-friendly pay audits are vital to achieve equal pay

A ‘protected period’ is needed to encourage employers to seriously consider equal pay.

The debate surrounding the government’s Discrimination Law Review is an important opportunity to look afresh at anti-discrimination laws and create truly modern legislation that tackles deep-rooted inequalities. The resulting single Equality Act – expected some time next year – will form a blueprint for generations to come.

In particular, the time is ripe to modernise equal pay legislation. Now more than 30 years old, it has no doubt contributed to great change, but it is reaching the limits of its usefulness.

Slow progress

More than three decades since the Equal Pay Act came into force, there have been more than 67,000 equal pay cases, yet many of the problems still persist.

The full-time gender pay gap for hourly earnings remains a stubborn 17%, and the part-time pay gap, at nearly 40%, has barely shifted in a generation. With the average woman working full-time losing out on more than £330,000 over the course of her working life, we must seize this opportunity to speed up the pace of change before yet another generation misses out.

The problem with the current system is that it puts the onus entirely on women to challenge unequal pay by bringing tribunal claims, possibly without adequate legal advice and often at a great personal cost. What’s more, employers find the web of sex equality and employment law confusing, and the cost of defending themselves against claims can be high.

Now the situation is reaching critical mass, with new figures released last week by the Tribunal Service indicating that the number of equal pay claims has risen by 155% since last year, and there are concerns that the tribunal system is struggling to cope.

Fresh approach

It’s time for a fresh approach and a debate about where we go from here.

Of course, changing the law alone is never the answer. But law does shape culture, so getting it right matters.

The Equal Opportunities Commission (EOC) believes it’s time for a modern legislative approach that works better for individuals and employers. It’s time to get off the back foot of addressing discrimination after the fact in our tribunal system, and on the front foot of preventing it from happening in the first place.

Many thousands of forward-looking employers are already creating a more welcoming environment through good policies and are reaping the rewards. They find preventing problems works far better than attempting to tackle them after they arise.

‘Protected period’

The EOC would like to see all employers required by law to take active steps to tackle inequality, including addressing the gender pay gap, which would build on recent changes in the public sector.

It’s time to ask all employers to accept responsibility to check the gender pay gap in their workplace and take effective action if there is a gap. In return, they should have a breathing space, or ‘protected period’, to put right any problems that they find.

At the moment, there’s a bit of a perverse incentive.

Why would an employer take proactive steps to see whether it has a pay gap and address it? What it finds could leave it vulnerable, and it’s often easier to look the other way and hope any inequalities aren’t challenged in tribunal.

A protected period from individual claims while robust transitional arrangements are put in place to tackle the pay gap might be just the modern approach that’s needed.

A fair exchange

In exchange, there would be a requirement on public and private sector employers (where the gender pay gap is 8.8% higher at 22.3% compared with 13.5% in the public sector) to conduct what the EOC calls an ‘equality check’ – an audit looking at whether there’s a pay gap in any given organisation, and what can be done to address the cause.

Without these changes, our legal system will continue to fail the UK’s female workers and their employers, who might benefit from a serious focus on prevention, not cure.

Jenny Watson

Chair, Equal Opportunities Commission

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