Equal pay: head-to-head

This month, Employers’ Law asked Susan Anderson, director of HR policy at CBI, and Jenny Watson, chairwoman of the EOC, for their opinions on equal pay issues.

Is it possible to make pay totally equal?

Susan Anderson
Real progress has been made in reducing the gender pay gap; it’s at its lowest ever level and this should be a cause for optimism among government, employers and employees.

However, while employer discrimination has largely been tackled, the remaining causes of the pay gap are deep-rooted and difficult to address. There is no short-term panacea. We must respect the choices men and women make, rather than forcing them into careers and working patterns they don’t want or are not suited to.

Better careers advice in schools and universities will help young women to fully understand their workplace options. And flexible working patterns and rights to request flexible working give parents – and soon carers more generally – the chance to balance their caring responsibilities and work.

Jenny Watson
At the current pace of change, it could be decades before we’re even close. Women working part-time earn 38.4% less per hour than full-time men, which has barely changed in the last 30 years. Full-time women earn 17% less. Action is needed now to ensure another generation of women don’t miss out.

We need to look beyond pay discrimination. Our investigations into flexible working and occupational segregation have shown just how significant the barriers are for women when they take on caring responsibilities.

The EOC is also calling for a responsibility for private sector employers to take action on all causes of the pay gap, including a requirement for every employer to carry out a diagnostic ‘equality check’ to identify any equal pay problem in their workplace, and if so, to take action to close it.

The government would prefer to educate business about the economic benefits of treating women equally rather than legislating. Yet Rita Donaghy, chairwoman of Acas, believes low levels of understanding and a lack of information are the key factors holding back equal pay. Does the government need to rethink its approach and become more forceful?

Susan Anderson
We shouldn’t make the mistake of thinking more regulation will eliminate the outstanding causes of the pay gap – which relate to the choices women make about their careers and working patterns rather than employer discrimination. Requiring all firms to undertake mandatory equal pay audits would have little impact on the gender pay gap. But it would put a real burden on companies and divert attention away from more effective ways of closing the pay gap.

Jenny Watson
Legislation alone cannot tackle the pay gap: workplace culture plays a big part and forward-thinking business practices, such as increased flexible working, will have a big impact. There is a strong productivity case for achieving equal pay. Leadership in promoting equality from both the government and business will help firms understand these benefits and bring them into their own workplaces.

Having said that, our research shows that two-thirds of organisations have not carried out an equal pay review and have no plans to do so. This figure has barely changed since 2002 and the numbers planning a review actually fell between 2003 and 2004. Clearly, we have reached the limits of voluntary action and the government needs to think about tougher action. We believe it is needed.

Could simple measures such as better training and promotion prospects for part-time workers be effective, as they directly contribute to the different skill levels between men and women?

Susan Anderson
Increasingly, women are choosing to remain in their previous jobs but on a part-time basis, while they balance home and work responsibilities, and some of them may want to return to full-time work at a later date. Employers invest in skills and training because they know it makes business sense and they need all their employees – full- and part-time – to undertake their duties to the best of their abilities.

Jenny Watson
Yes. Our investigation into flexible working found that four in five part-time workers – most being women – are working below their potential; they have previously held jobs at a more senior level, or have the skills to do so. Increased training and more opportunities for flexible working at senior levels could have a dramatic impact in reducing this chronic waste of skills, for which we all pay a heavy price: we call this the productivity penalty, since our economy loses out so badly.

Do you think the changes to maternity and paternity pay will have an effect in the long term?

Susan Anderson
The UK already has a good record of providing flexible employment opportunities that suit the needs of women. Ninety per cent of employers provide flexible working arrangements, and that is why the UK has a female participation rate of 70% – one of the highest in the EU.
Employers have also been active in implementing family-friendly employment rights and were able to support the proposed extension to maternity and paternity rights as part of a package that offered a real reduction in the administrative burden on business. However, given that the government has said firms will not be compensated with additional assistance, the CBI felt it had no option but to withdraw support for the proposed new rights.

Jenny Watson
The proposed changes to parental leave, which would allow mothers to transfer the second six months of maternity leave to their partner, will have a huge impact on working families by allowing couples to decide for themselves how to balance work and home.
But there’s always more that can be done: giving fathers paid parental leave in their own right would help dads to play a greater role in childcare, and increased opportunities for part-time and flexible working at senior levels would go even further. When families are changing so much, so fast, the best thing the government can do is provide a system of leave that gives maximum choice to parents to make their own decisions.

Then & Now
Full-time gender pay gap (compares men’s full-time and women’s full-time hourly earnings)
1970s 29.0%
2000s 17.1%

Part-time gender pay gap (compares men’s part-time and women’s part-time hourly earnings)
1970s 42.0%
2000s 38.4%

Proportion of females among managers
1970s 1.8%
2000s 33.1%

Proportion of females among company directors
1970s 0.6%
2000s 14.4%

Proportion of females among solicitors holding practising certificates
1970s 6.0%
2000s 41.0%

Proportion of females among Members of Parliament
1970s 4.3%
2000s 19.7%

Source: EOC

One-Stop Guide to Equal Pay Reviews

This One-Stop Guide from Personnel Today includes a step-by-step guide to designing and implementing non-discriminatory job evaluation schemes, an overview of tools available to review pay, and clear explanations of the key concepts in gender pay equality. The concise and accessible format will help you find key advice quickly and easily and pulls together all the essential information on best practice in this complex area. For your copy, go to www.personneltoday.com/resources


Councillor Irene Graham
Equality spokeswoman
Glasgow City Council

“Glasgow was the first local authority to agree a settlement package with the trade unions and make compensation offers to staff.

“We firmly believe that the best way to deal with equal pay is through negotiated settlement, rather than through the costly and lengthy tribunal system. The only people who win from that are the so-called no-win, no-fee lawyers.

“We will have to make efficiency savings to pay for the settlement, but we believe we can do this over the next three years through backroom measures, rather than cutting jobs, salaries or front-line services.”

Sally Hunt
General secretary
Association of University Teachers

“We often hear good, enlightened rhetoric in higher education about the issue of unfair pay for women. Sadly, what we rarely see is enough being done to root out and tackle the problem.

“We would like to see mandatory equal pay audits as a start to unearthing the scale of the problem and then a concerted effort to close the pay gap. Greater transparency over promotions at work would also help give a clearer picture of who is getting promoted and why.”

Rebecca Gill
Policy officer on women’s equality

“The gender pay gap has not moved in 35 years, so mandatory pay reviews should be introduced in the public and private sectors. But when the Women and Work Commission reports, I imagine it will say it should only be mandatory for the public sector.

“To see the problem you just have to look at the case of the six women who have taken Dresdner to court in the City. The bank would much rather have six women make a claim every five years than close the pay gap, for the simple reason that it costs it less money. Sadly, women will pay the price if the Equal Opportunities Commission drags its heels.”

For more…

Race and equal pay claims rise

Female workers at Argyll and Bute council to get equal pay bonus

Gateshead Council reaches equal pay deal

Glasgow Council compensation fight heads towards tribunal

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