Is the 25th anniversary of equal pay worth a cheer?

While most employers would welcome the simplification of the equal pay tribunal system, others are concerned that the proposed legislation could lead to more red tape.

Twenty-five years since the Equal Pay Act was implemented in the UK there is still a significant pay gap between men and women. Government research suggests that it currently stands at 18 per cent. A mid-skilled woman with no children, for example, will earn £240,000 less than a man in her working life.

The Government’s latest solution to the problem is to streamline the tribunal system for equal pay cases. It has just released a consultation document, Towards Equal Pay For Women, and aims to cut through tribunal red tape to speed up equal pay hearings.

If the draft legislation becomes law the claims procedures will be simplified for women. Tribunals will also be able to call in an "assessor" to offer expert advice, which would reduce the number of experts needed and thus speed up the tribunal process.

It also proposes to close a loophole which allows tribunals to dismiss a claim before it is properly investigated.

Many employers believe the proposals are a step in the right direction. Anne Minto, HR director at Smith Industries, says, "Any measures that simplify the rationale of equal pay cases should be supported."

Potential savings

Employers have also welcomed the potential cost savings the proposals contain. "It is good news for local government as the cost incurred by many authorities is quite significant and many cases collapse due to the length of time taken," says Terry Gorman, president of Socpo.

But few believe that reform of the tribunal system will be enough to significantly close the gender pay gap. Joanna Blackburn, senior employment lawyer at Mishcon de Reya, says, "The streamlining of tribunals will not make much difference to the number of claims being brought by employees. I wouldn’t expect a flood of equal pay cases once the legislation goes through."

Many believe the cultural factors behind women continuing to move into low-paid jobs has to be addressed before the gender pay gap will be reduced. Helen Froud, director of corporate services for Worcestershire County Council, says, "Women are still going into lowly paid jobs such as cashier work or cleaning. Men with similar skill levels tend to go on to higher paid jobs."

Employers are in a strong position to address this issue. New research by the Equal Opportunities Commission (EOC), exclusively released to Personnel Today, suggests that few organisations have adopted processes that actually target the achievement of equal pay. Only 20 per cent of the companies surveyed have used the EOC’s code of practice on equal pay, which was introduced in 1997.

While 68 per cent of organisations claim to have an Equal Pay Policy (EPP), the research showed that there was little difference between those companies with or without an EPP when it came to specified practices which could reduce the unfairness of the payment system.

Clearly the pressure on companies to implement equal pay practices varies according to their sector and the proportion of women in key jobs. Unsurprisingly, the research found that HR managers put more value on manufacturing, technical, professional and skilled manual jobs, that are often male dominated, than female-dominated support and administrative jobs.

The problem boils down to the distribution and valuation of jobs, reinforced by the fact that jobs carried out by men are much more likely to receive additional financial benefits.

Froud believes that the performance-related pay culture of the 1980s has slowed down the process of reducing the gender pay gap. She says, "Performance-related pay was prevalent in industries dominated by men and this has exacerbated the pay gap. A greater awareness of what people earn and transparency in the pay structure is required."

The private sector continues to be discreet when it comes to pay structures. The MSF union, for example, has started a campaign this month to pressure companies into allowing an equal pay audit of their staff. It is threatening to take companies which refuse to comply to tribunal.

"There is a culture of embarrassment about revealing your salary in the private sector," admitted said one private sector HR manager.

Companies are not obliged to reveal this information and many are even questioning the consistency of the tribunal proposals, particularly the measure to prevent tribunals dismissing claims before they have been properly investigated.

The CBI’s deputy director-general John Cridland said, "The proposals to remove the no-reasonable-grounds defence will worry businesses because it may make it more difficult to dismiss weak claims. It is a move in the opposite direction to recent tribunal reforms, which aim to free employers from defending no-hope cases."

While most HR directors acknowledge there is room for improvement in internal equal pay practices, they are concerned that they are facing yet more employment legislation which could create yet more red tape.

Best practice

As Bruce Warman, director of personnel at Vauxhall Motors, explains, "It’s difficult to put legal boundaries around an issue that is not easily defined." He continues: "It’s too early to say what impact these proposals will have on the settlement of equal pay claims.

"But one of the best measures by employers to ensure that the pay gap is closed is to ensure that best practice is circulated within the organisation. It is better than using a sledgehammer to crack a nut."

Milestones towards equality

1975 UK law recognises the right of women and men to equal opportunities. Equal Pay Act and Sex Discrimination Act comes into effect.

1983 Equal pay for work of equal value amendment to Equal Pay Act. For the first time working people can claim the same pay as someone of the opposite sex who is doing a different job but with the same skills and abilities.

1990 Barber v Guardian Royal Exchange: important case assisted by Equal Opportunities Commission allowing men equal pension benefits to women in company pension schemes.

1993 In the EOC-supported Marshall case, the European Court declares that the ceiling for compensation in sex discrimination claims is unlawful. For the first time individuals can get full compensation for discrimination.

1994 Trade Union Reform and Employment Right Acts guarantees every working woman the right to maternity leave for the first time.

By Karen Higginbottom

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