It is highly likely that you have heard the terms gender pay gap (GPG) and equal pay (EP), particularly in light of recent headlines involving the BBC and the unearthing that female employees are paid less than their male counterparts.
Top headlines have included senior employees such as long serving China Editor, Carrie Gracie, stepping down from her post, 14 female employees providing written testimonies based on their experience of pay negotiations at the BBC and male presenters showing their camaraderie by agreeing to take pay cuts with a view to aligning the pay between male and female employees.
So, GPG and EP are relatively hot topics in 2018, certainly in the employment and HR world anyway. But the question arises, are GPG and EP the same thing? If not, what’s the difference?
In short, GPG and EP are not the same thing and here is why:
Under the Equality Act 2010 females are entitled to be paid the same as males who are doing equal work. Equal work means that anyone employed under a contract personally to do work, is entitled to contractual terms that are as favourable as those of a comparator in the “same employment” of the other gender if they are employed on equal work.
Asda Stores v Brierley & Ors is one of the equal pay case to watch out for this year. In 2017, the Employment Appeal Tribunal granted claimant female store workers the right to compare themselves to male distribution depot workers who are paid more. Asda are seeking to defend the litigation, with the cost of backdating the pay for female employees over six years set to be a substantial amount.
It has also recently emerged that female store workers at Tesco are to submit a test equal pay claim, claiming they are paid less than predominantly male warehouse workers. It is believed the claim could cost Tesco £4bn.
Under the Equality Act 2010 (Equal Pay Audits) Regulations 2014, where an equal pay claim is submitted after 1 October 2010 and the Employment Tribunal finds in favour of the claimant(s), an employer will be ordered to carry out an equal pay audit unless an exception applies. Other than in these circumstances, there is no legislative requirement for employers to carry out an equal pay audit to ensure they are compliant with the EQA 2010.
Gender Pay Gap
GPG is all about the average difference between the pay of females and males. At present in the UK, the average pay for males is greater than it is for females. The Equality for Human Rights Commission reports an overall GPG for full time employees of 18.1 per cent.
The Equality Act 2010 contains provisions which provide the government with power to make regulations requiring private and voluntary sector employers to publish information relating to their GPG. With a view to narrowing the GPG and after much consultation, the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 came into force on 6 April 2017.
The Regulations require private and voluntary sector employers with 250 or more employees to report on their GPG, publishing their GPG result on their website and the government portal by 4 April 2018.
Employers express their GPG as a percentage, which is calculated by working out the difference between the average pay for all eligible male employees and the average pay for all eligible female employees. The number is then decided by the average pay of the male employees.
The same onus is placed on specified public authorities, with the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 largely replicating the Regulations. The deadline for specified public authorities to publish their GPG results is 31 March 2018.
It is difficult to say how effective GPG reporting will be. At present, there are no penalties for employers caught by the Regulations who fail to publish their GPG results. It is therefore unsurprising that less than 500 employers out of the thousands caught by the Regulations have already posted their GPG results. Some employers are likely to be wary of publishing their GPG results, because as we have seen with the BBC, it can cause a reputational headache. On the other hand, tackling the issue head on in an honest and open approach could also enhance the reputation of some employers.
Paige Tompkins is an employment solicitor at EMW Law