Recently the Office for National Statistics revealed that across the UK, women earn on average 87 pence for every pound in men’s wages.
In broad terms, the widening pay gap between men and women is echoed in the findings of the recent report I co-authored, entitled ‘Age before Beauty?’, which found that unlawful discrimination in the workplace is alive and well. These results are troubling when we are working for equality.
The right to equal pay for men and women was introduced over 40 years ago. The cause for equality was bolstered by further legislation aimed at reducing, if not eradicating, other types of workplace discrimination. Anti-discrimination legislation in the UK was consolidated into the Equality Act 2010, yet the pay gap is widening.
The current government publicly pledged to reduce “red tape” and employment related constraints on businesses. Yet it also had to acknowledge that the widening pay gap is undesirable. To try to bridge the gap between policy and life on the ground, new laws are being introduced later this year requiring employment tribunals to order employers found to have breached pay discrimination laws to carry out equal pay audits.
An audit will require the employer to publish relevant gender pay information, identify any differences in pay between men and women, give reasons for any differences, give reasons for any potential contravention of equal pay law identified by the audit and explain how the employer plans to avoid breaches occurring or continuing. Employers that fail to carry out an audit when ordered to do so could be liable to pay a fine of up to £5,000.
However, this only applies to claims presented on or after the 1 October. Micro-businesses employing fewer than ten people and new businesses started up in the 12 months preceding the claim will be exempt. Yet, Doyle Clayton’s research shows that employees of micro-businesses are less likely to perceive or experience unlawful discrimination than employees in medium sized businesses.
The requirement to publish audits on the company website for at least three years and the potential reputational damage may go same way towards bridging the pay gap. However, this is only for employers already found to have breached pay discrimination laws. Therefore, the new rules can only be expected to have a limited impact.
But will this work to reverse the depressing statistics? Section 78 of the Equality Act 2010 contained a power to require larger employers to publish gender pay gap information. However, the current government favours a voluntary approach to gender pay reporting.
In the run-up to the next election, the Liberal Democrats are seeking to differentiate themselves from the Conservatives by saying that they intend to pledge to enact section 78 in their manifesto. It will be interesting to see how the law develops after the general election next May.
Jessica Corsi is an employment partner at Doyle Clayton
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