Recently established Equal Pay Tribunal has no cases

A tribunal dealing with matters concerning equal pay has not heard any cases, six months after it was set up in Denmark by social partners CO-industri and DI. The tribunal was established in June, in collaboration with the Labour Court, and is expected to deal with the interpretation and understanding of the Equal Pay Act, its possible violation and the incorporation of the law’s provisions in the industry agreements between trade union CO-industri and the employers in DI.

Background

The social partners in manufacturing, the Central Organisation of Industrial Employees (CO-industri) and the Confederation of Danish Industry (DI), established an Equal Pay Tribunal with effect from 1 June 2011. It is modelled on the same lines as the Dismissals Tribunal and the social partners, in collaboration with the Labour Court, have appointed a Supreme Court judge as chair and two other Supreme Court judges as stand-ins. The tribunal deals with matters of interpretation and understanding of the Equal Pay Act, violation of the Equal Pay Act, and the incorporation of the law’s provisions in both the overall Industry Agreement and the Industry Agreement for Salaried Employees between CO-industri and DI. Cases of gender-based unequal pay have been dealt with so far by the civil courts but, with the creation of this tribunal, will now go through the labour law system and be governed by its collective bargaining principles.

DI and CO-industri step in after talks break down

The tribunal was created following the implementation of the Equal Pay Act in the industry agreements by the renewal of the collective agreement for the manufacturing sector in the spring of 2010 (DK1003011I). The Danish Confederation of Trade Unions (LO) and the Confederation of Danish Employers (DA) were originally to have jointly established the tribunal, but could not agree on its powers. DA wanted to award compensation to employees only if it could be shown that they had been deliberately underpaid while LO wanted the tribunal to be able to penalise employers who break the rules of the EU Equal Pay Directive.

DI and CO-industri then stepped in, agreeing to a settlement covering their own sector and creating a tribunal that can award compensation only in cases of proven unequal pay. Employers are also penalised if they do not publish gender-segregated pay statistics, or if they repeatedly violate the equal pay provisions.

Women’s pay still lags behind men

In 2008, following the turbulent collective bargaining round in the public sector (DK0709029I), the government set up the Wage Commission (Lønkommissionen) to investigate public sector pay, including the wage differences between men and women. In May 2010, the Commission’s final report (in Danish, 211Kb PDF) concluded that in occupations or sectors dominated by women, the average wage was lower than that of other sectors. This was supported by a report (in Danish) by the Danish National Centre for Social Research (SFI) in June 2010 covering the entire labour market. Entitled ‘Are women’s occupations low wage occupations?’, it concluded that the share of women in an occupation has more effect on wage levels than gender, and that it has been like this for decades.

A tribunal without cases

However, in the six months since its establishment, the tribunal has not heard any cases. Neither DI nor CO-industri is surprised by this, but the phenomenon has led to some public debate. Independently, the Danish Institute of Human Rights started a research project in March 2011 to try to find out why there are so few claims of gender-based unequal pay. The research focuses on earlier cases and tries to establish a pattern of obstacles.

Labour market commentators and social partners from CO-industri and DI seem to agree that there are three main explanations for the lack of claims, two of which could be characterised as ‘obstacles’.

  • Only companies with more than 35 employees, and with 10 men and 10 women working within the same area, have a legal duty to produce gender-based wage statistics. This combination is rare. Unions want the limits lowered considerably so that more companies will fall within the scope of the law.
  • There are not many precedents for claiming wage inequality within the male-dominated manufacturing industry. DI claims the low number of cases simply reflects the fact that there have never been many cases of unequal pay. However, CO-industri claims that this is also due to the fact that, in the industry sector, hourly wages are negotiated at company level, which makes it more difficult to isolate specifically gender-based differences from differences due to education or work function.
  • Finally, cases of unequal pay seldom go to court because they are resolved before they get there. The Danish system of resolving industrial conflicts is based on collective bargaining and the involved parties have a duty to try to resolve the conflict. Going to a court or tribunal is the last resort. The collective process involves a first meeting at the workplace between the complainant and their shop steward and a management representative. If no solution is agreed, the case goes to a ‘joint meeting’, where the respective social partners are also present. The next step is an ‘organisation meeting’, which involves the employers’ and unions’ confederations. Then comes a final ‘negotiating meeting’ and only after that, if the matter is still unresolved, does it go to a tribunal or court.

Commentary

It is not known how many cases of alleged unequal pay have been resolved by the collective process, since details of a case only become public if it comes before a tribunal or court. The Danish Institute of Human Rights’ investigation is attempting to put a figure on how many unequal claims are settled in this way.

However, there is a trend which undermines the assumption that cases are resolved voluntarily between the involved parties. In recent decades, more and more cases challenging the interpretation or possible breach of the collective agreement have been dealt with by union lawyers. This means that the trend is for fewer cases to be resolved by elected union secretaries and the employer organisation at out-of-court meetings. Instead cases are rapidly taken through the obligatory meetings and then final decisions are made in the Labour Court, with the attendant publicity, and this makes the results visible for union members. It is clearly important for a trade union movement in a period of declining membership (DK1012019I) that they can present tangible evidence that they are actively protecting their members’ rights. Given this ‘lawyerisation’ trend, it might have been expected that any claims of unequal pay would have been taken to the new Equal Pay Tribunal, yet so far this has not happened.

Carsten Jørgensen, FAOS, University of Copenhagen

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