Voluntary approach to equal pay reviews is failing, finds EOC

Research published by the Equal Opportunities Commission in January 2006 shows that levels of voluntary equal pay review activity have stagnated among large organisations and declined among smaller organisations. The Commission has called for a new approach to close the gender pay gap.

On 27 January 2006, the Equal Opportunities Commission (EOC) published new research showing that that voluntary progress in undertaking equal pay reviews (EPRs) has 'stagnated' among large organisations, and that there has been a 'significant decline' in reported EPR activity among smaller organisations.

Key findings from a survey carried out in 2005 included that:

  • 34% of large organisations (with 500 employees) had completed an EPR, compared with 33% in 2004. Large organisations in the private sector were more likely than those in the public sector to report no EPR activity at all;
  • the incidence of EPR activity among small and medium sized organisations was much lower - 87% of organisations with 25-99 employees and 74% of those with 100-149 employees reported no EPR activity, compared to 71% and 65% respectively in 2004; and
  • overall, 82% of organisations reported no past or ongoing EPR activity and had no plans to carry out an EPR. This compares with 68% of organisations in the 2003 and 2004 surveys.

EPRs have been promoted by the government and the EOC as a key means of tackling the persistent UK gender pay gap (UK0402104F). Both the government and the EOC have set targets for the voluntary completion of EPRs by employers. But, in the view of the EOC, the latest survey results show that the 'voluntary approach to EPRs is failing'. The EOC now wants to see 'fresh action to kick start change', including:

  • a modernisation of the UK’s 30-year-old pay and sex discrimination laws to require private sector employers to take action to close the pay gap. This would mirror the new 'gender equality duty' for public sector employers which the government is currently introducing through the Equality Bill;
  • a 'light touch equality check' in which employers would take an overall look to see whether they had a pay gap and to identify where action might be needed. A full EPR would only be needed where there was evidence of pay discrimination; and
  • an amnesty period for employers while they take steps to change their pay systems.

Jenny Watson, chair of the EOC, commented: 'The pay gap will never close until employers check whether they have a problem and [this] research shows that still too few employers do this'.

Reacting to the EOC report, Susan Anderson, director of human resources policy at the Confederation of British Industry (CBI) said that employers are 'committed to equality in the workplace' but that mandatory equal pay audits are 'cumbersome and resource-intensive' and 'are not the answer to tackling the gender pay gap'. She said that the CBI’s own research suggested that the government’s target that 45% of large organisations should have carried out an EPR by 2008 'will be met'. Moreover, 'nine out of ten organisations conducting pay reviews have found no cause for concern'. But pay reviews 'do not address the underlying causes of the pay gap which employers are already tackling through flexible working, by promoting women into senior positions, and by encouraging young women into better paid careers traditionally dominated by men'.

In response to the EOC research, the Transport and General Workers’ Union (TGWU) reiterated its call for 'mandatory equal pay audits'. Diana Holland, the union’s national organiser for women race and equalities said that the TGWU '[shared] the concern of the EOC at the lack of equal pay audits, particularly in the private sector'. She added: 'Audits turn paper rights into equal pay. In our experience this benefits both workers and employers.' The Trades Union Congress (TUC) also supports compulsory EPRs.

The Women and Work Commission, the government taskforce set up to look at the pay gap between men and women, is due to publish its recommendations early in 2006.

This information is made available through the European Industrial Relations Observatory (EIRO), as a service to users of the EIROnline database. EIRO is a project of the European Foundation for the Improvement of Living and Working Conditions. However, this information has been neither edited nor approved by the Foundation, which means that it is not responsible for its content and accuracy. This is the responsibility of the EIRO national centre that originated/provided the information. For details see the "About this record" information in this record.

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