Equality Bill targets gender pay gap

In April 2009, the government introduced an Equality Bill which, as well as harmonising existing equality legislation, proposes new measures including mandatory gender pay reporting requirements if employers fail to do this voluntarily. Employer organisations criticised the pay reporting proposal, whereas trade unions expressed disappointment that the government had not taken bolder steps to close the gender pay gap.

On 24 April 2009, the government introduced an Equality Bill (UK0807059I) in the House of Commons. A ‘second reading’ debate took place on 11 May and the legislation now proceeds to its ‘committee stage’ where it will undergo detailed scrutiny.

Key provisions

The bill has two main purposes: to harmonise discrimination law and to ‘strengthen the law to support progress on equality’. It will bring together and re-state the requirements of current anti-discrimination legislation, harmonising existing provisions to establish a unified approach where appropriate. Most of the current legislation will be repealed.

The Equality Bill will strengthen the law in a number of areas. In the employment sphere it will, among other things:

• extend the circumstances in which a person is protected against discrimination, harassment or victimisation because of a protected characteristic (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, gender and sexual orientation);
• create a single ‘equality duty’ which will require public bodies to consider the diverse needs of their workforce when developing employment policies;
• allow an employer to take positive action to enable employees to overcome or minimise a disadvantage arising from a protected characteristic;
• enable an employment tribunal to recommend to an employer who has lost a discrimination case to take steps to remedy matters not just for the benefit of the claimant but also the wider workforce.

Pay equality

The Equality Bill’s approach to pay equality attracted particular attention. The legislation includes new provisions which will:

• protect employees who discuss their pay with colleagues with a view to finding out if differences exist that relate to a protected characteristic. Any action taken against them by their employer for doing so will be treated as victimisation. ‘Secrecy clauses’ in employment terms that prevent workers from disclosing their pay to colleagues will be unenforceable;
• enable the government to make regulations requiring employers with at least 250 employees to publish information about differences in the pay of male and female employees. This requirement is likely to apply annually. Employers who do not comply could face civil enforcement procedures or a fine of up to GBP 5,000 (€5,610 as at 15 May 2009).

The first of these provisions is intended to ensure greater transparency and dialogue within workplaces about equal pay. As regards the second provision, the government wants the extent of the gender pay gap – the difference between men’s and women’s pay expressed as a percentage – existing in large private sector organisations to be put in the public domain. The government hopes that employers will publish such information voluntarily. To give voluntary arrangements time to work, the government has indicated that it will not make regulations under this power before April 2013, and that the law would be used only if sufficient progress on reporting had not been made.

Social partner reactions

The Confederation of British Industry (CBI) welcomed most aspects of the Equality Bill but warned that requiring companies to publish pay data by gender could ‘backfire’. CBI’s Director of Employment Policy, Katja Hall, said: ‘Companies that have too few women in higher paid roles, and are trying to attract more, could be forced to publish a statistic that would deter female applicants and compound the problem.’ She added: ‘The gender pay gap can be misinterpreted. It does not compare men and women doing the same job. It reflects the fact that fewer women have higher paid jobs and the way to address that is not by comparing misleading average pay rates, but by improving opportunities for women via better childcare and careers advice.’

The General Secretary of the Trades Union Congress (TUC), Brendan Barber, commented that, by publishing the Equality Bill, ministers had shown ‘courage in defying the business lobbyists who say that equality doesn’t matter in a recession’. The TUC was ‘disappointed’ that the government had not taken ‘bolder steps to close the pay gap, particularly in the private sector where it stands at over 20%’. However, the TUC welcomed the opportunity to work with the CBI and the Equality and Human Rights Commission in developing the proposed gender pay reporting requirements.

Mark Hall, IRRU, University of Warwick