News - What to look out for in equal pay from our next generation: Gender Pay Gap reporting

Employment & Discrimination - Alex Shellum

By Alex Shellum.

I will be watching out for the latest Gender Pay Gap data, the reporting of which represents a more recent legislative measure introduced to assist in the effort to eliminate sex discrimination in relation to pay. With the deadlines fast approaching for employers to publish their data, 31 March 2020 for public sector organisations and 5 April 2020 for businesses and charities, we will soon have a good idea of how well employers are doing in narrowing their Gender Pay Gap. It looks as though it could be a mixed bag, however, with the gap widening in no fewer than four of the government departments which have already reported (the Department for International Trade, Home Office, Ministry of Justice and the Foreign and Commonwealth Office).

2020 will be the third year in which organisations with over 250 employees will be required to publish their Gender Pay Gap data which, broadly speaking, is the difference between the average earnings of men and women across a single organisation over a period of time. Unlike Equal Pay law, therefore, which focuses on ensuring that those doing equal work (like work, work of equal value, or work rated as equivalent under a job evaluation study) are paid the same regardless of sex, the Gender Pay Gap aims at capturing pay differences between men and woman at a broader level within an organisation.

Gender Pay Gap reporting, rather than trying to compare the pay of employees doing particular jobs, seeks to give a measure of the inequality in pay between men and women across an organisation. For example, an organisation in which most senior roles are occupied by men and most junior roles by women will have a Gender Pay Gap. In that sense, Gender Pay Gap reporting shines a light on broader societal factors or other forms of discrimination which may impact differences between the pay of men and women which Equal Pay litigation cannot reach, such as a failure to promote women within organisations or a lack of women entering certain well-paid industries. Of course, there is a link between the two concepts, and large-scale Equal Pay settlements, such as the one agreed in 2015 (predating Gender Pay Gap reporting) between Fife Council and 1,400 of its low paid workers,  in which Melanie Tether acted, necessarily serve to narrow the Gender Pay Gap of a given organisation.

Gender Pay Gap reporting, however, is not a panacea. It imposes no obligations on reporting organisations to take any action in respect of their data and, to the extent that an organisation’s Gender Pay Gap is driven by societal factors, there is a limit to what individual employers can do even if they are inclined to act. Moreover, the fact that the reporting obligation only applies to organisations with more than 250 employees means that the shining light of Gender Pay Gap reporting fails to reach large chunks of the workforce.

Ultimately, the value of Gender Pay Gap reporting is not the single median figure so often published – the value is in the investigative analysis organisations may undertake to introspectively understand the key drivers of their data.  For some organisations a high Gender Pay Gap reflects a high attrition rate for women before they reach senior leadership roles, which could be improved through the adoption of more inclusive workplace policies such as flexible working and competitive maternity packages. For sectors such as the airline industry, the high Gender Pay Gap reflects the difference in earnings between predominantly male pilots and predominantly female cabin crew, which could demonstrate the need for the airline industry to engage proactively with schools and universities to challenge gendered views of careers in aviation.

Gender Pay Gap reporting is not the answer to unequal pay in the workplace, but it is a meaningful step towards improving collective understanding of both organisational and societal drivers of gendered pay. Therefore, all things considered, the introduction of mandatory Gender Pay Gap reporting is a soft but welcome addition to the ways in which the law seeks to eliminate how sex discrimination in various guises may contribute to inequalities in pay, first enshrined 50 years ago with the passage of the Equal Pay Act 1970, and I will be watching out over the next 12 month to see how employers have taken to the task of narrowing their Gender Pay Gap.

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