The long and winding road to equal pay

Sheila Fahy

Back in the day when the likes of Status Quo hit the charts with “Down Down” and Slade’s “Merry Christmas Everybody” took the prized number one slot during the festive period, women’s aspirations were also in the hit parade. Their dream was that their pay would go “Up Up” to level out with those of their male colleagues. The landmark Equal Pay Act 1970 was introduced in December 1975 to do just that. Almost 40 years later, the gender pay gap persists at 15.7% (according to official ONS 2013 statistics), even though the overall trend is a narrowing gap. Why has equality not been achieved in almost two generations?

It’s a big question indeed. My guess is that legislation can go some way to socially engineer change but that the real game changer is winning the hearts and minds of the decision-makers. And that takes a lot of time given that the gender balance of many of the decision-makers and leaders of businesses is less than ideal.

Only this week, we were cogitating about the legal nuances of whether shared parental leave pay should be enhanced for fathers if maternity pay is enhanced for mothers. The law on sex discrimination on this point is grey and in a state of flux, leaving the field wide open to make real equality choices that make a difference. But why are we debating it at all? Isn’t equal pay for both men and women the dream? Perhaps the issue is still on the agenda because it’s the one area where women get a “leg-up” in terms of pay, and we are reluctant to relinquish it. Or is because deep down we think the task of child-rearing and caring is probably best placed in the hands of women? At the moment, the law is hanging on by a thread to the philosophical belief that maternity leave is intrinsically linked to the biological condition of childbirth. This means that fathers will have difficulty arguing that failing to enhance their shared parental leave amounts to sex discrimination. Surely same-sex parenting, adoption and surrogacy challenge this received wisdom over time…

And that brings me back to legislation and the role it can play in gender pay equality. On 1 October 2014, the concept of mandatory equal pay audits is being woken from hibernation, having been dormant in the Equality Act 2010 for several years. In future, a tribunal must order an audit when an employer loses an equal pay claim in relation to either contractual or discretionary pay. Although drafted as a mandatory penalty, there are get-out-of-jail cards for employers. For example, if an equal pay audit has been conducted within the last three years, or there are transparent pay systems in place already, or, perhaps, the inequality was a one-off rather than institutionalised, the tribunal might be dissuaded from ordering an audit. If not, the audit (which will be checked by the tribunal to see if it complies with strict requirements) needs to be published on the employer’s website and remain there for three years.

The threat of being forced to conduct an equal pay audit on the tribunal’s terms together with the nightmare scenario of having to wash dirty linen in public is encouraging employers to consider taking pre-emptive action now in order to minimise these risks. Claimants will be aware of the sword of Damocles hanging over their employer’s head, and may use this advantage to secure higher settlements.

It will be interesting to see in ten years if the equal pay audit rules contribute to the narrowing of the gender pay gap. Or will it be another case of “some things never change”? I’d be happy to bet that Slade (and Status Quo) will still be in the charts, singing with all their hearts, “Look to the future now,
it’s only just begun…”

Comments published on Employment Talk do not necessarily reflect the views of Allen & Overy.

Read comments below or add a comment
  1. Hans-Peter Löw says:

    This is not a specific UK phenomenon. The German legislator is also determined to play a strong role in gender pay equality. German Government is preparing an act according to which companies with at least 500 employees have to report about gender pay equality in their annual accounts according to specified criteria. Based on this report the individual employee shall be entitled to ask for specific information. Based on this information she may either find her own compensation ok or raise a gender equality claim against the employer.

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