UPDATE: the EHRC has emailed in their response to the Guardian article, which they’ve sent as a letter to the newspaper. I’ve cut & paste it at the end of this post…
The Equalities and Human Rights Commission is poised to recommend government should not introduce pay audits, on the basis that it’s too much to ask companies to do in a recession, reports the Guardian.
The Equal Opportunities Commission, the body which preceded the EHRC, had recommended that companies should carry out equal pay reviews as a first step to addressing disparities. But the EHRC does not want pay reviews to be in the equalities bill, due to be published next month. “They can be a helpful diagnostic tool, but they are not the whole answer. I think we do need to be realistic about the economic climate,” Brewer said.
Pay audits are unpopular with businesses both because they are expensive and because revelations of pay disparities often unleash legal action by women who had not realised they were underpaid.
Then there’s this:
Summarising the strategy, the chief executive of the EHRC, Nicola Brewer, said an entirely new equal pay act was needed, and called for “radical reform in the future.” This would be a long-term exercise, requiring several years of work. More immediately, the commission’s approach is based on “encouraging” companies to improve their record voluntarily.
I do think that an equal pay act is needed (although what’s it going to have in it? Especially if pay audits are out?). And I can understand that the experience in the public sector demonstrates that pay audits can be expensive business for employers, as they uncover and are forced to confront and compensate for the endemic discrimination in their pay structures. But, is that a good reason not to do it? And isn’t EHRC is effectively saying, there’s a recession on, women should hold our horses and suck up unfair pay for the good of the nation? Isn’t the EHRC the body which is meant to be campaigning on women’s behalf? Can’t they leave it to the CBI to argue on business’ behalf? The Guardian story reports that the government may have already dropped the idea of pay audits at the CBI’s request; they already have massive influence. Don’t we need to be stepping up action on issues relating to work and pay, at this time, when it could all too easily fall off the radar, rather than giving in in advance?
The flip side to this is that the recession is a potential pressure point, at which we can demand change in the way the economy functions. What kind of economy do we want to emerge from this crisis? A replication of what’s gone before? Isn’t this arguably a good time for company’s to reassess their pay structures, to make them fairer?
Earlier this year, the Chartered Institute of Personnel and Development said exactly that:
Charles Cotton, CIPD’s reward adviser, said, “There are clear business benefits to conducting Equal Pay Reviews (EPRs), but there is a lack of understanding amongst employers as to what those benefits are.
“Particularly, in economic conditions such as these, it is crucial that employers can see how linking employee contribution to pay ensures they are not wasting limited financial resources.”
Meanwhile, a study in Austria in 2001 found that setting contracts on a transparent ‘equal pay for equal work’ basis caused an increase in performance of 29%.
More from the Guardian:
The focus on what is realistic in the light of the recession dismayed campaigners for women’s rights. “We must not get caught in this trap of saying in difficult times we will trade in women’s rights,” said Katherine Rake, director of the Fawcett Society.
Sarah Veale, head of the equality department at the TUC, said pay audits were “a crucial part” of eliminating the pay gap. “Until companies are forced to shine a light on where the anomalies are, you can’t address the problem,” she said.
Bronwyn McKenna, a director of Unison, said she was “very sceptical about any measure that doesn’t actually compel any employers to do an audit”. “The voluntary approach simply hasn’t worked,” she said.
Here’s Fawcett’s proposals on how to close the pay gap:
Mandatory pay audits for all organisations.
The Government to set dates for finally closing the pay gap
Full sign-up to EU law restricting working hours, so that those with caring responsibilities can better balance work and home.
More flexible working at all levels, so that part-time work, doesn’t have to mean low-paid work
Allow equal pay cases to be brought by group action so individuals don’t have to go out on a limb. Enable ethnic minority women who have experienced ‘double discrimination’ to bring a case on more than one ground.
Commission’s response to today’s article in the Guardian:
For the avoidance of any doubt, I would like make it clear that the
Commission does not believe that ‘equal pay is a step too far in the
recession’ (The Guardian, 16 March). Fairness and a strong economy are
two sides of the same coin, they are not in opposition to one another.
What is true is that we believe that the present approach to achieving
equal pay – the Equal Pay Act – needs radical reform. We need a longer
term approach than simply demanding in law that all businesses above a
certain size carry out a pay audit.
While audits are a useful diagnostic tool, without wider legislative
reform they will simply lead us down a cul-de-sac of a further deluge of
individual claims, without signposting a way out. The tribunal system is
already creaking under the weight of a 500 per cent rise in equal pay
claims in the last four years, and the key problem with the current system
is that it provides no other alternative to tackle unequal pay other than
for the ‘victim’ to seek redress through often lengthy and costly tribunal
claims. Some women are dying waiting for justice.
What we need is more ambitious – a root and branch review which looks at
the type of information the public and private sector should publish on
pay, how much of that should be enforceable in law and how other measures
such as an ability for transitional arrangements (where pay gaps are
gradually reduced without being derailed by litigation) can help.
What we hope the Equality Bill can do now is push for representative
actions, a higher degree of transparency, an ending of gagging clauses, and
empower employment tribunals to make wider recommendations on pay.
Calling for immediate mandatory audits on their own are not the answer to
a complex and decades old problem.
Chief Executive, Equality and Human Rights Commission