by Anne Lyne April-14-2016 in Employment Law
Gender pay gap reporting is to become a legal requirement for larger UK companies with proposed regulations due to be implemented later this year. Announcing the changes in July 2015, British Prime Minister David Cameron set out his ambition to “end the gender pay gap in a generation”.
The introduction of the UK legislation has highlighted the issue in this jurisdiction.
What is the gender pay gap?
The European Commission (EC) defines the gender pay gap as the relative difference in the average gross hourly earnings of women compared with men within the economy as a whole.
The latest EC figures show a widening gender pay gap in Ireland - the “unadjusted figure” rose to 14.4% in 2014 from 12.6% in 2008. The EU average was at 16.1 % with every country having a differential. Indeed the EC has summarised that women work “for free” 59 days of the year.
The “unadjusted figure” does not take into account factors other than gender that might account for pay differences. Thematic gender-based issues identified as affecting the pay of women include accessible and affordable childcare, gender stereotyping, the type of work carried out by women, how pay and bonuses are awarded, low numbers of women at senior level, and lack of training.
What is happening in the UK?
The UK is actively seeking to address this issue and has published the Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 on mandatory gender pay gap reporting. It is proposed that UK companies with over 250 employees will have to publish from April 2018 details of gender pay information. This will include not just pay but also bonuses and other benefits.
The data will have to be published on the employers’ website with a link to a government website. The employer will be permitted to give explanations around the data but this is not expected to be required.
It is not envisaged that there will be penalties for non-compliance – this is more a naming and shaming exercise.
It is expected that the final draft of the Regulations will be ready for implementation later this year.
Where does Ireland stand on this issue?
Ireland has had equal pay legislation since the implementation of the Anti-Discrimination Pay Act in 1974. This Act was introduced following our accession to the EU and the principle of equal pay for equal work set out in the 1957 Treaty of Rome. Subsequent legislation has been implemented to seek to protect women’s minimum terms and conditions of employment, including maternity protection, parental leave, protections on grounds of family and marital status, part-time worker protection and the introduction of a minimum wage legislation.
There were however no plans by the previous government to bring in gender pay gap reporting legislation. The current National Women’s Strategy 2007-2016 is drawing to a close and it is something for the Department of Justice and Equality to consider in any new strategy. The Low Pay Commission in examining the issue of “the underlying preponderance of women on the minimum wage” and may address the issue in its report on the matter.
The public sector positive duty set out in the Human Rights and Equality Act 2014 requires public bodies to “have regard to” the need to eliminate discrimination, promote equality of opportunity and protect the human rights of its employees and service users. This section could be used to seek to address the issue in the public sector. There are currently no penalties for non-compliance and it does not appear that there have been any substantive moves in the public sector to address the issue.
Proposals around addressing gender discrimination issues are open to challenge and are likely to attract controversy. This was seen in the recent case of Brian Mohan v Ireland and the Attorney General, 2016 when Mr Mohan unsuccessfully challenged the constitutionality of introducing “gender quotas” for political parties in the national election. The amendment the Electoral Act 1997 required political parties to field a minimum of 30% women candidates or lose 50% of state funding. Mr Mohan argued this impacted on his constitutional rights. His claim was not upheld by the High Court but has been appealed.
Pro-active steps by Irish companies?
It is of course open to employers in Ireland to voluntarily publish information on the gender pay gap. Benefits to reporting may include future-proofing in the event that similar legislation is brought in here or as part of an overall strategy to promote transparency, diversity and equality.
A version of this article appeared in the Sunday Business Post on Sunday 10 April 2016
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About the Author
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Anne Lyne
Anne is a partner in the Employment team at Hayes solicitors. She has considerable experience advising and representing employers and employees on all aspects of the employment relationship from pre-employment matters to termination.