Justice scales tip amid failing gender pay gulf

Despite decades of progress, the latest figures suggest that gender inequality persists. Causes include the sex stereotyping of occupations and the lack of part-time jobs at a senior level

Eighty years ago the courts held that it was unlawful and ‘eccentric’ for a London Borough to pay the same to men and women for the same work. Since then we have come a long way. The Equal Pay Act 1970 made it unlawful to pay men and women differently for broadly similar work or for work rated as equivalent under a job evaluation scheme and, after changes in 1983, to pay them differently for work of equal value.

Nevertheless, the latest figures suggest that gender inequality persists. For those working full-time, women’s hourly earnings were 17% less than men’s on average in April 2006. The Equal Opportunities Commission (EOC) calculates that this translates into a loss of around £330,000 over a woman’s working life.

The gender pay gap was 29% thirty years ago and so at this snail’s pace the gap will not be closed for at least a generation. This has led to much metaphorical hand wringing: three reports to government in the last five years alone into the causes of gender inequality, along with copious academic research. The causes highlighted include the sex stereotyping of occupations, the lack of part-time jobs at senior levels, the long hours culture in many organisations and the limitations of the equal pay legislation. This legislation is individualistic. Class actions are not permitted unlike in the US and the equal value procedure is expensive and time consuming, so, in effect, to bring a case individuals must be supported by their union or no-win-no-fee lawyers.

This has been happening, principally in local government and the National Health Service. The number of equal pay claims lodged has mushroomed – from 6,586 in 2000-01 to 17,268 in 2005-6. Moreover, equal pay judgments from the appellate courts and the European Court of Justice (ECJ) continue apace, often muddying the waters further. The most recent is the ECJ’s decision in Cadman v Health & Safety Executive on seniority-based pay systems which, it was held, can be challenged where there are ‘serious doubts’ as to their appropriateness. This is likely to give rise to yet more jurisprudence delineating what comprises ‘serious doubts’.

So how can prudent employers guard against the increasing numbers of equal pay claims, bearing in mind that a successful claimant may receive back pay for six years (five in Scotland)? They should ensure that there is a structured pay system, preferably one based on an analytical job evaluation scheme designed with equal pay principles in mind and that an employee’s pay increase does not depend on the discretion of a single manager. They should also examine high-risk areas such as starting salaries, bonus payments, performance-related pay and seniority-based pay systems. From time to time, they should also make spot checks and, if these reveal potential problems, carry out a full equal pay audit.

The EOC recommends a five-step equal pay review or audit, as set out in the Code of Practice. This involves collecting data to establish the causes of any significant pay gaps and developing an equal pay action plan and monitoring process. Equal pay audits, however, are time consuming and most private sector employers have not undertaken them, but this may change soon.

A ‘gender equality duty’ comes into force in April 2007. This will apply both to public bodies and to private sector and voluntary/charity organisations that tender for contracts with public sector authorities to provide services and goods (even stationery or room hire). The duty requires organisations actively to promote gender pay equality which, the EOC argues, can best be fulfilled by an equal pay audit. So, although there will be no legal compulsion for private sector employers to carry out an equal pay audit (nor is there likely to be in the foreseeable future), in practice many more than now will probably do so.

In short, we have come a long way in the last eighty years, but there is further to go.

Susan Corby, reader in employment relations, University of Greenwich