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Most employers and employees will be aware of the requirement on employers with more than 250 employees to publish certain specific information relating to their gender pay gap by 4 April under the terms of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. Many employers have already gone public with their reports and these can be viewed on the Government website https://gender-pay-gap.service.gov.uk/Viewing/search-results..

The big picture is stark. Of the employers who have published data so far 74% have a gender pay gap in favour of men. Analysis by the TUC indicates that the gender pay gap issue effectively means that the average woman has to wait more than two months of the calendar year before she starts to get paid compared to the average man. For many organisations the raw figures will not cast them in a particularly favourable light. In financial services the disparities appear to be particularly marked with Barclays Bank revealing a gender pay gap in mean hourly rates of 48% and a gap of no less than 78.7% in relation to bonuses. The respective gaps for state owned RBS are 37.2% and 64.4%. Before the deadline for first publication of gender pay gap information has even passed however there are pressures to require employers to go further and not just publish their gender pay gap but also to actively address it.  Meanwhile the (Conservative) chair of the Common Treasury Select Committee, Nicky Morgan  writing in the Guardian identifies a number of themes coming out of the committee’s Women in Finance Inquiry including the problem of “alpha male” culture in organisations at senior levels characterised by “winning at all cost rather than doing the rights thing”, sexual comments from male superiors, “old boys club” recruitment practices, the persistent problem of the “motherhood penalty” and the problem of presenteeism whereby performance is judged by visibility rather than output.

So what is to be done? The (Labour) Chair of the Commons Business, Energy and Industrial Strategy Committee, Rachel Reeves has recently published her letter to the Financial Reporting Council (FRC) calling for changes in the corporate governance code to help ensure companies take “concrete action” to tackle the gender pay gap. Reeves askes the FRC to place a requirement on corporate remuneration committees to explain how the proposed company remuneration policy will address any gender pay gap in the company including specification of an action plan with enforcement mechanisms being deployed. A recent report by Oliver Wynan on women in financial services makes a number of recommendations including adoption of family friendly practices, support for women returning to the workforce after having children and the creation of mentorship support for women whereby not just the women participants benefit but male sponsors also gain from gaining an awareness of their own biases.

Finally and more radically the Shadow minister for Women and Equalities, Dawn Butler announced on International Women’s Day that under a Labour Government companies with more than 250 employees will have to report on what specific action they are taking to close their gender pay gaps. If they do not “they will face further auditing and fines”. Moreover it is said that Labour would tackle underlying structural issues that allow disparities to exist including insecurity around self-employment, “exploitative” zero hours contracts, maternity discrimination and the low value put on care, hospitality and public sector work.

Despite the measures being fairly modest in themselves it does appear that the Gender Pay Gap regulations may have unleashed a momentum for significant change in the workplace. The Government's existing commitment is merely to review the regulations within 5 years of commencement.   The gender pay genie may now however be well and truly out of the bottle and the irony is that it may only be the fall of a rare female prime minister that sees the introduction of radical measures to achieve gender pay equality.

If you have any questions about gender pay gap issues please get in touch with a member of the Stronachs Employment Team.

Eric Gilligan, Partner

Chambers UK 2018

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