PAY DISCRIMINATION
"Complacent" employers told to take action to deal with pay inequality
Despite 25 years of equal pay legislation, women’s hourly earnings are still on average nearly a fifth less than men’s. A new report by the Equal Opportunities Commission reveals that discrimination in pay systems is all too real. Its findings are deeply disturbing.
Few organisations, it seems, have adopted processes which actively target the achievement of equal pay. "Many employers are simply burying their heads in the sand," said Julie Mellor, chair of the EOC.
No fewer than three significant and alarming revelations emerge from this survey of 300-plus large employers.
1. Access to bonuses and performance-related pay
The first revelation concerns women's lack of access to bonuses and performance-related pay. Astonishingly, as many as 13% of respondents admitted that only jobs which are mainly carried out by men receive these payments. "This is despite the fact that this is likely to result in breaches of the equal pay legislation," said the EOC.
2. Pay analyses and reviews
The report's second revelation is that only 35% of respondents had undertaken an analysis of pay by gender. Yet somehow the vast majority of employers — more than nine in ten — claim that their pay systems are fair. The EOC reckons that this misplaced sense of confidence may actually be limiting the amount of action employers are taking to ensure pay polices are fair.
"Some organisations have done very little to promote, monitor or review gender equality of pay, but are nevertheless very confident that their pay systems are fair," said the EOC. The worst culprits were found in manufacturing.
3. Code of Practice
The report's third revelation is that only one in five employers had made "active" use of the EOC's Code of Practice on Equal Pay (see below).
Want to know more?
Title: Gender equality in pay practices, by Judy Morrell, Marcus Boyland, Gabriel Munns, Louise Astbury, NOP Business, published by the Equal Opportunities Commission.
Methodology: The research was carried out by NOP Business in summer 2000. It involved a telephone survey of senior human resource managers in 301 larger organisation (with at least 200 employees); telephone interviews with national trade union officials; and 21 in-depth case studies.
Business sectors: The sample was "equally divided between the manufacturing, private services and public sectors".
Availability: the 90-page report together with an eight-page summary document can be downloaded free of charge in PDF format (you will need the adobe acrobat reader) . . . www.eoc.org.uk/gendernew.pdf
Employers who wish to achieve pay systems free of sex bias would be well advised to study these two documents:
1. The Equal Opportunities Commission’s Code of Practice on Equal Pay
The Code came into effect in 1997 and is admissible as evidence in employment tribunal proceedings. It is a quasi-statutory document; employers are not obliged to follow its recommendations, but an employment tribunal may take account of any failure to do so.
It provides employers with basic guidance on the law and practical advice on how to identify and eliminate sex bias in pay practices.
At the heart of the Code are Commission’s three main recommendations that employers:
adopt an equal pay policy (a suggested wording is provided)
carry out a review of pay systems for sex bias
take action to deal with pay inequality.
There is no legal obligation on employers to carry out a pay systems review or adopt an equal pay policy. These are included in the Code as good practice which is recommended by the EOC.
An internal pay review is "the most appropriate method of ensuring that a pay system delivers equal pay free from sex bias," the EOC says. The Code gives detailed guidance on an eight-stage review process. It looks at the particular elements of a pay system and identifies some of the discriminatory practices that might arise and at ways of addressing them. A system of regular monitoring should be set up to allow checks to be made to reward practices, followed by the drawing up and publication of an equal pay policy.
The Code is available to download free of charge in PDF format (you will need the adobe acrobat reader) . . . www.eoc.org.uk/Eoccofp.pdf
2. Paycheck: auditing pay systems for sex bias — a practical guide
TMS Equality and Diversity Consultants has published a valuable guide, entitled Paycheck, on how to ensure that pay systems are free of discrimination.
Building on the EOC's recommendations, this 110-page loose-leaf guide includes a comprehensive five-stage review process, which moves from an analysis of workforce composition by gender through to the crucial final part: explaining and correcting any difference in pay between men and women.
The trend towards increasingly flexible and variable reward systems may make pay decisions more vulnerable to costly challenges under discrimination legislation. TMS therefore carries sections on "equality-proofing" broadbanded structures, competency-based pay and performance-related awards, with useful checklists highlighting key areas of concern.
Monitoring
When it comes to monitoring, TMS recommends you ask the following questions — if the answer is "no" to any of these, you will need to investigate the practice to ensure it is free from sex discrimination:
Are performance assessments regularly monitored by gender and by various categories of employees such as full/part-time, temporary/casual etc?
Are performance payments regularly monitored by gender etc?
Has the scheme been checked for its impact on women on maternity leave?
Is the exercise of managerial discretion within the performance assessment and pay system monitored by gender?
Availability: Contact TMS in London, tel: 020 7251 3403 or email: tms@equality.tms.uk.com
To find out more, jump to . . . www.tms.uk.com