Time for an equal pay amnesty

Amid employers' reluctance to carry out reviews, Richard Kenyon looks at ways of bridging the equal pay gap without the delay of litigation

Women earn less than men.

After nearly three decades of equal pay legislation and the best efforts of the Equal Opportunities Commission (EOC), the gap in the average earnings between men and women in full time work remains 19%, a level that has not changed since the mid-1990s.

This widens to 25% on weekly earnings because men work longer hours than women on average and are more likely to receive overtime.

The gap widens again to 41% between the average earnings of women working part-time and men working full-time, a gap that has barely changed since the Equal Pay Act came into force in 1975.

Equal pay is at least back in the spotlight.

A questionnaire procedure was introduced at the beginning of April to give employees a lever, if not an absolute right, to access information about their employer's pay structure.

The Kingsmill Report and the EOC's equal pay taskforce have added fresh analysis of the equal pay problem.

It identified the main causes as pay discrimination, occupational segregation and the unequal impact of caring responsibilities.

The EOC calculates that 50% of the problem results from pay discrimination.

The recommended tool for implementing equal pay is for each employer to carry out an equal pay review.

While such reviews cannot solve all of the contributory factors, they can make a significant difference to pay discrimination.

Central government has led the way in implementing equal pay reviews.

Progress has been less enthusiastic in the private sector.

Recent EOC research showed that only 18% of large employers and 10% of medium-sized employers have completed or are carrying out an equal pay review.

Some 54% of large and 67% of medium-sized employers had no intention of carrying out an equal pay review.

And why would they? An equal pay review is not compulsory, and is likely to be time-consuming and costly and have an uncertain outcome.

In the process, discoverable documents will be created which may be used against the employer in tribunal proceedings.

Where inequality is found, each affected employee can claim up to six years' lost back pay.

Such claims are almost inevitable if employers take up the EOC suggestion of including union representatives on review teams.

The moral argument for carrying out an equal pay review is self-evident.

However, the economic arguments put to employers are largely specious.

Arguments that employees will be better motivated and productive are used to justify everything from family-friendly policies to upgrading the office drinks machine.

The threat of legal claims is also largely exaggerated.

ACAS dealt with only 2,614 equal pay related cases in 2001/2002, compared to 52,000 unfair dismissal cases.

Of those 619 were settled, 969 were withdrawn and only 264 went to a tribunal hearing.

Few employees have the resolve, determination and support to institute complex legal proceedings that may take years to resolve.

The real problem is that the current legislation is all stick and no carrot.

The financial threat of not carrying out an equal pay review is insufficient to get over the double obstacle of employers assuming that they do not have a problem and fearing that if they look, they might find one.

Even if the government made equal pay reviews compulsory, employers are still likely to err on the side of financial caution at every difficult question in the analysis.Perhaps we should wait and continue to let individuals push forward the cause of equal pay using the new questionnaire procedure.

However, if the gender pay gap does not start to close quickly, it may be time to look at incentives for employers.

Firearms amnesties deliver to the police considerably more weapons than the fear of prosecution for possession.

That approach is not free from criticism but it may be time to ask whether some kind of financial incentive or amnesty for those employers that voluntarily submit to independent equal pay reviews might help deliver equal pay faster than litigation.

Richard Kenyon is a partner specialising in employment and equality at City-based law firm Field Fisher Waterhouse