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Moving towards greater equality, can we speed up equal pay?

Category: Industry News, diversity, equality

Moving towards greater equality, can we speed up equal pay?

Three-pronged approach may be effective in increasing women’s prominence in the workplace

According to a story in the Independent newspaper recently, it would take women more than 60 years to achieve financial equality with men, even though legislation intended to bring this about (in the shape of the Equal Pay Act 1974 and its successor the Equality Act 2010) has been in force for 40 years.

However, a number of recent developments indicate that the political will to encourage women’s participation in the workforce, including at executive level, has not gone away.

Equal Pay

From 1 October 2014, employment tribunals can order employers that have breached the equal pay legislation to conduct an equal pay audit. Although this is a time consuming and complex exercise, it is questionable whether the risk of such an order would prevent an employer from paying women a lower salary, particularly if the organisation believes (rightly or wrongly) that the pay disparity is justifiable on experience or skill grounds. Also, a fine with a cap of £5,000 for non-compliance, followed by a further fine of a maximum of £5,000, is not likely to act as a serious deterrent to most corporations. However, the audit results will be published, unless there are legal reasons not to do so, and this may be more effective in changing behaviour as the risk of reputational damage is often one of the most influential factors for companies.

Shared parental leave

New provisions for sharing leave and pay between parents are expected to come into force I December 2014 and will be available for parents of children born or adopted on or after 5 April 2015. The shared parental leave provisions are designed to allow maternity and adoption leave arrangements to be flexible and to encourage fathers to be more involved in the care of the child. The provisions should allow women in senior positions to return to work much earlier if they wish to do so, as their partners will be able to “use up” their leave and statutory pay entitlements. So having a new baby should be less of a barrier to women trying to juggle the demands of motherhood with a demanding career.The government hopes that over time this will introduce a significant cultural shift in the way in which businesses view childcare arrangements and the role of women as the primary carer. It is likely to take some time before this shift happens, particularly looking at the time equal pay legislation has been in force and yet there is still disparity in pay between men and women, and it is not clear how popular shared parental leave will turn out to be - many commentators are anticipating a minimal uptake of the new rights.

Women on boards

 In 2011 the Davies review set a target of achieving 25 per cent women on FTSE 100 boards by 2015. A code of conduct was produced to help executive search firms encourage their clients to promote gender diversity on company boards. This year Charlotte Sweeney carried out a review of the code’s success. She found that women now account for 20.4 per cent of corporate board members, up from 19 per cent in 2013, 12.4 per cent in 2010 and 9.4 per cent in 2004. However, Sweeney also found that the code was taken more seriously by some search firms than others. Accordingly an enhanced code was published on 1 July, containing 10 new provisions to encourage firms to help disseminate best practice, raise awareness of gender imbalance issues, and increase transparency over board appointments.

While each of these legislative provisions on its own may not be able to change attitudes regarding female and male employees in the workforce, taken together they may well be effective in pushing employers and employees a step closer towards the equality of opportunity envisaged in the 1970s.

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VERCIDA works with over one hundred clients who are committed to creating an inclusive work environment. If you are an employer and interested in working with VERCIDA to promote your diversity and inclusion initiatives and attract the best candidates, please email [email protected] for more information.

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