New rules on equal pay audits won’t close the gap

New rules on equal pay audits won’t close the gap

New regulations on equal pay audits will have virtually no impact on the pay gap between men and women, Prospect has warned.

From 1 October 2014, employment tribunals will have the power to order an employer who has lost an equal pay claim to undertake an equal pay audit.

The audit must:

  • evaluate the employer’s pay and reward systems, so that it can identify action to prevent the continuation or recurrence of equal pay law breaches 
  • identify any differences in pay, whether contractual or not, between women and men doing the same or equal work
  • include an action plan for eliminating differences due to gender.

Nick Boles, minister for skills, enterprise and equalities said the government estimated that “an average of two or three equal pay claims a year are likely to result in the imposition of an equal pay audit order”.

But Prospect legal officer, Marion Scovell said: “The new provisions are likely to have extremely limited effect. Prospect has long argued that all employers should be required to carry out equal pay audits on a regular basis.

“The new rules fall very short of this and based on the government’s own figures, the power is only likely to be used in a tiny number of cases.”

Prospect has produced a short briefing on the regulations.

Access to tribunals

A Westminster parliamentary committee debated the new regulations in September. Labour MP, Stella Creasy said while Labour supported the legislation, it would be hampered by the introduction of fees to bring a claim to an employment tribunal.

Equal pay claims were down 84% in the past year, she pointed out.

“We are concerned that it will be harder, not easier, for people to get to a tribunal at all to challenge this sort of behaviour. We know that the number of tribunals has fallen by four fifths since the government introduced fees for tribunals,” she said.

She also asked Boles if he was “concerned that the regulations, which will bring in the potential measure to seek equal pay, will be beyond the reach of many of the women they are designed to help”.

Boles said he accepted “that we have a communication job to do to reassure women that it is still worth taking these cases to tribunals, if they have strong evidence of equal pay rules being broken”.

“While the overall intent of tribunal fees has been positive, there could be some unintended consequences, and we will keep that under close review. If she has any evidence of that actually happening and leading to fewer such cases being taken to tribunals, I hope she will bring it to us,” he added.

Think, Act, Report programme

In 2011, the government launched a voluntary framework to help companies think about gender equality in their workforces, particularly in relation to recruitment, retention, promotion and pay.

Creasy pointed out that although 200 companies have signed up to the programme, only four have actually published their pay gaps.

Annual Survey of Hourly Earnings

The latest Annual Survey of Hourly Earnings, produced by the Office of National Statistics, found the average gap in pay between women and men had increased.

Comparing mean hourly earnings (excluding overtime), the gender pay gap grew from 14.8 per cent in 2012 to 15.7 per cent in 2013, said the Fawcett Society.