Kate's Comment

Thoughts on British ICT, energy & environment, cloud computing and security from Memset's MD

Equal pay audits & the equality bill

Harriet Harmon’s surprise inclusion of gender pay audits in the equality bill is very welcome, and the concerns over the action are easily dismissed. But what will the bill actually stipulate? I have extracted a few key elements from the summary document: A Fairer Future. The Equality Bill and other action to make equality a reality. (pdf) See below:


Nearly forty years after the Equal Pay Act, the gender pay gap remains at
22.6%. It is higher in the private sector where around 80%9 of all employees
work. The Equality and Human Rights Commission’s inquiry into the
fi nancial services sector has revealed gender pay gaps of up to 60% in
annual gross pay and as much as 79% in annual incentive (bonus) pay.
We cannot tackle pay discrimination if it is hidden. Shining a spotlight on
the problem, workplace by workplace, will help employers and employees
identify the causes and take action.

The private sector

The Bill will contain a power to require reporting on the gender
pay gap by employers with 250 or more employees. However the
Government has committed not to use this power before 2013 and it will
only be used if sufficient progress on reporting has not been made. The
Equality and Human Rights Commission will develop a set of metrics for
gender pay reports in consultation with business, unions and others over
the summer. The Commission will monitor progress on reporting within the
private sector annually.

Another very sensible element is banning secrecy clauses:

Banning secrecy clauses on pay

According to research carried out in 2003 by the former Equal
Opportunities Commission10, 22% of employers did not permit employees
to share pay information with their colleagues and women were more likely
than men to be in the dark about colleagues’ pay.

The Equality Bill will ban pay secrecy or ‘gagging’ clauses which
stop employees discussing their pay with their colleagues.

This does not mean that people will be compelled to disclose their pay
details. But in situations where colleagues work closely together but are
paid different amounts or have different benefits packages, it is right that
they should be able to compare them if they want to.

The bill also encourages positive action:

The Equality Bill will expand the way positive action can be used
so that employers can pick someone for a job from an under-
represented group when they have the choice between two or
more candidates who are equally suitable, provided they do not
have a general policy of doing so in every case.

For example, the new positive action measures could mean:
The board of a bank that is 100% male decides to appoint a woman
when making a choice between two equally suitable candidates.
Choosing a woman will help to address the gender imbalance at the
top, making the management more representative of its customer base,
which is 50% female.

The Bill will not allow positive discrimination, which will remain unlawful.
Positive discrimination means employing or promoting people just because
they are from an under-represented group, even if they are less suitable. The
Equality Bill will not allow this to happen and will not allow employment

All in all, it appears that the bill is sensibly worded in order to address the key issue of pay inequality, which badly affects the IT sector as seen in the women in IT scorecard, and is also not something for businesses to fear.

The IOD’s knee-jerk “it will hurt business, especially SMEs” is totally unjustified:

  1. The pay audit requirement only applies to companies with over 250 staff.
  2. I am an owner-manager of an SME, and I do pay audits already. They are not onerous, and I regard them as a prudent part of good business management anyway.

The other negative reaction from old-school male-dominated business groups like the IOD was that this would force pay rises at a time of recession. There are again two key things they have missed:

  1. You don’t have to do anything until 2013.
  2. It does not require you to pay staff more – just pay the guys less, perhaps? If making redundancies, then fire the expensive people first.

I think that the gender pay gap can be put down principally to one thing: Women, in general, tend to care more about the collective and less about the individual. Testosterone makes people a little more selfish and little less altruistic. Yes, a sweeping generalisation, but I am one of the few people who can speak from personal experience. This means that guys put themselves forwards for promotion and pay rises more than women, who are generally more happy to keep working towards the greater good as a smaller part of the large machine. The equality bill will finally start helping to reward that better, more feminine mentality.


PS. And yes, I will be resigning from my position as vice-chair of the local IOD branch.