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London’s gender pay gap worst in the UK

The Office for National Statistics published data this week that shows London as a region has the widest gender pay gap in the UK. Currently, women working full-time in London earn 14.6 per cent less than their male colleagues. In the past twenty years the gap has narrowed only slightly from 15.1 per cent. In contrast, during this same period the pay gap in Wales and Scotland has gone from 17.5 per cent and 18.4 per cent to 6.3 per cent and 6.6. per cent respectively.

Among part-time workers however, women on average earn more than their male counterparts. The gap is narrowest in the South-East where women earn 3.1 per cent per hour more than men. This is down from 1997 when women typically earned 9 per cent more, indicating that men’s wages have grown quicker in this area.

The variation for part time workers in both the public and private sector is stark. In 1997 women working part-time in the public sector earned 6.1 per cent less. This gap has now widened to 22.3 per cent. The position has in fact reversed in the private sector where women earned 2.2. per cent less than men two decades ago and now earn 2.6 per cent more.

Although the gender pay gap reporting obligations introduced this year are certainly a step in the right direction, these latest statistics show that much work is still needed if the gender pay imbalance is to be improved in London and throughout the UK.

London’s gender pay gap worst in the UK

Publication of gender pay details

To date most companies have been slow to release details of their gender pay gap with only 176 companies publishing their data.

With some 8,800 yet to reveal their figures, Theresa May has called for more companies to report on their gender pay gap to address the inequality in the workplace. She said that, “the gender pay gap isn’t going to close on its own” and that “we all need to be taking sustained action to make sure we address this.” Nevertheless, the only Government Department to have so far published their figures is the Department for Education which has a gap of 5.9%.

So far a handful of City businesses have published details of their gender pay gap and the results are as anticipated with reported median gaps of between 24% and 35.7%.

The Prime Minister’s announcement comes in the wake of a report, published by the World Economic Forum, which showed that the UK has dropped from a ranking of 9th in the world to 15th in respect of its gender gap. This ranking comes after a study from the Chartered Management Institute which showed a 27% pay gap among the UK’s 3.3 million managers, where men outnumber women three to one.

While the gender pay gap reporting obligations are an important step in the right direction, it seems that much work is still needed to reduce the gender pay imbalance in the UK.

Publication of gender pay details

Landmark legal battle that could prevent women earning less than men in the UK

The latest hearing in the UK's largest ever private sector equal pay claim is due to kick off today, in a case that could eventually see around 15,000 predominantly female Asda workers recovering well over £100m in pay.
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Landmark legal battle that could prevent women earning less than men in the UK

Ethnicity Facts and Figures

On Tuesday 10 October 2017, the Government launched a new website – Ethnicity Facts and Figures – the aim of which is to challenge society to “explain or change” disparities in how people from different ethnic backgrounds are treated.
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Ethnicity Facts and Figures

EAT finds that Asda retail store workers are comparable to higher paid distribution workers

The EAT upheld the previous Tribunal ruling that female employees who work in Asda's retail stores are entitled to compare their work to that of the higher paid male employees that work in its distribution centres. The EAT agreed that the value of work between these two groups of staff is of equal value and, therefore, that their pay should be comparable.
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EAT finds that Asda retail store workers are comparable to higher paid distribution workers

Can employees doing different work bring their equal pay claims on the same claim form?

In the recent decision of Farmah & ors v. Birmingham City Council & ors, the EAT held that claimants could not bring equal pay claims on the same ET1 form where they were carrying out different work. Rule 9 of the Employment Tribunal Rules 2013 (the Rules) states that two or more claimants “may make their claims on the same claim form if their claims are based on the same set of facts”.

Three of the appellants were retail staff doing different jobs in supermarkets and claiming that they were performing equal work to men working in distribution centres. The women all included their claims in the same claim form. Some of the affected men argued in the same ET1 that, if the women were successful, they did equal work with the female claimants. The remaining two appellants undertook different jobs in local government and claimed their work was equal to that of men performing a variety of jobs. The respondents argued that the claims should be struck out on the basis that they did not comply with Rule 9 of the Rules.

The EAT found the fact that the claimants were performing different work and, even if based on the same comparator, did not satisfy the definition under Rule 9 of the Rules. Therefore, the use of a single claim form was in breach of Rule 9. Under Rule 6 of the Rules, wrongly including claims by two or more claimants in the same claim form is an irregularity and the Tribunal is a permitted to “take such action as it considers just” as a consequence, up to and including striking out the claims.

The full case report can be found here: Farmah & ors v Birmingham City Council & ors.

Can employees doing different work bring their equal pay claims on the same claim form?

The irregular thing about the Gender Pay Regulations…

As reported in our article “It’s all change in employment law in April…”, private employers with 250 employees or more should have collated their relevant data on the first annual “snapshot date”, on 5 April 2017. These employers must publish their calculations by 4 April 2018. Public employers’ “snapshot date” was 31 March 2017 and they must publish their calculations by 23 March 2018.

However, now that the process of calculating the key pieces of information has begun, many employers are realising that their figures reveal a significant (and often unexpected) pay gap. While the aim of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (the Regulations) is to address the UK’s gender pay gap, the reality behind the figures published will not always paint an accurate picture. The figures may demonstrate a demographic gap, rather than an equal pay gap. For example, the cause of a gender pay gap may be the result of a greater distribution of men in higher paid roles, rather than a disparity in equal pay. However, just because data reveals a demographic gap, it does not mean that this is not something which the government is trying to address. The Regulations attempt to deal with this issue through the inclusion of quartile calculations.

Where employers’ data reveals that there is a gender pay gap, many employers will assert that they pay their employees in a non-discriminatory manner and try to justify the disparity as being a result of the workforce demographic. However, even where employees receive equal pay, the results do not remove the risk that there are other discriminatory factors causing the disparity. For example, while an employer’s pay gap may be a product of how its workforce is spread across the business, this might be a result of discrimination on a different level, such as against females applying for senior positions. Alternatively, there may be other sufficient reasons for a gender pay gap, such as a shortage of qualified men or women in a certain industry. Therefore, the calculations may go a long way to emphasise the issues that companies continue to face and could provide an impetus on employers to deliver a solution.

This is where the optional narrative can be an important element of employers’ publishing obligations. This is an opportunity for employers to provide a commentary on the figures published and pacify any reputational risk that might arise from publishing the headline figures alone. It is quickly becoming more widely understood that the Regulations do not in fact deal with equal pay but this does not mean that the government is not taking steps to tackle other factors that are causing a gender pay gap. Therefore, employers have the opportunity to use their narratives to acknowledge the issues they continue to face and offer a way forward to improve these problems in conjunction with the government’s efforts. By doing so, any pay gap may be explicable and employers can be seen to be responding to the results proactively. This in turn might potentially minimise the risk of adverse publicity or internal grievances raised by employees.

The irregular thing about the Gender Pay Regulations…

New ACAS Guidance on gender pay reporting

With the commencement of the gender pay reporting obligations in April, ACAS have provided a helpful summary (as well as more detailed guidance) on the regulations.

By way of brief reminder, the regulations require that employers with 250 or more employees annually publish calculations that show the gender pay gap between their male and female employees. The calculations that need to be published are:

1. Average gender pay gap as a mean average;
2. Average gender pay gap as a median average;
3. Average bonus gender pay gap as a mean average;
4. Average bonus gender pay gap as a median average;
5. Proportion of males receiving a bonus payment and proportion of females receiving a bonus payment; and
6. Proportion of males and females when divided into four groups ordered from lowest to highest.

These calculations must be published (both on the company website and on a government website) within 12 months of the snapshot date (5 April each year). Companies may include a narrative explaining the calculations. This is an opportunity for companies to set out the challenges that they face, the success they’ve had, and/or set out their long terms plans to close the gender pay gap.

For further detail please click here to see our previous article on the revised regulations and click here to see the ACAS Guidance.

New ACAS Guidance on gender pay reporting

Revised draft Equality Act 2010 (Gender Pay Gap Information) Regulations: Key points

The government has published the much anticipated revised version of the draft Equality Act (Gender Pay Gap Information) Regulations. The key points to note are:

  1. The draft Regulations are due to come into force on 6th April 2017.
  2. The snapshot date will now be 5 April each year (rather than 30 April). Gender pay gap information will need to be published within 12 months, meaning that the first reports are due by 4 April 2018.
  3. The definition of “relevant employees” has been clarified and means “a person who is employed by the employer on the relevant snapshot date“. This is to include both workers and employees. There is, however, an exception to the duty to report for employees who are employed under a contract personally to do work where “the employer does not have, and it is not reasonably practicable for the employer to obtain, the data“.
  4. Only “full-pay relevant employees” need to be included when calculating the relevant gender pay gaps. This is to combat the distortion in figures that relevant employees who are being paid at a reduced rate or nil, as a result of being on leave, would cause. Leave includes annual leave, maternity leave, paternity leave, shared parental leave, sick leave and special leave.
  5. The updated Regulations have clarified how “gross hourly pay” should be calculated. This should be calculated by reference to an employee’s normal hours, however where no such normal hours are kept, a 12-week reference period should be used.
  6. There are two points to note in relation to bonus pay:
    1. bonus pay is still to be included in the calculations, however under the revised regulations only the portion of the bonus payment that is proportionate to the relevant pay period should be included when calculating gross hourly pay; and
    2. bonuses paid in the form of securities, securities options and interests in securities are to be treated as paid at the point that they would give rise to taxable earnings.
  7. Quartiles are to contain equal numbers of employees. To create quartiles, employers should rank all relevant employees in order of their hourly pay (low to high) and then divide the employees into four equal groups.
  8. Previously, the Regulations and guidance were silent as to what penalty might be applied in the event of non-compliance. However, the Explanatory Notes now state that a failure to comply with the reporting obligations could constitute an “unlawful act” under the Equality Act 2010. This means that the Equality and Human Rights Commission could take enforcement action.
Revised draft Equality Act 2010 (Gender Pay Gap Information) Regulations: Key points

Insight: UK Employment Law Round-up – November 2016

Employment Round Up THUMBNAIL In this issue we look at a recent Court of Appeal decision focusing on sexual orientation protection following a refusal to bake a cake decorated with a gay rights message. We also look at the rights of breastfeeding mothers at work, and Asda’s equal pay claim case, which may lead to further claims against Asda. We consider Tribunal decisions deciding employment status and rest break rights. We review the importance of having clear guidelines on job descriptions, and proposals to provide an entitlement to bereavement leave. Finally, we give an update on changes to the Immigration Rules.

Read the full newsletter here.

Insight: UK Employment Law Round-up – November 2016