Welcome to CM Murray LLP. This site uses cookies, read our policy here.

Critics warn that measures forcing firms to reveal gender pay gaps do not go far enough

The shaming of the sexual predator Harvey Weinstein and the courage shown by Carrie Gracie in facing down the BBC over the gender pay gap has given hope to millions of women that they can rid the workplace of sex discrimination.

But history has shown that the battle for women’s equality is a long, hard-fought business with many a slip between cup and lip.

In the case of women’s pay, reports suggest that it will take 200 years before parity is achieved between the sexes.

Recent disclosures of a gender pay gap of more than 15 per cent at Ladbrokes, Easyjet and Virgin Money reveal how challenging the task has become.

Cultural Shift
Maria Miller, chair of the Commons Women and Equalities Select Committee, warns that until “conscious and unconscious” discrimination is eradicated from the workplace, women will not get a fair deal at work.

She told i: “We have got to get rid of this problem sooner rather than later and modernise the workplace, which is still far too reflective of 19th-century practices rather than the 21st century.

“Today a record number of women are at work which means we can’t wait 200 years, we can’t wait 50 years, to have women achieving their potential at work because that will just cripple our country.”

Yet there is a growing sense of optimism that the time is right for a real cultural shift. Women have taken courage from the #metoo movement and the example set by high-profile figures like the BBC’s China editor Carrie Gracie, who said she would rather make the BBC a fairer employer than accept a £45,000 pay rise offered to her by her bosses.

At law firms like CM Murray LLP they are reporting a brisk business in sexual harassment and equal-pay cases. Partner Sarah Chilton says: “We have certainly seen an upturn in both these kinds of cases. Women are becoming more assertive on pay and more willing to speak out about being treated badly or sexually harassed.”

Pay gap reports
The Government hopes the introduction of gender pay gap reporting will force companies to put their own businesses in order by paying women the same as men when they perform equivalent work.

But the new regime only applies to companies which employ more than 250 people. And it doesn’t require bosses to identify salary differentials for individuals, only the average gender pay gap across the company.

Miller says: “Gender pay gap reporting is only one step forward… Most of the businesses in this country are SMEs [small and medium-sized enterprises] and they will not be affected by this legislation at all. Our report recommended including companies that are a smaller size and that would be more in line with other countries in the EU.”

It has been nearly 50 years since the first equal-pay laws were introduced in the UK. In the public sector, where salaries have traditionally been more transparent, a series of landmark cases have helped to even out pay rates at work.

But in the private sector progress has been much slower.

Cost of discrimination
Chilton says this has much to do with the secrecy surrounding an individual’s pay packet: “Some contracts and many pay reviews make it a breach of a condition of employment to reveal what you are paid. And workers would rather disclose anything else but their salaries. As a result, employers have been able to ensure wide differences in pay when the man and woman are performing essentially the same tasks.”

In the public sector this kind of discrimination has proved costly for employers when unionised workforces have brought group actions against employers for millions of pounds in compensation.

In the private sector, companies have largely been allowed to continue to enforce a pay policy of divide and rule.

But last year the UK’s biggest private-sector equal-pay claim came to court in a case that could eventually lead to around 15,000 predominantly female Asda workers recovering well over £100m in pay.

Judges have already ruled that lower paid shop workers – mostly women – can compare themselves to higher paid workers in Asda distribution centres, who are mostly men. Asda has appealed this decision. The next stage of the case will determine whether the jobs are of equal value.

In the higher echelons of the workplace there is much work to be done to close the pay gap. It is only when senior female executives start to bring high-profile cases against banks and financial-services companies that we will we start to see a cultural shift in attitudes, experts say.

Structural barriers
Seamus Nevin, head of policy research at the Institute of Directors, told i there were structural barriers that women workers must overcome.

“Another key problem is the fact that fewer women progress up the work ladder. This has various causes, including the ‘motherhood penalty’ – where mothers miss out on progression opportunities by being out of work whereas fathers are less likely to take time off work to share parental responsibilities.”

This is something that also concerns Miller.

“There is unconscious prejudice,” she says. “The assumptions that employers make about pregnant women or women with young children can often create unacceptable discrimination in the workplace that is hard to get rectified. How else can you explain the discrepancies within the BBC?”

Miller adds: “There are long-standing reasons why there is a gender pay gap and that is because historically women have taken time out of the labour market and then not been able to find the high-quality flexible work that enables them to rejoin the labour market after they have had children or after they have finished their caring responsibilities.

“And that is not a historical problem. That is a current problem today which my select committee report on the gender pay gap said will not be resolved in a generation, which is the Government’s objective. Unless those labour-market barriers are addressed, particularly around more high-quality, flexible, part-time working, women have to downgrade their jobs below their abilities so they take jobs in other lower paid sectors.”

If progress continues to be sluggish, future governments may have to consider more radical action. One option would be to impose individual salary reporting rules on all companies. It would mean everyone in every job would know exactly how much everyone else is paid in the company.

The result would either flood the courts with equal pay cases or lead to greatest levelling of pay grades in Britain’s economic history.

Sarah Chilton, published by iNews

By Robert Verkaik