Clause 64
Equality Bill
11:15 am
Lynne Featherstone (Hornsey and Wood Green, Liberal Democrat)
As currently worded, the clause allows employers defending equal pay claims to avoid the need to justify discriminatory pay objectively. Subsection (l)(a) allows employers to defend a claim by simply pointing to another reason for the pay differential that is not sex—not a protected characteristic, that is, sex. An employer only needs to refer to paragraph (a) because there is an “or” at the moment, rather than an “and”. If the employer cannot find or identify another reason, it is only then that the obligation kicks in to justify the differential in pay objectively.
That is inconsistent with European law and the decisions of the European Court of Justice in equal pay cases appealed from the UK. In practice, it means that where there is a female-dominated group, such as cleaners or home care workers, in local government, where it has been established that they should be paid the same rates of pay and bonuses as a comparable male-dominated group, such as road sweepers and refuse collectors, all the employer has to do to get out of equalling the pay is to identify a reason for the difference which is not sex. That reason could be something like the need to improve productivity or a need to recruit and retain staff in an environment where one particular gender was difficult to recruit. Once the reason has been identified, there will be no imperative for the employer to justify that reason objectively, and no obligation for them to show that there is a genuine need to improve productivity, that recruitment of a particular gender is difficult, or that the need is a proportionate or necessary reason to perpetuate the discrimination in pay. All the employer needs to do is to cite the other reason without any examination of the strength or veracity of that reason—carte-blanche really, so long as it is not covered by subsection 1(a).
The important point is that the female and male worker groups do jobs of equal value, and that equal value, by that stage, should have been evaluated as being equivalent under a recognised job evaluation scheme. It is only after that equality has been proved that the employer is able to raise the defence of material factor. It is important that the defence is fair and complies with European law.
The clause replicates the worst aspects of the judgment made in law under the Equal Pay Act 1970, a decision that has been roundly criticised and is currently under appeal in two cases at the Employment Appeal Tribunal and Court of Appeal. This is therefore a golden opportunity to bring United Kingdom equal pay law back into line with European law.
We have left out from our new clause subsection (3) on pay protection. I understand that the Government’s intention is not to scare the horses. For example, when pay has to be equalled up, if the disparity is huge and public sector organisations are faced with levelling pay, clause 64(3) allows for the long-term objective of reducing inequality. The Liberal Democrats want to test the Minister on that because it seems very much like letting them off the hook. Subsection (3) attempts to deal with the pay protection for groups of workers whose pay is reduced as a result of removing discrimination in pay.
For the majority of negotiated equal pay outcomes that seek to bring the pay of underpaid groups up to the level of the rates enjoyed by the comparable higher-paid work groups that does not simply involve raising the pay of the lower paid to that of the higher paid. It is important to note that many women and men have their pay reduced as a result of job evaluation in local government, and it is not always simple to state that it is necessarily men who are highly paid and that only women are underpaid. That said, there are often situations when large male-dominated groups are the subject of dramatic pay reductions and receive pay protection. As a result, what generally happens is that the higher-paid groups have their pay reduced and underpaid groups have their pay increased. In pay protection, the pay of groups rated as equal in a job evaluation is set somewhere in the middle of those two positions.
To have a system that requires employers to bring the pay of underpaid workers up to the level previously enjoyed by the higher-paid groups would be financially very difficult. I understand completely why, three years in, the majority of employers would find it hard if such a process had to be carried out immediately. I assume, therefore, that subsection (3) is about transitional arrangements, but the use of the phrase “long-term” would give far too much power and timing to the employer and less consideration to the employees.
Pay protection will be acceptable only if it is for a limited period, and the clause as drafted makes pay protection that perpetuates discrimination in pay unlawful. That is because such protection cannot be seen to have the purpose of reducing the gender pay gap and would therefore not be justifiable. It would make it difficult for all parties who genuinely desire a negotiated resolution of pay discrimination, and will create uncertainty. I should welcome the Minister exploring that long-term measure so that I can understand better if something in the clause will protect against an open-ended, kick-into-the-long-grass outcome. I await her response.