Clause 59

Equality Bill – in a Public Bill Committee at 10:45 am on 23rd June 2009.

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Relevant types of work

Question proposed, That the clause stand part of the Bill.

Photo of Joe Benton Joe Benton Labour, Bootle

With this it will be convenient to discuss the following: amendment 260, in clause 61, page 47, line 16, at end add—

‘(5) Where section [Relevant types of work (No. 2)] (2) applies, the provisions of this section will apply to the extent that a term of A’s is less favourable than a corresponding term of B would be, or that A does not have a term which B would have.’.

Amendment 261, in clause 62, page 48, line 27, at end add—

‘(11) Where section [Relevant types of work (No. 2)] (2) applies, the provisions of this section will apply to the extent that a term of A’s is less favourable than a corresponding term of B would be, or if a discretion in relation to A is capable of being exercised in a way which is less favourable than it would be in relation to B.’.

New clause 24—Relevant types of work (No. 2)—

‘(1) Sections 61 to 65 apply where—

(a) a person (A) is employed on work that is equal to the work that a colleague of the opposite sex (B) does;

(b) a person (A) holding a personal or public office does work that is equal to the work that colleague (B) of the opposite sex does.

(2) To the extent set out in sections 61 to 64, those sections also apply where A does not have a colleague B who does work that falls within subsection (1), because there is no such person of the opposite sex to A.’.

Photo of Lynne Featherstone Lynne Featherstone Shadow Minister (Children, Schools and Families)

This debate is about hypothetical comparators. The amendments would allow people to make a claim for equal pay when there is no real comparator. The argument is quite well-trodden—if one Googles “hypothetical comparator” on the parliamentary website, one can see that the discussion goes back through many forms of Committees over many years. This time round, I hope that we will make a change.

Traditionally, women who suffer unequal pay are at a significant disadvantage to other forms of discrimination, such as race and disability. It is the only type of discrimination regarding pay differentials where there is a particular requirement to propose a real comparator—to point to someone else to compare with, in the work that one is undertaking. That has proven—the TUC, the Fawcett Society and the Women’s National Commission agree—to be a significant obstacle where such a comparator does not exist. That happens when there is a majority female work force.

Professions dominated by females are often underpaid—cleaners, hairdressers, dinner ladies and many other female occupations. They often have a lower ratio of pay. Because there are virtually no men doing comparable jobs in comparable places, it becomes impossible to argue that the work is undervalued, because we cannot point to a real comparator.

For reasons of history and female economic inequality through almost every strata, women’s work is always given a lower price tag, even when men are doing equivalent tasks that require equivalent skills to those of a female-orientated job. The requirement is not imposed on other types of discrimination. For example, if someone is trying to prove race discrimination, they are not barred from claiming discrimination if they cannot find a real comparator. It is a discrimination within discriminations.

The Women’s National Commission, in its evidence, said that it is very much in favour of hypothetical comparators, and would like to see, as we would on the Liberal Democrat Benches—I suspect on many other Benches as well—the barrier removed from equal pay claims. The Fawcett Society said that that would make a huge difference. Will the Minister explain why there has been resistance to removing that barrier to equal pay, which has set women back so profoundly? I do not understand the rationale behind it, so I would welcome her response.

Photo of Sandra Osborne Sandra Osborne Labour, Ayr, Carrick and Cumnock

I would like to echo the comments of the hon. Lady. Getting equal pay has been a long-term problem. Many women are disadvantaged, especially those who are low paid and whose work is undervalued in our society. I also support the views of the TUC and the National Women’s Commission in relation to the matter. I would like an explanation from the Minister as to why the provision cannot be brought in to complete the Bill. I am sure that she has a good explanation, which I am looking forward to hearing.

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

I know that there are a number of views on the matter. The Fawcett Society and the NWC are in favour of hypothetical comparators, as the hon. Member for Hornsey and Wood Green said. I will turn specifically to that. If anybody finds it helpful, I could set out the whole scheme of the chapter, but I think she put her finger on the point that she is really interested in, as did my hon. Friend the Member for Ayr, Carrick and Cumnock.

I hope that it would be helpful if I set out some examples that are usually given to support the need for hypothetical comparison in equal pay cases. The first kind of example is about gender segregation, which the hon. Member for Hornsey and Wood Green has already mentioned. The example is that in some work environments, as a result of gender segregation, no men are doing equivalent work to women. The suggestion is that if the women believed that they were underpaid, they should be able to claim on the basis that, were there a man doing that work, he would be paid more. The amendment would allow that.

One difficulty with that is what the evidence would be that a man in that situation would be paid more. If there is clear evidence, such as a statement by the employer to that effect, a claim would be a possible—we have made it so in clause 66—as that would be direct discrimination. There may not be many cases of that, but those that exist will be caught by the Bill. Any remaining gap would be in cases where the employer discriminates indirectly against a woman in relation to contractual pay.

The amendments demonstrate the difficulty of doing that. As I understand them, the amendments would permit a claimant to argue that B, a hypothetical employee doing the same or similar work, has a term in their contract that the claimant does not, or one that is better than the equivalent one that the claimant has. It is quite difficult to see on what basis a tribunal could reasonably reach that conclusion. If it were asked to do so by relying on evidence that people doing completely different work had such a term, such a claim would not succeed. In effect, we would be asking the tribunal to decide that the fact that there is a difference in pay between two people of the opposite sex doing completely different work somehow supports the argument that two such people doing the same work would also be paid differently. That is a significant thing to ask a tribunal to do, and considerable uncertainty would emerge.

I may be asked what the difference is between that and a case of indirect sex discrimination. In an indirect discrimination case advanced on that basis, an employer would say that the difference in pay reflects a difference in work. That would, in our view, be sufficient to establish that there was a materially different set of circumstances under clause 22, which is the clause I spoke of earlier when we dealt with contract workers, and hence, the claim would fail.

A similar point can be made in respect of other examples commonly given. For example, a woman being paid only 50 per cent. of the salary given to a man, when she works at 75 per cent. of the value, should be able to claim. Other examples commonly given arise from situations where work has been privatised. They are difficult examples to agree with, because they call for a comparison between the terms of people who are employed by different employers. That is not how the  Bill works, and cannot be right. Direct discrimination in pay can, and should, in our view be properly examined through the equality clause provisions in the Bill.

An alternative approach would have been to scrap the contractual approach, but Members will know that we have retained the contractual approach and the distinction between contractual and non-contractual pay matters for work-related gender discrimination. While we could have done the opposite—scrap the contractual approach—or allow discrimination claims in parallel with it, in our view, all the difficult issues that arise in equal pay cases would arise with the discrimination approach too, only that they would be in a different order.

Mr. Benton, I wonder if it is possible for me to leave the room for a brief duration. I apologise that it is at so inconvenient a time.

Sitting suspended.

On resuming—

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

I thank all members of the Committee for their indulgence and for allowing me to take a most important telephone call about the steelworks in my constituency, which I could not put off until the end of our sitting. I want to explain, not least to the public, what has been going on. I am most grateful to you, Mr. Benton, and to colleagues.

I was saying that we could have taken an alternative approach, scrapping the contractual approach and allowing discrimination claims in parallel with it. They were the two options. However, all the difficult issues that arise in equal pay matters would come from that approach, too, even though they would come in a different order. It is clear that, if we made a wholesale change, the potential would exist for issues that have already been settled by the courts to be revisited. It is also likely that, more often or not, after expensive litigation the result would be the same.

There would always be the possibility, too, of new difficulties arising such as a claim advanced on the basis of a statistical analysis of the pay given to groups of workers doing different work, differently valued, perhaps showing that paying one group more disadvantages women who make up a smaller proportion of that group. Perhaps I should repeat that. A claim advanced on the basis of a statistical analysis of the pay given to groups of workers doing very different work—differently valued—could show that paying more to one group more disadvantages women who make up a smaller proportion of that group. One could see such a situation arising. Is that on its own to be the basis for a claim?

Surely the right response to that is not artificially to increase the pay of one group, but to seek to ensure by other means that women are as well represented in the higher paid group as in the lower. There might be risks of such cases arising. It would not be right to take the substantial risk that a large number of new cases, which would ultimately fail, would arise in such a way.

Doubtless we will have this argument again in various guises throughout consideration of the Bill, but that is a key point to raise at this stage. Changing to a different  model could lead to uncertainty with more litigation and unpredictable outcomes for employers and employees alike. We are not convinced that any real advantages for women would be achieved by that change to offset the disadvantages. Right now there is a need for stability.

What the hon. Members for Hornsey and Wood Green and for Oxford, West and Abingdon propose goes beyond the protection offered by indirect discrimination, and I suggest it goes a very long way. What the issues expose is in part related to the question of where the boundary lies between individual disadvantage, which can be corrected by the Bill, and the disadvantages that arise in society, which should be dealt with by policies aimed at closing the pay gap rather than individual remedy.

Photo of John Mason John Mason Scottish National Party, Glasgow East

I appreciate the point that the Solicitor-General makes, but if the Bill is not the place to address such issues, where is? There are some much wider issues out there disadvantaging women in particular, but also other groups. My own experience in a local authority showed that comparisons could be made within the authority, because everyone was employed by the same employer, but outside there are separate organisations that employ only specific groups of workers, and they are disadvantaged because they cannot be compared with anyone else. Is the Bill not the place to deal with that?

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

No. The issue is about equal pay between workers in the same employ. It is not about trying to ensure that employer A pays the same rate as employer B, which is something for trade union negotiations or policies connected more broadly with trying to redress the disadvantage of women who are likely to be paid less but who are not in a group that can be protected under the provision.

Photo of Diane Abbott Diane Abbott Labour, Hackney North and Stoke Newington

My hon. and learned Friend says that the issue is about ensuring that groups of employees doing comparative work for the same employer are paid the same, but she forgets the electorate. For them, the Bill is designed to address inequality of pay across the board between men and women, and they look to the Bill as a mechanism to achieve that. Over a long period, many groups have raised issue in the amendment that colleagues have tabled to achieve it. For the public, this is about not particular employers, but the salaries that women, on average, can expect to obtain for comparable work done by men, on average.

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

But this is not the clause in which the public will look for that. If they did, they would be misguided. There are many other matters in the Bill that we will debate presently, which are about trying to get equal pay through transparency. There are requirements on the private and public sectors.

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

I will finish my point first and sketch out the issues so that the hon. Lady can join in our debate about them.

The proposal, which is accepted by the CBI and the TUC, is that the commission will set up a group of the representatives of employers and employees that will work out the right things to measure—metrics, as they are now called—to achieve disclosure of pay gaps firm by firm, industry by industry. That is a better way to drive forward the broader agenda for equal pay than this particular provision, which is essentially about protecting an individual against an overpaid individual doing comparably equal work. When we come to those provisions, my hon. Friend the Member for Hackney, North and Stoke Newington will see, if I have not explained them clearly enough, that they are designed to get rid of the pay gap that exists in the public sector but more powerfully in the private sector.

In what we hope is a short period, we shall use the transparency demands to make businesses see that if they disclose unequal pay, they are not likely to achieve investment. Smart women will go where there is not unequal pay and consumers who buy ethically will not buy their goods. There are other provisions that directly seek to attack the whole question of systemic unequal pay.

We shall come to a debate about representative actions, too, albeit they are not in the Bill. However, they are under consideration. That, again, can have broader reach into the whole area of systemic inequality in employment not only for gender—gender in particular, as that is what we are talking about—but for other protected characteristics.

Additionally, in due course we intend to put out a document, side by side with the Bill, looking at all the other sources of unequal pay and inequality between men and women. The Women and Work Commission has been reconvened to look at its earlier recommendations—whether it sticks with those recommendations, whether it has further recommendations, whether the Government have done enough to meet the original demands—and, with our document, we ought to be able to draw things together for ourselves. There will be consultation, so that everyone can put in any strategy to get rid of unequal pay. Aspects such as poor training and the low quality of available part-time work cannot be reached by legislation. The broader issues of equal pay come under some of those headings, rather than being dealt with effectively here. There is plenty yet to come, and everything does not hinge on the clause. My hon. Friend is right, but this is not where public expectation should lie.

Photo of Lynne Featherstone Lynne Featherstone Shadow Minister (Children, Schools and Families) 11:15 am, 23rd June 2009

I appreciate the amount of work that the Government are doing to deal with such problems—we are all moving in the same direction. However, this particular case has been something of an issue for women going to tribunal when in women-only professions. In a sense, the ability to use a hypothetical comparator will give them insurance against whatever may happen with the Equality and Human Rights Commission matrix and all the other things. A number of organisations have supported the idea. For example, the Equality and Diversity Forum says that the directive does not permit the exclusion of provisions outlawing direct and indirect discrimination in relation to terms and conditions and, therefore, requires that hypothetical comparisons must be possible in that regard, in the same way as they would be in relation to race. That would bring the situation into line with European law.

Also, Unison says that the EU equal treatment directive allows hypothetical comparisons. The Bill, therefore, should allow the use of hypothetical comparators when no actual comparator exists. Interestingly, Unison says that such comparators ought to be permissible, while the EDF says that they ought to be a requirement. I would like to probe the Minister further on why she thinks that those organisations are still clamouring for a hypothetical comparator to be admitted—to be a requirement or to be permissible. All the work that she said is going on does not suffice to satisfy Unison or the EDF. I wish to test her further on that issue.

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

Organisations, as quoted, do press for that. They are also engaged with us—on the one hand they take up a campaigning position, clinging to hypothetical comparators as the magic elixir, but on the other hand they engage with us on all the other things that we are doing and appreciate that there is a lot of progress as well. There is nothing contradictory in that position, but the hon. Lady needs the context for her assertion that all those people consistently press for that.

There is some case law under article 141 of the treaty of Rome, in which the European Court of Justice has looked at the issue. It has consistently required an actual comparator to be identified for the purposes of an equal pay claim under the article. There is nothing in any pending directive that is likely to change that position. We find that to be a difficulty in accepting what the hon. Lady said.

There is, though, a recipe for confusion—I hope that I have expressed myself using the appropriate technical language, but all sorts of things can happen, which the hon. Lady is probably familiar with. Take for example a person in job A—a gardener—who wants to assert that he should have equal pay to the caretaker, and they are both men. If a hypothetical comparator were available, one could assume that one person was a woman and compare the pay of the man with the theoretical woman to see whether they should have equal pay. That has nothing to do with discrimination and pay; it concerns an argument that is better taken on by a trade union. The hypothetical comparator has real, practical drawbacks, as well as the ones that I have set out, and as well as the partial bar from Europe on taking it on.

Photo of Evan Harris Evan Harris Shadow Science Minister

My hon. Friend read out a note from the Equality and Diversity Forum, which is a serious organisation. I should like some clarification on that point, because the forum was referring to the directive of the European Parliament and the Council of 5 July 2006 on

“the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast)”.

It says that the directive has been fully in effect from 15 August 2008 and that it requires that hypothetical comparisons must be possible in that regard—as mentioned by my hon. Friend—in the same way that they would be in relation to a race case. That is an assertion of fact with which I presume the Minister disagrees. If she could put on the record that she thinks that that is wrong, that would be helpful for later discussions.

Photo of Vera Baird Vera Baird Solicitor General, Attorney General's Office

I would have thought that that was an assertion of law; it is one with which I disagree and so do the Government. I acknowledge entirely that EDF is a fine organisation. It is an organisation of organisations and we are happy and grateful to it for helping us all the way through the Bill. The tentacles that it has into equality and diversity are massively important to ensure that we are always in touch with people on the front line.

In summary, however, we do not believe that hypothetical comparators are either workable or required. We fear that allowing their use would create significant unintended consequences, some of which I have set out technically, and others I have exemplified. We have therefore decided, on balance, that ensuring pay equality is better served by maintaining our current approach. Clause 66 contains a provision to allow claims where there is evidence of direct discrimination in relation to contractual pay. I hope that the Committee will welcome that—it closes a gap in the current law. This law is better than it has been before, even in this specific way.

We will reflect carefully on what has been said, but we are not able to offer satisfaction today. I invite the hon. Lady not to press her amendment to a Division. However, it is good that we have had the discussion—we are, as she put it, all driving in the same direction. We are satisfied that we have a better state of affairs for the drive towards equal pay than that which she offers, but none the less, we appreciate that it is a tenable view that she is right.

Photo of Joe Benton Joe Benton Labour, Bootle

Just before the hon. Member for Hornsey and Wood Green indicates her intention, I want to ensure that she is aware that we are discussing clause stand part. If the Committee agrees to that, it negates her amendments. I want to clarify that so that the Committee is aware of the procedure. If it is her intention to pursue the amendments and the new clause, the stand part element has to be opposed.

Photo of Lynne Featherstone Lynne Featherstone Shadow Minister (Children, Schools and Families)

Thank you, Mr. Benton. All help towards my understanding procedures is gratefully received. I intend to divide the Committee on clause stand part.

Question put, That the clause stand part of the Bill.

The Committee divided: Ayes 10, Noes 3.

Question accordingly agreed to.

Clause 59 ordered to stand part of the Bill.

Clauses 60 to 63 ordered to stand part of the Bill.