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Bridging the pay gap

The Equal Pay Act was introduced in 1970 and yet nearly 40 years on, it seems that the gap between men and women’s pay is yet to disappear completely.

According to a report published by the Equality and Human Rights Commission, the current gap in pay in financial services can be as high as 60 per cent.

The biggest pay gap relates to women working full-time in areas such as fund management, stockbroking and futures trading but the figures for the industry as a whole are almost as bad, with women on average earning 55 per cent less gross pay. This gap is more than twice the national average.

So with a huge surge recently in equal pay claims in local government and the NHS, is this another fertile area for equal pay claims?

I definitely think so. From my experience in advising employers in both the private and public sector, I believe that the flurry of equal pay activity in the public sector will surely find its way in to the private sector.

The report itself was published as the first stage of the Commission’s inquiry into sex discrimination in the finance industry. The report indicated that although there are equal numbers of men and women working in the finance sector, women are concentrated in admin and secretarial jobs and are significantly underrepresented in managerial jobs. The report also stressed that there is a strong need for investigation into recruitment and promotion within the industry.

Chairman of the commission Trevor Phillips commented: “The figures are shocking and indicate how serious the pay gap has become in the financial sector.”

Phillips is asking the Government to take steps to address gender pay discrepancies in the forthcoming Equality Bill, expected to come into force in 2010.

The Bill aims to modernise existing discrimination legislation and address pay inequalities between men and women as well as encouraging transparency in the workplace in terms of pay by banning “gagging” clauses that traditionally prevent employees discussing what they earn.

However, some argue that the proposed changes of the Bill do not go far enough. Following Government consultation with business leaders, it appears that mandatory pay audits will not be a feature of the new legislation, much to the disappointment of women’s rights campaigners.

The new Bill will undoubtedly add to the pressures faced by employers who are trying to cope with the complexities of employment legislation. But although employers may be wary of carrying out equal pay audits in case they open up a can of worms, by not doing so they are just brushing the issue under the carpet and these issues always find a way of surf- acing eventually. The only real way to rid ourselves of the gender gap has to be to deal with the issue head on. Open that can of worms.

Jawaid Rehman is an equal pay specialist solicitor in the employment team at Weightmans LLP

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