Recession to rule out compulsory equal pay reviews

The government is to be advised not to push ahead with the planned introduction of compulsory equal pay reviews in the forthcoming Equalities Bill.

The draft bill, which was published last June, had put mandatory gender pay reviews on the agenda, but it is believed that the Equalities and Human Rights Commission (EHRC), the body now responsible for overseeing workplace equality, has recommended the proposal be dropped.

The reason cited is the current economic downturn and the vulnerability of business to wage rises.

Nicola Brewer, the chief executive of the EHRC, said that equal pay reviews can be a helpful diagnostic tool but that they are not the whole answer to the problem of the disparity between men’s and women’s pay.

Ms Brewer added: “I think we do need to be realistic about the economic climate.”

Businesses are uncomfortable with compulsory pay audits because they run the risk of prompting legal action by female employees who discover that they are being underpaid.

Instead, Ms Brewer set out the need for a wholly new equal pay act, which would demand several years of preparation.

In the meantime, the EHRC said it would encourage employers to address imbalances in gender pay on a voluntary basis.

The EHRC will also be pushing for better flexible working opportunities so that women who come back to work after starting a family are not forced into lower grade jobs that fail to reward their skills or to recognise their experience.

Figures suggest the pay gap between men and women grows more entrenched once female employees enter their 30s and take up part-time roles to allow them to continue with child care.

Ms Brewer acknowledged that a 500 per cent surge in recent claims over unfair pay has “brought the employment tribunal system to its knees” and went on to argue that the government should allow representative actions on equal pay. This would mean that tribunals could rule on claims brought by groups of women collectively, helping to clear the backlog of cases.

Charles Cotton, the reward adviser at the Chartered Institute of Personnel and Development (CIPD), welcomed the decision to drop mandatory equal pay reviews.

Mr Cotton said: “There is a business case for ensuring all employees are paid fairly and equally according to their skills and contribution, not their gender or any other irrelevant attributes. But this case is likely to be harmed not helped by blunt legislative measures at a time when businesses are struggling to stay afloat.

“We believe the greatest return will come from a tireless and concerted effort by government and other agencies to promote the business case for fair pay – in good times and bad. Enforcing equal pay audits could easily end up creating a box-ticking exercise that does little to tackle the broad and deep seated causes of gender pay inequality.”