Out-Law News 2 min. read
14 Aug 2014, 4:26 pm
Minister for women and equalities Jo Swinson said the companies subscribing to the voluntary 'Think, Act, Report' (TAR) framework "recognise the importance of transparency as a way of attracting, recruiting and retaining female talent". Tesco, Bupa, HSBC, Shell and Vodafone are among the companies that support TAR.
The TAR scheme has been in operation since 2011 and encourages signatory businesses to consider gender equality issues, take measures to address inequality they identify and report on the measures being taken.
Businesses signed up to the scheme, however, have an element of freedom over what precise information they disclose.
A recent report by the Guardian highlighted a government survey last year which found that only a fraction of the companies signed up to the TAR scheme go as far as publishing "detailed gender pay gap information broken down by every grade" – something former government minister Jenny Willott confirmed earlier this year.
Among the measures TAR signatories are encouraged, but not required, to report include "measures that directly capture the pay differences between men and women, and reward measures capturing wider pay and benefits".
This information could include the difference between the average basic pay and total average earnings of men and women with reference to different grades and job types.
Reporting this information "would provide detailed evidence of whether the pay gap is being driven by paying men and women who are doing similar jobs differently or by men and women doing significantly different jobs" and "show the degree to which any gaps stem from differences in basic pay or differences in other components of earnings e.g. overtime payments or bonuses", according to the framework.
Reporting other information, such as differences in men and women's starting salaries, is also encouraged.
Employment law expert Selwyn Blyth said the reporting of gender pay gap information has been a controversial issue.
"The previous Labour government supported new rules which would have made it mandatory for businesses to conduct equal pay audits and publish information about pay," Blyth said. "Those plans were opposed by many employers at the time who were perhaps worried, at least in part, about revealing information about pay publicly and the additional administrative burden involved in collating the information at a time when the country was in deep recession and organisations were cutting back on resources."
"Part of the controversy over the Labour plans also concerned how precisely employers would be expected to measure equal pay. The extent of the equal pay gap depends on what statistics are collected and the analysis applied: the pay gap between men and women in full time work is different from that between men in full time work and women in part time work," he said.
"In recognition of these issues and when it came into power, the coalition government stepped back from introducing the mandatory provisions of the Equality Act and instead gave its backing to the voluntary Think, Act, Report scheme instead. Whether mandatory disclosure on equal pay comes back onto the agenda could depend on the Labour party's appetite for such a measure to be included in their election manifesto next year," Blyth said.
"In the meantime, it is clear that organisations, including private sector employers, want to be seen to be taking action on equal pay. The government clearly believes momentum is building behind its Think, Act, Report scheme and there certainly appears to be a reputational gain to be had by embracing equal pay and being more transparent about the issue. However, what is clear is that different employers are interpreting the disclosure guidelines in different ways, with very few seeing a need to report specifically on the pay gaps between men and women with reference to the types of roles being performed in their organisation," the expert said.