Firms ‘should be automatically fined for failing to report gender pay gap’

Equalities watchdog pushes for faster punishments as it confirms formal investigation into 10 organisations

Firms ‘should be automatically fined for failing to report gender pay gap’

The head of the government’s equalities watchdog has called for the power to fine companies that fail to publish their gender pay gap statistics, claiming that without this power, enforcement is taking longer than it should.

Rebecca Hilsenrath (pictured right), chief executive of the Equality and Human Rights Commission (EHRC), said the power to fine companies for failing to report their gender pay data would free up the watchdog’s time to carry out more complicated investigations.

Giving evidence to MPs as part of the women and equalities committee (WEC) investigation into the enforcement of the Equality Act, Hilsenrath said she believed the watchdog was still effectively enforcing gender pay gap rules.

But she added: “If all we had to do was turn round and say, ‘Well you’ve not published, here’s a fine,’ then we could use more resource doing other stuff elsewhere without having to undertake formal statutory investigations.

“You either publish or you don’t publish [gender pay data] and it’s quite easy to understand whether someone is in breach of the law or not. Most [other] areas of the Equality Act require quite a nuanced judgement.”

Earlier this month, the EHRC named and shamed a number of organisations for failing to submit their gender pay data, and Hilsenrath told the WEC the watchdog was now looking at the final 10 companies that had still not published. It expected to begin statutory investigations into them imminently.

During the session, David Isaac (pictured centre), chair of the EHRC, said that many of the watchdog’s powers were not available until it had launched a statutory investigation, and asked for the committee to recommend this be changed.

“We cannot actually compel evidence until such time as a formal investigation is launched  and it’s one area where we would actually like to clarify the law,” he said. “It means prior to the formal investigation we are completely dependent upon the goodwill of individuals who are being threatened with the investigation.

“We can’t move as quickly as we’d like and can’t be as agile as we’d like with our current powers.”

MPs also heard the watchdog might not have the power to overrule non-disclosure agreements, even when undertaking a statutory investigation.

When asked by Labour MP Jess Phillips about how the use of NDAs might affect its recently announced investigation into equal pay at the BBC, Clare Collier (pictured left), legal director of EHRC, said: “That’s still a matter on which we’re seeking additional legal advice because it’s a really complicated crossover between our statutory powers – our powers to compel – and the arrangement.

“It will depend, in an individual case, on what the terms [of the agreement] are – that’s my current understanding,” she added.

But Collier said this should not hinder the EHRC’s investigation of the BBC, as the watchdog would be seeking the corporation’s own pay records and would not be looking at individual complaints.