Gender pay reporting regime ‘should be extended to cover more employers’

24 Jan 2018 By Marianne Calnan

Fawcett Society urges government to include age, disability and ethnicity information in reports

The gender pay reporting regime should be extended to include far more demographic information about employees, and should also cover smaller businesses, a report from the influential Fawcett Society has recommended.

Age, disability, ethnicity, sexuality and employment status should all be included in companies’ gender pay reports, said the charity, which suggested that businesses with more than 50 employees should be required to report. At present, only employers with 250 or more staff are covered by the reporting regime.

In its report, Sex Discrimination Law Review, published yesterday (23 January), the Fawcett Society reviewed sex discrimination law with a panel composed of discrimination, gender and equality experts.

The gender pay reporting regulations – under which businesses have to issue a report before April 2018 – were among the most significant areas covered and the review recommended that civil penalties be introduced to penalise non-compliant employers. 

The Equality and Human Rights Commission (EHRC) should be granted extended powers and resources to enforce the regulations, the panel said. Employment lawyers have raised concerns that the EHRC currently has “no direct power” to impose sanctions on employers that fail to comply.

The panel recommended granting employees access to their organisation’s pay information, reintroducing equal pay questionnaires and amending the Freedom of Information Act to include pay in the private sector so women have access to accurate data to inform their claims. It suggested that mandatory equal pay audits for employers with workforces of 250 or more should take place every three years.

Maria Miller MP, chair of the women and equalities committee, agreed that the reporting regime should be expanded, as current regulations leave “around 80 per cent of companies uncovered”. 

More broadly, she welcomed the women’s rights charity’s report, which she said illustrated the significant work that was required to combat all forms of sex discrimination. She told People Management that although the report’s initiatives will go “a long way to helping eradicate gender discrimination, you cannot legislate attitudes, so we need to make sure there are incentives for businesses to change attitudes”. 

The report said the pursuit of equality was “significantly undermined” by a lack of access to justice for many women, and recommended that legal aid cover be restored to many aspects of employment law. It welcomed the Supreme Court judgment, in a case brought by trade union Unison, which ruled that the introduction of employment tribunal fees in 2013 was inconsistent with the right of access to justice. 

To protect pregnant employees and new parents, the panel proposed that protection from dismissal should cover the six months after an employee returns to work following maternity leave, rather than ending on the final day of leave. The government should double the period in which employees can bring employment tribunals regarding maternity or paternity discrimination to six months, it said.

The panel argued that shared maternity and paternity pay, as well as pay received under shared parental leave, should be ‘day one’ rights, removing the requirement for individuals to have worked 26 weeks of the last 66 weeks to qualify. It recommended that the flat rate for these payments be raised to the equivalent of the living wage of £8.75 outside London and £10.20 in London. 

The government implemented shared parental leave in December 2014, but the scheme had been utilised by fewer than one in 1,000 employees in May 2017. The panel recommended a comprehensive review of the policy to ensure it is structured effectively. 

The report said many women faced “misery” after being harassed by clients and customers, and recommended that section 40 of the Equality Act 2010 be reintroduced to improve protection in this area. The legislation, which was repealed in 2013, placed a responsibility on employers to protect their staff from harassment carried out by third parties.

In terms of workplace dress codes, the review recommended a code of practice be introduced to bring clarity to the types of requirement placed on women that are unlikely to have a male equivalent.

Rachel Harfield, principal lawyer at Slater and Gordon, said she believed the recommendations would  help eradicate gender discrimination. “There’s a new story about gender discrimination or harassment every day – change is needed now,” she urged, highlighting a report from the Financial Times about a men-only charity dinner where female waiting staff were groped and harassed. 

Simon Kerr-Davis, counsel at Linklaters, argued, however, that the report failed to emphasise the importance of employers educating employees inclusively on sex discrimination to ensure they understand the law.

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