Gender Pay Gap – Pay Transparency.*

By April 15, 2021Employment Law

Gender Pay Gap – Pay Transparency.*

The European Commission on 4 March set out a proposal on pay transparency. This is to attempt to make sure that women and men in the EU get paid equal pay for equal work.

So, what does this mean in practice? The proposals are quite radical. They include such issues as pay information for job seekers, a right to know the pay levels for workers doing the same work as well as the gender pay gap reporting obligations for big companies.

There are proposals to strengthen the tools for workers to claim their rights and facilitate access to justice. We have yet to see the full proposals but one of the big problems in an employee claiming equal pay, currently in Ireland, is that the employee must have particulars as to the pay another worker has. Simply claiming that somebody is paid more is not sufficient. The employee has to be able to give some indication and prove the pay gap. The difficulty is that very often an employee will not have the information relating to what they are paid compared with a male comparator. This also applies of course in relation to, for example, a non-Irish National seeking equal pay for equal work with an Irish National. Unless employees are going to be in a position to be able to access this information it is going to make it extremely difficult for this proposal to work in practice. Of course, there are GDPR issues. However, this can be addressed quite simply by making sure that where a claim is put in there would be some independent body, such as the Workplace Relations Commission, to whom the information could be provided and to whom the information must be provided and who can then assess the matter. This may be as simple as an employee claiming that they are doing the same work as say three male comparators. Without breaching GDPR if the information was given to the Workplace Relations Commission the Workplace Relations Commission could advise an Adjudicator that the salaries are the same or that there is a difference in salaries without specifying the amount. An Adjudicator could then make a decision on any argument relating to issue other than for example gender, as the reason for the difference and if finding in favour of the employee it would be at that stage that the differential would be disclosed.

Without a method by which an employee can find out this information these proposals will not really address the issues.

The proposals are also indicating that employers will not be allowed to ask job seekers for their pay history, it appears employers will have to provide pay related anonymised data upon an employee’s request.

While that is useful the difficulty in relation to it, under current Legislation is that the employee has to be able to identify a specific person. Unless the proposals are very clear as regards the comparators for whom an employee can raise requests the issue is going to become difficult to implement. Also, there is going to be GDPR issues if the employee has only nominated one individual. Again, we will have to wait and see how the proposals come forward.

As interesting aspect is that employees will have the right to compensation for discrimination in pay. Currently an Equal Pay claim in itself is simply the economic loss. It has to be a second claim for discrimination. Being able to amalgamate these into one claim would make sense.

The President of the European Commission Ursula von der Leyen said when announcing the proposal; –

“Equal work deserves equal pay. And for equal pay, you need transparency. Woman must know whether their employers treat them fairly. And when this is not the case, they must have the power to fight back and get what they deserve”.

The Vice President for Values and Transparency Vera Jourova said; –

“It is high-time both woman and men are empowered to claim their rights.  We want to empower job seekers and workers with tools to demand fair salary and to know and claim their rights. This is also why employers must become more transparent about their pay policy’s, no more double standards, no more excuses”.

The Pay Transparency measures include; –

  1. Employers will have to provide information about the initial pay level or its range in the job vacancy notice or before the job interview.
  2. Employers will not be allowed to ask a prospective worker about their pay history.
  3. Workers will have a right to request information from their employers on their initial pay level and on the average pay levels, broken down by sex, for categories of workers doing the same work or work of equal value.
  4. Employers with at least 250 employees’ must publish information on the pay gap between female and male workers in their organisation.
  5. Employers for internal purposes should also provide information on the pay gap between female and male employees by categories of workers doing the same work or work of equal value.
  6. Where pay reporting reveals a gender pay gap of at least 5% and where the employer cannot justify the gap on objective gender-neutral factors employees will have to carry out a pay assessment in cooperation with workers representatives. Again, the issue of workers representatives is something that generally speaking is a particular item in European employments. It will mean that Irish Legislation would need to be amended to provide that every employer would have to have a worker’s representative.

In relation to the issue of access to justice for victims of pay discrimination these include; –

  1. A worker who suffered gender pay discrimination can get compensation including full recovery of back pay and related bonuses or payment in-kind. It will be interesting to see how this is framed as to how far back an employee can go.
  2. It is proposed that the Burden of Proof will be on the employer and it will be by default for the employer, not the worker, to prove there was no discrimination in relation to pay. This will completely change the Irish Legislation where currently the employee must prove certain matters. If this then shifts the Burden of Proof this is going to be a major change in Irish Employment Law.
  3. There will be a requirement for Member States to establish specific penalties for infringement of the Equal Pay Rule including a minimum level of fines. Again, this would need a complete change in our Legislation as currently the time limit for putting in such a prosecution is 6 months. As claims going before the WRC, even before the Pandemic, were taking on average 8 months there would need to be a complete change in our Legislation as regards the time limits if this is going to become a realistic issue of employers being fined.
  4. It is proposed that equality bodies and workers representatives may act in legal or administrative proceedings on behalf of workers as well as leads in collective claims on equal pay. Currently that would be the position in the WRC and the Labour Court. This proposal is more relevant as regards European bodies where there are specific Employment Courts. This may however change the face of cases in Ireland if this right is to be granted as it may effectively mean that workers representatives would have to be given access to the main Courts.

So, what is going to happen. The proposals will go to the European Parliament and the Council for approval. Once adopted Member States will have two years to transpose the Directive International Law. The requirement to ensure equal pay is set out in Article 157 TFEU and in the Directive on the Principle of Equal Opportunities and Equal Treatment of men and women in matters of employment and occupation.

In the past the Irish Government has been extremely slow at implementing Directives. Usually it takes them the full 2 years and sometimes longer, actually to implement Directives. If this issue of pay transparency and gender pay equality is to become a reality there will need to be a commitment by the Government to implement these a lot quicker. Effectively it means that the Department of Enterprise Trade and Employment, rather than Ministers making that commitment.

*Before acting or refraining from acting on anything in this guide, legal advice should be sought from a solicitor.

*In contentious cases a solicitor may not charge fees or expenses as a proportion or percentage of any award or settlement.

Richard Grogan

Author Richard Grogan

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