The Guardian recently reported that companies could be forced to publish figures in annual accounts showing the number of men and women in particular pay bands, under Government plans to tackle the gender pay gap. The Guardian claimed that the Government was considering including an additional provision in the forthcoming Equality Bill, allowing companies to be ?named and shamed? in league tables revealing pay inequalities amongst their male and female staff. The Government has since dismissed the report as ?nonsense?, claiming that it has not changed its intention to limit the duty to public sector employers. With speculation over a rewrite of the law quashed and latest figures suggesting that men are paid 17.1% more than women for full time work, many employee groups are wondering what, if anything, will be done to close the gender pay gap.
In June 2007, the Government published A Framework for Fairness: Proposals for a Single Equality Bill for Great Britain, which started a public consultation on a broad range of proposals aimed at three key policy objectives: harmonising and simplifying the law, making the law more effective, and modernising the law. Amongst the proposals, the Government announced steps to bring greater equality by encouraging transparency. To that end, the Equality Bill will ban pay secrecy clauses (clauses in employment contracts banning employees from discussing their pay or bonuses), although, as we have heard, there will be no obligation on the private sector to actively disclose pay.
Although secrecy may form part of the City bonus culture, it is not clear how many UK employees outside of the financial sector have these ?gagging clauses?. It has been suggested that the current lack of transparency is simply down to the fact that it is simply not very ?British? to discuss money, suggesting that a cultural, not a contractual change is required.
Until the Bill is passed (the date is currently unknown), employees who perceive that they have been treated less favourably on the grounds of their sex, can currently bring a claim for sex discrimination in the Employment Tribunal. If successful, the compensation he or she can be awarded is unlimited (unlike unfair dismissal claims, which is currently capped at ?63,000). Employees may also have recourse under the Equal Pay Act 1970, which provides that an employee is entitled to enjoy contractual terms as favourable as those of an employee of the opposite sex who is engaged in the same or similar work. Despite over 30 years having passed since the introduction of both the Equal Pay Act and legislation outlawing sex discrimination, a significant gender pay gap persists. It remains to be seen whether banning pay secrecy clauses will have any notable effect.
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