Can the Equality Act close the gender pay gap?

The Equal Pay Act 1970 came into force on 29 December 1975.  Whilst it was predicted that women’s pay would swiftly move towards equalisation with men’s this has not happened.  The latest figures derived from the Office of National Statistics’s Annual Survey of Hours and Earnings revealed that, as at April 2009, the gender pay gap for full time employees was 12.2 per cent, comparing median hourly earnings excluding overtime.  Median hourly rates for men were £12.87 for full timers, for women full timers hourly rates were £11.39.

In its Annual Report for 2008/09 the conciliation service ACAS announced that the number of equal pay claims received was 48,560.  Equal pay cases place a massive strain not only on the tribunal system but also on the budgets of local authorities and other public sector employers.  An Employment Tribunal recently upheld equal pay claims brought by more than 4000 women against Birmingham City Council which could lead to payouts worth around 200 million.

‘The Equality Act’ received Royal Assent on 8 April 2010.  The Act has two main purposes – to harmonise discrimination law and to strengthen the law to support the progress on equality. 

The Act largely, regrettably, replicates the current provisions of the Equal Pay Act 1970 which has not proved successful in achieving the aim of closing the pay gap.  There are some new provisions however.  The Act renders unenforceable (in certain circumstances) ‘secrecy clauses’ - contractual terms that purport to prevent or restrict workers from seeking or disclosing information about their pay and other benefits (Section 77).  The Act also enacts a power to make regulations requiring employers to publish information relating to employee’s pay for the purposes of showing whether there are differences in the pay of male and female employees (section 78).  However, the Regulations would not apply to an employer with fewer than 250 employees and will not apply to public authorities (specific equality duties are to address pay in the public sector).  Furthermore, the former Labour government were not planning to use this power to issue any regulations before April 2013, if at all.

The contents of the Act itself and the proposed deadlines will now be subject to review by the new Coalition Government.  On the Government Equalities Office website it is stated that the Office ‘continues to work on the basis of the previously announced timetable which envisaged commencement of the Act's core provisions in October 2010’.

The Coalition stated that it will ‘promote equal pay and take a range of measures to end discrimination in the workplace’.  How it will do this remains unclear when the current system places the onus on the individual to undertake the role of investigator, litigator and enforcer to recover back pay or contractual damages where inequality in pay is revealed, rather than on employers to prevent discrimination happening in the first place.  It will take robust legislation imposing positive obligations on the public and private sectors to close the gender pay gap and such legislation is long overdue.

For further information, contact Melissa Edmond, Employment Law Solictor.