Mind The Gap! Gender Pay Gap Reporting

Issue 21

The Gender Pay Gap Information Regulations were published on 6th December 2016 and will come into force on 6th April 2017. ACAS and the Government Equalities Office have published guidance on how businesses can calculate and report their gender pay gap.

Under the new rules employers with more than 250 employees must publish a snapshot of salaries and bonuses and publish information about pay differentials between men and women.

These new regulations are not directly related to the issue of “equal pay” claims the right to bring Employment Tribunal proceedings for equal pay based on discrimination on the grounds of gender has been enshrined in UK law for over 40 years. However, the statutory requirement to publish information about how men and women are paid within an organisation will shine a spotlight on employers who would, up until now, have been able to maintain an element of secrecy around such issues by relying on the principles of confidentiality and data protection. Those days are gone.

The Government has made clear that this policy is “absolutely key to achieving equality in the work place, which is why we are introducing requirements on all large employers to publish their gender pay and bonus data from April” (Caroline Dinenage, Parliamentary under Secretary of State for Women, Equalities and Early Years).

The ACAS guidance sets out a number of detailed steps for employers to follow:-

Identify essential information such as which staff are covered by the regulations, what ordinary pay and bonus pay they have received in the snapshot pay period;

Identify whether the calculations in relation to relevant pay and bonus gap figures show a disparity in the proportion of men and women receiving bonuses and the proportion of men and women in each salary quartile;

Prepare a statement for publication and consider relevant information as part of the explanation of why there is a pay gap as a supporting narrative;

Publish the gender pay gap information;

Implement plans to manage the gender pay gap issues in order to reduce the pay gap (if it appears reasonable to conclude that the pay gap is related to gender rather than other legitimate factors).

The duty to publish such information and to deal with any gender pay gap in a more transparent way than has previously been the case could be used by individuals and groups of employees as evidence that any inequality in pay structures which is related to gender could be actionable by bringing an equal pay claim in the Employment Tribunal.

One interesting point which could be of practical relevance to a number of large organisations is that the definition of “relevant employer” within the regulations does not expressly state that a company which operates a number of separate legal entities within a group company structure would have to count the total number of employees within the group to reach the 250 mark or whether each individual legal entity within the group should be treated as a separate and distinct employer for these purposes. It appears that, for the time being, it would be reasonable to interpret the regulations on the basis that each company within a group company structure should be treated as a separate employer. This means that if there is no individual company within the group company structure which has 250 or more employees it seems that the obligation to report on any gender pay gap would not apply. However, this could change if clarification was given in relation to how the definition of “relevant employer” should be interpreted in relation to group company structures. At the moment it is a case of “watch this space” and be mindful of any case law developments as the years go by.

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