Here'a an article provided by Claire Dawson, a Solicitor in the Employment law team at Russell Jones & Walker.

'In the Equality Bill published on Monday, the UK Government has introduced significant new measures designed to address the gender pay gap. This is in response to statistics which indicate that women in the UK still earn on average 17% less than men, almost 40 years after the Equal Pay Act came into force. This gap is even wider for City professionals. Research released by the Equality and Human Rights Commission this month shows that men and women’s pay in the financial services sector differs by an astonishing 60%, rising to 79% when including bonuses.

The Government, however, has this week attracted controversy over some of its proposals to tackle this inequality. Three key implications for City employees are highlighted here:

1. Private sector employers with at least 250 employees will be required to publish information about the differences in pay between their male and female employees. The information will be available to the public, including clients and shareholders as well as employees, and so is likely to impact on an organisation’s reputation as well as providing support for tribunal claims for sex discrimination and equal pay. The Government has said that it does not propose to make the publication of this information compulsory until 2013, because it initially wants to encourage employers to provide this information on a voluntary basis. At the moment it is unclear how employers will have to present the information and how elements of pay, such as bonuses, will be included in the stats, but the Bill does set out that a failure to comply can amount to a criminal offence.

2. The Bill also outlaws pay secrecy clauses which are still a feature of many City employment contracts. This will give protection to employees who discuss their pay with colleagues for the purposes of working out whether any difference in pay is discriminatory. At the moment, there is a culture of secrecy over discussing pay in the City. This may be for private reasons in many cases, but is also perpetuated by employers who can outright prohibit employees from disclosing details of basic salary and bonuses in their terms and conditions - with employees risking disciplinary action for even comparing pay. This helps to ensure that many employees never become aware that they are being paid less than their peers.

At present, even if an employee suspects pay inequality, it can be very difficult to obtain information about differences in pay between colleagues, short of formally asserting their legal rights, by submitting an equal pay questionnaire or bringing an Employment Tribunal claim against their employer. Unsurprisingly, most employees would prefer to have concrete information to rely on before embarking on that sort of process. This new provision means an employer will not be able to control this information being passed between colleagues, and is intended to start to introduce a culture of greater transparency over pay. However, employers can still impose confidentiality obligations on employees disclosing pay information to external third parties, for example, to competitors.

3. The Bill also attempts to promote diversity in the workplace by allowing employers to take positive action without risking a discrimination claim for the first time. Under the new laws, where an employer has a problem with under-representation of women or other minority groups in its workforce, and there are two equally qualified candidates for a role or promotion, they would now be able to offer the job to the under-represented candidate for this reason (but only in these specific circumstances). Currently for an employer to base its decision on ethnicity/gender would be unlawful but this measure is designed to encourage employers to take positive action towards diversity. As many City institutions are renowned for being 'pale and male', this could spark a new approach to recruitment, although the Bill does make it clear that it would have to be on a case by case basis - and so a blanket policy preferring one group over another would still be unlawful'.

www.rjw.co.uk

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