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Reward, Recognition & Employment Law
Presentation by: David Morgan, Partner To: HrNetwork Conference 2016
12 May 2016
Aberdeen Edinburgh Glasgow
Reward: Gender Pay Gap Reporting
Pop Quiz
• What is the UK’s overall gender pay gap?
A: 13.9% B: 19.2% C: 26.4% D: 3.1%
Gender Pay Gap Reporting
19.2%
What is the “gender pay gap”?
The difference between the average earnings of men and women in the UK
What is the “gender pay gap”?
Average overall pay
gap = 19.2%
Average full time pay gap
= 13.9%
What is the gender pay gap?
Why?
Unconscious bias
Historical job segregation and “women’s work”
Impact of family responsibilities
Lack of part-time/ flexible work in better paid positions
Lack of women in senior roles
Why?
Why?
• Equal pay laws having limited impact outside public sector
• Voluntary gender equality reporting initiative (Think, Act, Report) has not worked
• Section 78 of the Equality Act confers power to pass regulations requiring mandatory reporting
• Government proposing to exercise that power in order to “end the gender pay gap in a generation”
“What gets measured, gets managed. What gets publicly reported, gets managed even
better.”
Who do the rules apply to? • Any private or voluntary sector employer with more
than 250 employees • Public sector employers excludes • Includes companies, LLPs, partnerships • Employees ordinarily working in the UK • ‘Employees’ –vs.- casual workers • Contract governed by UK employment law
When?
• Regulations come into force Oct 2016
• Duty to report arises 30 April 2017
• Duty to publish report 30 April 2018
What does an employer need to report?
1. Difference in mean pay
2. Difference in median pay
3. Difference in bonuses
4. Proportion of men and women who receive
bonuses
5. Gender pay split breakdown
1. Difference in mean pay
• Snapshot on 30 April each year
• Average gross hourly rate of pay
• % difference in mean pay: (A-B)
A x 100
Definition of “pay”
Includes: • basic pay • paid leave • maternity pay • sick pay • shift premium pay • bonus pay
• on call allowances • standby payments • area allowances • first aider or fire
warden allowances • car allowances
Definition of “pay”
Does not include: • pay for a different pay
period • overtime • expenses • value of salary sacrifice
schemes
• benefits in kind • redundancy pay • arrears of pay • tax credits
2. Difference in median pay
• Snapshot on 30 April • % difference median gross hourly rate of pay
Lowest paid Median Highest paid
3. Difference in bonuses
• Calculated over 12 months before 30 April • % difference in mean bonus • Bonus pay includes:
- commission - long term incentive plans - cash equivalent value of shares
4. Proportion of men & women who receive bonuses
• 12 months before 30 April
• Must be expressed as a percentage
• Anti-avoidance
5. Gender pay split breakdown
• Quartile pay bands for overall pay range
• Lowest paid to highest paid
• Based on gross hourly rate of pay
• Report number of male and female employees in each
pay band
Publishing Information
• Annually from 30 April 2018
• No obligation to include explanatory commentary
• Accuracy statement
• Employer’s website for 3 years
• Must be ‘searchable’ by public and employees
• Upload to Government’s website
What happens if you don’t comply?
Oct 2016 No
penalties for non-
compliance
No mechanism
for checking accuracy
Next steps...
Next steps...
Investigate Review average male and female
salaries by job type and full and part time
status
Evaluate Evaluate the reasons for the pay gap and any justification for
this
Action Implement an action plan to address the
pay gap and consider how to report that
Will you be?...
Defensive In fear of equal pay
claims and/or reputational damage?
Positive Already have a good story to tell?
Honest Recognise the gap, give reasons for it,
explain what you are doing to improve it
and continue to report on progress?
Risks
Equal pay claims?
Sex discrimin-
ation claims
Reputational damage
Impact on employee relations
Addressing a Gender Pay Gap
Short term
• Job Evaluation Schemes (JES), equal pay audit, informal pay review
• Re-grading, red circling, back pay, settlement agreements
• See EHRC online equal pay resources and toolkits
Longer term
• Leadership training
• Recruitment training
• Training on “unconscious bias”
• Mentoring
• Review of salary review
process, promotion criteria and
flexible working practices
Recognition: Trade Union Bill
Law Reform
• Conservative party manifesto suggested that it would
“bring an end to disruptive and undemocratic strike action”.
• 15 July 2015, the government published a new Trade
Union Bill 2015-2016 proposing amendments to the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
Trade Union Bill 2015-2016
• Bill covers a number of amendments, in particular: – to increase ballot thresholds; – new information and timing requirements in
relation to industrial action; and – impose legal requirements on unions for the
supervision of picketing. • The TUC has called the Bill "unnecessary, anti-
democratic and unfair".
Ballot Thresholds
• Currently TULRCA provides that a strike or other industrial action will be unlawful unless at least 50% of trade union members who responded to the ballot voted in favour of the action.
• Bill will require, in addition to a majority being in favour of the action, that at least 50% of all eligible members must have voted.
Ballot Thresholds
• Example:
Where 1000 union members constitute the bargaining unit affected by the dispute, the new clause means that at least 500 of those members would need to vote for the ballot to be valid. Of the 500, then a simple majority of them would need to vote in favour for the ballot to lead to industrial action (e.g., if 500 voted and 300 of them voted ‘yes’)
Ballot Thresholds
• Bill proposes further additional threshold for workers engaged in “important public services”.
• These workers will only be able to take industrial action if, in addition to the turnout requirement, at least 40% of those entitled to vote have voted in favour of the action.
• UNLESS the union "reasonably believes" that the workers are not "normally engaged in the provision of important public services" at the time of the ballot.
“Important public services”
• Health services; • Education of those under 17; • Fire services; • Transport services; • Decommissioning of nuclear installations and
management of radioactive waste and spent fuel; and • Border security.
• Example:
Where 1000 union members constitute the bargaining unit affected by the dispute, as before, at least 500 of those members would need to vote for the ballot to be valid. Where the dispute was within an important public service, then at least 40% of the 1000 members entitled to vote would need to vote in favour to enable industrial action (400 members).
Ballot Thresholds
• It has been reported that the General Secretary of the Unite union, Len McCluskey, is willing to accept a 50% minimum turnout threshold in strike ballots, if the law is changed to allow online votes (e-balloting), to encourage turnout.
• House of Lords proposed a new clause on electronic balloting. This is being debated by the Commons.
• According to research by Ralph Darlington and John Dobson, only 85 of 158 strike ballots held between 1997 and 2015 achieved a 50% participation threshold.
Information Requirements – Ballot Paper
• TULRCA sets out the information which a union must include on a ballot paper.
• Currently union only need to ask members if they would like to take part in industrial action or action short of industrial action, and whichever the majority vote for, is protected and immune from legal action.
Information Requirements – Ballot Paper
• Under new Bill, must: – include a summary of the matter(s) in issue in the
trade dispute to which the proposed industrial action relates;
– No longer ‘a reasonably detailed indication’ as originally proposed
– if a strike is not proposed, specify the type of industrial action proposed; and
– indicate the period within which the industrial action is expected to take place
Information Requirements – Ballot Results
• TULRCA – as soon as reasonably practicable after a ballot, trade union must ensure that all those entitled to vote are informed of the number of: – votes cast; – individuals who voted “yes” and “no”; and – spoiled voting papers.
• The Bill will amend that so that all those entitled to vote will also be told: – The number of individuals who were entitled to vote; – Whether or not the number of votes cast was at least 50% of the number who
were entitled to vote; and – Where the additional balloting rules on important public services apply, the
number of people voting “yes” was at least 40% of the number of individuals entitle to vote.
• Must also ensure that they have taken all reasonable steps to give every relevant
employer this information.
Information Requirements – Notice of Action
• Currently, a notice must be received by an employer no earlier than the date on which the union notifies the employer of the result of the ballot and at least a week before the industrial action is due to start.
• The Bill will extend the minimum period of notice from seven days to fourteen days (UNLESS the employer agrees to seven days).
Information Requirements – Expiry of Mandate
• Currently, provided that industrial action is started within four weeks of the ballot, there is nothing to prevent the union from suspending and restarting action.
• The Bill will remove the existing time limits and replace them with a fixed six-month (or up to nine months by agreement) time frame from the date of the ballot within which industrial action may be taken and thereafter, a fresh ballot would be needed to sanction further action in the same dispute.
Union Supervision of Picketing
• The Bill will impose extra requirements where the picketing has been organised by a trade union, or the union has encouraged its members to take part in picketing:
– Attempt to halt ‘leverage’ tactics – Must appoint a person to supervise the picketing (picket supervisor); – The picket supervisor must be an official or other member of the union
who is familiar with the code of practice on picketing; – Picket supervisors must wear something to identify themselves; – The union or picket supervisor must take reasonable steps to tell the
police the picket supervisors name, where the picket is taking place and how to contact the picket supervisor;
– The union must provide the picket supervisor with a letter stating that they are authorised to act as such; and
– The picket supervisor must show the certificate to any police constable, or any other person who reasonably asks to see it.
Hiring Agency Staff During Industrial Action
• At the moment, employment agencies are prevented from supplying employers with temporary agency workers to perform duties normally performed by a striking worker.
• The government published a consultation seeking views on the removal of this provision
Overview of Reform Issue Position under TULRCA Position under Trade Union Bill
Ballot thresholds • simple majority • simple majority ; and • 50% of all eligible members must have voted; and • if “important public services”, at least 40% of those entitled to vote, have voted in favour.
Ballot paper • ask members if they would like to take part in industrial action or action short of industrial action
• summary of matters in dispute; • type of industrial action proposed; • period in which the action will take place.
Ballot results • inform all those entitled to number of: (i) votes cast; (ii) individuals who voted “yes” and “no”; and (iii) spoiled voting papers.
• inform all those entitled to: (i) number of individuals who were entitled to vote; (ii) whether the number of votes cast was at least 50% of the number entitled to vote; and (iii) where additional balloting rules on “important public services”, whether at least 40% voted “yes”.
Notice of action • 7 days notice • 14 days notice
Expiry of mandate • provided industrial action begins within 4 weeks of ballot, no expiry of action.
• six month (or up to nine months, by agreement) time frame for action.
Picketing • Code of Practice on Picketing • additional requirements of “picket supervisor”
Q A
