According to a report recently published by the Equality and Human Rights Commission, there still exists a gender pay gap of up to 60% in the finance industry. The largest gap relates to women working full-time in areas such as fund management, stock-broking and futures trading. These women earn on average 60% less annual gross salary than men - a pay gap of more than twice the national average.
So with a huge surge recently in equal pay claims in local government and the NHS, is this another fertile area for equal pay claims? I definitely think so. From my experience in advising employers in both the private and public sector, I believe the flurry of equal pay activity in the public sector will surely find its way in to the private sector.
The report itself was published as the first stage of the Commission's inquiry into sex discrimination in the finance industry. It indicated that although there are equal numbers of men and women working in the finance sector, women are concentrated in administrative and secretarial jobs and are significantly under-represented in managerial jobs. It also stressed there is a strong need for investigation into recruitment and promotion within the industry.
Chair of the Commission Trevor Phillips commented that: "The figures...are shocking and indicate just how serious the pay gap has become in the financial sector, with women concentrated in lower paid, lower skilled roles and few able to make it to the top".
Phillips is therefore asking the Government to take steps to address gender pay discrepancies in the forthcoming Equality Bill, expected to come into force in 2010. The Bill aims to modernise existing discrimination legislation and address pay inequalities between men and women, as well as encouraging transparency in the workplace in terms of pay by banning ‘gagging' clauses that traditionally prevent employees discussing what they earn.
But some argue that the proposed changes do not go far enough. Following Government consultation with business leaders, it appears that mandatory pay audits will not be a feature of the new legislation, much to the disappointment of women's rights campaigners. Time alone will tell whether such a measure may be the only realistic way of identifying whether, and to what extent, gender pay gaps exist within your organisation.
The new Bill will undoubtedly add to the pressures faced by employers who are trying to cope with the complexities of employment legislation. But although they may be wary of carrying out equal pay audits in case they open up a can of worms, by not doing so they are just brushing the issue under the carpet. And, as demonstrated by a rising number of claims under the Equal Pay Act in the public sector, these issues always find a way of surfacing eventually.
The only real way to rid ourselves of the gender gap has to be to deal with the issue head on. Open that can of worms...
Jawaid Rehman is an equal pay specialist solicitor in the employment team at Weightmans
