Equality and Human Rights Commission

28 May 2010

On the 40th anniversary of the Equal Pay Act, the Equality and Human Rights Commission has told businesses that they need to be proactive and take action to close the pay gap between men and women in their organisations.

When the Equal Pay Act was introduced in 1970, it was heralded as a major advance for women in the workforce. However, 40 years later, the pay gap remains a stubborn reality, with figures in Scotland showing that women are still being paid less than their male counterparts – an average of 12.2% less for full time workers and a massive 32% for part time workers.

Although figures for 2009 indicated that the gender pay gap for full time workers in Scotland had fallen marginally from 14% in 2008, this still means that Scottish women earn on average £113 a week less than men, an equivalent of £489 per month. In real terms, this gap translates as : 

• the average clothing and footwear bill per week for five families
• more than an average households weekly running costs (food and fuel bills)
• about 10 mid-priced premiership football season tickets per month

This gap is even wider in management and other senior roles, where men are earning up to £213 a week more than women, and in some sectors, the pay gap is significantly higher. The Commission’s recent inquiry into the finance sector found that women working full-time earn up to 55 per cent less annual average gross salary than their male colleagues. It also revealed that men in some of the sector’s biggest employers receive five times the performance pay of women.

The Commission’s research found a number of causes cited for the persistent gap.  These include stereotyping about women’s capabilities and skills, women bearing the brunt of caring responsibilities, and discrimination in pay systems.  

For businesses which do link equal work to equal pay, the rewards are well documented and include a boost in workplace productivity. Kaliani Lyle, Equality & Human Rights Commission Scotland Commissioner, called on companies to help address this problem by adopting transparent pay policies and more flexible working practices:

‘Although it’s encouraging that the pay gap between men and women is closing, it is nevertheless very slow progress - forty years since the Equal Pay Act, and women are still paid on average 12.2% less than men in full time employment in Scotland.  Clearly significant changes need to take place, and that means changing habits and practices. 

The Commission believes one important step is to develop ways for employers to measure and report on their gender pay gap.   By understanding that they have a problem, companies can start to take steps to address it.  We also know that adopting flexible approaches to work can make a big difference in helping to close the gap.  The Commission will provide whatever assistance it can to help businesses measure and address pay gaps. However, we have made it clear that when the voluntary approach fails, we will use our enforcement powers to address any persistent and significant problems. We are encouraged by the firms which are developing transparent pay policies and flexible approaches to work, but there aren’t enough of them.  The many need to learn from the few’

Emma Ritch, Project Manager for Close the Gap, a partnership project which works to address the gender pay gap said ‘After 40 years, the fact that such a large and widespread gap still exists is not only an issue of equality and social justice, but is bad for business and bad for Scotland’s economy.’

Ends

For press enquiries contact the Equality and Human Rights Commission : Deborah Cowan on 0141 228 5938, Colin Macfarlane on 07970 541 369

Notes to editors:

According to Close the Gap, a partnership project which works to address the gender pay gap, the three main causes of the pay gap are:

• Occupational segregation - women are clustered into the ‘5 Cs’ - catering, cleaning, caring, clerical and cashiering and are underrepresented in senior management. For example, women make up 89% of the health and social sector in Scotland, but only 19% of NHS Chief Executives/Heads are women.
• Lack of flexible working opportunities – more women than men work part time in order to balance responsibilities. Most part-time work is clustered in low paid occupations, and the lack of part-time and wider flexible working options at senior levels can also prevent women, who are likely to be the main carer, from progressing.
• Discrimination in pay and grading systems – for example individuals being appointed on different points on a pay scale, different job and grade titles for virtually the same job, male jobs having disproportionate access to bonus and earnings, women having less access to overtime and higher paid shift-work, and women not receiving the same access to training and development.

There are different ways of reporting on the pay gap. The media reports a combined headline UK figure which includes full-time and part-time earnings and is calculated using the median.  Annual Survey of Hours and Earning (ASHE) is the source for the headline UK pay gap which is published late autumn every year. GEO uses the median hourly earnings of men working full-time compared to women working full-time and women working part-time when reporting the pay gap.

In Scotland the gender pay gap is reported using the mean, as the median figures underplay the fact that there are a few extremely high earning staff, most of whom are men, and that many women are clustered in the lowest paid professions. The mean takes into account the outliers and reflects the structural inequality between men and women and the issues relating to vertical occupational segregation. Furthermore, international comparisons use the mean.

• The Equality and Human Rights Commission is a statutory body established under the Equality Act 2006, which took over the responsibilities of Commission for Racial Equality, Disability Rights Commission and Equal Opportunities Commission.
• The Equality and Human Rights Commission is the independent advocate for equality and human rights in Britain. It aims to reduce inequality, eliminate discrimination, strengthen good relations between people, and promote and protect human rights.
• The Equality and Human Rights Commission will enforce equality legislation on age, disability, gender, race, religion or belief, sexual orientation or transgender status, and encourage compliance with the Human Rights Act. It will also give advice and guidance to businesses, the voluntary and public sectors, and to individuals.
• Close the Gap is a partnership initiative working to close the gender pay gap in Scotland.   Close the Gap works with employers and employees to enable action to address the causes of the pay gap.
• Their partners include the Scottish Government, the Equality and Human Rights Commission, Scottish Enterprise, Highlands and Islands Enterprise, Skills Development Scotland and the Scottish Trade Union Congress.