Gender 'wars

As we eagerly await the release of ?Star Wars: The Force Awakens, we are reminded of some of the age-old debates surrounding the franchise: not just how one decides the viewing order of the saga or what are the merits of the prequel trilogy, but instead the more pressing gender equality issues. 

Yes, Leia Organa was an intelligent, resourceful princess of an oppressed people who could shoot a blaster with precision and brief squadrons of pilots in their war against the evil Galactic Empire, but the most iconic image of her is as a scantily clad, metal bikini-wearing slave next to the giant space slug, Jabba the Hutt. Indeed, as recently as November #SlaveLeia was trending on Twitter. Further, if you count up all the significant characters in the original trilogy, Leia was functionally the lone representative of the female gender in the Star Wars universe. 

While subsequent films in the franchise have sought to introduce other strong female protagonists, and as Disney is rumoured to completely eliminate ‘Slave Leia’ from its merchandising plans, gender equality – particularly in respect of pay – is not just an issue that permeates Hollywood. Some 45 years after the Equal Pay Act 1970 was introduced, the overall gender pay gap reportedly stands at 19.1 per cent. At its current rate of change, the economic divide between men and women will, therefore, not close before 2133. 

The legal sector is no different. The Law Society of Scotland has revealed that the gender pay gap north of the border was an astounding 42 per cent at its widest point. This is not altogether surprising. In 2014 the Law Society in England and Wales reported a pay gap of 30 per cent across all areas of private practice. 

Factors such as work type and career breaks go some way to explaining this. However, even those women who do not take time out of practice, are appointed partner, and work in the same sector as male peers statistically still receive less money for doing the same job.

Mandatory reporting

A principal issue appears to be that many organisations are simply unaware of their own gender pay gaps. So what can be done to address this? 

Employers who lose equal pay claims at the Employment Tribunal face the prospect of being compelled to carry out an equal pay audit, the results of which must be published online. However, such claims are notoriously difficult to bring. As a result, between January and March 2015 the tribunal received 25 per cent fewer claims than during the same period in 2014. Moreover, the effectiveness of the tribunal in reducing the gender pay gap is doubtful. 

As such, there could be no better time for the government to announce the introduction of mandatory gender pay reporting in 2016 through section 147 of the Small Business, Enterprise and Employment Act 2015. This will require private and voluntary sector employers with at least 250 employees to carry out an equal pay review and publish information about their gender pay gap. 

Although the details are not yet known, David Cameron has suggested that employers could be required to go beyond simply reporting the overall pay gap and publish the difference broken down by grade and job type, including bonus information, with the obligation extending to public sector employers. 

But what does this mean for employees? If the results of any mandatory publication of gender pay information are positive, this could increase employee confidence in the remuneration process and enhance a firm’s reputation. 

Conversely, of course, if inequalities are highlighted not only will companies risk the £5,000 maximum fine for non-compliance, this could have more harmful implications, including negative publicity, reputational damage, difficulty in attracting talent among women, disclosure of sensitive financial data, and the costs associated with employee claims for equal pay.

With the potential consequences in mind, firms would be well advised to start planning measures to address any concerns that their disclosures could raise and to consider taking action before publication. 

Like for like

It is worth considering what impact on wage equality would be felt as a result of the new rules. Employers are only likely to feel the pressure to close any gaps if they are required to report in a way that is detailed and meaningful in the context of their organisation.

Further, with any requirement to produce information by grade or job type to enable a greater ‘like-for-like comparison’, the challenge will be in how to define such a comparison. Equal pay is not only about paying employees who do the same job the same rate of pay. Employees with different jobs whose work is of equal value are also entitled to equal pay. The question of whether two jobs are of equal value has often vexed the Employment Tribunal, to such an extent that the question is often deferred to an independent expert on a case-by-case basis. 

The prospect of the mandatory reporting regulations establishing a test that will achieve the same result for all employers in all situations is, therefore, hard to imagine. As such, it is likely that employers will have some discretion in the way in which they present their reports. This leads to fears that businesses will be able to ‘cut the cake’ in a way that disguises their gender pay gaps. 

Reporting is not an end in itself. Crucially, it is what an employer does with the pay gap information, and in addressing the underlying reasons for said gap, that will make a real difference. 

Deloitte recently revealed that it pays women on average 17.8 per cent less than its male workers, although the gap between men and women in the same grade of job narrowed to ?1.5 per cent. This raises the question of whether the issue is really about equal pay for equal work or increasing the representation of women at senior levels and in highly skilled roles. 

Working patterns

The solution for the legal profession, like so many other sectors, is likely to lie in working patterns. The majority of, if not all, senior positions are currently full time. Statistically at least, women are more likely to take breaks in their career and take advantage of flexible working arrangements. ?To achieve a genuine and sustainable change ?in culture, employers will need to implement transparency with regard to progression and encourage a change in attitude towards non-traditional working patterns.  

Addressing the underlying reasons for the slower, and in some cases curtailed, career progression of female employees would certainly help in narrowing the pay gap and would make a significant difference to pay equality.

Notwithstanding this, it is estimated that the mandatory reporting regulations will affect 7,855 employers and 40 per cent of the working population. Given that there is no ‘one size fits all’ solution to the issue, increased transparency is surely one of the simplest ways to drive change. 

Mandatory reports will help to increase awareness of habitual imbalances while isolating certain obstacles. It should also encourage all firms to examine their pay structures and seek to resolve any issues before they become a problem. However, given that pay reporting is likely to become best practice, it is not something that should just be adopted by those firms with over 250 employees, especially if the legal sector is committed to promoting change. It will be up to all firms to work out how to effectively overcome the pay gap. 

Those firms that succeed will improve their chances of retaining the best talent. The legal profession should use this opportunity to fully commit to tackling the gender pay gap issue. Yoda, the wise Jedi master, was famous for telling his prodigies: ‘Do. Or do not…’ In my opinion, however, we must at least ‘try’ to close the gap.

Alice Bowkett is an associate at Bivonas Law www.bivonaslaw.com