Pay secrecy encourages discrimination

2004

The Equal Opportunities Commission has attacked the culture of secrecy surrounding the issue of pay in the UK, claiming that it encourages discrimination against women and perpetuates the UK's wide gender pay gap.

"Forget sex, politics and religion, pay is the new taboo," said EOC chairwoman Julie Mellor. "In Britain today, the whole business of pay is shrouded in mystery. Discrimination flourishes when people cannot be sure they are rewarded fairly."

The most common way of describing the gender pay gap is as a percentage difference between average hourly earnings of men and women working full-time. Using this definition, the gender pay gap in Great Britain is 18 per cent, or more than £6,700 a year.

At the same time, the EOC says that pay gap in London is wider than anywhere else in the UK, with men earning on average £400 more each week than their female counterparts.

However the EOC’s figures need to be seen in context. In London, pay figures have always been slanted by the number of very high earning City professionals - most of whom are male. Indeed the huge pay rises awarded to a small number of male executives in 2002 were so large that they widened the pay gap statistics against the long-term trend

Another significant factor in the gender pay gap is occupational segregation, where women are concentrated in a narrow range of low paid occupations such as cleaning, catering and caring, and the impact of caring responsibilities on women in the labour market, including the ability of women to work full-time or over-time.

The impact of outright pay discrimination - where women are paid less than men for doing the same job - appears to be more localised.

Last year, for example, figures compiled by the Chartered Management Institute and Remuneration Economics found that the proportion of women in management posts has more than trebled in the last ten years, that female managers are paid the same as their male colleagues and that they enjoyed higher average pay rises than men.

However a number of high-profile legal actions have underlined that women continue to lag behind male colleagues, particularly in the investment banking sector where the pay gap stands at 46 per cent.

"The conspiracy of silence about pay and bonuses that is still so common in the City allows discrimination to fester below the surface.” Mellor said last year.

Ironically the law is another area where women are getting a raw deal. On average, male trainee lawyers earn thirteen hundred pounds more than women trainees. In Greater London the disparity is £1,400.

However there are signs that things might be changing. Last year, EOC research found that more than a fifth of employers do not allow employees to share information about their pay with colleagues and that only 18 per cent of large employers and 10 per cent of medium-sized employers have done a pay review or are in the process of doing one.

But ahead of its upcoming annual reward survey next month, the Chartered Institute of Personnel and Development (CIPD) has said that it has recorded “a large increase” in the number of firms carrying out pay audits over the past year.

Nevertheless, as Julie Mellor said yesterday: "Employers who want to recruit and retain the best people need to demonstrate there is no discrimination in their workplace. It is also in everyone's interest to avoid a claim of pay discrimination going to a tribunal."