Pay to rise by 3pc next year, but men still winning

2005

Three-quarters of British private sector workers are likely to get a pay rise of 3 per cent or more in the coming year, a study has suggested, but official figures still show men doing better than their female counterparts.

Specialist journal IRS Employment Review has predicted that the level of pay settlements for 2005/06 will range from 2 per cent to 17 per cent, with the majority – 58.7 per cent – expected to fall between 3 per cent and 3.99 per cent.

Many employers are likely to play it safe, with more than six out of 10 of the bargaining groups covered by the survey likely to receive the same percentage award in 2005/06 as they did in 2004/05.

One-fifth of private sector workers are predicted to benefit from a higher pay rise next year but the same proportion is also tipped for a lower increase.

Its findings came as latest figures from the Office for National Statistics showed the pay gap between men and women is narrowing, but only painfully slowly.

Women employed full-time earned 13.2 per cent less than men, while last year the gender pay gap was 14.5 per cent.

The improvement in the gap was because of an increase in the proportion of women taking higher-paid professional jobs, said ONS.

But when it came to part-time working it was still more a chasm than a gap, with women paid nearly 40 per cent less than men on average.

The ONS study also a growing disparity between the wages of Britain's wealthiest and poorest workers.

The highest earning full-time employees saw their wages grow by nearly double the percentage of the lowest paid workers, it found.

However, wages in the public sector had risen far more quickly in the past year than in the private sector, ONS added.

Public sector workers saw their wages rise by 4.1 per cent during the year, compared with 2.5 per cent in the private sector.

Across the whole economy, the average wage for a full-time employee had risen from £22,100 to £22,900 in the past year.

The Equal Opportunities Commission described the figures as "grim".

Acting chair Jenny Watson said: "Thirty years on from the Equal Pay Act coming into force, the law has reached the limits of its usefulness. Unless radical new action is taken, another generation of women can expect to suffer the injustice of unequal pay."

She added: "Current legislation places the burden on individuals to fight for equal pay through the tribunal courts, which is costly for both employees and employers, and it's not working.

"We know that two thirds of employers have no plans to check their pay systems to see if they deliver equal pay.

"It is time for government to ask employers to take more proactive steps to address this persistent problem, through the introduction of a requirement on the private sector to promote sex equality and eliminate sex discrimination," she stressed.

Women in part-time were now an "underclass", she warned, stuck in badly paid, low-level jobs, with little hope of career progression.

"Good employers already recognise that to make the best use of women's skills they need to ensure that high quality work can be done flexibly. But too many employers fail to see the benefits this could bring to their company," she added.

The IRS study also found that, for the seventh year running, individual performance-related pay – used by 65.1 per cent of organisations polled – was the preferred reward system.

The use of cash bonuses had seen the largest decline, with fewer than half of those polled now paying them, down from 57.9 per cent in 2004's survey.