How the New Government May Impact on the Equality Act

This article discusses how the protracted formation of the new government could have an effect on how far and wide ranging any measures of gender equality from the Equality Act may be.

The protracted progress on the Equality Act reached a conclusion at the close of parliamentary proceedings prior to the election.  Its move to the statute book is however, not the end of the matter for Reward practitioners. The similarly protracted formation of a new government could have a material effect on how far and wide ranging any measures of gender equality may reach.  At this stage, many of the specific details relating to the actual reporting requirements to be placed on organisations are not fully clear. Firstly, the provisions of the Act can be summarised as follows:

1. The Act allows for the government to require all employers with more than 250 staff to report their gender pay gap from 2013, if sufficient progress on reporting has not already been made voluntarily.
2. The Equality and Human Rights Commission will develop a set of metrics for gender pay reporting, and the commission will monitor the progress of reporting within the private sector annually.
3. Public sector organisations with more than 150 employees will also be required to report on gender pay as well as other equality data including the number of black, Asian and minority ethnic workers, by April 2011.

As can be noted above, a ‘timetable’ for full implementation of the Act exists running to 2013, a key date for the formal requirement of gender pay gap reporting in the private sector.

Some provisions will be subject to implementation only through subsequent regulations, such as any potential requirements to enforce equal pay audits, so these may well be changed or even discarded altogether if the government of the day so decides.

Another key element of the Act is the provision to use the significant ‘buying power’ of the public sector to ensure that successful contract bidders have gender and other equality facts and figures integral to the bidding process. The implication of this could be that an element of the rating process for submitted tenders will be the promotion and assurance of equality. However, once again the exact mechanisms for this will have to be developed.

With the newly installed Conservative/Liberal coalition, any pay gap reporting measures are likely to avoid excessive regulation and administration and may encourage broader organisation level pay gap reporting or the requirement to provide a commentary on the gender pay gap. In principal, a Conservative led government has little appetite for increased regulation in the private sector.

In the public sector, the Conservatives have expressed concern that smaller and medium sized organisations are often incapable of competing in tender processes with more heavily resourced organisations and with an additional gender pay gap evidence barrier to overcome, this will not ease their concern.

The potential pressure for more detailed pay gap reporting (and therefore more accurate!), such as by 'grade' or job evaluation application may have diminished as a result, at least in the private sector.

The Equality Act will provide the need for greater transparent pay processes but the extent of this change will be tinged with a blue or red hue.

Author: Graeme Stephen, Senior Reward Consultant

Find out more about Graeme: http://solutions.northgatearinso.co.uk/graeme_stephen

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