By Margaret Doyle
Here in Britain, it’s hard to ignore the recent hubbub about gender pay equality. The other day, 4 April, was the big reveal. All private-sector and most public-sector employers with 250 or more employees are now required, under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, to publish data on the differences in average hourly pay for men and women in their organisation – the gender pay gap. The new regulations require organisations to report annually (and initially by 4 April 2018), on:
- the difference between the average hourly rate of pay paid to male and female employees
- the difference between the average bonus paid to male and female employees;
- the proportions of male and of female employees who receive bonuses; and
- the relative proportions of male and female employees in each quartile pay band of the workforce
The differences in hourly rate must be reported as both mean average (the result of adding all the rates and dividing between the number of rates) and median average (the mid-range number of all the rates). Mean averages give a useful overall average but can be skewed by bonuses applied to only some employees. Median averages give a ‘typical’ rate, what a middle-earning employee earns; they don’t tell you as much about the overall picture but are also less likely to be distorted by outliers.
The resulting data (available on https://gender-pay-gap.service.gov.uk/public/assets/pdf/gender-pay-gap-explained.pdf) have been pored over, analysed, celebrated and dismissed in the news over the past few days. Some organisations have had shamefully poor report cards; others surprisingly good ones. The reasons for gender pay disparity are many and complex, and the gender pay gap reporting requirement is a fairly crude measure of equality, but it is one that can be measured, and in this sense the initial reports serve as a valuable benchmark against which to gauge progress. How organisations respond to the results is the true test of their integrity in relation to gender pay equality.
Is this about equal pay?
The gender pay gap is not the same as equal pay, which is paying men and women the same for the same or similar work. Failing to comply with the equal pay legislation is illegal (and has been since the Equal Pay Act of 1970, although it is now covered by the Equality Act 2010). However, having a gender pay gap is not illegal (although failing to comply with the 2017 Regulations is – see below).
The gender pay gap is the difference in average hourly wage of all men and women across the organisation. The pay gap generally reflects men being paid more than women, on average. In some organisations, the pay gap is in favour of women; ie the average hourly wage is higher for women than for men. This is true for 13% of organisations reporting. A further 7% reported no pay gap at all. The vast majority reported a pay gap in favour of men.
Failure to comply with an obligation imposed by these Regulations constitutes an ‘unlawful act’ within the meaning of section 34 of the Equality Act 2006 (c. 3), which empowers the Equality and Human Rights Commission (EHRC) to take enforcement action. The EHRC has been in the news making it clear that it will be rigorous in investigating non-compliance with the Regulations and, where necessary, taking enforcement action.
What does it tell us?
The median gender pay gap in Britain in 18.4%, according to the Office for National Statistics. However, that figure covers all organisations, not only those with 250 or more enployees. The median gender pay gap reported to the government ‘gender pay gap portal’ is 9.7%, according to the BBC (see http://www.bbc.co.uk/news/business-43651780). Almost eight out of ten of the more than 10,000 organisations reporting on the portal pay men more than women.
The gender pay gap identifies potential structural inequality, not inequality or discrimination at an individual level. Although there is some criticism of the crude nature of the data being reported, it is generally accepted that reporting on the gender pay gap reveals patterns and trends about the proportion of women in senior positions, which in turn gives insights into potential barriers for women in the workplace, including the effects of prejudice and unconscious gender bias and of caring responsibilities (for children, elderly parents, etc) still primarily being taken on by women. Identifying a gap in pay can help organisations see that there’s a problem that needs addressing.
A female employee earns 33p for every £1 paid to a male employee of Ryanair.
A female employee of the Financial Ombudsman Service earns 93p to every £1 paid to a male employee.
These problems will be specific to the employer or sector. For example, many airlines are reporting a high gender pay gap because pilots, who are paid much more than cabin crew, are predominantly male. In education, one factor is that women with family responsibilities are drawn to a sector that offers part-time and term-time work, which for administrative staff and teaching assistants usually means lower hourly pay. These are not excuses for tolerating a pay gap, however. Rather than tolerating a pay gap, organisations need to consider their recruitment and promotion strategies.
What causes a gender pay gap?
Having a gender pay gap is not evidence of intentional discrimination but does reflect entrenched patterns and as such it invites honest reflection on the part of organisations. A number of complex factors influence an organisation’s gender pay gap (as noted by the EHRC), including but not limited to:
- Men at the top: The highest paid sectors are male-dominated; women often end up in employment sectors that offer narrower scope for financial reward.
- Undervaluing some work over others: Some sectors or jobs that are primarily female dominated are not valued and thus not as well paid as male-dominated sectors and jobs.
- Not sharing caring: In the UK caring for family and children is still predominantly seen as ‘women’s work’ and mostly carried out by women. The gender pay gap is affected by more women being in part-time work and taking time out in order to accommodate caring responsibilities.
- Stereotyping and unconscious bias: Recruitment and promotion are key to addressing the imbalance if women in senior positions, where pay is highest. Efforts need to be made to combat bias, prejudices and assumptions. Assumptions may also be made about women not asking for or accepting promotions because of their caring responsibilities or not negotiating higher pay on appointment. Many employees assume pay parity and are not aware of gender discrepancies and hence do not push for change.
More details on the factors that contribute to a gender pay gap are given in the EHRC’s research report, The Gender Pay Gap, published in August 2017.
How do ombuds fare?
Four ombuds schemes have reported: Legal Ombudsman (LeO), Parliamentary and Health Service Ombudsman (PHSO), Financial Ombudsman Service (FOS) and Ombudsman Services (OS).
|Financial Ombudsman Service (FOS)||Women’s mean hourly rate is 7.2% lower than men’s||Women’s median hourly rate is 6% lower than men’s|
|Legal Ombudsman (LeO)||Women’s mean hourly rate is 10% lower than men’s||Women’s median hourly rate is 0% lower than men’s|
|Ombudsman Services||Women’s mean hourly rate is 13% lower than men’s||Women’s median hourly rate is 4.3% lower than men’s|
|Parliamentary and Health Service Ombudsman (PHSO)||Women’s mean hourly rate is 9.9% lower than men’s||Women’s median hourly rate is 9.8% lower than men’s|
Staff are divided into four groups (quartiles) according to level of pay: top quartile (highest pay), upper middle, lower middle and lower quartile (lowest paid). In all four ombud services, women are in the majority in the top two quartiles. In PHSO, LeO, and Ombudsman Services women are in the majority in all four quartiles.
Three of the services award bonuses: In FOS, roughly equal percentages, 96% of both men and women, received bonuses, although women’s mean average bonus was 6.5% below men’s. In PHSO, 25% of women and 26% of men received bonuses, and women’s mean average bonus was 6.1% higher than men’s. In Ombudsman Services, 18% of women and 14% of men received a bonus, and women’s mean average bonus was 0.9% higher than men’s. LeO did not award bonuses.
Although it’s difficult to reach any robust conclusions from the data, it appears that ombuds’ report cards generally look better than average in terms of pay discrepancy. All except the PHSO had a median pay gap lower than the average reported figure of 9.7%, and the Legal Ombudsman has no median pay gap. Representation of women at the higher-paid levels in all these ombud services is promising. Nevertheless, it is disappointing that all have a gender pay gap, at least in terms of mean average, suggesting work to do to achieve gender equality. It will be interesting to see how they respond.
The problem – and it should be recognised as a problem, even if the averages among ombuds are at or below the national average – needs to be addressed organisationally and individually and requires leadership. At an individual level, training in unconscious bias can help address the pernicious prejudices that we all have and that can manifest themselves in recruitment and promotion decisions. Organisationally, it is important to identify the factors leading to the gap and to review approaches to recruitment, retention, promotion, job grading, and coaching opportunities.
A shared commitment among ombuds to eliminating the gender pay gap would be a great start.
About the author:
Margaret Doyle is a mediator and researcher and manages the ombudsresearch.org.uk website, which was set up as part of a mapping project on the use of informal resolution by ombuds in the UK and Ireland. She is also Senior Research Fellow with the UK Administrative Justice Institute at the University of Essex and an independent member of the Validation Committee of the Ombudsman Association.
Earlier this month the Independent Police Complaints Commission (IPCC) published guidance on handling complaints about discrimination. The guidance follows a number of critical reports by the IPCC, which found significant failings in the way police forces carried out such investigations and engaged with complainants. It raises an interesting question: To what extent do ombuds and other complaint handlers hold bodies they investigate to account for discriminatory behavior and decision-making?
Fairness is a key concept of the ombuds approach: both fairness of decision-making and fairness of the processes used to handle citizen-consumer ocmplaints. Yet ombuds schemes and other complaint handling bodies in the UK have generally been reluctant to tread into the territory of naming discrimination and human rights breaches in findings on complaints. Part of the reluctance is the concern that any determination of a breach of equalities and human rights legislation must be made by a court. Breaches of human rights can, however, inform findings of maladministration, but as noted by Buck et al in The Ombudsman Enterprise, this innovative use of the law has its dangers, not least the risk of judicial review.
Promoting and protecting human rights is the primary function of National Human Rights Institutions (NHRIs), some of whom also have complaint handling roles. A current study of the role of NHRIs in dealing with human rights complaints is exploring how that complaint-handling role fits with the wider strategic function, and to what extent informal processes such as mediation are being used for these. (We were interested to note that the researchers are finding, as we did, that certain ADR and informal processes are ‘amorphous and difficult to isolate’ and that shared meanings and forms of, for example, mediation appear not to exist.) In some countries, the NHRI is also an ombud, but in the UK ombuds are separate organisations; the Council of Europe uses the term ‘national human rights structures’ to refer to those commissions, ombuds and police complaints mechanisms that have a human rights mandate but are not the accredited NHRI.
Last year the Equalities and Human Rights Commission published a guide to human rights in action. The section of the report on regulators, Inspectorates and ombuds (RIOs) includes several case studies, from the Parliamentary and Health Service Ombudsman, the Prisons and Probation Ombudsman and the IPCC, illustrating the use of the human rights framework in complaints handling and investigation.
Among those ombuds who have been proactive in identifying these issues in complaints is the Parliamentary and Health Service Ombudsman (PHSO), which has published a number of reports highlighting the human rights and discrimination elements of many complaints, particularly about vulnerable people in care or hospital (for example, this one on disability discrimination). The former Parliamentary and Health Service Ombudsman has stated that ‘the Ombudsman’s approach includes an overall concept of fairness, a fundamental commitment to the humanity of individuals and their right to equality in treatment and outcomes. Issues of discrimination and equalities underlie many of the complaints which come to the Ombudsman…’.
The PHSO makes clear in its general standards for determining complaints that it will expect a public body to comply with the equalities and human right legislation and will hold them to account:
‘It is not the role of the Ombudsmen to adjudicate on matters of human rights law or to determine whether the law has been breached: those are matters for the courts. The Health Service Ombudsman’s Principles of Good Administration do, however, state that the Principle of ‘Getting it right’ includes acting in accordance with the law and with regard for the rights of those concerned, and taking reasonable decisions based on all relevant considerations….
If the public body is unable to demonstrate that it has had regard for, and taken account of, human rights, the Ombudsmen will take that fact into account when considering whether there has been maladministration and/or service failure.’
The Northern Ireland Ombudsman has been in the forefront if this work and has worked closely with the NI EHCR to develop a manual and training for complaint handlers to help them identify human rights issues in complaints they receive.
The UK Financial Ombudsman Service has published briefings on the need for businesses to comply with the Equality Act, such as this one. One of the issues is, as FOS points out, ‘consumers rarely articulate their complaint as “discrimination” – or invoke the Equality Act. More often than not, they’re simply frustrated at being unable to access the services they want or need to – and feel that the business’s processes are unnecessarily inflexible and impersonal.’
‘If ombudsmen want a broader canvas on which to paint their distinctive contribution human rights is probably the best, perhaps the only, place to turn at present.’ Nick O’Brien
An optimistic view is that ombudsmen in the UK will ‘increasingly contribute to wards the resolution of human rights issues in public administration, both in conducting investigatory work and in the office’s relations with other bodies’ (Buck et al, The Ombudsman Enterprise, 2011). Nick O’Brien, a human rights specialist and ombuds-watcher, has noted the increased consumerism plaguing ombuds schemes and argues that ombuds can mark themselves out among complaint-handling bodies by having a focus on discrimination and human rights issues: ‘If ombudsmen want a broader canvas on which to paint their distinctive contribution human rights is probably the best, perhaps the only, place to turn at present.’
How far do complaint handlers go in identifying discrimination or human rights as issues in complaints? How do ombuds and complaint handlers use the legal framework for discrimination and human rights in their casework and findings? Perhaps these questions need further research.