Dr. Kara McGann:

I thank the joint committee for the opportunity to address it on this important issue for the business sector. IBEC welcomes the introduction of gender pay gap reporting in Ireland and commends the Minister of State, Deputy Stanton, and the gender equality division of the Department of Justice and Equality on their tireless work in developing the general scheme of the Bill.

Gender pay gap reporting will encourage effective discussion and action to tackle the challenges facing business and society in regard to gender balance. Members will be aware that this challenge relates to the difference in the average hourly wages of men and women across a workforce and comparing the pay of all working men and women, rather than only those in same jobs, with the same working patterns or the same competencies or experience. It does not indicate discrimination, bias or even an absence of equal pay for equal value work, which is illegal, but it does report a gender representation gap. For example, if women hold more of the lower-paid jobs in the organisation than men, the gender pay gap is usually bigger. Although great strides have been made over recent decades to see greater numbers of women progressing, the starting point was low and the improvement is not yet consistent with our ambition.

Pay disparity as measured by the gender pay gap is not solely an organisation level issue, but rather is symptomatic of how we think of men, women and gender and how society has evolved. Several complex factors typically lead to a gender pay gap, including pre-labour market areas such as education and skills acquisition and issues surrounding caring responsibilities and how these impact on labour market outcomes.

This is timely legislation which will contribute to the tackling of gender imbalance in Ireland, an issue that is a strategic imperative for many employers. Its success, however, will ultimately be judged in terms of how it delivers.

As is set out in other submissions, employers are but one actor in the gender pay gap process, yet they are the only stakeholder who may receive unfair reputational damage from the publication of their gap.

This is a complex challenge which no country in the world has yet fully conquered. We have one opportunity to get this important legislation right to achieve the buy-in of the Government, employers, civil society and individuals and to enable solutions to be identified and implemented. To achieve that requires the right methodology, strong coherent communication regarding the conclusions that can and cannot be drawn from a pay gap figure and support to address the challenges that have created the gap, many of which require action from stakeholders other than employers and solutions outside the employer’s control. Fundamental to solving a problem is knowing where the problem exists and what is causing it. As such, IBEC welcomes the publication of the general scheme of the gender pay gap information Bill and the aims set out therein. However, we have some concerns over how the general scheme envisages the introduction of reporting and believe that some amendments would ensure it provides for a useful method of reporting. As currently drafted, the general scheme provides for a hybrid of multiple methodologies so as to be administratively burdensome and costly to the employer. It calls into question issues of privacy and data protection, yet fails to yield certain information that would enable solutions to be identified.

While an in-depth commentary is impossible in a five minute statement, I wish to highlight where we believe the most significant challenges exist from a business perspective. First, there is the issue of quartiles. The general scheme quite correctly emphasises the importance of examining where males and females are located throughout the organisation as gender pay gap reporting is, in reality, a measure of representation. However, reporting on quartiles requires dividing an organisation's workforce artificially into four equal bands. This can result in two employees on exactly the same pay being placed into different bands to fit the quartiles. IBEC has proposed the use of occupational categories akin to the Australian model of gender pay gap reporting. Should a gender pay gap be calculated, this model would allow the data to be further interrogated to identify where and often why the gap is occurring, enabling real solutions to be sought. Unfortunately, the general scheme alludes to both of these measures under subsections 6(xi) and 7 of head 2. This appears to require employers to engage in double the administration for no real gain. As such, only one methodology should be required.

Second, IBEC has concerns regarding the inclusion of head 6 in the general scheme. The purpose of this legislation is not to create employee rights but to provide a diagnostic tool to help address barriers to the full socioeconomic equality of women. Involving the Workplace Relations Commission, WRC, and giving employees entitlements to make claims before the WRC introduce the prospect that this becomes rights-based legislation which was never what it was intended to be. IBEC is concerned that head 6 risks pitting employees against employers, and encouraging employees to take claims to the WRC will increase the likelihood that attempts to address an organisation’s gender pay gap will become an adversarial process. This is not in the interests of either party and will certainly not facilitate solutions.

Gender pay gap reporting alone cannot change the imbalance of males and females within organisations, but measurement and reporting tend to be key drivers of change. This can either be a box-ticking exercise which will not realise our common aims or we can use this opportunity to tackle gender balance. A renewed focus on the gender pay gap and its roots in the representation of women offers business and society an opportunity to move the dial substantially if we are serious about addressing this problem. I thank members of the joint committee for the opportunity to present IBEC's views on this important issue.