Oireachtas Joint and Select Committees
Wednesday, 21 November 2018
Joint Oireachtas Committee on Justice, Defence and Equality
General Scheme of the Gender Pay Gap Information Bill: Discussion
Today's engagement is to conduct pre-legislative scrutiny of the general scheme of the gender pay gap information Bill. From the National Women's Council of Ireland we are joined by Ms Orla O'Connor, director, and Ms Denise Roche, legal and policy advisor. From the Irish Congress of Trade Unions we are joined by Mr. David Joyce, equality and international development officer, Ms Marie Sherlock, an economist with SIPTU, and Ms Geraldine O'Brien, assistant secretary general of Fórsa. From the Irish Business and Employers Confederation we are joined by Ms Nicola Harkin, employment law solicitor, and Dr. Kara McGann, senior labour market policy executive. The deputations have colleagues in the Visitors' Gallery and they are all welcome too.
Shortly, I will invite those of you who have drawn the short straw to make your opening statements. Before I do that I must draw the attention of our witnesses to the situation on privilege. Please note that you are protected by absolute privilege in respect of the evidence you are to give to the committee. However, if you are directed by the committee to cease giving evidence on a particular matter and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your evidence. You are directed that only evidence connected with the subject matter of these proceedings is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Members of the committee should be aware that under the Salient Rulings of the Chair they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.
I will invite Ms O'Connor to speak first, followed by Mr. Joyce and Ms Harkin, if I am right in identifying the three opening speakers.
Ms Orla O'Connor:
I thank the committee for inviting the National Women's Council of Ireland to discuss the general scheme of gender pay gap information Bill. We appreciate the opportunity.
As committee members are probably aware the National Women's Council of Ireland is the leading national women's membership organisation. We are a feminist organisation campaigning for equality and advocating for women's rights. We have more than 180 member organisations throughout the country.
We believe that the gap in earnings between women and men, which stands at almost 14%, goes to the heart of economic inequality between women and men. It has serious implications for a woman's lifetime earnings, her life and career decisions and her ability to live in older years with a decent income. Unfortunately, there is no one solution to closing the gender pay gap. There are many complex and inter-related factors that influence women's employment opportunities and progress at work. These factors directly contribute to the existence of economic inequality and relate to issues of low pay and childcare.
We believe increased transparency and accountability around pay are vital in tackling the gap. In that respect we warmly welcome the Bill. Requiring employers to publish statistics on an organisational level will shine the spotlight for the first time on those organisations. An employer may even be unaware that it has a gender pay gap until it analyses pay information. Requiring employers to be more open about gender pay differences should bring pressure to bear on them to explain the reasons for those differences and to consider what they can do to eliminate them. Transparency around pay will ultimately help to improve the issue of gender-influenced pay.
Ireland is not alone in adopting this type of legislation. That is a positive point and to our advantage, as we have the opportunity to learn from other countries. While we warmly welcome the spirit and direction of the Bill, we call on the committee to consider a number of matters that we believe would serve to strengthen its overall scope. Currently, the proposed legislation will initially apply to companies with 250 or more staff. Then, on a phased basis, the provisions will extend to companies employing 50 or more staff. If this happens, the legislation is far less likely to have the same immediate impact on women in employment as the Private Members' Bill proposed by the Labour Party, which would have had immediate application to companies employing 50 or more staff, rather than having to wait for a given period.
Let us consider the threshold figures in more detail. The National Women's Council of Ireland sought to obtain the gender breakdown of those employed in small, medium and large businesses. It is rather difficult to get this data. We appreciate the fact that Senator Ivana Bacik raised this matter. The 2016 Central Statistics Office figures are from a certain sector of the business economy only. They cannot be disaggregated by gender. In any event, these are the figures we know. The total number of persons engaged in active small enterprises with fewer than 50 persons was 720,000. The number of persons engaged in medium-sized enterprises of between 50 and 250 persons is 290,000. The number of persons engaged in large enterprises, namely, those with 250 or more, is 467,000. Clearly, large numbers of people are working in small enterprises that will never be included within the scope of this proposed legislation.
We know from speaking to the members of the women's council and from speaking with women in general that they tend to be significantly represented in small and medium enterprises. In light of this we call on the committee to be more ambitious rather than rolling out this legislation starting with organisations with more than 250 employees. This type of legislation has long been signposted. The threshold for reporting should commence at a much lower figure. It should be extended to all those employers with at least 25 employees, the threshold adopted by our Icelandic neighbours.
Furthermore, organisations should be required to publish an explanation of any gender pay gap alongside the figures and, most important, an action plan for closing the gap, against which progress must be reported each year as part of normal reporting requirements. One of the major criticisms of the UK model is its failure to implement such a requirement. Civil penalties for non-compliance should be introduced at a level at which the cost of non-compliance is significant.
The Bill provides the ideal opportunity to address the discrimination inherent in wage negotiations. A person’s initial salary at an early job can affect salary at a later one because hiring managers often base their offer on previous pay. Research has shown that those who get lower salary offers are often women. The legislation should prohibit employers from asking about salary history or seeking that information through an agent or from other sources such as the applicant’s former employers. Employers should be legally required to state the minimum salary they are prepared to offer for an advertised role, regardless of whether it is advertised internally or externally, and generally prohibited from inserting terms in a contract that prevent employees from disclosing or discussing wages. Such measures would help to ensure that salaries reflect the qualifications, skills, experience and achievements of the particular employee and help to shift the emphasis from presenteeism to the quality and output of work done such that taking extended periods of time off of work would not unduly affect future wages. This is essential for women, who shoulder most of the burden of care and tend to have more career interruptions than men.
Increased pay transparency will, over time, improve fairness, and a more equal role for women in the workplace will contribute to equality and economic growth. Although the legislation is not sufficient to tackle the gender pay gap or its underlying causes, it is a very important step, and one we support, albeit with those reservations. It could be more ambitious.
Mr. David Joyce:
We welcome the opportunity to participate in today’s meeting on gender pay gap reporting. The gender pay gap in Ireland stands at approximately 14% and is linked to a wide range of cultural, legal, social, and economic factors. It is a far more complex issue than the concept of equal pay for equal work and requires us to tackle issues such as cultural conditioning, stereotypes and segregated labour markets; the lack of a quality, affordable early years care system; paid and unpaid parental leave; collective bargaining and salary negotiation systems; and the barriers to women’s progression at all levels of their career. That said, mandatory reporting of gender pay gaps in individual enterprises can make a significant contribution to tackling the gender pay gap and we therefore welcome the publication of the general scheme of the Bill. We note the previous work on this by Senator Bacik and her 2017 Bill and hope that this new Bill will not further delay the introduction of such reporting.
It is clear that a broad consensus on the issue is emerging across political parties, employer bodies, workers’ representatives and civil society organisations. We have engaged with IBEC, the Minister, Deputy Flanagan, the Minister of State, Deputy Stanton, and departmental officials with a view to agreeing how best to progress gender pay gap reporting.
We note that the Bill will essentially enable the Minister to make regulations requiring employers to publish information relating to the pay of their employees for the purpose of showing whether there are differences in the pay of male and female employees and, if so, the scale of such differences. It is significant that the heads of the Bill include the word “publish”, but there is no detail as to how that will happen. There is a central website for that purpose in the UK and such may be established here. In addition to publication on a website or elsewhere, ICTU believes that sharing the information with the workers in the enterprises who are directly affected by this issue and their representatives could lead to useful discussion, further investigation and action. We have, therefore, requested that gender pay gap information be shared with employees and trade unions.
Other issues include the fact that firms with fewer than 250 employees are initially excluded from the provisions of the Bill, although firms with more than 50 employees will eventually be subject to the requirements. That means that approximately 50% of firms will not be obliged to report. As the scheme develops, far from fearing such a measure, some companies may begin to disclose publicly and voluntarily as a signal of their commitment to workplace equality. Indeed, we note the recent launch of the pay disclosure pioneers initiative under which leading businesses will commit to early pay disclosure and advancement towards workplace equality before that is legally required.
It is useful that part-time work is dealt with in the Bill, given the predominance of women working in that way, as is bonus pay. ICTU has discussed the desirability of including a list of occupational categories as the best way to proceed in regard to part-time work. We have discussed with IBEC a proposed list of four managerial and four non-managerial categories which could be considered as a workable option. However, it is worth noting that if we were to categorise workers per occupation, we would need to know the share of workers in that occupation. A comprehensive list such as that would be a significant improvement on the UK scheme and would lead to greater granularity in the data to be collected. Similarly, the UK scheme does not ask for information on part-time worker pay gaps.
The inclusion of a narrative with the figures reported is not addressed. One of the lessons from the UK experience is that the narrative section of reports provides context and useful information to help interpret the raw data that companies publish. ICTU has made the point that a narrative may explain what the figures represent and include what actions companies will take to narrow it. It also provides unions and others with the possibility of holding companies to account on their performance in regard to these actions. We have suggested that such a narrative should be compulsory. It is voluntary in the UK system and only approximately one third of employers provide it in their reports.
We note the various enforcement mechanisms proposed in the scheme, including the role of the Circuit Court, equality reviews and the roles of the Irish Human Rights and Equality Commission and Workplace Relations Commission and are happy to discuss these further.
Heads 2(4)(a) and (c) of the Bill, which deal with classes of employer and employee and the treatment of proprietary and non-proprietary directors, as well as those in consultant roles whose only client is the company, will be of importance. Some sectors are organised in terms of partnerships rather than incorporated companies, and we would hope to ensure that such enterprises are included. Head 6(10), regarding the publication of the complainant’s name, seems an extreme measure to disincentivise vexatious complaints. I thank the committee for the opportunity to raise these issues and look forward to the discussion.
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.
I thank the witnesses for attending the meeting and for their submissions. It is unacceptable that in 2018 we have a gender pay gap of 14% so the members of the committee welcome the legislation that is being advanced. The representative of ICTU mentioned that there is a concern about the publication. Obviously, the legislation requires disclosure. What would his preference be for publication? Should it be something that is retained in the Companies Registration Office or should it just be available on the website of the company concerned?
Mr. David Joyce:
In other jurisdictions there tends to be a central online facility where all the data are published. There is no reason that we could not do something similar here. The additional point we would make is that rather than just sending it out to this public arena it should be shared internally with employees and their representatives. These are the people who can negotiate solutions to this.
It proposes to divide employees into quartiles or different types of groups. That is easy in the case of Deputies, for example, where we all do the same work or where there is a difference between a Deputy and a Senator. However, how will it arise in organisations where people do different tasks and it is difficult to categorise them in similar groups? Will that be a problem?
Dr. Kara McGann:
We have looked at the occupational categories and we have tested them with employers in different sectors to see how they might work. There are four categories for managers and eight categories for non-managers. The definitions are quite clear as to who would and would not fit in. An employer would have to put down who fits into which type of category and why. For data protection reasons where there are very few in a particular category there might be a reason for them being in a different area. However, it is quite straightforward and most of the employers who have road tested it, as it were, have found it is quite accessible. It offers the opportunity to see exactly where the gap is happening and why it is happening there, as opposed to a more global figure that does not tell us why. It therefore offers the opportunity to put focused solutions in place.
Where Deputy O'Callaghan puts a specific question to a witness and other witnesses believe they have something to offer that is salient to the question please indicate that to me. We are here to hear all of you. Ms Sherlock wishes to expand on that.
Ms Marie Sherlock:
I agree in large part with what has been said. The purpose of the Bill is not just to depict the trend but to understand the causal factors behind the gap or why the gap exists within the organisations. In that regard there is an issue with just stating the proportions of workers in each of the quartiles. We believe the criteria set out under head 2, section 6, need to go further. The section refers to the difference between males and females in terms of hourly pay, bonus pay and those who are part-time and on temporary contracts. That is welcome. However, it does not refer to the proportion of workers in those categories. The Bill requires the proportion of workers who are paid bonuses and benefit-in-kind but it does not seek the proportions of those in part-time and temporary work. That is important.
It is also important to understand the definition of part-time work. There are two definitions. The Central Statistics Office, CSO, typically defines part-time work as working less than full-time hours and then there are those who might be called marginal part-time workers who typically work less than half of full-time hours. That is an important feature to understand particularly if women are trapped or certainly working marginal part-time hours and the share of women in the organisation who are in that situation. That ultimately informs the bigger picture or the narrative as to why the gap may or may not be big. In addition, while the average hourly pay gap across Ireland is approximately 14% the weekly pay gap is well in excess of 30%. Again, that is because of the differential between the hours worked between men and women.
When we look at the factors that are driving the gap we know that sector and occupation are important as is employment status in terms of part-time work. Another thing that is very important - it is not discussed here but should be acknowledged - is that there is lower wage dispersion within organisations and less of a pay gap when there are strong systems of collective bargaining within the organisations. This Bill is obviously important in terms of pay transparency but it does not fix everything.
Ms Nichola Harkin:
With regard to part-time work, we do not wish to discourage employers from offering flexible and family-friendly working policies to their employees. That is why we believe the narrative is so important. In many companies that offer part-time working it is very much at the request of employees. It allows employees, particularly female employees, to remain within the labour market.
We certainly do not want to discourage that or demonise employers who offer family-friendly working practices to their employees.
Any legislation that is introduced should be for the public benefit but specific groups may also be beneficiaries. In this case, do the witnesses believe that employees within organisations will be the real beneficiaries? If people are outside, they will not have the full picture. Will the advantage of this legislation accrue to a woman working in an organisation? If she can see pay gaps in the organisation, will it be of assistance to her?
Dr. Kara McGann:
It will be useful to have that picture internally but it is just as important in a broad sense. It is not just a pay gap but a representation gap and we need to tackle gender balance across the board, in the business community and beyond. It is a societal issue and it requires a whole-of-society approach to tackle it. This will be a good diagnostic tool, as it will shine a spotlight on the issues and get conversations going but the actions to solve it are what is important.
Ms Orla O'Connor:
The question of who the beneficiaries will be is important. It will certainly benefit women who are working in the companies in question to have transparency but, from a wider viewpoint, it will help women returning to work and applying for new positions because they will have a clearer picture of the employer they are dealing with. It will also help all of us who make decisions about policy and will enable us to get deep into the causes of the gender pay gap.
The narrative is important because it is how we explain what is happening within a company. The action plan is also necessary, however, because we have to ask what people will do to reduce the gaps in their companies. It needs more than an explanation and the legislation needs to put some obligation on an employer to say what they are going to do about any gaps that exist.
Ms Geraldine O'Brien:
My background is in civil and public services. Across Departments, we have been trying to redress the imbalances for the past 20 years. We have a workforce that is predominantly female but where male and female colleagues enter the workforce at the same time with the same qualifications and have the same length of service, the chances of the female progressing any further than middle management are 24% of those of the male.
Many combinations need to be addressed. This is an important Bill but we also need to fix the problems as we go forward. Great strides have been made in the public service but there are still some issues. One of them is flexible working, which is not always available. At lower grades, flexibility is available but it is predominantly females who take time out of work for childcare or elder care and, when they look to move on, flexibility is not an option so they tend to stay where they are and where they can avail of it. By the time their responsibility for caring is over and done with, they are on the back foot and their male counterparts, who joined on the same day with the same qualifications, have gone ahead of them in leaps and bounds. They also lose the confidence to challenge.
Ms Marie Sherlock:
Females may not put themselves forward for promotion because of circumstances and some interesting research has been conducted in the UK into the pay of females after promotion relative to males. Once it is controlled for all other factors, the research shows that females do far worse than their male counterparts. There are opaque negotiation structures and females do not negotiate as good a package as males. The benefit is that the provision will shine a light onto the practices around promotion in organisations.
We are talking about the gender pay gap, which is an important issue because it represents a form of discrimination, but the general pay gap between lower-paid workers, who are also often women, and people at higher levels is also important. Years ago, people in lower paid jobs could have been confident that, when they retired, they would have a pension and they could try to get their kids through university, even though they may have hard pressed to do so. What other solution is there to deal with a pay gap that exists generally in society, than a legislative solution in the form of a minimum wage ?
Ms Orla O'Connor:
The issues raised by the Deputy go well beyond the scheme of this Bill. We are talking about low pay and there are many ways to tackle it. One is by increasing the minimum wage, such as by bringing it up to the level of the living wage. Women are certainly affected by low pay but exact pay is one issue, while other issues include the possibilities of moving up. Many women remain stuck in low-paid jobs and that interacts with our welfare system.
Ms Nichola Harkin:
The Low Pay Commission is now in place and is looking at that very issue. We have the second highest minimum wage across the EU and we need to balance that with the need for decent work and well-paid jobs. Legislation not only impacts on large employers who have bigger pockets; it also impacts on small companies which are stretched.
Can Mr. Joyce expand on the various enforcement mechanisms which he mentioned in his submission? Dr. McGann expressed some concern around the involvement of some of the enforcement architecture. Perhaps she might comment on that. The letter to the Minister reflected concerns about GDPR data aggregation and how we balance that in any legislation we bring in. Ms O'Connor mentioned civil penalties. What civil penalty regime does she envisage to ensure compliance and enforcement?
Dr. Kara McGann:
I will deal with the workplace relations issue and I might ask Ms Harkin to answer the GDPR element of the Deputy's questions.
From our perspective, bringing the redress through the WRC as opposed to having IHREC take it through the Circuit Court, which we feel is an appropriate response, has the possibility of creating an employee rights issue with what was supposed to be a diagnostic tool. It is taking it to a further level. It could see us in a position where we have vexatious claims. Whether the employer is found to fall foul of the regulations, it takes time and has a cost every time that has to be challenged. We believe it is a less appropriate measure than going through the process with IHREC. It also has the potential to open up a rights issue in legislation that was never meant to go down that road.
Ms Nichola Harkin:
With regard to privacy concerns, one of the biggest principles of the general data protection regulation is data minimisation and the idea that we only collect the information that we need to achieve the purpose we are looking to achieve. That is why we need to drill down into each piece of information required and ask if it will help or if it is just additional information. The privacy issue becomes even more acute as the thresholds become lower. For many employees, their salary details are private and it is sensitive information to them. For the purposes of reducing the gender pay gap, there is an issue with opening that sort of private information within the public domain. We need to be conscious of people's rights to privacy and the serious data protection regulations that we are all now subject to due to GDPR.
Ms Denise Roche:
Currently, if a company does not comply with IHREC, it has to go to the Circuit Court to secure an order to enforce compliance. We are asking it to go to court. It is time-consuming and we have an overburdened court system. In Iceland, if there is non-compliance, a company gets a chance to comply and if it does not comply, there are daily fines related to the turnover of the business in question. It can be quite substantive but will force companies to comply.
Everybody sneaks out. Sorry about that. This is interesting and is part of a bigger picture. We are here to discuss what is, in some ways, a small aspect of the overall area that should be relatively easy to implement. I am struck by people's points in that regard. We want to fine-tune some of those practicalities to get it moving. I am impressed that the witnesses in ICTU and IBEC seem to have had a great deal of dialogue on this behind the scenes. There should not be a barrier to us getting this up and running relatively quickly. We would be motivated in doing that and pushing it along.
The points about the numbers that will be excluded by this legislation if it is enacted in the manner in which it has been put forward are striking. The NWCI suggested 25. I am interested in the opinion of IBEC and ICTU on that. I do not see any basis for the staggered approach. Starting at 250 employees means not starting at all. What are the views of other organisations on that? I ask IBEC to respond to some of the points made by ICTU on part-time work. I note the points about being family friendly. Does everybody agree that there should be a narrative? I ask for some commentary on that. This Bill is only about information. Information is important. All policy should be evidence-based and getting accurate information is key and presumably in everybody's interest. Deputy O'Callaghan said it relates to particular workplaces. It does but it raises the sights of all of society about where we are going with this. We do not have the time today but the Deputy said that a 14% gap is shocking in this day and age. It is but, in reality, it is far more than that because of the differential in hours. That is a discussion for another day. Will the witnesses address the narrative?
Dr. Kara McGann:
I will address the matter of 25 or more employees. With regard to the staggered approach, while it looks like a straightforward calculation on paper, it is not, due to resources required when one looks at regulation and what is included or excluded in the bonus definition or total remuneration. For example, a person on a period of unpaid leave is not counted, overtime is counted and shift work is not counted, using the UK model. This has added a layer of complexity. We have said that starting with companies of 250 or more allows us to work out all the bugs in the system with companies that have resources to do that. When we have fine-tuned that, cascading it down layer by layer will allow it to be something that we learn from with larger companies before we get to smaller companies which often do not have dedicated human resources or financial employees in place in-house. It would be a much greater burden on them to start off. That is the reason for the cascading approach.
With regard to the narrative, the gender pay gap figure, without both organisational and sectoral context, is meaningless. The narrative allows one to understand where that figure is coming from, why it has come about and what factors in the organisation and perhaps external to it are at play. There may not be enough graduates coming through in a particular area to even start a balanced pipeline at the entry stage or people may not be returning. The organisation has to look inside to see what policy issues or bias exist but equally we have to look outside and ask if there is an issue with the cost of childcare, so that we can approach this from all angles to solve it.
Ms Nichola Harkin:
The Employment (Miscellaneous Provisions) Bill, which I understand will be enacted shortly, introduces rules regarding banded hours and will impose onerous burdens on employers. I know from speaking with many of our members that part-time work is becoming an increasingly requested element from employees and many companies do it to keep female workers in the workforce. I would be conscious of painting part-time work as somehow precarious work. It is high-paid for many people and keeps them in the workforce. It is a choice and we need to be careful not to disregard that fact. I am always conscious of that in respect of many of the issues that are coming up with the gender pay gap. Having spoken with members which offer salary sacrifice measures, that can impact their gender pay gap. We need to be careful not to disincentivise measures that companies are bringing in to have a more inclusive workforce. I take the Deputy's point that the task seems simple but, having spoken with members, we have had meetings for three to four hours trying to figure out how some of this will feed into their gender pay gap reporting. It is simple for companies that pay on an hourly basis and that have strict pay regimes within the workforce. For companies which offer more salary sacrifice measures and different benefits, it is more difficult than one would think and we need to have regard to that.
Ms Marie Sherlock:
We have no desire to speak negatively about the availability of part-time work if a worker requests it because there should be a choice.
However, there is an issue that we know from the research that those who remain in part-time work for a prolonged period suffer a pay penalty over their lifetime. There is an issue here about access to pay progression. We know that part-time workers, in particular, in certain organisations do not access the same pay progression measures that are available to full-time workers so there is an issue with that. We would certainly share the view that there needs to be a narrative but I think we also need to be clear that it is very important that we recognise that some part-time workers become trapped in a low paid, or lower paid, situation relative to their full-time peers.
The second thing relates to the number of employees to whom this Bill applies. There would be a certain sympathy to a staggered, or a phased-in process for this Bill, starting with the bigger employers and moving to smaller employers. Ultimately, in terms of the destination here, it needs to be far lower than organisations with 50 employees. Certainly when we look at the business demography which Ms O'Connor talked about earlier, the vast majority of employers in this country obviously employ around 20 people. We think that for this legislation to have any real impact, the number needs to be less than 50. If we look at the international experience, in Sweden the minimum number is ten employees, in Lithuania it is 20 and it is below 50 in other countries. There is no excuse but to reduce it below 50 here.
Ms Denise Roche:
If you start at the 250, from reading the Bill, it is two years from the commencement of the Act. We are talking about perhaps three years before we see any figures at all. The experience from the UK was that companies waited until the very last minute to publish, so the earliest we will see anything, if we go with this timeline, is three years.
If we look at the experience of other countries, Australia started with 100, Austria started with 150. The UK started at 250 but they have 67 million people living in their country. We think a much lower figure is much more reasonable and would be much more immediate. Then again, there have been questions raised about data protection, but Lithuania is in the EU and has managed to start at 20 and is meeting the same requirements as are we.
It is important that the idea of the action plan is not lost. It is not enough to provide information as to why the numbers are the way they are. We want to see companies saying how they will fix things and what they are going to do in the intervening years between publication of their figures.
I think that is useful. Basically I am hearing that nobody is really objecting to the staggered approach but there is a serious concern about the timescale on this, particularly as the legislation has been bandied around for quite some time now. Would it not be the case that in smaller organisations, the pay arrangements will be less complicated anyway by virtue of the arrangement and that all of these big, mad bonuses and special bonuses and arrangements diminish when the employment is small? It is not as complex and presumably, if there is learning curve to be had, the fact that we are coming late to this issue means we have the advantage of international experience. We do not need to make the mistakes that were made in the other jurisdictions. I am not convinced on the need for a staggered approach at all, but I am hearing that nobody has a huge problem with that, although there does seem to be a general agreement that it should move quicker and go down. If I am wrong on that, I would like to hear more.
Maybe it is me, and it is early, but I do not get the point about part-time workers, I really do not. What would the problem be from IBEC in that? Part-time workers, in terms of gender pay gap, is key. This is an information provision. Particularly given the significant levels of under-employment that are now being revealed, many relating to women, is the problem that, when the information is gathered, the employer might be worried about looking bad or something? I do not really get it. If that is the case, then the points the witnesses made that the reason this is here is because they had all these requests, can be explained and made look as though it is not a problem. The bigger picture for women and gender equality is that part-time work and underemployment are huge contributors. Any information we can get that assists in impacting on policy has to be key.
Ms Nichola Harkin:
I absolutely agree that underemployment of female workers is absolutely an issue. What Deputy Clare Daly is saying about employers being concerned that they might look bad is interesting. I think that probably feeds into the issue that we have here. If one looks at the press coverage of the gender pay gap publication figures in the UK, it very much focused on the employer, the company and the gender pay gap within a company and employer. We can all agree there are some things employers can do but there are other things they cannot do. The gender pay gap has in some ways been caused - not completely, but in some ways - by the cost of childcare and the number of female graduates coming through in STEM subjects. There is only so much employers can do to actually fix that.
There is some a concern from an employer's point of view that there will be reputational damage from this measure, even in circumstances where employers may be doing everything in their power to address the gender pay gap but in which, because of factors outside their control, they are still constrained and still have a gender pay gap. That is a genuine concern of employers and it is why the general understanding on the causes of the gender pay gap is important. It is useful that everyone here has accepted that there is a multiplicity of factors which feed into it.
Does that not feed into the point about taking action? It actually makes very good sense that there would be follow-on action. In many instances, the action may be outside the hands of the employer. All these reports are coming and there is evidence that we have a significant problem with childcare in this society. There is nothing to fear here. As I say, I was glad to hear the co-operation but we need to move more.
I refer to the points made by IBEC about a sort of misunderstanding, of this being rights-based and about access and the WRC. What do other of the witnesses think about that point?
Mr. David Joyce:
Briefly, if an employee was to take a complaint to the WRC, there is no award to the employee envisaged in this. It would just be a ruling from the WRC that the company has not been complying with the requirements of the legislation. Equally, of course, from our point of view, it is important that the victimisation measures in the Employment Equality Act would apply here also.
Ms Denise Roche:
One of the parts of the gender pay gap is actual active discrimination so it will provide information. It may be a case that there will be legal action because it will be proven that there is significant discrimination occurring within a firm. More than likely, it will show the multiple of factors as to why women are earning less in a particular company, because they are working part time or other reasons.
Absolutely, but I suppose one could look at it either way. In one way, one can ask why then have it in there at all? Information is power and it absolutely could be used in a discrimination case or whatever, which is fine. It is a different thing, however, to be the subject of action based on the law and on this piece of law and the pursuit of it. I am curious about that.
The onus is on all of us to get moving on this quite quickly and that is why we have the hearings. It is interesting to hear the toing and froing even among the panel, so it is very useful for us that the witnesses came in.
It will show the Minister that society gains by this. Everyone is a winner. That is really the message of this. It is a different scenario than one would normally have. Everybody is a winner on this one and as we all have a responsibility to push it on, I thank all the witnesses for coming in. It is very interesting.
I thank the witnesses for coming in. Many questions have been asked but I have a few general questions to help reflect on the importance of this issue. According to the World Economic Forum, it would take until the year 2186 to close the current pay gap globally. This type of legislation is being introduced in more and more jurisdictions. It is of value and all speakers have reflected that in and of itself, it is not a silver bullet or anything like that. The gender gap within individual companies will not necessarily capture the gender gap that exists within society as a whole. There could be a large childcare provider with a favourable male-female balance in terms of pay but that does not reflect the fact that childcare workers are very low paid in general in the context of society as a whole. There are numerous elements such as that.
While I take on board the points that were made on part-time work, nobody is making the argument that people should not have the option of part-time work. If it is the case that disproportionate amount of women rely on part-time work when they would rather not, as compared with men, that is also a problem that must be addressed. In the same way that there are narratives around reporting pay gaps in companies, perhaps an organisation such as the Irish Human Rights and Equality Commission, IHREC, could produce a narrative on the gender gap within society as a whole, across all employers. Perhaps there is some scope within the legislation for that.
I have looked at the scheme and while this point may be addressed within it, I have not seen it. Agency workers could be a potential way around it for employers who do not necessarily want to comply. Is it the witnesses' understanding that an agency worker should be reported as part of the agency's responsibility to report on the gender gap or is it the responsibility of the place of employment where the workers are located?
Ms Marie Sherlock:
I reiterate the point I made earlier about understanding the share and proportion of workers in terms of their employment status across the organisations. If we understand the amount of workers who are in part-time work, in temporary contracts and in agency work, then we will be able to remedy that. The responsibility should not be on the agency itself but on the employer which takes on the agency workers to be able to identify the share of workers who are agency workers and how that pay compares with the permanent workforce.
Ms Nichola Harkin:
It is worth noting that we already have protection of agency workers in employment in place, which provides that agency workers have a right to equal terms and conditions of employment as direct employees. We need to be careful that we do not muddy the water in new legislation around where the employment relationships lie and that particular legislation to protect agency workers provides that the employer of the agency worker is the agency.
I am not suggesting that. From my point of view, I am trying to establish that it is not possible for agencies to be used to circumvent this proposal and the first two answers have established that.
My second question relates to the point made by Mr. Joyce in his opening statement on heads 2(4)(a) and (c) that there might be a need for some clarification or development on classes of employer and employee and the treatment of proprietary and non-proprietary directors, as well as those in consultant roles. He noted some sectors are organised in terms of partnership and not incorporated companies and raised the question as to how they will be treated.
Ms Marie Sherlock:
I might take that point. Our understanding is that this legislation applies to incorporated firms. There are obviously a significant number of organisations that exist in the Irish economy which are not incorporated. It is like partnership. If we take the legal sector or dentistry, for example, they do not incorporate as a firm but they remain as a partnership. As there are other employment structures which may not fall within the ambit of this legislation, it will be important to ensure we have as broad and inclusive a definition of possible of the organisations that are covered within this legislation.
Ms Denise Roche:
One of the major criticisms from the UK model was that it emerged that partners from law firms, be it an equity or a non-equity partner, who are predominantly male, were not included in the figures and it was only because of public backlash that law firms came out and showed the figures.
That is an issue that needs to be addressed. It is not the responsibility of anybody in this room but I note that it is a bit unfortunate that the Government has decided to start another Bill from one direction when there is a Bill that could have been worked with that started in the Seanad and has finished Committee Stage. I am not sure why Senator Bacik's Bill could not have been worked with.
IBEC raised the point that it is expected that there will be an obligation to report on quartiles and on an occupational basis. It is the view of IBEC that this is an administrative burden that does not tell us very much and is unnecessary. Do the other organisations have any sympathy with that view or do they have a contrary view on it? Do the witnesses believe there is a need to report on both of those bases?
Ms Marie Sherlock:
Until we have an idea of the share of the distribution of those occupations across an organisation, it does not lead us any closer to understanding why there is a pay gap within the firm as a whole. To return to the earlier point that head 2(6) needs to be expanded upon in terms of the categories where they seek information on the proportion of workers - that needs to cover those who are in the occupations as well.
Dr. Kara McGann:
The general scheme intimates that we could look at doing both. We feel the occupational categories piece would be a superior way of doing it as it would give us more information than the quartiles would. To do both, however, would be a futile exercise and would double the work without giving a more meaningful result. We see it as being one or the other and in our view the categories would give us more detail and robust information.
Many of the questions have already been asked so I do not have any more. I do not expect a response but my view is that the staggered approach is too much of a delay and reporting should start earlier on in the smaller organisations.
That brings our engagement on the issue of the general scheme of the gender pay gap information Bill to a close.
On behalf of the Joint Committee on Justice and Equality, I thank Ms Orla O'Connor and Ms Denise Roche from the National Women's Council of Ireland, Mr. David Joyce, Ms Marie Sherlock and Ms Geraldine O'Brien from the Irish Congress of Trade Unions and Ms Nichola Harkin and Dr. Kara McGann from IBEC for their respective contributions. They were very helpful.