Tuesday, 14 May 2019
Gender Pay Gap Information Bill 2019: Second Stage
I move: “That the Bill be now read a Second Time”.
I am pleased to address the House on the Second Stage of the Gender Pay Gap Information Bill. The purpose of the Bill is to provide for a requirement that employers with 50 or more employees publish certain information on the differences in pay between female and male employees.
The gender pay gap is a well-known phenomenon which is receiving more and more attention in Ireland and internationally. Most commentators on the gender pay gap are keen to find ways to reduce it and legislation providing for the publication of information concerning the pay gap at the level of the firm is seen as important in improving understanding of the pay gap and incentivising employers to use whatever means they can to reduce it.
The gender pay gap has long been an issue of concern at EU level. In 2014, the European Commission issued a recommendation on pay transparency and this Bill can be seen as a response to it. In 2017, the Commission adopted an action plan on the gender pay gap. In addition to addressing the many aspects and causes of the pay gap, this plan raises the possibility that aspects of the 2014 recommendation might be the subject of a draft directive which would make them binding.
In Ireland, A Programme for a Partnership Government includes a commitment to promote wage transparency by requiring companies of 50 and more to complete a wage survey. The National Strategy for Women and Girls 2017-2020 has a number of actions to address directly or indirectly the gender pay gap. The action relevant to this debate is No. 1.23 to “promote wage transparency by requiring companies of 50 or more employees to complete a wage survey periodically and report the results.”
In light of all of this, we have conducted extensive consultations on the gender pay gap. In August to November 2017, we held a written consultation, which was followed by a well-attended seminar in January 2018. The outcome of both of these lends ample support to this Bill. I myself have spoken on many occasions and to a wide variety of groups on the issue. The culmination is this Bill, which is an important measure to address the gender pay gap though, of course, it is not the complete solution.
Senator Ivana Bacik and her Labour colleagues in the Seanad have also done very good work. They introduced the Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill, which has been passed by the Seanad and has gone through Second Stage here. As I have said a number of times in both Houses, the Government shares the objective of this Bill but we do not agree with the mechanism it proposes for gender pay gap reporting.
On 7 February, the Joint Committee on Justice and Equality issued its report on pre-legislative scrutiny of the general scheme of the Bill which is before us. This is a very informative and interesting report even if I disagree with some of its conclusions.
I turn now to the main provisions of the Bill. Section 2 provides for the insertion of a new section 20A in the Employment Equality Act 1998. This provides that the Minister for Justice and Equality shall, as soon as is reasonably practicable after commencement, make regulations requiring the publication of gender pay gap information. The regulations must include certain items of information and there is a discretion to include additional items. The items that must be included are the mean and median gap in hourly pay between men and women, in bonus pay and in hourly pay of part-time male and female employees; and the percentage of men and of women who received bonus pay and benefits in kind.
Section 20A(1)(c) requires the publication of the reasons, in the employer’s opinion, for any gaps and of the measures, if any, that the employer is taking or proposes to take to eliminate or reduce gaps. This reflects a recommendation in the pre-legislative scrutiny report of the Joint Committee and came from other interests as well.
In addition to the required information which I have outlined, the regulations may provide for the publication of the following information: the mean and median pay gap between men and women on temporary contracts, the percentage of each pay quartile who are men and who are women and the publication of pay gap information by reference to job classifications.
Section 20A(2) provides that, in making regulations, the Minister shall have regard to the estimated costs of complying with and enforcing the regulations.
Section 20A(3) provides for the threshold of employees above which the employer will be required to publish gender pay gap information. The key point is that employers with fewer than 50 employees will not be covered. It also provides for the phased introduction of the requirements on certain employers to report, namely, that the regulations shall not apply to employers with fewer than 250 employees before the second anniversary of the making of the first regulations, nor to employers with fewer than 150 employees before the third anniversary. I will return to the thresholds and the phasing later.
Section 20A(4) provides that the regulations may prescribe, among other things, the classes of employer to which the regulations apply, subject to the thresholds I have just mentioned, the classes of employee and the classes of remuneration to be reported.
Section 20A(5) provides that the regulations may prescribe the form and manner in which and the frequency with which information is to be published in order to bring the information to the attention of the employees and the public. For example, the regulations might require the employer to send the information to the employees in addition to publishing it on the employer’s website and uploading it on a central Government website. Publication will not be required more often than once a year.
Section 20A(6) provides for publication of gender pay gap information by each Government Department, scheduled offices, An Garda Síochána and the Defence Forces. Essentially, the intention is that this legislation applies to the public as well as the private sector where the body in question is within the employment threshold.
Section 20A(7) provides for the situation in which the employer does not have access to pay information on employees. In that case, the regulations may require the person who has such access to give the information, or access to the information, to the employer so that the latter can comply with the regulations. This arises in the education sector where teachers are employed by a school board but are paid by the Department of Education and Skills.
Section 20A(8) provides that the regulations may prescribe measures to ensure that personal data have undergone pseudonymisation before or when they are released. This means the processing of personal data in such a manner that the data can no longer be attributed to a specific person.
Section 3 is concerned with enforcement and inserts three new sections in the Employment Equality Act 1998. These are sections 85B, 85C and 85D. Section 85B provides for the appointment by the Minister of designated officers to investigate how employers prepare the information required to be published to ensure its accuracy. Provisions already in the Employment Equality Act on powers to enter premises, obtain information and require persons to provide information and associated sanctions are applied to this situation.
Section 85C enables the Irish Human Rights and Equality Commission, IHREC, to apply to the Circuit Court for an order requiring a person to comply with the regulations. A person who fails to comply with a Circuit Court order is in contempt of that court. Section 85D allows for an employee to make a complaint to the Workplace Relations Commission, WRC, of non-compliance with reporting regulations by their employer. The Director General of the WRC or an adjudication officer, to whom one would expect this function will be delegated, will investigate the complaint if satisfied that there is a prima faciecase. If, on investigation, the officer finds in favour of the complainant, he or she may make an order requiring the employer to take a specified course of action in order to comply. This is the only remedy that may be ordered. For example, compensation may not be awarded, as it is not an appropriate remedy in this situation. Enforcement of WRC orders is through the District Court.
Sections 85C and 85D adopt the approach of requiring a person to comply with the regulations rather than penalising the person for failure. If they fail to comply they are in contempt of court. I prefer this approach to one of creating a criminal offence. In contrast, the Labour Party Bill creates a summary offence with a maximum fine of €5,000. It is doubtful whether this would be an adequate sanction. I would not be content to see perhaps substantial employers accepting a fine and failing to comply with the regulations.
Section 5 inserts a provision in the Irish Human Rights and Equality Commission Act 2014 to allow the Minister to request IHREC to consider exercising its powers under section 32 of that Act. This section concerns the carrying out of equality reviews and the drawing up of equality action plans. It will be for IHREC to decide whether to exercise its section 32 powers following the Minister’s request. For instance, the situation could arise that it becomes apparent to the Minister following publication of an employer’s gender pay gap information on a central government website that the pay gap is abnormally large having regard to all relevant considerations.
It would then be appropriate to draw it to IHREC's attention and ask it to consider using the powers I have mentioned.
Section 6 provides that the Minister shall review the Act before the fifth anniversary of commencement.
I will return now to the question of the threshold at which the reporting requirement should apply. In accordance with A Programme for a Partnership Government and the national strategy for women and girls, this is set at 50 employees. There have, however, been calls for lower limits. In its scrutiny report, the Oireachtas joint committee notes that the vast majority of companies in Ireland have fewer than ten employees. The committee then recommended that the Bill reduce the threshold for public and private organisations to between ten and 15 employees. Other interests have also argued that the proportion of employers that employ 50 or more people is very small, at 1.4% of employers, and that the vast majority of businesses will not have to report gender pay gap information. Focusing on the percentage of employers that will be affected is only marginally relevant, if that. What we need to consider is the proportion of employees that will come within the legislation. According to the CSO's Business Demography 2016, almost 57% of employees are in firms with 50 or more employees. However, when we look at the public service, which is also covered by the legislation, we find that organisations with fewer than 50 employees are rare. According to the Department of Public Expenditure and Reform's databank, more than 99% of employees are in bodies which employ 50 or more. These are figures from quarter 4 2018. Taking the private and public sectors together, there are grounds for believing that approximately two thirds of employees are covered by the Bill.
The CSO uses a classification whereby firms with fewer than ten employees are regarded as micro, firms with between ten and 49 employees are small, firms with between 50 and 249 employees are medium and those with 250 or more are classified as large. The committee's recommendation would take in all small firms and is, therefore, unacceptable. At the same time, the committee recognises that extending the coverage of the scheme in this manner would cause problems because it goes on to state:
With lower thresholds, consideration should be given to the capacity of smaller businesses to meet reporting requirements. One option would be to establish a unit in the Department of Justice and Equality, or potentially the Revenue Commissioners, to provide necessary supports.
My priority will be to get the resources needed to implement the overall reporting system. Deputies generally and, in particular, those who have served as Ministers or Ministers of State, will recognise that setting up new units, etc., is far from easy and I would be totally against imposing the regulatory burden that this would entail for small business.
On phasing, the Oireachtas joint committee recommends extending the requirement for reporting within one year to all companies with 50 or more employees. I believe, however, that it is better to phase in the introduction of gender pay gap reporting in the more measured way set out in the Bill, namely, by applying it to firms with 250 or more employees for the first two years, to those with 150 or more employees in the following year and to those with 50 or more employees the year after that. This gives firms and those charged with administering the new system an adequate lead-in time and presents an opportunity to modify the regulations, if necessary. We have an opportunity to learn. Large companies have the resources, manpower and wherewithal to do this and they are willing to do it. The smaller companies can learn from their experience and, possibly, mistakes, etc. That is important to bear in mind. Many small companies do not have the resources or wherewithal to do this.
I look forward to hearing the views of Deputies and to discussing the Bill in more detail on Committee Stage. I commend the Bill to the House.
I am pleased to confirm that Fianna Fáil will support the Bill. In recent decades, interventions aimed at addressing the gender pay gap, including equal pay legislation, a focus on educational outcomes for women and girls and anti-discrimination measures, have impacted upon gender equality. However, the gender pay gap remains stubbornly persistent. According to figures published by EUROSTAT in 2016, across the EU women's gross hourly earnings were 16.2% below those of men and the Irish gender pay gap was 13.9%. The gender pay gap is experienced differently by different groups of women. The gap is worse for older women, women from ethnic minorities and higher earners. According to PwC, the potential long-term economic gains across the OECD from an increase in women in work would boost GDP by almost $6 trillion.
Although equal pay legislation has been on the Statute Book and tackling pay discrimination for more than 40 years, we still have a significant problem regarding the gender pay gap. The Gender Pay Gap Information Bill 2019 will require the phased introduction of pay gap reporting for any employer with more than 50 employees, as the Minister of State outlined. Employers will be required to report the percentage mean and median pay gap for men and women in terms of hourly pay for both full-time and part-time employees, as well as any bonus pay. Employers will also report on the proportion of male and female employees who receive bonuses or benefit-in-kind.
While it is in some way understandable that the pay gap is widest for older employees, worryingly statistics suggest that the gap is now widening for younger women too. In an age where significant strides are being made in other areas of gender equality, it is depressing that this remains the case. It is clear from the lack of progress in this area that the only way the gender pay gap can be addressed is through Government intervention. If companies over a certain size are required to publish information in respect of the gender pay gap, it focuses attention on the issue. Although this is a positive step forward, we also recognise the limitations of this legislation. This type of legislation will not be enough on its own. We must also have measures to increase the number of women in better paid roles and occupations and to improve childcare provision. We must also deal with gender stereotypes and ensure more women are involved in decision making. Fianna Fáil is committed to tackling the gender pay gap through its own measures of establishing an affordable childcare scheme and improving shared parental leave.
If this Bill comes into force, we must ensure that businesses are supported in meeting the increased burden of complying with this requirement.
Fianna Fáil will support this important legislation. I agree with Deputy Niamh Smyth who noted that we introduced equal pay legislation 40 years ago. That seminal legislation had an impact. Unfortunately, however, we still do not have gender pay equality. It is wholly unacceptable that a woman would not be paid the same as a man for doing the same job simply because she is a woman. It is important that we recognise the need to produce innovative legislative proposals that will force companies to ensure they do not have gender pay inequality. This legislation will start the process of achieving that outcome.
We will never be able to eradicate inequality but we should be able to eradicate discrimination. At the heart of this debate is the discriminatory act of women not being paid an equal amount as men for doing the same job. That is against the law and we need to ensure we bring in legislation that will reveal where this practice is happening more easily than is the case at present.
It is important to ponder on the statistics cited by Deputy Niamh Smyth in respect of the ongoing gender pay gap that exists in the European Union. The Deputy noted that the earnings of women in the EU are 16.2% below those of men, while the Irish gender pay gap appears to be 13.9%. I hope this legislation will have the desired effect.
It is also important we recognise that gender pay inequality is completely unacceptable. There is, however, another form of pay inequality that is not defined by gender or sexual orientation. This is the extraordinary gap that now exists between those at the bottom level of companies and those at the top end. While this is not a matter for today's debate, a report was published today by the Institute for Fiscal Studies in the United Kingdom. I can assure the Ceann Comhairle this is not a left-leaning think tank. In fact, it is criticised for being too pro-market. However, the report deals with an issue that this House will have to address. It indicates that there is a growing and dangerous level of inequality in pay in the UK and that the UK is catching up with the United States in this respect. I have no difficulty with people earning good salaries and lots of money but I have a concern if they are increasing their salary on the back of other people having a declining income or having their income take from them. It is important that we consider what Professor Sir Angus Deaton stated today when launching this report. He warned of the dangers of disillusionment if people did not feel fairly rewarded for their work and that extreme wealth seemed to be gained by "taking rather than making". He stated that "people getting rich is a good thing" but not if it meant "enriching the few at the expense of the many".
That report pointed out the fact that in the UK at present, the average chief executive of a FTSE 100 company now 145 times the average salary. That is up from 47 times in 1998. That is a trend that we see with many technology and big companies where people at the top earn vast amounts of money and the salaries of other people working within those companies or elsewhere are declining. We do not know the reason for that. It may be because of falling trade union membership, which is one of the reasons put forward by the Institute for Fiscal Studies, but it is having serious consequences in the UK and it is generating greater inequality there.
Fortunately, in this country, I do not believe we have gone down the route of the UK and United States but we need to be very careful to ensure we do not allow a divergence to develop in incomes between people at the bottom and people at the top such that we have extraordinary inequality in the country in the same way as there is in the UK and the United States. Obviously, one is never going to have uniformity in respect of people's salaries. Equality is not about uniformity but we need to ensure that we do not allow a situation to develop here which has been identified and warned of by the Institute of Fiscal Studies. This is something we need to keep an eye on in the future, that we do not allow a situation to develop where people at the bottom see their earnings dropping and dropping. Fortunately, in this country, we have minimum wage legislation which we need to protect. We also need to ensure we convey a message to companies that it is to their benefit to have employees who are well paid. It is to the benefit of society if everyone is well paid as opposed to just large companies trying to run down wages so that profits can be made for shareholders and the greater salaries paid to the wealthy people at the top of the companies.
Táim ag tacú leis an mBille seo. Tá roinnt cáineadh a bhféadfaimís a dhéanamh faoin mBille seo mar atá sé, agus go bhféadfadh sé a bheith níos fearr. B’fhéidir go mbeimid ag déileáil leis sin trí leasuithe ag Céim an Choiste. Is Bille tábhachtach é an Bille seo ó thaobh comhionannais pá de idir fhir agus mhná agus comhionannais maidir le meas a thaispeáint do dhaoine. We will support this Bill, although with reservations and we will introduce a number of amendments on Committee Stage. The fight to ensure pay equality is another step in the battle to ensure equality between men and women. I note, and I think it is unfortunate, that the Labour Party Bill, which essentially sought to achieve the same objective, is already at a very advanced stage. I refer to the debate we had on the last piece of legislation and the fact that Private Members’ legislation, to which amendments were tabled, passed through all Stages and will now be commenced and will become law. It is unusual, given that a Bill has passed through all Stages in the Seanad, including Second, Committee and Report Stages, and has proceeded to the Dáil, not to work with that legislation rather than start again. That is unfortunate. We are starting with this legislation now and I may be wrong but it is possible this Government may not be in a position to pass it through all Stages. I do not know what plans the Minister or Fianna Fáil have. We shall see. It would have been more efficient and better in terms of procedure to work with a Bill that was already in train.
That being the case, if the Minister intends to stay the course with this legislation, I ask that it be prioritised. It is a vitally important piece of work. We have travelled a long way in terms of equality idir fhir agus mhná le blianta beaga anuas, ó thaobh an vóta céad bliain ó shin agus i gcoinne na mbac a bhí ann ó thaobh pósadh sa Státseirbhís go dtí tríocha nó daicead bliain ó shin. We recently had the fight to repeal the eighth amendment that caused so much harm and suffering to women over more than 30 years. We now have this fight for equal pay. It is an issue right across the world. It is starker perhaps in other parts of the world than it is here but is quite significant here. According to the World Economic Forum, it would take 217 years to close the economic agenda gap globally. It is quite significant in Ireland. With a gap of 13.9%, it would take 55 years to close the gender pay gap in this jurisdiction, if we were to continue to do things in the same way. That cannot be the case and we must change.
This Bill is a mechanism that has been introduced in other jurisdictions. Britain has gender pay gap reporting and similar proposals have been implemented in other EU countries and in the United States. Measures similar to the ones proposed here are due to be signed off for the North in the coming months. We welcome these moves. They are not as a silver bullet, and many other issues need to be addressed. I would highlight that a gender pay gap does not necessarily tell the whole story about the structural inequalities that exist within an economy. If one takes the example of a childcare centre, which I think I raised with the Minister previously, where many of the employees are likely to be on low pay, if there are any men employed in it, the pay gap between men and women within that employment is likely to be quite low, if there is any. That does not reflect the fact that there is a structural inequality between the professions in which women are commonly employed and men are more commonly employed. This legislation does not necessarily deal with that. It feeds into the point that Deputy O'Callaghan made, to which I will return because it was quite an interesting one.
This Bill rightly reflects the responsibilities that employers have to tackle inequality within their employments, but there are also structural issues which go beyond any one job or employment. It is right to shine a light on those businesses that might be fearful of the Bill's provisions – wrongly, I believe – and in which there is a significant pay difference, which is in inexplicable in some circumstances. This is a way to bring pressure to bear and to shine a light on those who are making no effort to ensure equal treatment.
Having regard to that, and the fact businesses with over 50 employees only make up half of the number of businesses in the State, we will be moving amendments on Committee Stage to increase the number of companies required to report under this legislation to include companies with 20 or more employees given that we believe that the more data that exists, the better the actions that can be taken to address the malaise of unequal pay on the basis of gender. I will not labour the point about why we need the close the gender gap. It is self-evident and is obviously necessary. There will be few dissenting voices in Irish society and within these Houses in that regard.
We know equality benefits to the economy and families by increasing the take-home pay of women with some projections in Britain estimating that women's earnings could increase by £85 million on foot of measures such as this, which is a staggering amount of ground that could be made up. There is not just one aspect to this. A suite of measures is needed in order to cancel out what has been described as a motherhood penalty, which includes: improving shared parental leave; childcare that is affordable for parents and wraparound childcare, points we dealt with in the previous debate; and carrying out the work to ensure that flexible work practices become the norm. Maternity benefit as a percentage of pay in this State is still one of the lowest in the EU. Increases in this payment should be a priority for the Government, in seeing to the welfare of mothers and ensuring they have greater flexibility and options.
The content of the Bill is relatively concise but we believe it needs to be strengthened. The information specified in section 2 refers the mean and median gap in hourly pay between men and women, the mean and median gap in bonus pay between men and women, the mean and median gap in hourly pay, the percentage of men and women receiving bonus pay, and the percentage of men and women who receive benefits in kind. While we believe this is reflective of the information required, we will table an amendment to ensure a full gender breakdown of all those employed, both part-time and full-time, in an attempt to achieve a fuller picture of the gaps and disparity that exists within companies more generally.
There is also a need to ensure that the area of partnerships and forms of employment such as that are dealt with. This point was discussed at the pre-legislative hearings in committee. Section 2 provides for a phased or staggered roll-out of the requirement for companies and employers to report with companies with 150 or more benefiting from a delay in their need to report and comply with the legislation. We believe this is unnecessary and it is something of which employers have been aware for some time. We will seek to amend this in order to do away with what we believe is a two-tiered approach and have all employers subject to the legislation once it comes to pass.
Our party moved an amendment to the Labour Party Bill to ensure that where a company does not comply with the legislation by refusing to publish data, the company's title would be published by the Irish Human Rights and Equality Commission, and we will again table a similar amendment to this Bill. At the time the amendment was debated, both Senator Bacik and the Minister of State indicated that any measure to take a "name and shame" approach should be complemented by a "name and fame" approach, listing companies that actively address the issue of the gender pay gap. I have no difficulty with that and I am certainly willing to consider it. I hope the Minister of State will consider that there is a need for both recognition and holding people to account. Publicity can be as powerful as any fine in this regard and although there is a role for fines, the focus must be on shining a light and putting pressure on companies to comply, particularly those which actively discriminate.
There are many other issues that must be addressed in tackling the gender pay gap. As I stated, reporting of this kind will not address the overall gender pay gap. The points reflected upon by Deputy O'Callaghan are true, and there is increasing inequality in how the global economy functions and major companies pay their staff. We can look at models of employment such as that pursued by Amazon and the way it treats some of its low-paid employees in some distribution centres is quite worrying. It is something of which we must be aware. A factor is falling union density so I urge anybody following this debate to join a union. It is an insurance policy that a person may never need to use but it is always worth having a union card in one's pocket. Workers are stronger when they stand together and negotiate with an employer together. It needs to be emphasised more in Irish society.
The Government can take action to support union membership by ensuring there is better legislation on union recognition. The tax deductibility of union contributions is another factor and perhaps incentives could be created for employers who recognise unions. If we are serious about pay inequality and realise that gender inequality is real and needs to be tackled, we must also recognise that there is inequality in pay generally. There must be support to ensure workers can organise freely and fairly in a democratic society. The Government should encourage that as much as possible. It is a key element of tackling the inequality issue.
As I mentioned, the legislation we discussed immediately before this debate is relevant and the practice of shared parental leave is a step towards the idea of equality that would primarily benefit certain sections of society. We need a range of measures to counteract the real effects of austerity and its impact on working class women in particular. We need a serious conversation about how working class women and families have often shouldered the burden of austerity and cutbacks and how we want to assist them. There is also the matter of those with unequal or insecure work.
Ba mhaith liom a rá arís go dtacaím leis an mBille agus go bhfuil súil agam a bheith ag obair leis an Aire Stáit ag Céim an Choiste ionas gur féidir linn dul ar aghaidh leis an díospóireacht sin chomh luath agus is féidir.
I thank the Deputies who contributed to the debate. I will consider all views, although I may not agree with all of them.
I stated in my opening comments that this Bill is a very important step. It does not provide a complete solution to the problem of the gender pay gap and Deputy Niamh Smyth is correct in that the gender pay gap arises because of many causes, including women being inadequately represented at the higher levels of organisations and in higher paying occupations, absences from the paid workforce in order to discharge caring roles and gender stereotypes. Gender stereotyping is a problem on which I am focusing in the National Strategy for Women and Girls 2017-2020. Such issues are being addressed in that strategy. In the next few weeks I hope to launch the first report of the Balance for Better Business group of senior business leaders looking at measures and targets to improve gender balance on corporate boards. In due course they will consider gender balance among senior management as well.
We looked very closely at the Labour Party Bill and I would have liked to have progressed it. However, the main thesis of the Bill was unamendable in reality and it went on a completely different track to what we wanted. We are where we are with the current Bill and I thank colleagues for supporting it. I met representatives of the Irish Congress of Trade Unions, IBEC and Chambers Ireland, etc., and the trade unions and employers are agreed on this phased approach that will affect companies with more than 250 personnel first. We want to get this right and in order to do that we must start with larger employers and get the template right and working correctly. When this is done, we can learn from the process and move to other businesses. If we start with smaller businesses, they may struggle and we could end up with all kinds of issues.
In a time of virtually full employment, other matters come into play with respect to other pressures on employers to find workers and so forth. There are many women out there who want to work and who have much to contribute. We want to support and encourage them in doing that. The previous legislation will help both men and women in this regard. I look forward to Committee and Remaining Stages of the Bill. We hope to get it enacted, with the co-operation of colleagues, as soon as possible.