UK Builds on Gender Pay Gap Regulations with Enforcement Proposal
On 19 December 2017, the Equality and Human Rights Commission ("EHRC") proposed a draft plan for enforcement action in relation to the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (the "Regulations"). The proposal was set out in a draft policy and it was open for consultation until 2 February 2018. We now await the results.
The Regulations came into force on 6 April 2017 and state that private sector employers with 250 or more employees are required to disclose certain information about their gender pay gap. To summarise, the following must be published by no later than 4 April 2018 (and thereafter annually):
- the mean and median ordinary gender pay gap and bonus pay gap;
- the proportionate difference between men and women receiving bonuses; and
- the proportion of men and women in each salary quartile of the pay structure.
During the development of the Regulations, there was uncertainty surrounding the consequences of failing to comply. The Regulations have indicated that it would be an "unlawful act" if employers were to be non-compliant and that the EHRC could take enforcement action under its statutory powers. In the draft proposal, the EHRC describes how it will scale the level of non-compliance after the reporting deadline and will then decide which form of enforcement is required. The proposed levels of enforcement for non-compliant companies are as follows:
- The EHRC has indicated that in 2018/2019 it will first focus on employers that did not disclose any data at all and will engage informally with those employers. It also proposes to monitor and publish compliance rates, including accuracy of data.
- In terms of the informal resolution of non-compliance, the EHRC intends to write to the employers and remind them of their obligations, requiring a letter of acknowledgment within 14 days. In the letter, the employer will need to confirm that they will rectify their non-compliance of the past year within 42 days and will conform to the Regulations for the current year. If the employer does comply, the EHRC will not take further action.
- If an employer ignores this informal approach, the EHRC will launch an investigation to determine whether the employer has breached the Regulations and may issue a notice to enforce compliance. If the employer ignores this notice, the EHRC may apply for an order from the court. Failing to comply with this order could result in an unlimited fine.
- During the investigation, the EHRC will offer the employer an opportunity to enter into an agreement in which the employer would agree to abide by the Regulations for the previous and current year. So long as the employer complies with the agreement, the EHRC would not take further action.
It is doubtful that the proposed enforcement plan and the results of the EHRC's consultation will be known before the first reporting deadline of 4 April 2018. Employers should make sure they are aware of the reporting obligations and will want to have processes and procedures in place to collect and analyse the relevant data. It is important to note that the EHRC is intending to address the inaccurate reporting of the gender pay gap too, therefore employers will want to ensure that their data is accurate and that any accompanying documentation is credible and presentable. The Government Equalities Office does intend to publish a list of employers that have not yet registered with the government's gender pay gap reporting service, despite the deadline still being several weeks away.
Female Category Specialist awarded £24,000 after being persistently denied promotion and equal pay by her employer for over 18 months
A female Category Specialist at UK Power Networks has won an equal pay claim against her employer after being denied equal pay and a promotion for 18 months.
Facts of the Case:
- Amy Arnold initially started working for UK Power Networks as a contractor in September 2013 and became a permanently employed Category Specialist in April 2014. Management indicated that when she became a permanent employee, she would be paid an annual salary of £40,000. Instead, she was offered an annual salary of £22,000, which she managed to negotiate up to £35,000 per annum.
- In December 2014, following
discussions with her male colleagues, Ms Arnold discovered that she
was being paid less than they were. In January 2015, Ms Arnold was
offered a position outside of the company for a higher salary. As
she thought her career prospects were more promising at UK Power
Networks, she declined the offer but she went on to write to her
line manager, raising her concerns over pay, training
opportunities, and the fact that she had been offered another role
with a different company at a higher salary. She wrote in her
"It has also come to my attention that there are male individuals in the procurement team that are seemingly less capable than me but are on better pay packages. While I appreciate that everyone has negotiated their individual salaries when joining the business it doesn't seem appropriate that these individuals who come to me for guidance and advice on a regular basis are earning a higher wage than me".
- On 27 January 2015, Ms Arnold discussed her issues with Mr Waring, Head of Operational Procurement, and was told that her salary would be increased to reflect her progression if she achieved some professional qualifications. Five months later, after completing several of the required qualifications, Ms Arnold had still heard nothing in regard to her pay review. Further, between March and June 2015, Ms Arnold had also taken on additional responsibility for leading a sub-team, yet no progress had been made on her pay review.
- UK Power Networks continued to move the goalposts. Ms Arnold applied for the role of Tactical Procurement Lead in March 2016; however, she received no reply. She was told in April 2016 to send over her qualifications certificates in order to agree her salary increase, but again she received no reply and nothing was done regarding her pay. In May 2016, a pay increase was promised again, but only after her mid-year performance review. Ms Arnold achieved her mid-year targets in July 2016. Her pay review was confirmed again; however, a new line manager, Mr Bird, was unable to inform Ms Arnold of when it would take place. Ms Arnold went on to receive an email from Mr Waring claiming that he had no mandate to make salary changes. Some 18 months had now passed since Ms Arnold had raised her original concerns.
- In October 2016, Ms Arnold was short-listed for a new role, along with three other internal candidates: two male and one female. By this time, she had completed all of her qualifications and was fully qualified for the role; however, she was not successful and the role went to a male colleague with less experience. Mr Waring was one of the interviewers. The court noted that he wrote in his comments "desire to progress rather than the attractiveness of the role".
Judgment of the Employment Tribunal
The tribunal found that Ms Arnold was a victim of direct discrimination due to the failure to appoint her to the position of Tactical Procurement Lead in 2016 and that Ms Arnold was victimised under the Equality Act 2010, the protected act being the raising of a complaint about her pay. The judge wrote:
"It is clear that Mr Waring and Mr Bird were equally frustrated, they were annoyed that this matter would not go away. There was a total lack of movement by Mr Waring and Mr Bird seemingly passing it backwards and forwards. The goal posts were changed. The claimant was clearly perceived as a thorn in their side and when the job vacancy came about she clearly was not going to be preferred under any circumstances."
Despite her treatment, Ms Arnold remains an employee of UK Power Networks. The parties reached an agreement on compensation to include an amount for injury to feelings and loss of opportunity. Ms Arnold received a sum of £24,000. The parties also agreed that all members of the UK Procurement Team were required to undergo training in the Equality Act 2010.
What is the impact on your organisation?
The issue of gender pay discrimination is high on most business agendas at the moment; the new gender pay gap regulations are fueling increased awareness of gender pay disparity amongst employees.
Complaints and grievances about perceived gender pay inequality are likely to increase over the coming months. This case is a clear example of why it is important to treat such issues seriously and in accordance with your grievance procedure. The case cautions against ignoring an employee's concerns and treating an employee negatively as a result of their raising concerns. A complaint about pay should be dealt with in exactly the same way as any other grievance issue.
It is a credit to Ms Arnold that she persevered with her employer. She probably would have had a strong constructive unfair dismissal claim had she decided to resign.
UK Minimum Wage Increase 2018
The National Minimum Wage is set for a rise from 1 April 2018.
- Aged 25 and over - £7.83 (previously £7.50)
- Aged 21 to 24 - £7.38 (previously £7.05)
- Aged 18 to 20 - £5.90 (previously £5.60)
- Aged under 18 - £4.20 (previously £4.05)
- Apprentices - £3.70 (previously £3.50)
In other news...
- A senior auditor of Morrisons supermarket, Andrew Skelton, publically leaked the personal details of almost 100,000 co-employees in an act of revenge against Morrisons for disciplining him for a separate matter. Mr Skelton is currently serving an eight year prison sentence following a criminal conviction for his actions; however approximately 5,000 of the employees whose data was leaked have brought proceedings against Morrisons for primary and secondary (vicarious) liability under the Data Protection Act 1998. The High Court has found that Morrisons was not primarily liable for breaches as it was not Morrisons that disclosed and misused the information, The High Court did however find that there was a sufficient connection between Mr Skelton's employment and his wrongful conduct for vicarious liability to be established. The court has granted leave to Morrisons to appeal the decision on vicarious liability. It is presently unknown as to whether Morrisons will appeal – we shall update you on this case in our next newsletter once we know Morrisons' decision.
- An employment tribunal has told the retailer Primark to adopt a policy on how to deal with transgender staff after a retail assistant was constructively dismissed from her position at Primark's Oxford Street (West) store after being harassed for being transgender. Alexandra de Souza E Souza informed Primark that she was transgender when she applied for her role and during the interview, the company told her that her official name would need to be used for payroll but she could use whatever name she liked on her work name badge. HR staff incorrectly changed her preferred first name on the company's IT system and 'Alexander' was printed on her name badge by mistake. De Souza E Souza was laughed at when she corrected her manager for calling her the incorrect name, she alleged that staff sprayed men's aftershave over her until she started coughing and that she was told she had a man's voice.
Workers allegedly made comments about de Souza E Souza's sexuality and allegedly called her "evil" and a "joke". She alleged that the company did not take her complaints seriously and that management told her to calm down, as she was "drawing attention to herself". The employment tribunal found that Primark had failed to deal with the matter correctly, which amounted to direct gender reassignment discrimination. De Souza E Souza was awarded £47,433.03 in compensation.
Tier 2 (General) Visas: Restricted Certificate of Sponsorship Cap Reached
The monthly quota for non–European Economic Area nationals sponsored under the Tier 2 (General) visa category has been reached for the third time in as many months. In 2011, the Home Office set an annual quota on the number of restricted Certificates of Sponsorship (CoS) to be granted. The annual quota of 20,700 restricted CoS is divided into 12 monthly allocations.
Restricted CoS are used for new-hire applicants earning under £159,600 per year coming to work in the United Kingdom from overseas. The restricted CoS request must be submitted by the 5th of the month, with the decision being communicated to the sponsor by the 11th of that same month.
Restricted CoS are allocated by points that are awarded based on a variety of factors, including the salary and the type of job, e.g., shortage application role or job that passes the resident labour market test (RLMT).
What is the impact on your organisation?
Sponsors should be aware that if any restricted CoS applications were rejected in February, they can reapply as part of the next panel consideration provided that the RLMT (if applicable) was conducted in the last six months. The overflow, however, may add to the backlog and the chance that the quota will be met again.
Indefinite Leave to Remain in the UK (ILR): Main Applicants and Points-Based System Dependants
Updates to the Immigration Rules came into force on 11 January 2018. One of these changes referred to the way in which absences are calculated for the purposes of indefinite leave to remain in the UK (ILR) applications for migrants in the UK under the points-based system on or after 11 January 2018.
Previously, absences of up to 180 days in fixed 12-month blocks were allowed; however, following the changes, absences will be calculated on a rolling basis, meaning that applicants must not be absent from the UK for more than 180 days in any 12-month period.
This is particularly unfavourable to applicants applying for ILR after 11 January 2018. We will update you if there are changes to this following backlash from immigration firms.
In early December, the UK and the EU finally reached an agreement on citizens' rights, providing some much-needed clarity.
The agreement came with the caveat that "nothing is agreed until everything is agreed", which ultimately signifies uncertainty in the months ahead. Having said that, we are optimistic that there will not be any substantial changes to the agreement regarding citizens' rights.
The Office for National Statistics revealed that net EU immigration to the UK in the second quarter of 2017 fell to its lowest level since records began, while EU emigration increased. The fact that fewer people are coming to the UK and more are leaving is not due to greater control of migration, but rather the personal choice of migrants. The UK is seen as a less desirable place to do business, live, and work.
As uncertainty following the Brexit referendum remains a deterrent to EU migrants, there are a number of ways in which employers can support and reassure their EU workforces and plan ahead to protect their businesses from future changes. These include running seminar sessions for staff, supporting and financing applications where appropriate, and assessing alternative immigration solutions post Brexit.
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