So Mr Chief Executive, why do you pay women less than men?


The deadline for gender pay gap (GPG) reporting by employers has arrived. Over 10,000 employers have published figures on the average gap between what women and men earn. 


Most left it until the last days and minutes before the reporting deadline (30 March in the public sector and 4 April in the private sector) before disclosing their figures. Compared with the overall 18.4% gap between the hourly earnings of men and women some of the reported pay and bonus gaps are much bigger. 


Virgin-branded companies were a case in point. Their gaps ranged from 9.0% in Virgin Media and 10% at Virgin Active health clubs to 19.6% in Virgin Care, 24.4% on West Coast Trains, 32.5% in Virgin Money, 37.6% in Virgin Holidays and 57.6% on Virgin Atlantic. 


Craig Kreeger, chief executive at Virgin Atlantic, pointed the finger at the gender statistics (94% of UK pilots are male, only 15% of engineering and technology undergraduates are female). 


Brian Strutton, general secretary of pilots’ union BALPA, acknowledged that “no-one really knows” why there are so few women pilots, but training costs, the lack of visible representation and the pilots’ lifestyle could be part of the problem.


The banks also came in for scrutiny. TSB, for example, announced a mean gender pay gap of 31%. Accord, one of the TSB unions, said it had worked to ensure that equal pay is a reality and the position was “generally satisfactory”, but the gender pay gap is different. 


“Much of that gap is because there’s a greater proportion of women in the lower grades and a greater proportion of men in higher grades. This isn’t just an issue for TSB or other banks. It’s a societal issue but it can change if the will exists to do something about it,” according to the union.


Under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, British private and voluntary sector employers with more than 250 employees had to record a “snapshot” of pay and bonus pay levels as they were last year. There are equivalent regulations for most public sector employers (see box 1). 


The results are published on the employers’ own web site and a government site https://gender-pay-gap.service.gov.uk and show at least the following: 


• mean and median gender pay gaps; 


• mean and median bonus gender pay gaps; 


• proportions of men and women receiving a bonus payment; and 


• proportion of men and women in each quartile pay band 


The early signs are that it has given some union reps an opportunity to quiz management. Great Western Railways (First Great Western Limited) had a 20.8% pay gap (26% median) with female employees concentrated at lower earnings levels making up 39.3% of staff in the lowest earnings quartile, 26.3% in the second lowest against 12.2% in the second highest and 7.6% in the highest. Women were more likely than men to receive a bonus — 44.8% as against 29.7% — but with a lower average value — 23.9%, 64.1% at median level.


Union reps told Workplace Report that in this male dominated workforce there are no “set or fairly evaluated pay rates” within management grades, so pay is negotiated on an individual basis. The company needs a job evaluation exercise for the management grade; transparency so individuals know how to achieve a bonus and the relevant rates; and work to increase the numbers of women in the workplace who are empowered to be promoted.


Many employers go into more detail than the law requires. Sussex Police, with a 9.61% gap (14.99% median) provided a breakdown between staff and police officers: 


• officers: mean pay gap 4.07%, median 0%; women in pay quartiles (low to high) 39.7%, 33.4%, 50%, 22.8%;


• staff: mean pay gap 4.96%, median 3.27%; women in pay quartiles (low to high) 64.7%, 52.7%, 59.9%, 52.3%


UNISON which represents Sussex Police staff underlined the importance of that breakdown. Police staff and officers need to be treated quite separately with a clear structured program developed for both, but the “focus for improvement” would be on officers. 


Limitations of the regulations


Expectations for the GPG regulations have been low in some quarters of the trade union movement, although that may be changing. A significant early issue was the 250-worker threshold, which was challenged by the TUC.


And the regulations don’t require employers to publish other kinds of pay gap. Zohra Francis, equality officer at the top and middle management civil service union the FDA, has called on civil service to “lead the way by revealing pay gap data for its BAME and disabled staff”. 


They cover some agency and self-employed workers, but not “gig” workers. The Musicians Union says the vast bulk of its problem with pay discrimination will go unreported. 


Compared with a full-blown Equal Pay Audit, the 2011 Public Sector Equality Duty, or the challenge of submitting multiple equal pay claims, GPG is said to lack detail. Research into similar initiatives elsewhere in Europe suggests that is what’s needed if the process is to become more meaningful and effective: 


“Only in those cases where sufficiently detailed information is available, and where they are further discussed and scrutinised, do the reports and audits move from being a mere formality towards becoming an effective and powerful instrument,” according to EU agency, the European Foundation for the Improvement of Living and Working Conditions.


Helen Stevens, who is responsible for Prospect members at the Met Office says GPG is a great start for employers who have so far not done anything, but as a negotiator it is not “granular” enough. Its recent success at securing a new pay agreement designed to close the gender pay gap owes more to union pressure. 


Gareth Murphy, a senior official with the Financial Services Union (FSU) which covers Northern Ireland, agrees that pay gap reports “don’t tell you much”. More detailed information is needed to show whether actual discrimination exists or whether the gender pay gap is a result of there being more senior men. 


Union plans to use the information

However, that perception may be open to change as unions get used to using this new form of transparency. The PCS civil service union has asked its negotiators to pay particular attention to what the gender pay reports are saying and to use them to progress its equal pay agenda.


Prospect says that while the regulations are not perfect, they have achieved at least one important goal: shedding more light on gender pay inequality and reigniting a broader conversation about why women are paid less than men and what needs to be done about it. 


The union has developed an e-learning course and other resources on GPG to bring its reps up to speed (see link at end of feature).


Information provided for Workplace Report by union reps earlier this month suggests that some are already using GPG to press for action on issues like gender segregation, the glass ceiling, pay inequalities, pay differences arising from working time arrangements, bonus pay and performance pay. 


Union reps at Colchester Institute, for example, only heard about their employer’s gender pay gap figures (16.1% mean, 23.3% median) shortly before the deadline. They said they want meaningful dialogue, which they are confident will occur, and are looking for a review of progression routes from lower paid areas into higher grade support or teaching roles.


Hull Culture and Leisure has a 9.6% mean gap (6.8% median) with a larger proportion of women in the lower-paid roles, although in some departments the proportion of female managers is high. The employer is said to be looking into its recruitment and family friendly practices to encourage more women into higher level posts, and the union wants a “task and finish group set up to look at how we work together on this”.


Some union reps see public sector pay limits and the lack of funds for pay adjustments, incremental progression and development opportunities for women as contributing to the pay gap. At one local authority with a mean pay gap of 3.6% (median 4.3%) and a fairly even spread of women through the pay levels, UNISON is drawing up an action plan and was concerned that comparing data against other councils “takes focus away that the gap exists and what needs to be done to close the gap”. 


The much-discussed shortage of women in engineering jobs is seen as a factor behind the pay gap at Essar Oil UK Ltd (16.1% mean, 15.8% median), even though women account for a greater proportion of staff in the higher pay levels (lower quartile 9.3%, lower middle 8%, upper middle 11%, upper quartile 23.1%).


The company is said to be reviewing its recruitment policy, but the union also wants transparency on pay bands: “We would like to see the grades for jobs mainly done by women reassessed to see if they are being fairly compared with similar jobs done by men at the same grade.”


Pay and bonus differences arising from part-time working and shift premiums lay behind pay gaps at BMW (UK) Manufacturing in Oxford (mean 8.3%, median 4.0%); and chemicals manufacturer BASF (mean 5.8%, median 5.4%). But unlike BMW, the median women’s bonus at BASF is higher than the men’s — 45.2% higher.


These problems have been discussed, and BMW is said to be committed to existing and new initiatives like the Girls Go Technical programme and updated online diversity training for managers, to help improve the company’s ability to attract, engage and develop women.


Performance related pay

Performance-related pay is seen as the main reason for the 10.9% mean pay gap at housing group WDH. Over a quarter of the workforce are trades workers who adopted a performance-related pay scheme. The company is said to have a diversity and inclusion action plan for 2018-2019 and is targeting recruitment for more female trade positions through an apprenticeship programme.


Another union rep mentioned this as a problem area and said their employer was organising “unconscious bias” training in an effort to address it. 


It is a theme that has been taken up by Gareth Murphy of the FSU: “We are actively seeking employers to conduct gender audits of performance management ratings and performance related pay increases as we feel these could contribute to gender pay gaps within grades if not analysed and addressed. There is a body of research which suggests that performance management objectives can be biased, either by design or not, toward men. If this is the case then this will lead to a growing gender pay gap within roles and grades and, potentially, discrimination in performance related pay.”


Subsidiaries and outsourcing

The GPG regulations can be thwarted where work is divided among subsidiaries, or has been outsourced, contracted-out or hived-off. Northumbria Healthcare NHS Foundation Trust has a mean pay gap of 20.1% which drops to almost zero if consultant medical staff are excluded (and when the pay gap is measured as a median). However, the Trust’s report does not include its subsidiaries. 


One of those, Northumbria Healthcare Facilities Management Limited has its own gender pay gap (18.3% mean, 1.78% median), but the gap between the Trust’s median hourly rate of £11.20 and the facilities management median rates (£7.73 female, £7.87 male) is bigger.


UNISON regional organiser Natasha Nicholson points out that those staff would previously have been directly employed, “which does beg the question if the Trust’s pay gap figures would have been greater had these figures been included?”


The outsourcing of low-paid male jobs, while low-paid female jobs remained in-house, was given as a reason for a 13.7% gap (12.6% median) by one local authority, although the union rep was sceptical: “I don’t think that argument completely stands up. I think it’s more about women being disproportionately represented in the top pay quartile and wider societal reasons for women not progressing up the career ladder”. 


The employer is proposing a home working policy as part of its response but the union wants the reinstatement of a women-only training course designed to encourage women into leadership roles.


The mean 8.7% pay gap at Liverpool City Council (median 9.7%) is seen as being linked to the retention of traditionally female-dominated job roles at the lower end of the pay scale — with more female employees in part-time roles. The GPG report hasn’t been discussed yet but union reps have already been in contact with the council about the developing an action plan for career development and progression for black and minority ethnic staff (council equality data covers both ethnicity and disability, although it is not broken down by gender).


Reps at several of the companies and organisations contacted by Workplace Report indicated that as well GPG they had also seen equality data from other sources and there seems to be no reason why the two can’t work in tandem. 


That seems to be happening at Norfolk County Council (mean gap 6.8%, median 9.7%) where a 3% increase in the number of men revealed in Public Sector Equality Duty data would have helped reduce the pay gap. 


It is early days for GPG reporting and many of the unions and union reps contacted by Workplace Report did not respond. However, the examples here suggest that there is plenty to discuss with the employers – given that they will have to come up with new figures every year – and a very reasonable expectation that they will want to go into more detail than is strictly required, even if only to explain themselves to the workforce.