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Government reveals plans on equal pay, maternity pay and positive action

31st January 2011

In a document entitled “Equality Strategy- Building a Fairer Britain” the Government has set out its approach to equality law. The Government has indicated that it does not see that all developments in equality should be made through legislation. A voluntary approach is to be promoted where possible. In particular, the Government plans to develop a voluntary scheme of gender pay reporting for private and voluntary sector businesses. These plans are to be primarily aimed at companies that employ 150 or more employees. The plans also involve an annual review of the number of companies releasing pay gap information voluntarily, together with the quality of the information that is released. However, it has still been left open for the Government to bring into force a section of the Equality Act 2010 that would make it mandatory for companies to publish the gender pay gap information.

In addition in April 2011 the provisions on positive action in recruitment and promotion under the Equality Act 2010 is due to come into force. However, the Government has emphasised the fact that this does not impose quotas on employers, nor does it mean that employers must give jobs to people because they are disabled, or women, or from an ethnic minority. Employers should still appoint on merit.

The Government plans are quite wide ranging, and commit to improving careers advice for women, members of ethnic minorities, disabled people, and others to help ensure that they are aware of options available to them. The plans also set an aspiration that 50% of all new appointments on public boards will be women by the end of the current Parliament.

It remains to be seen how far a voluntary approach can achieve the aims set out by the Government. It is our view that sometimes legislation has forced employment practices to change where a voluntary approach is likely to have taken a very long time to make any real impact. There are many employers that will only make the types of changes and implement the types of measures set out in the Government strategy if and when they are forced to, which frequently means being forced to by legislation. Frankly this is all the more likely at a time when many businesses are struggling to survive at all, and to recruit the skills that are essential to their survival.

In addition to publishing the equality strategy, the Government has committed to the introduction of measures to enable mothers to share their maternity leave with the father of the child. This still poses practical problems for all parties concerned, the mother, father and their respective employers, in administering such an arrangement. The current paternity leave provisions have been viewed as being unfavourable to fathers that may wish to spend time with their children. The paternity leave and paternity pay provisions limit the period that a father can take to just a couple of weeks, with very little pay. The provisions are such that the only fathers that can really afford to make use of them are those that are wealthy, who can afford to see a large drop in income over the paternity leave period, or have the benefit of contractual arrangements with their employer that enhance the statutory pay and/ or leave entitlements. In our experience very few private sector employers, particularly at the moment, can or do provide any contractual enhancements on paternity leave or paternity pay. 

Plans to extend the period of full pay for the first 20 weeks of maternity leave have recently been rejected by the EU Employment Council of Ministers. The European Parliament had put forward this suggestion. The UK Government’s view was that such a measure would be socially regressive anyway, as it would mean that the highest earners would be the greatest beneficiaries. The European Commission is now likely to consider the earlier proposals of extending the minimum period of maternity leave from 14 to 18 weeks. In the UK the maternity normal leave period is already longer, so this is unlikely to have a significant effect.

It is clear that the current Government is taking a different approach to equality law from its predecessor, but it remains to be seen if their preferred “voluntary” approach will bring about the changes envisaged, or if they will subsequently resort to forcing change on employers through legislation.

If you have any questions on the issues raised in this article, please do not hesitate to contact us.
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