Seanad Second Stage Debate
24 May 2017
Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill [Seanad] [PMB] 2017
Statement by Minister Stanton
I welcome the opportunity to speak on the Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill 2017, proposed by Senators Bacik, Humphreys, Ó Ríordáin and Nash.
While the Bill is relatively short, it proposes to amend the legislation establishing the Irish Human Rights and Equality Commission by assigning to IHREC powers to make mandatory information disclosure schemes. Under such schemes, specified categories of employers would be required to compile and publish information relating to differences in the pay of their male and female employees. Contravention by an employer of the provisions of a scheme would be an offence. Schemes would not apply to employers of fewer than 50 employees.
I acknowledge the good intentions behind the Bill, the general thrust of which I support in terms of its objectives and the need to address the gender pay gap. As the Senators are aware, it echoes specific commitments in this regard in the current Programme for Government.
The principle of equal pay for women and men for equal work, or work of equal value, has been part of Irish law for almost 40 years and is part of everyone’s contract of employment. The gender pay gap, the difference between the average gross earnings of female and male employees, is not as well understood. In 2014 the pay gap between women and men employed in Ireland was 13.9 per cent, before any adjustments are made to take into account of factors such as differences in education, labour market experience, hours worked, type of job, etc. Among the many factors which interact in creating the pay gap, a number have an obvious gender dimension. I refer here to traditional role models, gender-segregation in education and in the labour market, the challenges of balancing work and family life, the difference in participation of men and women in family responsibilities, the availability of quality, affordable childcare facilities and out-of-school hours care, and processes within organisations where imbalance needs to be addressed.
To put the situation in Ireland in a broader context, it should be noted that Ireland is one of the better performers in the EU. While the gender pay gap across the EU overall was 16.7 per cent in 2014, the gender pay gap in Ireland at 13.9 per cent was the 11th lowest in the EU. I fully accept that this is not where we want to be and that we need to act on the gender pay gap. This objective is articulated both in the Programme for a Partnership Government and in the actions of the new National Strategy for Women and Girls.
I want to highlight, in particular, the importance the Government and I attach to taking action to promote wage transparency, as a means by which some of the factors contributing to the gender pay gap can be identified. This is expressed as a specific commitment in the Programme for a Partnership Government to introduce wage surveys for companies of 50 or more employees.
Therefore, I am not opposed in principle to the Bill. However, I have concerns with the specific approach proposed.
Before going into detail on the provisions in the Bill, it is important to mention the National Strategy for Women and Girls 2017-2020 which the Tánaiste and I launched on 3 May 2017, and which specifies a package of actions to deliver on this Programme for Government commitment. In this regard, Action 1.22 of the Strategy will initiate dialogue between key stakeholders, unions and employers, aimed at addressing the gender pay gap, and develop and promote practical information resources to explain and increase understanding of the multifaceted aspects of the gender pay gap and its causes. Practical tools will be developed to assist employers in calculating the gender pay gap within their organisations and to consider its aspects and causes, mindful of obligations regarding privacy and data protection.
Furthermore, Action 1.23 pledges to “Promote wage transparency by requiring companies of 50 or more employees to complete a wage survey periodically and report the results.”
Beginning with the purpose of the Private Members' Bill, I note that the explanatory memorandum with the Bill identifies three uses for the information to be published by employers who come within the scope of a scheme.
The primary purpose is to provide information to diagnose the causes of the gender pay gap in organisations to inform the formation of public policy. I assume this would require the compilation and analysis of responses from all employers within a scheme, and for such analysis to be available to Government for policy formation.
The second use is by employers, providing them with a means of benchmarking their gender pay gap against that of their competitors. I note that this would require employers’ information to be publicly available.
The third use is by the Irish Human Rights and Equality Commission itself. A scheme would provide IHREC with an additional source of information on differences in the pay of male and female workers employed by an organisation. Such information could inform a decision by IHREC to use its existing powers to invite employers to carry out equality reviews and prepare and implement action plans. It could also inform a decision by IHREC to carry out such equality reviews and action plans on its own initiative, or to initiate inquiries.
Turning to the Bill itself, section 1 provides for the insertion of a new section 32A into Part 3 of the Irish Human Rights and Equality Commission Act 2014, which sets out enforcement and compliance procedures involving IHREC.
Subsection (1) provides for the making of a scheme by IHREC. As set out in this subsection, the exercise of any authority or power to make a scheme would be at the sole discretion of IHREC. There is no provision under which the Minister may require or request IHREC to make a scheme. As such, there is no provision made whereby enactment of this legislation is guaranteed to result in the introduction of wage surveys, as promised in the Programme for a Partnership Government, or indeed, within the timescale envisaged in the new National Strategy for Women and Girls.
Also, IHREC is fully independent and must be able to determine its own work priorities. The imposition of such an obligation raises the possibility that IHREC may not be in a position, or indeed, the most appropriate body in this context to carry out such a task.
As subsection (1) is currently phrased, approval of the Minister is not required for any such scheme. While IHREC has undoubted expertise in this area, it may be appropriate that any powers are subject to the control of the Minister as is the case with section 31 of the Irish Human Rights and Equality Commission Act 2014, whereby codes of practice can be prepared by IHREC for submission to the Minister and the Minister may by order approve them. There is no similar mechanism in the Bill.
While Subsection (3) provides an indicative list of matters which may be prescribed in a scheme, and Subsections (4) and (5) specify the minimum information that must be published by an employer under any scheme, terms and concepts are used which are ambiguous or are not defined in this context. For example, bonus pay, pay quartiles, breakdowns by reference to employees’ ages and breakdowns by part-time and full-time status, are all terms to be defined.
The Bill also proposes in Subsection (6) to create a new offence of contravention of the provisions of a scheme by an employer. The imposition of a Class A fine in respect of this offence would appear to be out of line with other offences under the IHREC Act 2014, which are liable for Class C fines.
With the level of information that the Bill requires to be published, there is a danger that the pay of some individuals could be ascertained. For example, would it be possible for such information to be identified from publication of the proportions of men and women in the different quartile pay bands? If only one or a few men or women were in a particular band, this could be possible and it obviously raises data protection concerns.
Subsection (5) requires the information specified in Subsection (4) (a) to (f) to be further disaggregated, by reference to age and by reference to employees’ part-time or full-time working status. This level of disaggregation increases the likelihood that an individual employee’s pay is identifiable, even in respect of employees of larger employers. The State’s legitimate interest to increase wage transparency in order to provide information on gender pay differentials within individual companies must be balanced against the rights of individual employees to privacy on pay. The one-size-fits-all approach set out in Subsections (4) and (5) gives me cause for concern. The case for making this information publicly available in respect of all employers, irrespective of the size of their workforce, requires careful consideration and must be examined to ensure it is proportionate and necessary. A more nuanced approach may be needed.
The Bill appears to draw selectively from recently introduced UK legislation - namely the UK Equality Act 2010 and Regulation 2017 No. 172, which require employers with 250 or more employees to publish similar information relating to differences in the pay of male and of female employees – on which there was extensive public consultation, informed by regulatory impact analysis. The aspects of the UK model which are incorporated in this Bill are Subsections (1), (3), (4) and (5), which are similar to provisions of s.78 of the UK Equality Act 2010, while Subsection (4) is similar to paragraph 2 of Regulation 2017 no. 172. It is notable that Subsection (5), which requires the breakdown of information by reference to the full-time or part-time status of employees and by reference to their ages and which raises data protection issues, is a level of detail not provided for under the UK law.
These are my comments on the provisions of the Bill. More fundamental than these views, however, is my concern that we should not enact legislation in this area without having full consultations first with interested stakeholders, in particular employers and trade unions.
We need to ensure that the legislation asks for the right information; that it is reported in the most efficient and useful manner, and that it will produce the best indicators for future policy directions – not only for national policy, but crucially to support analysis and inform change where it is most needed at the level of the individual employer. Consultation will allow for an assessment of the full range of approaches to the design and implementation of wage surveys.
I very much welcome today’s debate and I am listening carefully to what everyone is saying. The Government is open to, and indeed readily welcomes, debate on the issues this Bill aims to address. I can assure the House that the Government is committed to acting on the gender pay gap.