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Whilst certain but limited progress was made by the out-going Government in relation to its commitment to introduce gender pay gap reporting legislation, it remains to be seen whether the next Government will echo the same commitment and indeed how long it will take to enact this long-awaited legislation.  

History

Previously, two separate Bills were initiated in the Houses of the Oireachtas. In May 2017, the Labour Party initiated a Private Members Bill entitled “The Human Rights and Equality Commission (Gender Pay Gap) Information Bill 2017” and separately, the out-going government published the Gender Pay Gap (Information) Bill 2019 (the “Bill”). The Bill progressed to the Third Committee Stage of the Dail, however, as with the 2017 bill, this has now lapsed with the dissolution of the Dail in January 2020.

Advancing the legislation

Whilst the timing of this legislation is unknown, the next government will be under pressure to advance such legislation - the European Parliament passed a non-binding resolution on 30 January 2020 calling on EU member states to strengthen their efforts to definitively close the gender pay gap by strictly enforcing the equal pay principle and adopting legislation increasing pay transparency. 

EU guidelines

The European Commission reports that the overall gender pay gap in the European Union is 16%. In her political guidelines for 2019-2024, Commission President Ursula von der Leyen committed to addressing the gender pay gap within the framework of the upcoming Gender Equality Strategy. The Commission has previously called on member states to take efforts to close the gender pay gap and to address barriers to women’s participation in the labour market. Therefore, as there is an emerging consensus from the European Union to close the gender pay gap, there is a strong possibility that the next government will introduce gender pay gap legislation to comply with the proposals outlined at European level. 

Implications for business

Against this background, employers are advised to commence preparations at an early stage. Organisations which leave preparations too late will find themselves addressing any issues in the public domain, under the scrutiny of the media, trade unions, their employees and customers. Organisations reporting a high gender pay gap may be viewed as being less than fully committed to pay parity, promotion and development opportunities for women. Where a gender pay gap exists, this may negatively impact their brand, employee relations, public reputation and their ability to attract and retain talent. If organisations operate within a pyramid workforce structure when it comes to gender, this will create a pay gap. If such gap is greater than their peer employers, they may have some uncomfortable explaining to do to their stakeholders.

Employers who take the opportunity to analyse and explain their gender pay gap are likely to benefit from such transparency

The all-important narrative

The percentage gaps are important, but the explanation of the gaps is what could distinguish progressive employers from those who are merely observing a compliance obligation. Under the Bill (as once debated), employers were required to publish - concurrently with the percentage results - the reasons for such differences and if they have taken any measures to eliminate or reduce such differences.  This requirement needs to be replicated in any new legislation, as to be permitted to publish figures in isolation will erode the effect of the legislation. Mere reporting of figures could lead to a compliance complacency whilst defeating the spirit of the legislation, whereas employers who take the opportunity to analyse and explain their gender pay gap are likely to benefit from such transparency.

The narrative for any gap is a particularly important opportunity for employers who have a relatively large gender pay gap.  The media and the public often confuse the issues of ‘the gender pay gap’ and ‘equal pay’, even though the two are very different concepts.  Employers should use their narrative to help minimise the risk of confusion and to take the opportunity to explain the nuances or legacy issues in their organisation which may have led to a gender pay gap.  This should encourage a level of transparency enabling employees to question and challenge reward models and packages and allow employers to highlight their efforts in achieving gender pay parity.

This article first appeared in Accountancy Ireland and is reproduced here with their kind permission.

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For assistance with the issues outlined above, or related queries, please contact Aoife Newton, Legal Services, via this form.

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