Employers will shortly be forced to publish gender pay gap information. Harry Fehily, Managing Partner, takes a look at the hammer which is about to break the glass ceiling.
Ireland is set to follow in the steps of its UK counterparts by way of legislative reform introducing employer transparency on gender pay gap information, with the ultimate goal of ‘shattering the glass’ on gender inequality.
Employers should consider, if they have not done so already, collating salary figures for their male and female staff ahead of the legislation coming into force. This is necessary to assess their organisation and implement strategies to improve any gender pay gap and will also assist in avoiding reputational damage.
Despite living in an era where the promotion of equality is at the forefront of society, gender inequality in the Irish workforce remains a very live issue, with many female employees lagging behind their male counterparts when it comes to equal opportunities, management roles and income. Although a number of national and pan-European strategies have been put in place to attempt to resolve this problem, according to research and statistics more still needs to be done to close the gap.
The government has responded by introducing two separate pieces of legislation which are currently making their way through the Oireachtas in the form of the Gender Pay Gap (Information) Bill and the Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill 2017 (collectively referred to as the ‘GPG’) which, when enacted, will introduce a number of changes. These include mandatory reporting obligations on employers in relation to the salary figures of men and women.
When we talk about the ‘gender pay gap’ we mean women’s earnings as a percentage of men’s earnings. Somewhat alarmingly, Ireland witnessed a 2% increase in its gender pay gap from 12% to 14% between 2014 and 2017, in figures revealed by the Central Statistics Office. However, we are below the overall European average which remains in or around 16%.
A significant contributing factor to such inequality is the lack of women holding roles at senior management level. According to the Women in Management – the Leadership Pipeline Report 2017, only 19% of CEO positions in Ireland are held by women, with 31% of Executive Directorships held by women. A recent survey carried out by Korn Ferry in 2018 also discovered that women comprise only 13% of the boards of Irish listed companies.
“There are fewer large companies run by women than by men named John” Justin Woulfers, New York Times 2015
Mandatory reporting obligations
One of the main features of the GPG is the proposed mandatory requirement for employers with at least 50 employees to publicly publish pay related information regarding its staff. This will essentially operate in a naming and shaming fashion with potential reputational damage for those companies with a higher pay gap. It is proposed that the Irish Human Rights and Equality Commission (‘IHREC’) will be the body charged with enforcing the requirements and there is also potential scope for criminal convictions for employers who fail to comply with any “scheme” put in place by the IHREC in accordance with the GPG.
As it is no longer a case of ‘will’ such reporting obligations come into effect but rather ‘when’, Irish employers must implement appropriate measures to comply with its obligations so as not to fall foul of the legislative requirements. This includes IT infrastructure which will accurately collate employee salary data, as well as sufficient human resources to govern the task.
Whilst compliance with the reporting obligations is a key element of the GPG, on a more fundamental level, employers should also be assessing what the report data says about its organisation as a whole from a governance perspective and what overall strategies can be implemented to ‘shatter the glass’ and achieve a fully gender-equal workforce. After all it has repeatedly been proven that the main beneficiary of a fully diverse organisation is the organisation itself and so it is a worthwhile investment which, in my view, should feature in any strategic plan.
For further information contact Harry or one of our Employment and Pensions team.