A fairer Scotland for women: gender pay gap action plan

Chapter 2 Employment

This chapter looks at what action we must immediately undertake to address workplace practices which discriminate, undervalue and underutilise the skills and potential of women, and in particular disabled women, older women and minority ethnic women, if we are to succeed in tackling the gender pay gap.

What we are doing

As outlined later in this document many of the conditions for creating and sustaining the gender pay gap are set before women enter the workforce. The actions that we and our partners will be taking now and over the rest of this parliamentary term to address these conditions will take many years to have an impact on the gender pay gap. 

The Equality and Human Rights Commission (EHRC) have explored the race, disability and gender pay gaps in their 2017 progress report. Research^[10] undertaken by Close the Gap also identifies the intertwined set of gendered and racial barriers that affect minority ethnic women’s ability to enter, progress and stay in good quality employment. We have used the evidence within these and many other reports to help shape this action plan and its supporting analysis paper.

At any time, failing to capture potential of the workforce at your disposal on the grounds of gender is both discriminatory and short sighted. As we face into Brexit and other potentially seismic changes in the labour market, it is an absolute economic imperative that we make use of all the talents at our disposal. Findings from the BMG/Equality and EHRC^[11] poll suggest that businesses with larger pay gaps than their competitors are at risk of losing out on talent and reduced loyalty from employees, and of suffering reputational damage if they do not take action to reduce it, placing them at a competitive disadvantage. The Scottish Parliament’s Economy, Jobs and Fair Work committee published a report called ‘No Small Change^[12]’ following their inquiry into the gender pay gap in Scotland. This inquiry examined the business case for addressing the gender pay gap.

There is no shortage of ability among women coming into the labour market. Women go to university in much higher numbers than men and often predominate on high demand courses such as medicine. Despite this across disciplines we see women’s graduate earnings fall behind men’s as soon as five years after graduation^[13]. In the UK, three in five professional women returning to the workforce after maternity leave are also more likely to return into lower skilled or lower paid roles than they left, experiencing an immediate earnings reduction of up to third^[14]. 

Among women in low paid occupations, the situation is often worse with some occupations being low paid solely because of the way skills and values are socially constructed which can mean that certain types of work generally undertaken by women is undervalued. We know that some minority ethnic communities are over represented in low paid work, because of a number of different factors including challenges around the recognition of qualifications gained from outside of the UK. We can also see pay increase as the proportion of men entering an occupation rises^[15] meanwhile the reverse occurs as sectors feminise^[16].

Women working in male dominated workplaces can be more likely to experience sexual harassment^[17] and within some rural sectors be unable to access appropriate personal protective equipment^[18]. For many women this can contribute towards occupational segregation and choosing lower paid occupations in exchange for a safer female dominated environment.

While increasing income from employment is the most sustainable route out of poverty, the majority of families in poverty already include someone in work. To address in-work poverty, our Tackling Child Poverty Delivery Plan identifies the need to ensure that there is access to high quality jobs with a decent rate of pay, good training and support, opportunities to progress, a flexible work environment, and enough hours in work to meet basic family needs. This is also key for addressing some of the poverty issues women face in later life. 

Largely because of these caring responsibilities, many women choose occupations which offer more flexible working patterns. However, the flexible jobs market is limited, with only 12% of quality jobs advertised with flexible options in Scotland at the point of hire. Furthermore, male-dominated workplaces tend not to offer flexibility in relation to work patterns or hours of employment^[19], which has a hugely disproportionate impact on workingage women, particularly those with children^[20]. It also has an impact on employers who are missing out on attracting talent by failing to promote and offer support and flexibility at the point of recruitment. Women who have negotiated flexibility with their employer can find themselves blocked from progression as there is only a very limited flexible jobs market for them to access. The need for more flexible working is already a real problem, and one that is likely to become more intense, as the population continues to age and caring responsibilities expand.

Child and family poverty is particularly gendered for many reasons. Women still take on most of the caring roles in households and women with children face a range of barriers to paid employment and progression. It is much harder for lone parents (predominantly women) to earn enough on return to the formal labour market to cover costs for children and some cannot access child maintenance from ex-partners. Wider social structures and power relations mean that parents will not automatically share the same access to resources, whether from paid work or social security. In the household setting women tend to lose out. So barriers for women in the labour market which lead to the existence of the gender pay gap also contribute to the existence of poverty. This is even more acute for child poverty, as it is women who typically take on the bulk of childcare responsibilities. 

The Scottish Government funded research – ‘An Investigation of Pensioner Employment^[21]’, and ‘Older People and Employment in Scotland^[22]’ highlighted that older workers have experienced ageism in the labour market, and felt that their skills and experience were undervalued. Some were worried that they might be discriminated against on grounds of age if they left their current employer to look for a new job. There was also evidence to suggest that ageist and sexist attitudes amongst employers may interact, with the result that older women may end up in jobs for which they are over-qualified and underpaid. This can be seen as a contributing factor to gender pay gap and pensioner poverty in later-life.

The introduction of the gender pay gap reporting regulations (2017) is still relatively recent and it is clear that it may take some time for this legislation to have its desired impact.

There are employers across Scotland who are taking steps to improve the gender pay gaps within their organisations, however some of the actions will require time to yield results. 

We are all faced also with the immediate risks of Brexit. It has therefore never been more important to fully maximise the skills, ingenuity and contribution of women in Scotland’s labour market. 

That is why we are encouraging employers to consider what actions they can take to do this. The UK Government Equalities Office reported that as of May 2018, just under half (48%) of employers subject to the gender pay gap regulations had published action plans outlining how they intend to tackle their gender pay gap. There has also been some criticism^[23] about the quality of the plans in terms of meaningful activity that was time-bound, target-driven and evaluated. We therefore continue to encourage employers to consider not only how to tackle their gender pay gaps but also to be transparent about their actions and to evaluate their effectiveness.

The Scottish Government has been taking and continues to take steps to address many of these issues. 

As outlined in our Fair Work Action Plan, we continue to support strong trade unions in Scotland. Trade unions play an important role in improving the employment conditions of women and advancing gender equality in employment.

Pay

As highlighted by the EHRC report a common theme in tackling pay gaps across equality groups was the introduction of the national minimum wage as it hugely helped women, minority ethnic and disabled people who are over represented in low paid work. That is why we are continuing to support the Poverty Alliance to deliver the living wage across Scotland. We are providing them with £340,000 in 2018-19 to uplift a further 7,500 workers across Scotland to at least the Living Wage rate, giving particular attention to low paid sectors such as Hospitality and Tourism where many of the workers are females working part-time. 

Since the Scottish Living Wage Accreditation Initiative launched in Scotland in 2014 there have been 987 uplifts in hospitality. By focusing on this sector the Poverty Alliance have facilitated 393 uplifts, since April 2018, demonstrating that a sector based approach has had a positive impact. We remain keen to work with the Poverty Alliance to explore further a gender and geographical focus to ensure we continue to impact areas where females are paid below the real Living Wage. 

The good example local authorities set by paying the Living Wage can have a positive influence on employers within their area to follow suit, which is to the benefit of their local communities and the wider economy. 

The Living Wage place programme advocates a place based approach to promoting the Living Wage and seeks to engage major local public and private sector employers, including Local Authorities to develop this in their areas. The Scottish Government continues to work collaboratively with the Poverty Alliance in developing place based recognition. We congratulate Dundee’s commitment to becoming the first city in Scotland, and the rest of the UK, to launch their Action Plan setting out their collaborative work to “Make Dundee a Living Wage City.” 

The real Living Wage is paid to workers engaged in the delivery of 94% of Scottish Government contracts. Although this is a step in the right direction, we will continue to strive towards 100%.

In recognition of the need to improve recruitment and retention of the adult social care workforce and address low wages in the sector, the Scottish Government and COSLA are promoting the payment of the real Living Wage in public sector contract settings, involving the third and independent sector where wages have tended to be lower. A commitment was made by the Scottish Government and COSLA to pay the real Living Wage from 1 October 2016 to care workers providing direct care and support to adults in care homes, care at home, and housing support. This commitment is benefiting up to 40,000 staff, many of whom are women and in 2018/19 is being extended to cover hours where a sleepover is provided.

Furthermore, payment of the real Living Wage will be promoted through our commitment to Fair Work First. As stated within our Fair Work Action Plan we will work in partnership with the STUC and affiliate unions to increase the number of workers in Scotland covered by collective bargaining.

The Scottish Government has made a clear commitment to promoting collective bargaining through the inclusion of an employee voice indicator, measured by collective bargaining coverage, within the National Performance Framework. 

Under the Equality Act 2010, women are entitled to equal pay with men doing equal work. This means that employers need to be confident that their pay system delivers equal pay and protects them against the risk of an equal pay claim. Just as the Scottish Government as an employer has made a commitment to undertake an equal pay audit we would encourage other employers to consider doing so too. 

In 2016, to help to improve transparency around the gender pay gap we lowered the threshold for listed public authorities in Scotland to publish their gender pay gap every two years, from those with more than 150 employees to those with more than 20 employees. 

Workplace Practices

To help employers deliver innovative solutions to overcome workforce inequalities, including helping them to identify and close their gender pay gaps, we are providing £750,000 to the Workplace Equality Fund^[24]. Learning from across the 22 projects being supported through the Fund will be shared with other employers.

In 2017-18 we delivered on our commitment for a Returner’s programme to assist women to re-enter the workforce following a career break. ‘Returnships’ can play an important role in bringing experienced women back into their previous career after a break, helping them update skills and knowledge, and enabling employers to gain from retaining skilled staff. One of the projects funded through this programme was specifically aimed at supporting minority ethnic women to return to work within the manufacturing sector. Going forward the Scottish Government recognises that we need to significantly upscale this programme and consider how going forward it can be targeted at supporting women with other protected characteristics^[25] Disabled women, minority ethnic women and older women› and focus on sectors where women are significantly under-represented.

“It has given us a rich opportunity to bring fresh ideas into the company, improved our ability to focus on new areas of the business, as well as an early opportunity to learn from building a team. It has also strengthened our belief that a diverse workforce is of great importance and an area we will continue to advocate for and build our own culture around.”

satou Njai, Drink Baotic. Placement provider on returner programme 

We will also expand the Carer Positive employer accreditation scheme to ensure that it reaches a wider range of employers. The scheme encourages employers to put in place flexible, fair and supportive policies and practices to support the carers in their workforce and provides recognition to those employers who do this.

In December 2018 we published A Fairer Scotland For Disabled People: Employment Action Plan^[26]. This Plan sets out the range of actions which will support the Scottish Government’s ambition to at least halve the disability employment gap in Scotland, including improved support for employers, particularly around recruitment and retention. The plan recognises that the barriers that exist for disabled people can also intersect by gender, race, religion, sexuality and class.

We have sought to develop an understanding of the motivations, opportunities and barriers experienced by older workers and employers around later-life working. This has helped to inform our policies on supporting older workers who wish to extend their working lives. We will continue to work in partnership with the University of Edinburgh, Age Scotland, Business In the Community, and Chartered Institute for Professional Development to share good practice and to promote adoption of more age-inclusive working practices to employers. 

In January 2019 we funded a conference, which was designed by the Scottish Women’s Convention, to look at women’s lived experience of transitioning through the menopause. 

Tackling the Motherhood Penalty

We have demonstrated our continued commitment to tackling workplace pregnancy and maternity discrimination through our work with partners, including EHRC, Advisory, Conciliation and Arbitration Service (ACAS), Federation of Small Businesses, businesses and women working in particular sectors. This work has included creating best practice guidelines for employers, hosting a series of employer training events across Scotland on maternity and the rights and responsibilities for both employers and employees, before, during and after pregnancy; as well as improving access to guidance and advice for pregnant women and new mothers. 

Within our Letter of Guidance 2018-19 to Skills Development Scotland (SDS) we have asked them to explore how the experience of pregnant women and young mothers in accessing, participating in and completing national training programmes might be improved. We are also exploring with SDS the most appropriate means of promoting EHRC advice to employers on supporting pregnancy and maternity in the workplace, within the context of other SDS support for business and current resources. We will seek to also do this with other public bodies.

Flexible working and thinking about job design is crucially important to women who have caring responsibilities, to disabled women, and for those who wish to change their working patterns as they approach the end of their working life. It is particularly important in increasing family incomes to tackle child poverty. There is some evidence to show^[27] that in minority ethnic households with extended families, people are brought up with the cultural expectation that they will look after their family members, many therefore can find it difficult to strike the balance between caring and continuing with their jobs. The Scottish Government is keen to encourage employers to normalise flexibility for all employees and to recognise that these types of adjustments are reasonable and a necessary part of creating a fairer Scotland and enabling a better work life balance for all employees. Businesses have a huge amount to gain from offering flexible working in terms of staff retention and motivation; skills optimisation; productivity; staff diversity; and business costs in terms of carbon foot print and office space^[28].

To support and promote development of flexible workplaces to employers we are also continuing to provide funding for 2018-19 to Family Friendly Working Scotland (FFWS) Partnership. Later this year we will be working FFWS to hold a festival aimed at inspiring more employers to implement flexible ways of working and to provide them with practical know how to increase the numbers of individuals able to access flexible working.

Tackling gendered assumptions about who works and who cares is crucial to broadening parental choice and in tackling the gender pay gap. The Modern Families Index^[29], published by Working Families and Bright Horizons, shows that young fathers are becoming increasingly involved in caring for their children and want to become more so but blame their employers for their lack of work-life balance. There is also some research showing a link between increased paternity leave and a range of positive outcomes, including an increase in the mother’s earnings and greater maternal wellbeing^[30]. There are some employers in Scotland that offer enhanced leave or pay, including the Scottish Government, which offers staff four weeks’ paternity leave on full pay. We would however like to see an increase in the numbers that do so and would encourage employers to work in partnership with their workforce to consider voluntarily offering enhanced paternity leave.

Seniority Gap

It is encouraging to see some sectors^[31] within the labour market exploring the issue of how to get more women into senior roles and what interventions are likely to make the biggest difference.

We remain committed to improving the representation of women and other under-represented groups in positions of seniority within a business, leadership roles within boards and to making ministerial appointments more diverse and reflective of Scotland’s population. Increasing the talent pool available and supporting such participation will lead to the creation of strengthened Boards that are better able to understand customer needs and deliver improved outcomes, decision-making and corporate governance.

Through the Scottish Government’s Partnership for Change, launched on 25 June 2015, we have been working with public bodies, third sector organisations and companies from across Scotland to encourage them to make a voluntary commitment to improve the diversity of their board and work towards 50/50 gender balance by 2020. The Partnership currently has 219 signatories. 

Using our new legislative powers, through the Scotland Act 2016, the Gender Representation on Public Boards (Scotland) Act 2018 aims to lock in the gains we have already made to improving the number of women on public boards. In November 2015 the proportion of female board members in Scotland broke the symbolic 40% mark and continues to increase steadily, reaching 47.75% as at 1 October 2018.

Sexual Harassment

We are determined to tackle the scourge of sexual harassment both in the workplace and in wider society. That is why the Scottish Government is implementing Equally Safe, Scotland’s strategy^[32] to prevent and eradicate all forms of violence against women and girls and has been encouraging employers to adopt robust policies and procedures. Close the Gap, are also being supported by the Scottish Government, to develop an employer accreditation scheme ‘Equally Safe at Work’ which is in the process of being piloted. We would also encourage employers to follow in the steps of COSLA in signing up to the White Ribbon campaign which asks men to never commit, condone or remain silent about men’s violence against women in all its forms.

Domestic Abuse

At least one in five women in Scotland will experience domestic abuse in her lifetime^[33]. Evidence from Scottish Women’s Aid employability Building Equality project, which was funded by the Scottish Government, highlighted that perpetrators can exacerbate women’s barriers to participate equally in the labour market by preventing women from attending work and discouraging women from applying for promotion or positions where they would become the primary earner in the household. That is why we welcome South Ayrshire Council’s ‘safe leave’ provision which will enable employees, who experience domestic abuse, to take up to 10 days off to find the help and support they need for themselves and their families. As an employer the Scottish Government also has support in place through special leave to support employees. We would encourage other employers to consider what policies they could put in place to support the victims of domestic abuse.

While most of the legislative responsibilities relating to employment are reserved to Westminster, we will use the powers at our disposal to address the workplace issues relating to the gender pay gap. 

In addition to the actions identified in our other labour market action plans, in 2019-20 we will: 

• Support women to stay in or return to work after a career break at levels commensurate with their abilities and experience through our planned £5m three-year Women Returners Programme. This programme will have a particular focus on supporting women with other protected characteristics, for example older women, disabled women, minority ethnic women; and focus on sectors where women are significantly under-represented. 
• Through an expanded Workplace Equality Fund, based on the lessons learnt from the previous Fund, work with employers and trade unions to improve workplace practices (including support during menopause and for victims of domestic abuse) for the benefit of women with particular focus on supporting women who also have other protected characteristics^[34].
• Undertake research into international practices on using wage setting powers within the public sector to reduce the incidence of low pay among women.
• We will work with women’s organisations, and trade unions to gain a clearer picture of the issues faced by women transitioning through the menopause to identify other areas where action may need to be taken.
• Continue to support the adoption of the Fair Work Framework, which aims to address gender inequality across all dimensions of work – opportunity, security (including pay), fulfilment (including skills acquisition and deployment), respect and voice – and encourage application of the Framework through Fair Work First, our new approach to encouraging Fair Work practices among employers that receive Scottish Government funding.
• Conduct case study research into the ways that businesses can reduce their gender pay gaps, investigating the strategies they use and the barriers they face to help inform policy and guide businesses.
• Work with employers to persuade them to develop robust and meaningful gender pay gap action plans and support the Fair Work Convention with their employer engagement.
• Refresh the gender and diversity element of the Scottish Business Pledge to encourage actions and measures to address all aspects of diversity and inclusion, including the gender pay gap.
• Fund research on the career trajectories of mothers returning to work based on longitudinal data from the Understanding Society survey. This research will help us understand the barriers that mothers face when returning to work.
• As part of our ongoing commitment to tackle child poverty, we will fund a feasibility study for a ‘Centre for Flexible Work’ for Scotland. This Centre, a UK first, would design, test, embed and scale new approaches to increase the availability of quality, flexible work in Scotland. Its core aim would be to ensure that those who have the most to gain – low income parents – are supported to access this work and raise their living standards. Timewise will lead on the feasibility study, working with a wide range of partners in Scotland to develop plans for the Centre. 
• Fund Family Friendly Working Scotland to support and promote the development of flexible workplaces to employers
• Continue to press the UK Government to amend Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 to require employers to publish a gender pay gap action plan.
• Request that UK Government reinstates section 40 paragraphs (2)-(4) of the Equality Act and that it be amended to remove the requirement for the employer to know that the employee has been subjected to two or more incidences of harassment before they become liable.
• Urge the UK Government to strengthen and enforce protection to women (including pregnant women) and carers against discrimination and dismissal; strengthen paternity leave rights; introduce the right for all employees to request flexible working from day one of employment; and consider the introduction of ‘safe leave’ based on New Zealand’s “Victims Protection Bill” that requires employers to give victims of domestic violence up to 10 days leave from work, separate from annual holiday and sick leave.