International mechanisms to revalue women's work: research

Findings

Women’s Position in the Labour Market in Scotland

There is considerable evidence that women in Scotland – as elsewhere – are at a disadvantage in the labour market and that their work is generally undervalued compared to men’s. (The Literature Review in Appendix 2 provides a more in-depth summary of women in the Scottish labour market). Undervaluation occurs when women receive less acknowledgement, lower pay and poorer conditions for their skills, knowledge and experience than men in comparable jobs or jobs evaluated as having equal value. Undervaluation is a key driver of the GPG and may mean that women are paid less than men for the same level of efficiency within the same job, and/or that women are heavily over-represented in occupations that tend to be lower paid and undervalued compared to those that are male dominated. Covid-19 has raised important questions about the valuation of what have historically been considered ‘low-skilled’ or ‘unskilled’ work or ‘elementary’ occupations, including in health and social care, cleaning, security, food production and distribution and retail.

Well over a third (43%) of women in Scotland work in sectors in which women are disproportionately represented. Of this proportion, 17% are in personal service occupations, 15% in administrative and secretarial jobs, and 11% in sales and customer services^[3]. Specific occupations within those sectors with an over-representation of women include social care; leisure and other services; sales and customer service; and so-called ‘elementary’ occupations such as cleaners, or kitchen and catering assistants. Almost half (46%) of women workers in Scotland are concentrated in the public administration and defence, education and health and social work sectors^[4].

While the Scottish GPG has narrowed, it remained at 10.9% in 2020 for all employees – a reduction from 14.4% in 2019. For full-time employees it was 3.0% in 2020 – a reduction from 7.2% in 2019. The figure for full-time workers was 4.9% in the public sector in 2020 and 15.6% in the private sector. For part-time workers the overall GPG was -10.3%, 10.3% in the public sector and -0.6% in the private sector^[5]. Close the Gap report that while the GPG varies between different ME groups, migrant women face wider GPGs than white women^[6]. In 2018, average hourly pay in the UK was £9.93 for disabled women, compared to £13.20 for non-disabled men^[7]. While there is no firm pay data for LGBTQI women, the high level of discrimination faced suggests some impact on earnings.^[8] Over one third (38.5%) of women workers in Scotland work in low-paid occupations, compared with 20.6% of men^[9].

Evidence indicates that women’s position in the labour market has been weakened by Covid-19 and that many mothers who were working at the start of the pandemic are now unemployed or working reduced hours^[10]. Initial research suggests disabled mothers are three times more likely to have lost jobs as a result of the pandemic^[11]. Close the Gap report the disproportionate disruption faced by women in Scotland, who are more likely to work in a sector that has been shut down, but also that these sectors have an over-representation of ME women, migrant women and young women^[12]. At the same time UK research found that ME women were more likely to have to work on the frontline and work more hours than usual during Covid-19 than white women^[13].

The Scottish Women’s Budget Group has called for a gender equal economy in Scotland to address both the Covid-19 recovery and climate emergency:

‘Core to tackling climate destruction is valuing life-sustaining livelihoods, including the care economy. This means a new deal for care workers whether in social care, unpaid care, childcare, teaching, or health care. These are low carbon jobs that have positive multiplier effects when accompanied with sufficient investment. They are also roles that are disproportionately carried out by women, showing that a green and just stimulus centred on care can be a strong lever for tackling inequality.’^[14]

The ‘caring economy’ prioritises the environment and care, investing in the care workforce. It would transform both paid and unpaid work, redistributing caring responsibilities between women and men, and between the family and the State. Gender mainstreaming would be central to policy, embedding Equality Impact Assessments (EqIAs) in policy design and budgeting processes, alongside a comprehensive programme of capacity building on gender analysis and requirements under the Public Sector Equality Duty^[15].

Collective Bargaining

The term ‘collective bargaining’ means the process by which recognised trade unions negotiate with employers over pay, working conditions and other issues affecting their members. The Labour Research Department’s (LRD) survey of Scottish collective bargaining shows that, by number, the wholesale, retail and health and social care sectors employing high proportions of women, have the lowest collective bargaining coverage ^[16].

In half of the collective agreements identified by LRD, negotiations cover Scotland, rather than the whole of the UK, and the majority of bargaining in Scotland takes place at national or industry-level. Three-quarters of workers covered by collective bargaining come under large sectoral agreements including the local government Scottish Joint Council (SJC) agreement, which also includes local government staff working through Health and Social Care Partnerships and in arms-length external organisations delivering health care; NHS Scotland Agenda for Change; the Scottish Agricultural Wages Board and the Construction Industry Joint Council. These figures highlight potential for the SG to promote the extension of collective bargaining to the private sector and smaller employers, and to influence women’s pay and conditions either directly or indirectly.

Existing literature confirms the generally positive impact of collective bargaining and unionisation on the GPG, including where there is gender segregation. Research has shown that unions generally lower within-establishment gender gaps in pay, but also the economy-wide GPG^[17]. In the public sector across the EU, the positive effect of collective agreements on the GPG between 2008 and 2018 was confirmed in public administration and education where the average GPG was lower in organisations with national or industry-level pay agreements, compared to those with no agreement^[18]. However, in health and social work across the EU, the relationship is not as straightforward, and the collective agreement does not necessarily translate into a lower GPG, possibly because privatisation has removed workers from public sector employment and collective bargaining^[19]. While the lower level of privatisation in Scotland and SG commitment to paying the rLW may mean Scotland is an exception, the Australian case study (Appendix 1: Case Study 1) suggests that decentralised collective bargaining systems create barriers to achieving pay equality because they fragment the pay bargaining process.

Research on the EU GPG highlighted that the average, unadjusted GPG in the public sector across the EU-28 between 2007 and 2018 increased during recession and has only just started to recover, although the overall average obscures variation between countries^[20]. Austerity measures have differed in depth and nature between EU states and have had differential outcomes. Two measures of austerity that increase the GPG are increases in unemployment across economies and lower levels of government expenditure on public sector pay. The latter suggest that punitive public sector pay policies within the EU under austerity have impacted negatively on the GPG.

Close the Gap highlights fluctuation in the Scottish GPG during 2011 and 2012, when there was a rise in the combined mean pay gap from 16% to 18%. Close the Gap suggests that one explanation for this is the high number of public sector workers, the majority of whom are women, who have been affected by the public sector pay freeze, job losses and reductions in the number of posts. This highlights how economy-wide changes can affect the GPG.

A recent working paper for the International Labour Organisation (ILO)^[21] on the role of trade unions in closing the GPG identified three measures relevant to achieving equal pay in the public sector, where women predominate in the workforce. These measures are: collective action on the under-evaluation of women’s work, action to address internal pay differentiation through job evaluation and intervention in procurement. In line with the recommendations of the independent FWC, the SG, as part of its commitment to fair work, has adopted collective bargaining coverage as an indicator of progress in its National Performance Framework.

Mechanisms

In terms of measures taken to narrow the GPG as a result of austerity measures, the UK Civil Service union, Prospect, has successfully combined collective bargaining with strategic litigation to achieve equal pay and to narrow the GPG in several parts of the English Civil Service (Appendix 1: Case Study 12). Prospect’s success was achieved despite the negative impact of localised pay bargaining imposed by the Government in the early 1990s and pay restraint within the public sector since 2010, which led to pay stagnation and a subsequent increase in the GPG in four central government departments. The case highlights the impact of public sector pay freezes in trapping younger women on lower pay rates.

The landmark case of Cadman and Wilson against the Health and Safety Executive (HSE) in 2001 challenged length of service as an acceptable means of progression. Since Cadman and Wilson, Prospect has also taken cases in the Valuation Office, Veterinary Laboratory Agency, Prison Service and Intellectual Property Office, all with the support of male comparators. The union’s most recent success was in the Meteorological Office. Here a pay freeze meant that rates remained at 2008 levels and by 2014 70% of people were still in the ‘development zone’, despite their experience, widening the GPG. The ad hoc use of recruitment and retention allowances had also distorted the pay system.

Alongside litigation, Prospect also took industrial action, lobbied MPs and produced an ‘Equal Pay Manifesto’. Despite ongoing pay freezes in the public sector, the Met Office got agreement from the Treasury to settle individual cases and establish a new pay structure. Individual, retrospective equal pay settlements and a new pay agreement were negotiated in 2018. These resulted in a pay increase of up to 20% per annum for 70% of employees and narrowed the Gender Pay Gap from 10% to 2% in three years. However, the agreement did include reductions in allowances, weekend premia and performance related pay, which the employer insisted on to make the offer affordable and which caused some tensions between employees.

In Sweden, public sector union Kommunal aimed to address gender segregation by linking occupational wage levels to educational attainment (Appendix 1: Case Study 9). In 2016 a one-year collective agreement, with an increase of 2% for all blue-collar workers^[22], was agreed. There was an understanding that Kommunal would then demand an additional increase for assistant nurses, and that if the strategy was not successful during that year, the metal union, Metall, would join Kommunal in strike action giving the assistant nurses huge leverage. (At present such ‘secondary’ industrial action would be unlawful in the UK, although this could change in the future in Scotland). A three-year deal was signed early in 2016 for an additional wage increase for assistant nurses. Under the subsequent 2020–23 agreement, Kommunal broadened its focus and moved away from the link to that specific occupation.

In 2020 Kommunal reached a new, four-year, collective agreement with Sweden's regions and municipalities, including a one-off lump sum payment of SEK 5,500 (£463) for 400,000 workers in health and social care and schools on top of wage increases in line with the industry norm of 5.4% over 29 months. The extra increase was partly as a result of Covid-19. Representatives of Kommunal reported that the wider support of unions for these additional pay increases was important, particularly where they were seen by some as being at the expense of other workers.

In Finland, following a longstanding pay freeze, TEHY, the union covering health and social care professionals, achieved an Equality Allowance through national negotiations, for women in female-dominated sectors. This was in addition to other nationally negotiated increases (Appendix 1: Case Study 4). The Equality Allowance was designed to secure successive higher pay increases in female-dominated sectors and to close the GPG. TEHY predicted that a 1.8% salary increase in the health and social care sector, on top of what would be negotiated in future annual pay increases in male-dominated occupations, could narrow and potentially close the national GPG in Finland within ten years. However, Covid-19, disruption to national collective bargaining and financial constraints, meant that the Equality Allowance was rejected by the employers in 2020.

Following a decade-long campaign, TEHY has also secured the removal of health and social care professionals from the general collective agreements and established a separate social and health care collective agreement from September 2021. The 2020–22 agreement negotiated a 30-minute cut in weekly working time and a pay increase of 3.02% for all those covered by it. Women in the union argue that gender equality is not a priority for general collective agreements as the trade union representatives taking part in the negotiations come from male-dominated sectors or occupations. A separate agreement will allow for better consideration of the specific characteristics of health and social care work in terms of working hours and pay.

Applicability

While there are questions about the long-term sustainability of equality allowances and one-off additional increases and their impact on job-evaluated pay and grading systems, the FWF Action Plan and the SG’s influence over local government, the Civil Service, NHS and other public sector employers provides scope for negotiations between trade unions, employers and the SG, over the revaluation of women’s work through collective bargaining. Measures such as those in Finland and Sweden would need the support of unions and employers and, as the lessons of the Scottish Single Status agreement have highlighted, would need to be properly funded, applied and communicated.

The LRD report suggests that with backing from the SG and supported by the FWF Action Plan, separate collective bargaining could be established in the Scottish social care sector along the lines of the Finnish model, expanding bargaining coverage by up to 100,000 workers. It also mentions extension of the local government SJC and Agenda for Change agreements to staff working for contractors and arms-length external organisations (ALEOs). These suggestions may be superceded by the establishment of a National Care Service. It is suggested that this might involve a separate collective agreement and bargaining, although there are important equal and low pay considerations to take into account. These are highlighted later in the report in the section on the proposed National Care Service.

Recommendations

The SG could:

• Support and encourage unionisation and collective bargaining in areas of low-paid women’s work, reinforcing this goal in the Fair Work Action Plan. In particular, focusing on encouraging unionisation among migrant workers who have lower unionisation rates.
• Provide further support for sectoral and collective bargaining, including the extension of sectoral bargaining to social care, and the implementation of the sector-level body for social care workers, as proposed by the FWC’s Fair Work in Scotland’s Social Care Sector report^[23], subject to the considerations raised later in this report.
• Promote discussion between employers and unions of additional pay increases for bargaining groups with disproportionately high numbers of low-paid women workers, consistent with equal value, JES and equal pay law and in the light of Covid-19.
• Encourage systematic collection of data by public, private and third sector employers on pay and grading, hours and conditions of work by gender, race and ethnicity, migrant status, disability, maternity and age. Data collection could be made mandatory for both private and public employers in any future reform of UK equality legislation to facilitate effective collective bargaining and action to achieve equal pay.
• Consider establishing a Scottish Centre for Equal Pay and appointing an Equal Pay Champion. Both could play a key role in the promotion of equal pay and collective bargaining, alongside the Fair Work Action Plan and the Fair Work Ministerial Working Group.

Job Evaluation (JE) – The Review and Maintenance of JE in the Public Sector

Job evaluation is a means of ensuring that different jobs with the same employer are ranked in order of relative worth, in a transparent manner, and paid accordingly. JES free of gender bias will establish relative worth and jobs of equal value, ensure that attributes of female-dominated jobs such as the need to respond to emotional demands from clients are included in the job analysis and that there is no gender bias in the assessment of the relative contribution of jobs done by men and women. However, job evaluation is not a means to ensure that other pay-related benefits such as bonuses, overtime and seasonal payments are free of gender bias. Generally, pay-related benefits are more likely to be paid to men than women and can contribute significantly to unequal pay and the GPG. They need to be subject to gender equality audits and paid on the same basis to both men and women.

Use of an analytical JES free of gender bias is a means of determining ‘equal value’ as defined by the Equality Act 2010. Job evaluation and equal value were linked as far back as the ILO Equal Remuneration Convention of 1951. Use of a JES which complies with equal pay law can also provide an employer with a defence to an equal pay claim. Section 65(6)(a)(b), of the Equality Act 2010 defines equal value as follows:

‘‘A’s work is of equal value to B’s work if it is –

a) neither like B’s work nor rated as equivalent to B’s work, but

b) nevertheless equal to B’s work in terms of the demands made on A by reference to factors such as effort, skill and decision-making.’’

Belgium has introduced legislation which requires gender-neutral JES within each collective agreement in the private sector (Appendix 1: Case Study 2).

Job Evaluation in Scotland and the UK

The UK public sector leads the global field in development and use of JES designed to be free of gender bias and thus determine equal pay for work of equal – and relative – value. The NJCJES has been universally used in New Zealand as the basis for an economy-wide approach to gender-neutral job evaluation. The local government National Joint Council (NJC) and Scottish Joint Council (SJC) JES, the NHS JES which underpins Agenda for Change (AfC), the new Police Scotland scheme, the Job Evaluation and Grading Support (JEGS) scheme in the Civil Service and others in higher and further education are all examples of JES which were developed in order to deliver equal pay for work of equal value and transparent pay systems, compliant with the Equality Act 2010. The schemes were developed jointly by trade unions and employers, each using recognised JE experts.

The National Joint Council for Local Government Services (NJC) Single Status agreement was reached for the whole of UK local government, including Scotland in 1997. The agreement harmonised the conditions of work of manual and white collar workers and established a common UK pay spine on which employees would be placed following JE exercises within local authorities. A separate bargaining structure – the Scottish Joint Council (SJC), Single Status agreement and SJC JES – were introduced in Scotland in 1999. The agreement provides for common pay and conditions for manual workers and administrative, technical and professional staff, an SJCJES and a common pay spine for all SJC councils. The initial 1999 Single Status SJC JES differed in some significant aspects from the NJCJES. It has since been revised twice, lastly in 2015. A minority of local authorities chose to use other JES to underpin Single Status pay and grading structures. In Scotland, Glasgow City Council developed its own JES and lost an appeal in the Court of Session^[24] against UNISON and others, who challenged its compliance with the Equality Act 2010 and ability to deliver equal pay.

As in the rest of the UK, no additional funding above the central grant provided by the SG to councils was made available for implementation of Single Status or the creation of equal value proofed pay and grading structures. This resulted in significant financial pressure on local authorities and cuts in men’s pay – largely through the removal of bonuses paid almost exclusively to men – to create ‘equality’^[25]. Most – 85% – of Scottish local government funding comes via central government in the form of grants. Only 15% is derived locally from Council Tax, although revenue support grant contains an element derived from the ‘non-domestic’ Business Rate^[26]. While direct negotiations over pay and conditions take place between the Convention of Scottish Local Authorities (COSLA)^[27] and the Trade Union Side of the SJC, the SG provides a significant proportion of local government funding and its Best Value legislation requires councils (and other public bodies) to achieve value for money and also comply with equality legislation. Underfunding of Single Status has been a major barrier to the successful and universal achievement of equal pay for work of equal value and has resulted in protracted litigation^[28]. The Scottish Audit Commission reported that by the end of 2018/19 councils had spent £1.314 billion settling equal pay claims^[29]. In comparison the equivalent Agenda for Change – the later parallel to Single Status in the NHS – was fully funded.

The 2006 NHS JES used in Scotland is the same as that used in the rest of the UK, although there is a separate and active JE subgroup of the NHS Scotland Terms and Conditions Committee, which ensures that the scheme reflects jobs in NHS Scotland is kept up to date and carries out training needs analysis. Implementation of AfC was fully funded by the SG.

The 2019 Police Scotland JES was designed to create a single, new pay and grading system across the ten legacy pay systems integrated into Police Scotland in 2013. It was based on the SJC-JES, but modified to incorporate jobs such as Police Community Support Officers and police custody workers. SG invested £13.4 million in the new pay system and its implementation resulted in a 10% narrowing of the GPG within Police Scotland.

The JEGS (Job Evaluation and Grading Support) JES for grades below Senior posts in the Civil Service is a UK-wide scheme. However, it is suggested^[30] that the latest updated version of the scheme is not being employed in the SG and allied agencies, which gives some grounds for concern.

The FEDRA JES in further education (launched in 2019) and the HERA scheme in higher education are also both jointly developed schemes designed to produce grading and pay structures that comply with the legal requirement for equal pay for work of equal value and transparency.

Mechanisms

The 2018–20 collective bargaining initiative by the National Joint Council (NJC) for Local Government Services in England, Wales and Northern Ireland (Appendix 1: Case Study 11) aimed to increase the lowest rates of pay (and thereby pay throughout the pay structure), ‘equality proof’ the NJC Job Evaluation Scheme (NJCJES), restore ‘equal value’ differentials (gaps between pay points) that had been distorted by adoption of the rLW by local authorities and further narrow the GPG. In doing so, both the Employer and Trade Union sides of the NJC hoped to improve and ‘future proof’ the NJCJES and maintain equal pay for work of equal value within local government and associated employers. The negotiations were part of the routine NJC pay negotiation cycle and took place following years of below-inflation pay increases, a four-year pay freeze from 2009–12 and then a 1% pay ‘cap’. These had left local government and allied workers earning less than those in equivalent posts in the NHS, the Police and in the Civil Service, while NJC conditions like sick pay, holiday pay and car allowances had been cut in over 60% of councils.

The 2018–2020 NJC agreement established a universal bottom rate of pay of £9 per hour in 2018 – equal to the rLW of £9 for 2018–19 (now £9.50). It also re-structured the NJC pay spine, which contains common pay points to be used by constituent NJC councils and equalised gaps between pay points up to scale point 20 – halfway up the pay spine. This ensured that differentials reflecting equal pay for work of equal value can be maintained into the future and increments on the pay spine – at least up to the middle – are equal. The Employers Side would not agree to equalisation of gaps between pay points higher up the spine for cost reasons, but agreed that the issue should be addressed in future negotiations. As a result of the Agreement the NJC GPG narrowed from 5.7% to 2.3%.

Applicability

Public sector job evaluation schemes have largely succeeded in establishing equal value-proofed rank order of jobs – if not equal pay. The JEGS within the Scottish Civil Service is under the direct remit of the SG, which also has indirect influence over local government, the NHS and other public sector bodies through funding and legislation such as Best Value in local government. JES outcomes have sometimes been undermined by lack of funding, such as with Single Status, and perpetuation of gender bias in bonus payments, overtime, seasonal work payments and the loss of pay for women associated with term-time only working in school-based jobs.

While there are costs, the avoidance of litigation and associated costs have to be considered. The cost of not funding Single Status has been considerable in both Scotland and the rest of the UK. Long-term sustainability of pay systems also needs to be considered. Job evaluation schemes and pay and grading structures need regular reviews to ensure that changes to jobs are reflected in their grading, new jobs are evaluated properly and expanded jobs resulting from re-organisations are re-evaluated. Capacity and expertise are key to such reviews and are considered below.

While FWF recommends employer commitment to employee voice, including trade union recognition, use of zero hours contracts only where appropriate, positive action to address the GPG and payment of the rLW, it assumes compliance with equal pay law, but does not reference JE. International examples suggest that compliance with equal pay law needs to be specified and monitored.

The Covid-19 pandemic has led to a growing and widespread realisation of the importance of cleaning, catering, care, retail and early learning and childcare work. It has been recognised that predominantly women workers have been responsible for ensuring public health and safety, care of the elderly and those at high risk of infection and provision of care and childcare support for those – mostly women – required to work at home or long hours in vital front-line jobs in the NHS and care. Retail workers have continued to work throughout the pandemic, providing a vital public service, sometimes at considerable risk to themselves.

As the note by JE expert Sue Hastings points out (Appendix 4), attitudes to the value of specific jobs can change over time and according to new circumstances and shifting social values. This appears to be the case with the low-paid women’s jobs that are the subject of this report. It might be appropriate to amend public sector JES to reflect the high levels of responsibility associated with the jobs above. This could be done by changing factor weightings for ‘responsibility for people’ factors, which have traditionally been lower than ‘responsibility for financial and physical resources’ factors – or weighted lower in private sector schemes like Hay. Changes could be justified by the purpose or mission of local authorities, the NHS and schools and associated private contractors.

Recommendations

The SG could:

• Issue guidance under the Scottish Specific Duties, to all public sector employers on the need to update and maintain JES and ensure that new and changed jobs are evaluated and correctly graded to ensure equal pay for work of equal value. The NJC Trade Union Side guide to local government pay and grading reviews – ‘Keeping Pay Equal’ could be useful in this work^[31].
• Extend the requirement for public authorities to produce Equal Pay Statements under the Scottish Specific Duties to include evidence of JE and pay and grading reviews.
• Ensure that adequate funding is made available to establish and maintain pay and grading structures which deliver equal pay for work of equal value in the public sector, like Single Status.

Job Evaluation (JE) – Extension into the Private Sector

Although originating in the private sector, there is little use of job evaluation or transparent means of determining the value of private sector jobs such as cleaning, catering, childcare and retail. In addition, most existing private sector JES are not regarded as equal value compliant by equality experts. Lack of strong legislation or action to require and support the use of equal value-proofed JE in the private sector has obvious implications for women in low-paid jobs in cleaning, catering, retail, early learning and childcare, and care occupations. Current equal value claims by shop floor women workers and cashiers in supermarkets, comparing themselves to male warehouse staff, exemplify the problems arising from the absence of JE based on equal value principles and their consolidation into pay structures.

Pay in the retail sector is determined by collective bargaining in larger retailers and the statutory National Living Wage (NLW). However, the most important impact on the GPG in retail are potentially the equal pay cases currently being pursued by female checkout workers against Asda – the biggest-ever equal pay claim in the private sector in the UK, with parallel claims in other supermarket chains. The checkout workers are claiming pay discrimination on the basis that the predominantly male warehouse workers are on wages of between 80p and £3 an hour more than them. Asda has recently lost its appeal to the Supreme Court, in which it sought to overturn a verdict by the Court of Appeal that the pay of 35,000 predominantly women store workers can be directly compared with that of mainly-male depot staff in its distribution operation. It is reported that Asda could be facing backdated pay claims totalling £8 billion. Similar claims are currently being pursued by women workers at Tesco, Next, Sainsburys, Morrisons and Co-op.

Job comparisons by experts for the women applicants are based on factors such as knowledge, experience, responsibility for planning, maintaining stocks, looking after finance, health and safety, data handling, the need for concentration, the stress of the job, problem-solving, communication, physical skills, and working conditions. The Employment Tribunal found that the women’s job descriptions did not accurately depict the demands placed upon them as shop floor workers. Asda had claimed that checkout workers were not required to have any particular knowledge about products in order to do their jobs – this claim was dismissed by the Employment Tribunal.

Mechanisms

In Belgium the 2006 Equal Value Project was set up to develop analytical and gender-neutral JES. Belgian legislation calls for parties subject to private sector collective agreements to establish evaluation/classification schemes free of gender bias (Appendix 1: Case Study 2). Technical guidance and support from the federal Institute for Equality between Women and Men (IEWM) has been acknowledged as important to the narrowing of the GPG in Belgium^[32]. The 2007 Gender Act focused on gender mainstreaming and discrimination in employment and was reinforced by a 2007/08 cross-industry agreement, which encouraged the social partners to develop and use gender-neutral job evaluation. In 2008, Collective Agreement Number 95 called for further measures to secure equal treatment in employment, followed by the 2012 law focussed on the GPG and requiring annual pay audits, biennial gender analysis of wage structures in companies with more than 50 employees and action plans where women are seen to be earning less than men and wage bills covering women workers are lower than those for men^[33].

Applicability

JE expert Sue Hastings (Appendix 4) has examined the potential for public sector schemes to be adapted to apply to public-facing jobs in the private sector. She concludes that the AfC JES or NJCJES could possibly be adapted to the retail sector and banking or finance companies. She points out that Jersey and Guernsey have both adopted the NJCJES for a wider range of jobs than in local government and that New Zealand used the NJCJES in the late 1990s to develop a universal JE tool to apply across the economy while reforming its equal pay legislation. As in Belgium the SG could encourage private sector organisations to develop and apply gender-neutral job evaluation schemes. Job evaluation could possibly be employed as a tool to increase the pay of catering, cleaning retail and childcare workers in the private sector. However, it should be recognised that there is currently little awareness amongst private sector employers of equal pay law and the need to pay equal pay for work of equal value and almost no use of job evaluation in areas of the private sector in which many low-paid women are employed – hence the current mass equal value claims in the retail sector.

European and UK research suggest that there is unlikely to be sufficient HR knowledge or capacity in the private sector to carry out JE and establish equal pay proofed pay and grading systems, without either support and guidance. Existing private sector JES are likely to undervalue attributes of women’s work and not produce equal pay for work of equal value. In addition where there is just one core occupation – e.g. cleaning – job evaluation might not be appropriate or the solution to low pay. It should also be clear that private contractors operating in public services – with the exception of the NHS where AfC pay and conditions are often followed – generally determine pay according to a ‘market’ that undervalues women’s work, the funding level of the contract and the profit to be extracted, with no reference to equal pay law. Implementation of JE will reflect conditions in the contract with the public body, contract compliance and the level of contract funding.

The SG could draw on the Belgian experience and legislation in any future reform of equal pay law – and in lobbying the Westminster Government – to ensure that there is a requirement for all employers to ensure that gender-neutral job evaluation is part of action plans to ensure equal pay for work of equal value.The Equality Act 2010 also needs amending to apply a stricter test of what comprises a gender-neutral JES.

Establishing equal pay for work of equal value is disruptive and there are costs to employers. It cannot generally be established on a cost-neutral basis. There may therefore be resistance to considering JE in the immediate post-pandemic era or in small companies where margins are tight and HR resources scant. Trade union membership and recognition are weak in many areas of the private sector in which women are concentrated, undermining the potential for a joint approach to JE.

Recommendations

The SG could:

• Once legal proceedings are finalised, prepare to support the large supermarkets and unions in implementing JE across the sector, as part of an economy-wide initiative to underpin equality-proofed pay structures in future. This could be reflected in the SG’s Retail Strategy.
• Promote the appropriate use of JE in other areas of the private sector where women are concentrated in low-paid jobs, by launching a widespread equal value and job evaluation awareness exercise with employers and employers’ organisations.
• Work with Close the Gap, the STUC, the EHRC, equal pay experts, academics and other appropriate bodies to offer detailed training and support to private sector employers. The benchmarking tool (Fair Work Employer Support Tool) produced by Fair Work First could include JE. The proposed Scottish Centre for Equal Pay and Equal Pay Champion could play a key role in this work.

A Scottish Care Service – The Integration of Health and Social Care

In 2021, the SG gave its commitment to the creation of a National Care Service (NCS)^[34]. The Independent Report on Social Care in Scotland (‘the Feeley Report’), published in February 2021, made a number of detailed recommendations about the creation of a National Care Service^[35]. These have major implications for the predominantly female social care workforce.

The Feeley Report recommends that an NCS be established by statute with standardisation and implementation of fair work requirements and practices agreed and set at a national level by the new NCS and delivered locally across the country. It recommends ‘improvements in the conditions of employment, training and development of the workforce’. Even more significantly, it recommends ‘a national job evaluation exercise for work in social care, to establish a fair and equitable assessment of terms and conditions for different roles. This should take account of skills, qualifications, responsibilities and contribution’ (Recommendation 43)^[36]. This could provide a major opportunity to re-evaluate social care work in Scotland. The Feeley Report also recommends ‘Establishing a national forum comprised of workforce representation, employers, Integration Joint Boards and the SG to advise the National Care Service on workforce priorities and to take the lead in creating national sector level collective bargaining of terms and conditions. (Recommendation 46)^[37].

Sectoral collective bargaining and the establishment of the national forum could create important opportunities to tackle low pay amongst care workers, re-evaluate their jobs to reflect the current and post-pandemic care context and establish equal pay for work of equal value with workers elsewhere in the public sector. JE expert Sue Hastings (Appendix 4) highlights recent learning about the high value of care jobs from the Covid-19 pandemic and suggests that they should be re-evaluated within existing local government and/or Agenda for Change job evaluation schemes to reflect the higher level of responsibility and other factors evident within them. These JES themselves may be in need of review to reflect the pandemic context, public sector re-organisations and other changes to jobs.

The possibility of a separate collective agreement and job evaluation scheme, coupled with a potential link to SJC/Agenda for Change pay and conditions could represent an improvement for many care workers – especially in the private and voluntary sectors. However, some caution about the establishment of single-sector bargaining in care is required from an equal pay perspective and is suggested from a closer examination of the composition of the social care sector.

According to recent research by LRD for the STUC^[38], over 101,000 care workers are employed in the private and voluntary sectors in Scotland, across 2,913 separate organisations. Others are employed on SJC or Agenda for Change terms and conditions in Health and Social Care Partnerships, local authorities or the NHS, which currently employ 1,876 care workers. There is little evidence of trade union membership or collective bargaining in the fragmented private and voluntary sectors, with Scottish Care unable to give details of either to the Feeley review. A new national forum or subsequent collective bargaining unit would therefore embrace a large number of workers who are currently not unionised and from workplaces in which no collective bargaining currently occurs. The question of ‘voice’ and negotiating power of a group of predominantly women workers, spread thinly across a large number of workplaces, therefore needs to be given careful consideration. It is not known how representative Scottish Care is of the private and voluntary sector employers either.

Furthermore, it is suggested by Feeley that a new job evaluation scheme be devised for the proposed care sector bargaining unit. While a potential link to Agenda for Change has been mooted, this proposal contains some dangers as it could break the link with other jobs in the public sector, ignore the relative worth of jobs which would not fall within the scope of the care bargaining unit and establish worse grading and pay levels and conditions than apply to jobs of equal value elsewhere. Pressure to keep pay and conditions at a minimum could be applied by private and voluntary sector employers unless full funding of equal value with jobs elsewhere in the public sector and improved pay and conditions underpins any agreement.

It is also noted that the Feeley review posited a cost of £15.5 million to pay the real Living Wage of £9.50 to care workers and a further £4 million if it were applied to ‘auxiliary staff’ in the care sector, while the trade unions are calling for a £15 rLW. It is likely that the pay of many care workers would fall above the rLW rate if properly evaluated to reflect pandemic and post-pandemic responsibilities, knowledge and skills by revised SJC or AfC job evaluation schemes. Indeed, any assumption that the rLW is the appropriate bottom rate of pay for care workers would need to be carefully scrutinised. The SG would therefore need to ensure that a commensurate and appropriate budget – likely to significantly exceed £20 million – was allocated to achieve equal pay for work of equal value for care workers.

Finally, there is a further danger in separating care and allied workers from those in local government or the NHS. Given the high proportion of women in the care sector – 83% – it could prove very difficult to identify male comparators within the new collective bargaining unit as a lever to achieve equal pay for work of equal value. Women’s equal pay rights could be limited within a separate bargaining group and this needs very careful consideration.

Mechanisms

The implementation of equal pay agreements sometimes has unintended consequences, as seen in the case of ‘aged care’ workers in New Zealand. In 2011/12, the New Zealand Human Rights Commission led an inquiry into the ‘aged care’ sector (Appendix 1: Case Study 8). It made a wide range of recommendations including that the Minister of Health should direct District Health Boards (DHBs) to develop a mechanism to achieve pay parity between health care assistants working in DHBs and carers working in home support and residential facilities within three years. A subsequent equal pay claim by a care and support worker, against her employer, Terranova Homes and Care Ltd argued that the caring work she did was undervalued because it was mainly performed by women. This was compared to work that was male-dominated but required a similar level of skill, effort and responsibilities. The claim was upheld and extended to 55,000 workers, who also worked in aged care, disability and home support, resulting in higher wages and a new classification structure.

This success of the Terranova case led to the 2017 Care and Support Worker (Pay Equity) Settlement Act, which was broadly welcomed by both workers and managers, but meant that smaller providers struggled to remain in business under the existing funding model. An unintended consequence was the reduction in working hours of care and support workers to reduce costs and increased workloads, with negative effects on the quality of care. The main legislation and funding changes were not effectively communicated to workers and managers and there was a lack of support provided for these groups to deal with the changes^[39].

Applicability

The creation of a National Care Service (NCS) will provide a major opportunity to re-assess the value of care in Scotland, to re-evaluate the work of those who provide care post Covid-19 and to build on the recommendations of the FWC Inquiry into Social Care. Several of the Feeley recommendations suggest a framework essential for ensuring pay equality for the social care workforce. It would provide an opportunity to move towards the integration of health and social care workforces that would contribute to more integrated health and social care provision. This could also give social care workers new opportunities for career progression. However, a key issue will be the linkage of pay rates to other public sector agreements and the starting rate of pay in the sector.

Funding and the involvement of the private sector are two issues that need to be addressed if an NCS is to be successful in addressing the re-evaluation of social care work. The experience of several countries shows the importance of adequately funded pay equality agreements, including that of Canada where inadequate resources put pressure on working hours and increased workloads. There may also be challenges for smaller providers particularly in rural areas where there may be only one or two providers.The creation of a National Forum to take a lead on national sector level collective bargaining would provide an institutional framework for the future negotiation of collective bargaining agreements.

The private sector currently provides a significant amount of social care in Scotland, whether paid for directly by clients or via local authority commissioning. The Feeley Report provides some suggestions about how the private sector could be managed within NCS. Key requirements for sector-wide pay equality are that any national job evaluation exercise is applied to the private sector and the results are made mandatory within it. The Feeley Report recommends that:

‘The care home sector must become an actively managed market with a revised and reformed National Care Home Contract in place..… A ‘new deal’ must form the basis for commissioning and procuring residential care, characterised by transparency, fair work, public good, and the re-investment of public money in the Scottish economy.’^[40]

This would mean that the private sector would become part of a managed market. The Feeley Report also proposes that:

‘Commissioning decisions should encourage the development of mutually-supportive provider networks as described above, rather than inhibiting co-operation by encouraging fruitless competition’^[41].

Recommendations

The SG could:

• Eliminate competition from the commissioning process, in line with the Feeley Report and the Fair Work Action Plan, in order to support fair work and fair pay and move towards collaborative commissioning.
• Establish core requirements for ethical commissioning to support the standardisation of care and employment standards and implementation of equal pay, set at a national level by the new National Care Service and delivered locally across the country.
• Establish a national forum comprised of workforce and employer representives, Integration Joint Boards and the SG, which could advise the National Care Service on workforce priorities and take the lead in creating national sector level collective bargaining of terms and conditions, as recommended by the Feeley Report.
• Ensure that changes to collective bargaining for predominantly female social care workers, a move towards sectoral bargaining and a customised JES for care are based on alignment with other public sector agreements and designed to deliver equal pay for work of equal value with jobs elsewhere in the public sector, with commensurate funding made available.

Privatisation and Procurement

Privatisation of those public service jobs in which women predominate – particularly catering, cleaning, health and social care – has led to downward pressure on women’s earnings and working conditions and exclusion of women from collective bargaining and GPG reporting regulations^[42]. This has disguised the real GPG within public services. The achievement of equal pay for women in social care, early learning and childcare, cleaning and catering jobs will remain compromised while privatisation continues, unless the achievement of equal pay for work of equal value can become a contract condition and contractors comply with equal pay legislation that is amended to enable ‘privatised’ women to compare themselves with men doing work of equal value, but remaining ‘in-house’.

In the case of cleaners, a firm’s ability to pay the real Living Wage is dependent on contractual terms under outsourcing^[43]. The funding level of the contract will also be crucial. Unrealistic cleaning contracts mean downward pressure on wages and conditions, which are largely determined by contract value. The EHRC found that high levels of competition drive pay downwards at early stages in the tendering process and when contracts are due for renewal. Good procurement practice is thus crucial and Scottish legislation allowing public bodies to specify the Living Wage potentially very important. Previous research found that paying cleaners the rLW has been seen to have clear benefits. Cleaning firms adopting it reported lower levels of absenteeism and staff turnover and clients reported improved service^[44]. However, absence of effective enforcement of labour rights and labour inspections in cleaning have also been highlighted^[45].

A 2015 analysis of outsourcing in the care sector^[46], showed how the pay of predominantly female and increasingly ME front-line workers had failed to keep up with that of workers in the public sector, especially in relation to pensions, sick pay and travel/subsistence allowances. In 2014, Cunningham and James^[47] examined the changing nature of social care outsourcing and the effect on employment conditions in voluntary/not-for-profit organisations in Scotland. The use of more arms-length and cost-based contracting had led to an erosion of employment conditions. The use of Approved List Providers reduces costs as well as destroying the relationships between local authorities and providers, which are replaced by more remote relationships with procurement and finance. The personalisation of care, through personal budgets and direct payments, has also created conditions for new public management demands for efficiency and value for money. Voluntary organisations and not-for-profit providers have less and less scope for protecting pay and working conditions, including reducing access to sick pay, pensions and other benefits^[48].

From October 2016 the SG and COSLA jointly agreed that front-line care staff working in publicly funded adult social care should be paid at least the rLW of £9.50, in part to resolve recruitment and retention difficulties. Local health and social care partnerships transfer funding via local authorities to care providers. Research by the University of Strathclyde^[49] reported that there was consensus among participants in their study that the introduction of the rLW for adult social care workers represented ‘a significant progressive effort by the SG to improve the working conditions and living standards of front-line staff in the sector’. There was only limited evidence that providers were cutting other terms and conditions of employment to fund payment of the rLW, although it was reported that differentials between care workers and supervisors were being squeezed as a consequence of rLW rates being paid to the lowest paid. A number of authorities were apparently making the rLW a de facto requirement of tendering.

The FWC has completed analysis on the driver of zero hours and insecure work as a direct result of ‘non-committal tendering frameworks’ in social care and have called for the immediate suspension of these^[50].

A similar commitment exists for publicly funded early learning and childcare (ELC) where Funding Follows the Child is the long-term policy framework to support its delivery, agreed by both SG and COSLA. It is ‘provider neutral’ and is underpinned by a National Standard that all settings – regardless of whether they are in the public, private or third sector, or childminders – have to meet. A key aspect of Funding Follows the Child is the payment of sustainable rates to providers that reflect the cost of delivery and payment of the real Living Wage to childcare workers delivering the funded entitlement.

Mechanisms

In Switzerland the 2016 Charter for Equal Pay in the public sector and the Federal Act on Public Procurement (FAPP) state that contracts will only be awarded to suppliers that guarantee equal treatment of men and women in respect of pay for workers performing services (Appendix 1: Case Study 10). By signing the Charter, authorities affirm that state-affiliated companies and companies in tenders under public procurement or as subsidy bodies implement equal pay as employers. Under the Ordinance on Public Procurement, the awarding authority may call for checks in respect of equal treatment of women and men and the task of conducting such checks may be assigned to federal, cantonal or local authority gender equality offices. The Logib (Lohngleichheitsinstrument Bund) is a free, online federal self-analysis tool for companies with 50 and more employees, allowing companies to check whether they comply with the requirement of equal pay for women and men. Logib can be used by organisations applying for public contracts or subsidies to provide the required evidence of compliance with equal pay. In 2017 all companies with 50 and more employees were obliged to carry out a self-test every four years under the supervision of a third party and to communicate the results to the employees. However, lack of effective monitoring, enforcement and checks are perceived as the greatest challenge to compliance with the Charter^[51].

A report on the EU-wide GPG found examples of industrial action by women in occupationally segregated sectors to defend and/or improve their pay and terms and conditions in the context of austerity and in particular, reductions in local government spending across Europe. In the case of care workers this often reflected the impact of privatisation. In most cases industrial action was not framed in terms of equality or the GPG, although may be posed in terms of seeking recognition and societal revaluation of their work.

Prospect’s current campaign to gain trade union recognition for catering and retail workers in the trading companies within the Scottish heritage sector points to the issues for outsourced workers, including exclusion from Civil Service job evaluation schemes and pay structures and collective agreements. Similarly, cleaners working for companies contracted to National Rail in the major stations in Scotland have been backed by the Transport Union RMT in a campaign to receive the rLW^[52]. Cleaners on public sector contracts represented by UNISON reported fewer incidents of zero-hour contracts than those contracted by the private sector.

Applicability

Recognition of the impact of contracting out of services on the valuation of women’s work and their ability to access equal pay would be an important step forward. The SG has capacity to end privatisation and contracting out in central and local government, health and social care and rail, at least once existing contracts have expired. The renewed public ownership of ScotRail and transfer of the workforce to an arms-length Scottish company is an opportunity to redress the impact of privatisation on workers in the rail industry, including cleaners and catering workers.

The SG considers the payment of the real Living Wage to be a significant indicator of an employer’s commitment to Fair Work practices, although under EU procurement law, it cannot be a mandatory requirement as part of a competitive procurement process. Equal pay could be treated similarly to the rLW in SG and other public sector procurement under the the Scottish Specific Duties Regulations 2012. Fair Work First, which is to be applied in all appropriate grants, commissioning and procurement contracts by the public sector, already includes equal pay as a requirement. However, it assumes that there is compliance with equal pay law, whereas international examples and UK experience suggest widespread lack of knowledge of equal pay requirements and compliance needs to be specified, monitored and accredited.

Although quality carries more weight in procurement than price, since pricing criteria are more comprehensive than those reflecting quality, indicators of equal pay or the rLW, may not prevail. Cunningham^[53] et al. in their report on the initial application of the rLW in social care, identified a number of lessons that could be learned. They found that providers, lead bodies of employers and contracting authorities agreed that the level of transparency and consultation regarding the introduction of the rLW was limited. The distribution of funding to resource the rLW in adult social care was viewed as being overly complex, and again there was limited transparency in terms of how decisions regarding final sums were arrived at. There was variation in approaches to implementing the rLW ranging from percentage uplifts for all providers to undertaking detailed individual negotiations – variation in approaches on equal pay may be resolved by easy access to a self-analysis tool.

Recommendations

The SG could:

• Recognise the negative impact of privatisation on the valuation of women’s work and their working conditions and prepare for an end to privatisation and contracting out of public services.
• Highlight to contractors that active compliance with equal pay legislation and principles is a significant indicator of an employer’s commitment to Fair Work practices, along with payment of the real Living Wage as the minimum rate of pay for any job.
• Implement the FWC’s recommendation to suspend ‘non-committal tendering frameworks’ in social care and the call in its report into Social Care in Scotland for commissioning practices to set out minimum contract standards and sector level engagement between purchasers, providers and those who deliver social care services.
• Support the development of a self-analysis tool for companies to provide evidence or certification of compliance with equal pay legislation and principles, perhaps through the Scottish Centre for Equal Pay proposed in this report, integrated with the Fair Work Employer Support Tool developed in the Fair Work Action Plan.
• Consider developing and introducing capacity for checks on equal pay in companies with public contracts.

Gender Pay Gap Reporting

As a result of the 2014 EU Transparency Recommendation and Member State law governing pay transparency, measures requiring organisations to report their GPG have been introduced across a number of countries, although in some they have been limited to the private sector. In the UK, private and voluntary sector employers with 250 or more employees must report and publish their GPGs. Under the 2016 amendment to the Scottish Specific Duty, the reporting threshold for public authorities was reduced to 20 in respect of GPG reporting and equal pay. Scottish public sector organisations with 20 or more employees must publish GPG information and an equal pay statement. The reports must cover the whole authority and should include both part-time and full-time staff. The report must calculate the gap as a percentage difference between hourly pay for men and women, excluding overtime. These requirements are stronger than the specific duty for England, where public bodies need only produce GPG information and not equal pay statements and the threshold for reporting is 150 plus employees. However, the Scottish regulations do not specify whether the mean or median measure of pay should be used, which can create confusion.

Mechanisms

In 2019 France saw the introduction of the Index Égalité requiring private sector companies with 50 or more employees to publish a range of measures calculating the GPG. This was to be extended to the public sector at the end of 2020 (Appendix 1: Case Study 5). The Index provides a common methodology to measure unjustified GPGs according to an ‘equal pay for equal work’ principle, with a score out of 100 calculated on five indicators. If a company scores lower than 75 it is required to put in place corrective measures within three years. Companies that do not publish their index or do not implement their scores expose themselves to a maximum penalty of 1% of their wage bill. Publication is expected to be on company websites or circulated to employees by other means with worker representatives having access to the information.

For the first time in France a group action has been taken on the GPG against the the Ile-de-France Savings Bank (CEIDF). Under 2016 judicial reforms, class action allows a judge to order measures to put an end to discrimination and redress the harm suffered by all those included in the group concerned with companies summoned before the Paris Tribunal de Grande if management has not addressed the GPG through adequate measures. The French Confédération Générale du Travail (CGT) trade union confederation had been urging the CEIDF management to enter negotiations over the GPG since June 2019, calculating their GPG at 18% or 700 euros per month. It reported that it takes women on average three years longer to get promoted and that they face a ‘glass ceiling’. The bank claims the pay gap is only 1%. In October 2019, the CGT took the CEIDF to court over discrimination against women and is at the second stage of proceedings, expecting an outcome in June.

The CGT sees this ‘group action’ as a way to open ambitious collective bargaining on the GPG. If successful, it means that all 2,700 women working for CEIDF can benefit, as they can then join the claim once the judgement has been made. The union suggests that the Index Égalité has been used to conceal pay gaps – a company can claim 95 points out of 100 while maintaining a 10% GPG. While the Index does not solve the problem of the GPG it does expose it, and has had a small impact in encouraging the recruitment of women to senior positions and changing attitudes. Application and enforcement remain challenges.

In 2017 the Icelandic Government mandated organisations of 25 people or more in the private and public sectors to prove they pay men and women equally. The Equal Wage Management Standard (EWMS) is an externally certified, mandated standard to determine the value of a job in relation to other roles in the organisation. It was the result of tripartite working between Employers’ Associations, the Government and trade unions, and allows employers to prove they pay men and women the same and receive certification. Failure to pay women and men equally results in a daily fine. Employers must review their equal pay certification every three years. The EWMS does not guarantee equal wages, it ensures that evaluation of jobs within an organisation is not dependent on gender. Unions report a lack of infrastructure to support the standard, including sufficient certification bodies.

From 2018 Iceland became the first country to require companies to prove they pay employees in the same roles equally, regardless of their gender, sexuality, or ethnicity. From 2021 the Californian federal government requires employers with over 100 employees to submit annual pay data reports by gender, race and ethnicity and job category and pay band. Data has to be reported to the Department of Fair Employment and Housing (DFEH), which may seek an order requiring the employer to comply with the requirements. In the UK, manadatory ethnicity pay gap reporting appears to have been rejected by the Government’s Commission on Race and Ethnic Disparities' 2021 report^[54], which suggests it should be voluntary.

Applicability

Close the Gap’s 2019 analysis of Gender Pay Gap reporting in Scotland found that less than two in five employers had published a narrative to explain the causes of their GPG, with the majority providing a poor level of analysis. Less than a third of employers had published actions, the majority of which were unmeasurable and unlikely to result in positive change. Only 6% had published targets, with most lacking timescales and only 4% had provided evidence of action taken since the last reporting round. The analysis suggests an issue with compliance. Close the Gap conclude that:

‘The standard of reporting in 2019 suggests a strong sense of complacency from employers on the Gender Pay Gap as a priority issue, and a lack of commitment to take steps to address it’^[55].

In particular, Close the Gap noted the tendency for employers to refer to the GPG as ‘a societal issue’ as a reason for their inaction.

Across Europe – including the UK – unions have been critical of employer discretion in GPG reporting, including over what constitutes categories of ‘equivalent jobs’. They have also been critical of the exclusion of smaller employers. Unions have produced checklists of what elements of pay and promotion should be included and how information should be disseminated and to whom. Key criticisms are the exclusion of contracted-out workers, as well as the weakness of compliance and enforcement measures. There might be scope for the SG to consider strengthening GPG reporting requirements, particularly in public contracts, under the review of the operation of the Public Sector Equality Duty (PSED) in Scotland. There may be a case for Equal Pay Certification under a Scottish Centre for Equal Pay.

Recommendations

The SG could:

• Consider some form of Equal Pay Certification to strengthen GPG reporting, by revising the Scottish Specific Duties Regulations 2012.
• Monitor compliance with GPG reporting and look at how employer discretion can be challenged.
• Make the formulation of equal pay action plans in conjunction with trade union or employee representatives a requirement.
• The SG could support calls by Maternity Action and others for reporting of the duration of return to work and retention rates after maternity leave as part of Gender Pay Gap reporting since it is proven that maternity discrimination and the ‘motherhood pay gap’ exacerbate the overall GPG.
• Strengthen GPG reporting by revising the Scottish Specific Duties Regulations 2012 and consider requiring public bodies to also publish GPG data on contracted-out workforces in any review of GPG reporting. There should be clarification of which hourly measure of pay to use.
• Extend pay gap reporting measures to race and ethnicity as in California and Iceland, and discuss whether and how there should be further extension to other cover other protected characteristics.
• Institute systematic collection of employee data by protected characteristics across the public sector and, when legislative change becomes possible, across all employers.

Application, Inspection and Enforcement of Regulation

The case studies suggest that whatever legislation and regulations are in place, a key issue is compliance and enforcement. In Canada, the Bilson Review^[56] recognised the ‘need for ultimate recourse to an independent adjudicative body with expertise in pay equity issues’. A proactive pay equity model should involve a system in which stakeholders are fully supported in taking steps to achieve pay equity, and that this would make it less likely that complaints and litigation would be resorted to by employees or their representatives. However the report acknowleded that recourse to an adjudicative mechanism would be a necessary even as a last resort. It noted that an adjudicative body should be independent, but have specialised expertise in pay equity.

Mechanisms

Subsequent to the Bilson Review, in 2015, the New Zealand Government appointed a Crown Negotiator to lead negotiations with key stakeholders – care providers, unions and funders, initially to resolve the case with Terranova and then other equal pay claims. The 2020 Equal Pay Amendment Bill aims to provide a clearer and accessible process for pay equity claims, but also sets out a bargaining framework for employers, workers and unions to negotiate in good faith. It encourages use of mediation and dispute resolution services if agreement is not reached with legal action a last resort. It is hoped to mark a move away from adversarial legal proceedings. A union can raise a pay equity claim on behalf of its members with multiple employers, while multiple unions within a workplace can raise a collective claim.

In Canada the position of Equity Pay Commissioner has been established to administer and enforce the Equity Pay Act. The Commissioner will play a key role in assisting workplace parties in understanding their rights and fulfilling their obligations, including through the development of tools and education materials, investigating complaints and considering applications, and facilitating the resolution of disputes. Employers will have to submit annual statements to the Commissioner regarding their pay equity plans.

Applicability

The SG could explore the appointment of an independent Equal Pay Champion to raise the profile of equal pay and play a key role alongside the Fair Work Ministerial Working Group and the proposed Centre for Equal Pay in developing expertise, education and training.

Recommendations

The SG could:

• Consider the appointment of an Equal Pay Champion or equivalent to promote a bargaining framework for employers, workers and unions to negotiate in good faith over equal pay claims.
• Consider the use of mediation and dispute resolution services if agreement is not reached, with legal action a last resort.

Equal Pay and JE Expertise – Education and Training

Ensuring the viability of job evaluation schemes requires adequate capacity on both the employer and trade union sides and the involvement of JE experts. It is widely recognised that there are now very few JE experts with equal pay expertise or the technical ability to develop or maintain new or existing gender-neutral JES. Equally, many of the trade union reps and officials who were trained to implement the SJC and AfC JES have retired. High-level knowledge of JES and good leadership is required by HR functions, while sufficient numbers of trade union reps and paid officials need to be trained to ensure that job evaluation is not a one-off event, but an ongoing, dynamic process that is mainstreamed across employers.

Mechanisms

In 2006 Belgium established the Equal Value Project to establish analytical and gender-neutral job evaluation schemes (Appendix 1: Case Study 2). The Institute for the Equality between Women and Men was given responsibility for this work and for producing guidance and training on JE for employers and trade unions^[57].

Previous research had suggested that where equal pay for work of equal value has been raised for women in senior and/or high-profile positions, trade unions have reported that women concentrated in lower grades have not seen this as relevant to them^[58]. In the case of Ireland a case study of public service broacaster, RTÉ, found that the focus on high-paid workers ‘took no cognisance of the people who were on lower pay grades’ with a lack of clarity amongst union members as to what the GPG is, leading the union to conclude ‘we have a job of education to do with our own members to get them to understand.’ The Irish Congress of Trade Unions concurred that ’much of the discussion around the pay of senior journalists is far from the experience of the vast majority of women’^[59].

Applicability

The Bilson Review recommended the establishment of a Pay Equity Agency that could play an important role in ‘providing publicity, guidance, sensitisation, training, monitoring and dispute resolution’. The focus on development of gender-neutral JE in the private sector and accompanying guidance and training provided by the Belgian IEWM, suggest a model that could be adopted by the SG – either by providing increased resources to a third sector organisation, or by establishing a specialist unit such as a Scottish Centre for Equal Pay, which could be located within a university. The aim would be to demonstrate the value of JE and action to achieve equal pay to private sector employers and help with its implementation.

Recommendations

The SG could:

• Set up a programme to develop new JE experts who can assist employers and trade unions to develop and maintain gender-neutral JES.
• Establish ongoing training and support for public and private sector HR professionals and key decision-makers with a view to widening awareness of equal pay legislation and developing expertise in the use of JE and other mechanisms to achieve equal pay and close the GPG, possibly within a Scottish Centre for Equal Pay.
• Allocate resources to the Union Modernisation Fund and/or the Scottish Union Learning Fund to launch a long-term programme of equal pay and JE training for trade union reps and officers.

Moving Away From Non-Standard Contracts

Women are more likely to be on non-standard contracts than men. These are contracts that are not open-ended and have no fixed weekly hours or direct relationship between employer and employee, and include zero hours, guaranteed hours and temporary contracts and term-time working. Such contracts are concentrated in accommodation and food and health and social work^[60]. School-based workers other than teachers are also subject to non-payment for much of the school holiday period, while men in seasonal occupations in local government – such as gritting or grounds maintenance – are paid for 52 weeks and are given other duties during ‘down times’. The 2019 Fair Work in Scotland’s Social Care Sector report^[61] reported that one in five workers (20%) are not on permanent contracts, with 11% on zero-hours contracts. Work in retail is associated with non-standard working contracts, seen to reduce costs, with contracts as low as four hours a week that can then be flexed up^[62].

Mechanisms

Japan has taken a different legal approach to addressing pay inequality. In 2018 the government introduced the Work Style Reform Act, which mandates organisations to pay regular and non-regular (non-standard) workers the same in the private sector (Appendix 1: Case Study 7). Implemented in 2020, the purpose of this Act is to address pay disparity between regular workers and non-regular employees. The Ministry of Labour produced guidelines to assess the gaps between regular and non-regular workers, but it is not mandatory to use these guidelines or to conduct a job evaluation exercise. This Act is not about equal pay between men and women, but it is hoped that through addressing pay disparities between regular and non-regular work more comprehensive and transparent processes for wage determination will be created, which will indirectly affect women who are predominantly located in non-regular work. There are concerns, however, over the fact that the enforcement mechanism is individual rather than collective – an employee has to negotiate to address any observable imbalances to correct the gap.

Applicability

While the Japanese context is very different, recognition that non-standard contracts have disproportionate impacts on women working in care, retail, catering, cleaning and in schools, including on pay, is overdue. A number of European countries have outlawed or restricted zero-hours and minimum hours contracts and there is scope to ensure that term-time working in schools is treated in the same way as seasonal working for men, such as gritters and grounds maintenance workers in local government. While regulation is not within the remit of the Scottish Parliament, a stronger line could be taken in procurement and public contracts linked to the required quality of service.

Recommendations

The SG could:

• Consider promoting pay equity between regular and non-regular workers as part of wider equal pay measures. This could be achieved through revising the Scottish Specific Duties Regulations 2012 to cover the public sector.
• Mandate pay gap reporting between regular and non-regular workers as part of the ‘due regard to equality’ provision in the public sector under the Scottish Specific Duties Regulations 2012.
• Implement the FWC’s call for the suspension of zero-hours contracts and precarious work in social care as soon as possible.

Changing UK Law – Making Equal Pay Law More Effective

Equal opportunities legislation, as defined in the Scotland Act 1998, remains under the control of Westminster. Scottish ministers do not have the power to amend the Equality Act 2010, but do have the scope to make regulations imposing specific duties on public bodies listed in Part 1 of Schedule 19 to enable them to apply the Public Sector Equality Duty more effectively. This has been done by means of the Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012. There are different specific duties for the four UK nations, however, the Welsh and Scottish duties are more prescriptive than the English duty. The purpose of the specific duties in the devolved nations is to promote compliance by public bodies with the general duty.

The 2015 Smith Commission Agreement^[63] states that while the Equality Act 2010 will remain reserved, the SG can introduce gender quotas in public bodies and can legislate ‘in relation to socio-economic rights in devolved areas’ when making strategic decisions. These powers give the SG powers to establish new protections for public bodies with regards to their devolved functions, but the SG cannot lower the protections that are included in the Equality Act 2010^[64]. In 2018 the EHRC carried out a review into the PSED in Scotland in three areas: the duty to publish equality outcomes and report progress, the duty to gather and use employee information, and the duty to publish GPG information^[65].

While Scottish Ministers only have powers to impose duties on public bodies to ensure Scottish functions are carried out with due regard to meet the PSED, the Scottish Parliament does have powers, under the Scotland Act 1998, to encourage equal opportunities, impose duties on Scottish public bodies and those cross-border public bodies that operate in Scotland to meet the requirements of the PSED and this may provide some scope for the SG to take action in relation to the GPG.

Further differences between the Scottish, English and Welsh systems were expected with the devolution of Employment Tribunal (ET) procedures as advocated by the Smith Commission. The management of the reserved Tribunals would be devolved while Westminster would retain power over the legislation^[66]. However, these plans have now been put on hold until at least 2022^[67]. As the plans move forward, however, there could be scope for addressing the GPG through the procedures used in the Scottish Employment Tribunals, for example ET judges providing recommendations that apply to the wider workforce and not just the employee who brought the case, as currently happens.

Devolution of equal pay and wider equality law could ‘support the creation of a systemic intersectional gender architecture by placing the power to legislate and regulate around equality’^[68]. This approach would allow Scotland to establish its own equality regulator that requires public bodies to ‘involve the communities their decisions affect’^[69].

Mechanisms

In Canada, pay equity is a human right protected under the Canadian Human Rights Act (CHRA). Pay Equity Regulations will be introduced under the Pay Equity Act (2018) in 2021 (Appendix 1: Case Study 3). These represent proactive pay equity legislation to replace the current complaint-based regime with a proactive regime for the federal jurisdiction as proposed in the Bilson Review:

‘It places positive obligations on employers to review their compensation practices, identify any gender-based inequities, and take steps to eliminate them. Unlike the complaint-based approach, the proactive approach also includes timeframes for the elimination of any inequities. It is a systemic approach to a systemic issue’^[70].

Under proactive legislation, pay equity is achieved by implementing a pay equity plan, generally formulated on the basis of the following steps:

• determination of job classes and their gender predominance;
• identification of the evaluation process, method and tools;
• actual evaluation of these job classes;
• wage comparisons and identification of wage gaps;
• determination of the method of payment for salary adjustments;
• payment of salary adjustments.

The proactive model aims to avoid the confrontational approach that has marked discrimination cases brought before the courts and associated costs. The proactive regime will require all employers with over ten employees to conduct a pay equity exercise to identify and correct gender-based pay inequities. The legislation will contribute to reducing the GPG by addressing the portion of the gap due to the undervaluation of work done by women, particularly in light of Covid-19. Employers with ten or more employees will form a pay equity committee made up of employer and employee representatives. This committee will be responsible for developing a pay equity plan that will identify pay equity gaps between predominantly male and female job classes of equal value and determine any increases in compensation owed by the employer to employees in female job classes to close those gaps. A methodology is provided to compare the average compensations between predominantly female and male job classes using an equal average or equal line method.

Supporting methodologies for job comparisons are an essential part of implementing pay equity legislation. While gender-neutral job evaluation schemes are important for highlighting equal pay for work of equal value in sectors where male comparators exist, they are less useful in female-dominated sectors, where undervaluation of women’s jobs is likely to reflect sexist assumptions about the value of women’s work and market pressures. Changes to Californian Equal Pay legislation in 2016 eliminated the requirement for employees to work at the ‘same establishment’ in order to enable an equal value comparison. Canada and New Zealand have legislated for the use of ‘proxy comparators’ to enable equal value to be stablished in female-dominated sectors and workplaces. In New Zealand, the Pay Equity Settlement Act was applied to care and support workers to pay them in line with male roles.

Although the Canadian Pay Equity Commission created proxy indicators in 1993, it was not until 2019 that it established that men in similar larger workplaces could be used as a ‘proxy’ comparator where the wage gap between men and women had already been identified by the job-to-job comparator (Appendix 1: Case Study 3). In 2016, the Ontario Nurses’ Association (ONA) and the Service Employees International Union (SEIU) applied to the Pay Equity Hearings Tribunal alleging that the Participating Nursing Homes (PNH) had violated the Pay Equity Act RSO 1990 c P.7 because of a failure to maintain pay equity for their employees. The Tribunal rejected the arguments of ONA / SEIU.^[71] Although this initial case was rejected, a later judicial review in 2019 found that Article 15 of the Canadian Charter of Rights and Freedoms (CCRF) had been violated as it failed to give effect to equality protection. The Act has a statutory mandate ‘to recognise and redress the systematic discrimination that women suffer in the way in which they are compensated in the workforce and ensure discrimination does not emerge. Therefore, the court found that ‘the decision of the Tribunal was unreasonable’ and concluded that women in predominantly female workplaces should have access to male comparators to maintain pay equity. The rulings of the Superior Court and Appeal Court are significant in that they acknowledge the importance of having access to a system of ‘proxy’ comparability in re-evaluating women’s work and pay.

In Canada the proposed regulations also allow private and public sector employers without any predominantly male job classes to choose, with certain restrictions, between two methods outlined in the proposed Regulations – the ‘proxy’ or ‘typical job classes’ methods – to establish a pay equity plan. The proxy method would require an employer or pay equity committee without a male comparator to select three or more predominantly male job classes from another organisation or business covered by the Act and to develop ‘proxy’ male job classes in their plan. The Canadian Government has produced a cost-benefit analysis of the legislation.^[72]

Under Australia’s Fair Work Act, the Fair Work Commission can make an Equal Remuneration Order, which requires certain employees be given equal remuneration for work of equal or comparable value (Appendix 1: Case Study 1). These Orders overrule collective agreements between employers and trade unions that already exist. In 2010, five trade unions, led by the Australian Services Union, made an application to the industrial tribunal, Fair Work Australia (FWA), for a first Equal Remuneration Order on behalf of social and community service (SACS) workers. In 2012, two years after the initial submission, FWA found in favour of the proposed wage increases (ASU, 2012). In response to this second submission, FWA made an order providing for increases of between 19% and 41% weekly rates for social and community workers, to be phased in over an eight-year period^[73]. Although this was a major win for workers in the social and community services sector, it did not result in wider pay equity in other sectors at either state or federal levels for several reasons. One technical reason was that the FWA was not involved in wage setting in some of the industries where women’s work is undervalued. This limited the power of the FWA to achieve gender pay equity for the whole workforce^[74]. The long-standing trend towards decentralised collective bargaining at enterprise level also made it difficult to establish sector-wide agreements. This case highlights the importance of developing integrated equality and collective bargaining systems. Central government must play a key role in leading this integration.

In California from 2017, equal pay legislation was extended to cover race and ethnicity so employers cannot pay their employees less than employees of another race or ethnicity for substantially similar work. ‘Substantially similar work’ has replaced ‘equal work’ and is viewed as a composite of skill, effort and responsibility, and performed under similar working conditions. ‘Substantially similar work’ refers to work that is mostly similar in skill, effort, responsibility, and performed under similar working conditions. Skill refers to the experience, ability, education and training required to perform the job. Effort refers to the amount of physical or mental exertion needed to perform the job. Responsibility refers to the degree of accountability or duties required in performing the job. Working conditions has been interpreted to mean the physical surroundings such as temperature, fumes, ventilation and other hazards^[75].

Applicability

Governments play a key role in defining remuneration principles in occupations with predominantly female workforces in order to achieve pay equity and in establishing equal pay principles and enshrining clear guidelines for comparing pay between women in female-dominated occupations and men with ‘substantially similar skills, responsibility, and service’ in male-dominated occupations in law. In Scotland legal change may be dependent on successful pressure on the Westminster Government, devolution of employment law and/or preparation for new legislation in the event of Scottish independence.

Changes to equal pay legislation allowing for proxy comparators are crucial in addressing sectoral segregation, as in the case of Canada, which allows proxy comparisons without restrictions in terms of public or private sector. However, even here, the report of its Pay Equity Task Force (the Bilson Review)^[76] noted that it is not so effective in private, feminised sectors with low union representation and high numbers of migrant workers. Proxy comparisons need to take into account the features of all jobs, the size of the external organisation, the market it serves, the nature of its products and production techniques and whether it is a profit or non-profit organisation.

Recommendations

The SG could:

• Lobby UK Government to move towards simpler, proactive collective pay equity legislation to replace the current individual complaints-based regime. The new focus would be on a duty on employers to review their compensation practices, identify any gender-based inequities, and take steps to eliminate them
• Lobby UK Government to reform equal pay legislation to require ‘levelling up’ of women’s pay to that of men doing work of equal value and to enable class or group actions.
• Consider whether to push for UK law to enshrine proxy comparators.
• Explore campaigning for pay equity between regular and non-regular workers as part of wider improvements to equal pay legislation as in Japan. Equal pay measures must cover workers on non-standard contracts, including so-called ‘self-employed workers’. Reporting measures could be included in the revised Scottish Specific Duties Regulations 2012.
• Ensure that Equal Pay Gap reporting measures include gender, race and ethnicity and that future Scottish measures extend to all protected characteristics.
• Promote the development of widespread expertise on equal pay law and the possible means to make it more effective, possibly as part of a Scottish Centre for Equal Pay.
• Ensure mainstreaming of knowledge of equal pay law and practices across government departments and agencies such as the Scottish Exchequer, the Directorate General for Economy, Audit Scotland and the Accounts Commission to ensure achievement of equal pay for work of equal value is properly supported.
• Move towards the devolution of Employment Tribunals and employment legislation to facilitate the integration of employment and equality law into one jurisdiction.