Public sector pay policy 2024-2025: equality impact and fairer duty assessment

6. Key Findings

In terms of the pay policy, the continued commitment to support the real Living Wage and encouraging progressive increases will help mitigate the impact of in-work poverty and could help support those living on low incomes.

Furthermore, the analysis indicates there are higher proportions of women, those with a disability, from a minority ethnic background and younger employees among lower earners. Therefore any individual pay proposals within the overall budgetary constraints which target higher increases for lower earners will help protect these individuals and in many cases provide a positive benefit. This may also help in working towards reducing the gender pay gap within the public sector as it should increase the overall base levels of pay for lower earners where traditionally women are overly concentrated and particularly if this is further supported by the continued restraint applied to higher earners including senior appointments, where there are higher proportions of men.

The pay policy provides scope for employers, within overarching pay negotiation principles, to take their own decisions for pay and reward which take account of their own business needs, workforce issues and affordability. As employers are also subject to the statutory public sector equality duty, it is their responsibility to ensure their pay systems are fair and non-discriminatory. Employers are expected to undertake their own assessment of their pay proposals prior to submitting them to the Scottish Government.

The pay policy provides employers with the flexibility subject to affordability to address evidenced workforce or structural pressures that create or maintain pay inequalities. The policy will also continue to provide organisations the opportunity to submit proposals, to undergo wider reform over a longer period subject to affordability. The Public Sector Pay team collects information to enable them to have oversight and identify those employers at risk of potential inequalities, such as lower paying organisations or those with longer journey times than the average.

The policy continues to allow for individual employers to take decisions on the payment of progression within their overall budgetary envelope. It is a matter for each public body to equality proof their own progression and pay arrangements taking into account affordability and performance. Therefore there is no direct discrimination as a consequence of the policy approach to progression.

Nor is there evidence to suggest that the continuation of suspending non-consolidated performance payments will adversely impact on individuals with a protected characteristic.

There is no evidence to suggest that the pay policy would adversely impact the take-up of Board Appointments among those with a protected characteristic as the level of daily fee rate may not be the key driver for taking up an appointment but rather to provide the opportunity to represent and raise awareness. The guidance for Senior Appointments makes it explicit that the main objective of remunerating Board Members is to increase diversity but is not intended to meet in full the market rate that the individual may otherwise expect or command.

Nevertheless it remains the case that women are significantly under-represented among senior appointments and, although the aim of the pay policy is to continue to work towards making sure that pay is fair and non-discriminatory, the pay policy only focuses on levels of remuneration and not wider HR policies.

A fifth of employees covered by the policy work part-time and three out of every four of them is a woman. Part-time workers are more likely to be among the lower paid employees. Although we do not have the information, it is likely that some of those working part-time are older employees and may do so to cover care duties however there may also be some who choose to reduce their hours for phased retirement or to pursue other life choices. We do not have information on full-time equivalent salaries or individual working patterns to determine the extent of any potential detriment.

The positive movement with the majority of employers standardising to a 35 hour working week during 2024-25 can be seen to provide a benefit to all impacted employees. It is possible there could potentially be a greater benefit for part-time employees, particularly for the many who are lower paid and as such more likely to be a carer, a woman, a disabled person, an individual from a minority ethnic group, a younger employee or a combination of one or more of these characteristics.

The continuation of the commitment to a No Compulsory Redundancy policy provides job protection for all employees covered by the pay policy and there is no evidence to suggest that this creates any negative direct or indirect discrimination.

It is recognised that, while we do have gaps in the information provided by employers directly subject to the pay policy on some of the protected characteristics, we are satisfied from the analyses undertaken there is no unlawful discrimination in the proposed pay policy.

Due to the higher proportion of women, disabled people, those from a minority ethnic group and younger employees among lower paid public sector workers, these individuals are more likely to benefit from any progressive pay measures and will help to work to reduce the gender pay gap and overall pay inequality. Employers are responsible for determining pay increases within the pay policy framework to ensure they are affordable and sustainable along with maintaining a no compulsory redundancy policy helps to protect public sector jobs.