Employment Law Birmingham News

Recent figures released from the Annual Survey of Hours and Earnings (ASHE) have shown a drop of 9.6% in the UK gender pay gap in April 2012.

Other data in ASHE show that median gross weekly earnings for full-timers, at £506, were up by 1.5% on the 2011 figure of £498. Public sector workers saw a rise of 1.6% (from £556 in 2011 to £565 this year) while in the private sector the increase was 1.5% (£472 a week in 2011, £479 in 2012).

There was a narrowing in the gap between the highest and lowest paid employees: between 2011 and 2012, the hourly earnings excluding overtime of full-timers at the top decile point fell by 0.2%, whereas those at the bottom decile point saw an increase of 2.3%.

The region where employees had the highest median gross weekly earnings was London, at £653, and the region with the lowest earnings was Wales at £453.

The district with the highest-paying jobs was the City of London (a median of £917 a week full-time) and the district with the lowest-paid jobs was Torridge (£348 a week full-time).

New figures from the Chartered Management Institute have revealed that the average female executive suffers a lifetime earnings gap of £423,390 when compared to a male worker with an identical career path.

With the current gap between male and female average pay at management level standing at £10,060 a year, a woman and a man entering executive roles aged 25 and working their way up the career ladder until retiring aged 60 would take home pre-tax totals of £1,092,940 and £1,516,330 respectively, based on today’s levels.

This year’s survey also reveals that the gender pay gap extends to annual rewards. At the 91 participating employers providing data on the payment of bonuses, women receive less than half what men are awarded in monetary terms – the average bonus for a male executive was £7,496, compared to £3,726 for a female executive.

News on the nature of the ‘management pipeline’ is also mixed. The figures show that the percentage of women in the executive workforce now stands at 57%. However, while at junior level the majority (69%) of executive workers are now female, a much smaller percentage have made it into top roles – just 40% of department heads are female and only one in four chief executives (24%).

The European Commission's latest annual report on gender equality has found that improving equality between women and men is essential to the EU's response to the current economic crisis.

"The economic case for getting more women into the workforce and more women into top jobs in the EU is overwhelming," said Viviane Reding, Vice-President of the European Commission in charge of Justice, Fundamental Rights and Citizenship. "We can only reach our economic and employment goals by making full use of all our human resources – both in the labour market as a whole and at the top. This is an essential part of our economic recovery plans."

In the labour market, the employment rate for women is 62.1%, compared to 75.1% for men, meaning the EU can only reach the overall Europe 2020 target rate of 75% employment with a strong commitment to gender equality.

Under the Europe 2020 strategy, the Commission has highlighted the need to promote a better work-life balance, in particular through adequate childcare, more access to flexible working arrangements, and by making sure tax and benefit systems do not penalise second earners. These can all help to make sure more women enter and remain in the labour market.

The gender pay gap has narrowed slightly across the EU. On average, women earn 16.4% less than men for every hour worked. The gender pay gap is caused by multiple factors such as labour market segregation and differences in educational choices. Slow progress in narrowing the gender gap in company boardrooms led the Commission to launch a public consultation on possible measures at EU level to address the problem, which risks holding back innovation and growth in Europe.

A recent Eurobarometer poll has found that 47% of those interviewed believe that the gender pay gap is best tackled at EU level. However, respondents were almost evenly divided on how best to close the gap.

While the pay gap between women and men doing the same job with the same qualifications is seen as a serious problem by almost seven in ten Europeans (69%), respondents were divided on whether incentives or penalties would be more effective in reducing the gap.

The three possible remedies offered, namely "facilitating access for women and men to any type of employment" (27%), "imposing financial penalties on companies that do not respect gender equality" (26%), or "transparent pay scales in companies" (24%), all scored similar percentages.

When asked at what government level these measures are best taken, 47% of those interviewed said they favoured action at EU level, 38% at national level and 11% at local level.

Unsurprisingly, women saw gender inequalities, and the pay gap in particular, as more of a problem than men did. More than three in four women said that the gender pay gap is a serious problem (76%), compared to 62% of men. More men (35%), than women (21%), said that it was not a serious problem.

When asked about pay trends, 60% of respondents said they thought gender inequalities had decreased over the past ten years, whereas 12% thought that there had been no change.

A recent report has revealed the extent to which women are under-represented in senior executive and management positions across Europe.

According to the data published by Mercer, the ratio of senior executives and managers that were female averages 29% in countries across Europe compared to 71% of men. Mercer has also revealed that despite organisations’ efforts to achieve a diverse workforce, the majority (71%) do not have a clearly defined strategy or philosophy for the development of women into leadership roles.
 
Sophie Black, Principal in Mercer’s Executive Remuneration team, said “Women’s representation on company boards is a big issue and there is substantial noise in the EU about board diversity. It’s not just an issue of gender, of course, although discrimination in any form is undesirable. It’s also an issue of talent as it this sort of bias in a company limits the candidate pool and skill set. A more diverse workforce reduces turnover and absenteeism and increase innovation and creativity,”

The EU is committed to addressing gender inequality and the Gender Pay Gap as part of its EU Gender Action Plan. While there is opposition to the imposition of politics into the workplace, Mercer’s data underscores the role that political intervention can play in balancing the inequalities created by market forces. According to the data, former Soviet-bloc countries have the highest levels of female participation and equality in Europe. In fact, the nine countries showing the best representation of women in senior positions are ex-communist states.
 
In Western Europe, the countries with the greatest proportion of women in the executive suite amongst the sample group were Greece and Ireland (33%), followed by Sweden (30%) and Belgium (29%). Spain, UK and France all had 28% female representation.

Quota systems to increase women’s representation in business have been in existence for several years in countries like Spain, Norway, France, Belgium and Italy. In the UK, the government is taking steps to improve women’s representation in the boardroom following Lord Davis report Women on Boards which recommends increasing the proportion of women executives on boards of the FTSE 350 group of companies to 25% by 2012.