EHRC proposes flexible working for all to close pay gaps

The Equality and Human Rights Commission (EHRC), the UK’s national equality body, has published a six-point strategy to help close gender, ethnicity and disability pay gaps.

Father taking on additional caring duties for child

Ruth Holmes

15 August 2017

Among the headlines in the comprehensive review are calls for all jobs to be offered as flexible from day one, and more support so working fathers can play a greater role in childcare. Recent research in both of these areas suggests untapped latent demand for flexible working practices and calls for a review of shared parental leave amid low take-up.

Flexible working for all?

The statutory body is recommending employers offer all jobs up for flexible working to help remove the barriers faced by women and disabled people. These employee groups are more likely to have to negotiate flexible working or accept part-time jobs that are often low-paid, says the EHRC.“The pay gaps issue sits right at the heart of our society and is a symbol of the work we still need to do to achieve equality for all,” explained Caroline Waters, deputy chair of the Equality and Human Rights Commission.“For this to change, we need to overhaul our culture and make flexible working the norm; looking beyond women as the primary caregivers and having tough conversations about the biases that are rife in our workforce and society.”

Overhaul of shared parental leave?

The report, Fair Opportunities for All: A strategy to reduce pay gaps in Britain, also proposes giving fathers extra “use it or lose it” paternity leave paid at the right level.Statutory pay for fathers during paternity or shared parental leave is lower than that for mothers. Take-up of the right is also low and at single figures. There is currently no requirement on employers to enhance statutory shared parental pay.However, the EHRC notes that unequal pay terms for shared parental leave may be discriminatory. A recent legal ruling means employers who offer enhanced contractual shared parental pay should offer the same terms to men and women to avoid a potential discrimination claim.It is proposing the government introduces a dedicated non-transferable, ring-fenced "use it or lose it" parental leave for fathers with a pay rate that acts as a real incentive to take-up.

Who will foot the bill for shared parental leave?

Commenting on how the recommendations will work in practice and recent case law in this area, Suzanne Horne, partner and head of the international employment practice at law firm Paul Hastings, raised concerns about the cost to employers of implementing change.“The proposals today by the Equality and Human Rights Commission (EHRC) to adopt the model operated in certain Scandinavian countries are not a surprise, particularly given the current focus on gender pay and equality,” said Ms Horne.“The key issue here is who pays for extra time off for fathers. In Sweden and Norway, it’s the government who funds up to 80%–100% of fathers’ pay through higher rates of income tax for all. As well, the family loses the father’s quota if it is not taken. Neither these incentives nor funding structures exist under the current UK system. What’s more, it’s highly unlikely that a Conservative government with the slimmest of majorities will be keen to support a policy that requires higher taxes.“Therefore, it is increasingly likely that it will be employers who will ultimately be footing the bill for these benefits. Indeed, we are already seeing a growing body of UK case law being established which provides that employers will be held liable for direct or indirect sex discrimination.”

The EHRC's recommendations

As well as pressing for flexible working to be encouraged in all jobs at all levels, and better support for shared-parental leave, the strategy also urges governments, their agencies and employers to:

unlock the earning potential of education by addressing differences in subject and career choices, educational attainment and access to apprenticeships
improve work opportunities for everyone, no matter who they are or where they live by investing in sector-specific training and regional enterprise
encourage men and women to share childcare responsibilities by making paternity leave a more effective incentive and improving access to childcare
increase diversity at all levels and in all sectors by encouraging employers to tackle bias in recruitment, promotion and pay and introducing a new national target for senior and executive management positions
report on progress towards reducing pay gaps by extending reporting to ethnicity and disability and collecting annual statistics.

Closing pay gaps

The EHRC believes these recommendations will shake up workplace cultures and working practices to reduce pay gaps. These currently stand at 18.1% for gender, 5.7% for ethnic minorities, with the disability pay gap at 13.6%.However, these gaps mask significant differences between different ethnic minority groups and type of disability. Male Bangladeshi and Pakistani immigrants experienced the largest pay gaps (48% and 31% respectively).Pay gaps for men with neurological or mental health conditions are also notably large. Men with epilepsy experience a pay gap close to 40% and women with epilepsy have a 20% pay gap compared to non-disabled men and women respectively. Depression and anxiety also impacts earning power in men to the tune of around 30%. For women, this figure is 10%.“The inequalities in pay for ethnic minority groups and disabled people also need to be talked about,” continued Ms Walters. “We’re launching this strategy to kick start the change we need. This includes action to tackle inequalities across the board, including those who are trapped in low pay who often get missed from the headlines.”

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Positive responses to the EHRC's strategy

The recommendations have been widely welcomed, with the CIPD acknowledging the steps as important for increasing awareness and uptake of existing rights.Dr Jill Miller, from the professional body for HR and people development’s diversity and inclusion adviser, said: “The EHRC’s recommendations on the changes needed to address pay gaps in Britain are timely for many businesses who are preparing to report on their gender pay gaps.“We welcome the breadth of their new strategy, Fair opportunities for all, which looks at gender, ethnicity and disability pay gaps, and agree a greater focus on flexible working opportunities across the labour market would enable disadvantaged groups to both ‘get in’ and ‘get on’ in work.“While the right to request flexible working is available to all UK workers who have worked for the same employer for 26 weeks, it is yet to be recognised as such in practice.“To make flexible working the norm it’s crucial that organisations challenge assumptions of who it is for and encourage far greater uptake.“HR professionals have a critical role in questioning workplace cultures and busting the myths around what flexible working means to encourage businesses to act differently.“Through recognition that flexibility is not just about the hours people work and challenging traditionally rigid job design, organisations can create ‘people-shaped jobs’ that enable those with a range of circumstances to access and reach their potential at work, while boosting long-term productivity.”Julia Waltham, head of policy and communications at charity Working Families, also commented: “I’m delighted the EHRC has added its voice to the increasingly loud chorus for change. The gender pay gap remains a stubborn reality. We need the radical solutions the Commission is proposing if we’re going to change things for the next generation of mothers and fathers.“The ‘motherhood penalty’ is a price that women continue to pay at work and at home. The answer lies with fathers. A decent period of ‘use it or lose it’ paid paternity leave would allow more fathers to care for their young children – and push this out of the domain of ‘women’s work’ for good.”