EEF response to the EOC’s Revised Code of Practice on Equal Pay

The EEF (Engineering Employers’ Federation) is the representative voice of engineering manufacturing in the UK, and is a nation-wide federation of 12 regional Associations and the ECIA (the Engineering Construction Industry Association). We have a growing membership of over 5,800 companies of all sizes, employing over 900,000 people from every sector of engineering manufacturing, engineering construction and the technology-based industries. We have considered the EOC's draft revised Code of Practice on Equal Pay (“the Code”) and set out our views below.

Summary

1. The EEF supports the Code and welcomes the structure and format of it. We particularly welcome the fact that the Code separates what employers are required to do under the law from the provision of best practice guidance.

2. Overall, whilst we are pleased that the guide is easy to read and well structured, we are disappointed that the opportunity presented by the issue of a new Code has not been taken to give a little more detail and more examples about aspects of this complex and difficult legislation. We would point to the Code of Practice under the Disability Discrimination Act 1995 (“the DDA Code”) as a very good example of clear yet more detailed guidance which employers (and their advisers) find helpful.

3. In particular we think it would be useful to extend the case study format to Section 1 of the Code in order to illustrate the key elements of the legislation in a way similar to the DDA Code.

4. We have a number of specific comments on particular paragraphs of the Code and we set these out below.

Section 1

General comments

5. The EEF believes that, whilst the text in Section 1 is very clear, more detail can and should be given about the key concepts of the Equal Pay Act 1970. We believe there is scope for doing this without losing the existing clarity. We highlight below the key issues on which we feel more detail should be given.

Paragraph 19: Comparators

6. The EEF is concerned that there is no explicit discussion in the Code of the factors to be taken into account in selecting comparators or, indeed, the benefits of being selective. In our view, the Code, on this important question, should both set out the legal position and offer practical advice to prospective complainants. We feel this is particularly important in view of the forthcoming questionnaire procedure, which may result in more speculative applications for disclosure of information from potential complainants.

Paragraph 20: Same employment

7. As drafted, a reader might understand this paragraph to mean that the woman can choose which test of “same employment” applies to her which, of course, is not correct. The paragraph should make clear the circumstances where the 2nd – 4th bullet points may apply.

Paragraph 23: Like work

8. This paragraph about the basic concept of like work could be expanded a little to give more guidance and the example is rather obvious. For instance, like work means the same or broadly similar work and the nature of the work actually done needs to be considered.

Paragraphs 28 - 30: Pregnant women and women on maternity leave

9. The EEF has long campaigned for the maternity and discrimination legislation to be updated to give greater clarity and certainty to employers about the issues connected with pay and benefits during maternity leave.

10. The EEF accepts that the position is complex. However, we feel that it would be much more helpful if the EOC took the opportunity provided by the Code at least to summarise the position and give employers and employees guidance on general principles. As drafted the paragraph merely suggests readers seek specific advice; the EEF believes that the opportunity should not be lost to give more practical advice.

11. We also have the following comments about paragraphs 28-30:

· The reference to “statutory” maternity leave is confusing; from the context it appears that the drafter is referring to “ordinary” maternity leave. However, it is unusual (and confusing) to refer to it in this way, particularly as additional maternity leave is also derived from statute.

· Following on from the above, the final bullet point under “Key points” is incorrect because the regime during additional maternity leave is less beneficial to employees. The problem, we suggest, arises because the term statutory maternity leave is used to refer to ordinary maternity leave. The key points should summarise the position under both types of leave.

· The final sentence of paragraph 30 should be expanded to more accurately reflect the right to return position for women returning from both ordinary and additional maternity leave. We think this sentence does not reflect the fact that, subject to sex discrimination legislation, employers have a little more flexibility in relation to the role women return to from additional maternity leave as opposed to ordinary maternity leave.

· Footnote 8 should read “as amended by the Employment Act 2002”.

· Footnote 9 needs amending to reflect the changes arising out of the Employment Act 2002.

12. It would be useful to include a cross-reference to other publications, for example, the DTI’s guide on Maternity Rights.

Paragraphs 33 – 40: Genuine Material Factors

13. We think it would be much more helpful if, instead of the short paragraph 36, the drafter of the Code separated out a number of the typical factors relied on by employers (such as red circling or other protection arrangements, enhanced payments for extra skills or training, additional duties, greater experience, etc) and set out a distillation of the general position arising from the authorities. This is likely to make the document more user-friendly.

14. We would also make the following specific comments:

· In paragraph 34 there is a brief reference to record keeping. It is our view that this is a very important element of best practice and is a sufficiently important point to justify a separate section. We suggest wording along the following lines:

“Employers should be aware that employees may bring complaints or make enquiries about pay decisions which were taken many years previously since when the decision-maker or makers may have left the organisation and/or memories have faded. For this reason it is advisable for employers to keep records which may in the future help them to explain why pay decisions were made. Without this information, an employer may have difficulty satisfying a tribunal that it ever had a genuine material reason unrelated to sex for a pay differential.”

A short case study might also be useful to illustrate what such record keeping might entail in practice.

· In paragraph 34 reference is made to ensuring that any factor that is used as justification is free from both indirect and direct sex discrimination. It would be useful if, within the Code, further guidance, for example by way of a short case study was given as to how an employer could demonstrate this.

Paragraph 43: Raising the matter

15. We suggest that this paragraph should indicate that employees are likely to have the statutory right to be accompanied in any meetings if they raise the question of unequal pay for equal work as a grievance with their employer.

Paragraph 44: Time limits (and “back pay”)

16. As some employers and employees might rely on the Code for information in the event of a grievance being raised, we suggest that the section on time limits should be expanded. As it stands paragraph 44 sets out only the bare principle under the legislation and does not reflect the more detailed provisions of the draft amending Regulations.

17. Section 1 of the Code should also set out the limits on back pay for a successful complainant. A short case study might also be helpful to illustrate how the time limits on bringing a complaint and the limit on back pay interact, as this can be confusing to both employers and employees.

Paragraphs 48 and 49: Confidentiality and the Data Protection Act

18. The EEF believes that the Code does not provide enough information and guidance for employers on dealing with equal pay questionnaires particularly in relation to the Data Protection Act and the related issue of confidentiality.

19. Annexed, as Appendix 1 to this response, is a copy of the EEF’s response to the Government’s consultation document on the proposed Equal Pay Questionnaire. We emphasised in that document our concern that employers should be given a clear steer on how they should respond, particularly where proceedings have not yet been issued, to requests from complainants for confidential information about their colleagues. The Code should explicitly make clear that different rules are likely to apply if the questionnaire has been served where proceedings have not been issued and should summarise what the rules are relating to disclosure of information.

20. We are also concerned that the position set out in the Code should not conflict with the advice set out in the Notes of Guidance which are issued with the Questionnaire and we would ask the EOC to ensure that the two documents are consistent with each other.

21. In paragraph 49, we suggest readers should also be explicitly referred to the Information Commissioner’s Code [insert full title] and particularly the part dealing with record keeping.

Paragraphs 50 and 51: Disclosure of information

22. In relation to disclosure of information for collective bargaining purposes, the drafting of these paragraphs does not strictly reflect the differing rights of recognised and non-recognised trade unions. We believe the paragraphs should separate out the brief description of the statutory position from the best practice position and clearly indicate in the Code where it is making suggestions as to best practice. We feel that, as presently drafted, these paragraphs are confusing.

23. In a similar vein, we suggest that, rather than stating that unions should respect confidentiality, more detail should be given of the present position under the CAC disclosure of information procedure relating to confidentiality of personal information.

24. The title for these paragraphs should also make clear that it relates to disclosure for collective purposes.

Section 2 – Good equal pay practice

25. We would welcome a paragraph in this section which gives companies a realistic indication of the time and resources involved in conducting an equal pay review. We appreciate that this will vary between organisations but we would expect that it would be possible to give some broad indications. From our experience, we believe it is better that companies have a good understanding of this before they embark on the process.

Case study A, 4th bullet

26. Throughout the Code there is an emphasis on working in partnership with trade unions and/or employee representatives. We would, therefore, suggest that the reference to “side” be deleted.

Step 5: Developing an equal pay action plan

27. In paragraph 67, it is said, "where there is no genuine reason then employers will need to...provide equal pay”. We suggest that it would be more accurate for that sentence to read “where the reason for the pay differential is connected with sex employers will need to provide equal pay”.

Case Study E, 1st bullet

28. Delete “carried out” after equal pay review.

Annex A, Employment Rights Act

29. This paragraph should be amended to reflect the changes introduced to maternity rights by the Employment Act 2002.