Equal Pay and Flexible Working Bill [HL]

My Lords, it gives me enormous pleasure to have the opportunity and privilege to introduce this Bill today. Equal treatment, equal pay and family-friendly working practices are issues that I care passionately about, as they are to all noble Lords taking part in today's debate. I am enormously grateful that so many of your Lordships, with a wealth of experience and often a lifetime of dedication to these causes, are speaking. At its heart this is an issue of social justice. Equal pay is not just for high-flying women in the City, in law or industry, who are often earning hundreds of thousands of pounds a year. It is just as much about ensuring proper protection for women at the bottom of the pay scale who are working hard to provide for their families, day and night, and who do not have the voice or the confidence to fight for fairness. The Bill was born from the excellent work carried out by the Conservative Women's Policy Group, which outlines the opportunities and challenges that women face today. It spent months of hard work travelling around the country, speaking to many women and tackling some difficult and disturbing issues. It was left in no doubt that, by all measures, the gender pay gap, its existence and extent, is beyond doubt. They suggested as a remedy the measures included in the Bill. My right honourable friend Theresa May wrote to Harriet Harman to say that these are such important issues that we would be happy for them to be included in the forthcoming equalities Bill. Although the Government are undoubtedly sympathetic, our offer was declined so I decided to introduce a Private Member’s Bill to bring this debate to your Lordships’ House. I am not seeking to do anything revolutionary, simply to ensure that the Equal Pay Act 1970, which arrived on the statute book while I was still at school, is properly observed. I also wish to build on the current flexible working practices that the Conservative Party has warmly supported. The purpose of the Bill is twofold. First, it would strengthen existing pay legislation to make it more effective in the face of unfair treatment. It would do so in two ways. First, it would change the ““material factor”” defence to include a test of reasonableness. The Equal Pay Act currently provides for the ““material factor”” defence for cases where the variation is genuinely due to a material factor which is not the difference of sex. However, tribunals are not presently required to agree that such a material factor is reasonable, only that it was the cause of the pay difference and that it was not discriminatory. For example, an employer could say that it was reasonable to pay a woman working in Manchester less than a man doing an equivalent job in Leeds, without having to prove that the cost of living in Leeds was greater than in Manchester. Clause 1(2) introduces such a reasonableness test for the ““material factor”” defence, which would make it easier to identify cases where pay discrimination is indirect and not just direct. Employers do not currently have to give a justifiable reason for pay inequalities. While I acknowledge that this can be a complicated area, and employers have every right to pay different amounts where a woman genuinely wishes to vary her contract, there is clearly room for abuse and the Bill would close that loophole. I must apologise for a drafting error. Those who have worked with me on Bills will know that I could never aspire to be a parliamentary draftsman. In my defence, however, this was looked at by a number of people. I am most grateful to the noble Lord, Lord Lester, whose eagle eyes spotted the mistake. Clause 1(2) should read, ““In Section 1(3) … before paragraph (a)””. This will be amended at a later stage of the Bill. Clause 1(3) of this Bill covers equal pay audits, the use of which must be strengthened to make them more effective. At the moment, if an employee takes their employer to a tribunal and that employer is found guilty of discrimination, the appropriate action is taken and the case ends there. If another employee suspects that they are also a victim of such discrimination they would have to bring their own action, effectively starting the whole process from scratch. Subsection (3) would introduce the requirement that employers found guilty at tribunal would have to undertake an equal pay audit, thereby benefiting all other employees and identifying and rectifying any further abuse. Pay audits are costly, time consuming and demand that organisations publish their findings. That is why I agree with the CBI that it would not be sensible to overburden business or for all employers to undertake a pay audit, although my proposed change would go a long way to deter discriminatory practices in the first place. However, companies and organisations that have undertaken voluntary pay audits, such as the Inland Revenue, have found that the process improves employee morale, loyalty and relations, which in turn have a beneficial effect on productivity—although I hesitated to mention the Inland Revenue and ““productivity”” with 31 January looming. The thinking behind subsections (2) and (3) in Clause 1 is to promote good practice and encourage employers to adopt a fair and sensible approach to rewarding their staff. The majority of this country’s employers are good and caring, and are exemplary in this regard. Apart from a small number of bad employers, I genuinely believe that the others have not set out intentionally to discriminate, but have drifted there unknowingly. Over the years, they have paid a little more here and there, especially when bonuses are taken into account. However, unintentional action is no defence. The second purpose of the Bill is to extend the right to request flexible working to all parents with children under the age of 18. Clause 2 amends the Employment Rights Act 1986 to this effect by removing the legislation that currently limits the right to request flexible working to parents with children aged six and under and carers, which came in with the Work and Families Act. I think it is legitimate to ask why I am introducing the Bill now, in a period of such economic uncertainty and turmoil. I agree that the last thing that we should be doing at this time is subjecting businesses to more red tape and regulation, but this is not an extra regulation. Many companies operate flexible working practices already, with enormous success. Many companies strive to pay all their employees fairly and according to their talent and experience rather than their gender. The Bill therefore imposes absolutely no extra burden on them. However, pay inequality is not acceptable whatever the economic times are. We must ensure a culture of equality and fairness in the workplace, to motivate women, who will play a crucial part as the economy recovers. I am sure that noble Lords around the Chamber will share my dismay that, in the 21st century, women are still paid on average 17 per cent less than men. That figure rises to 36.3 per cent for part-time work, and 45 per cent of women who work in the UK do so on a part-time basis. These are often women who are supporting children, elderly parents or, in the current climate, unemployed partners. They deserve to be treated fairly and to be protected by the law. The Government have made some admirable pledges in this area but, unfortunately, to little avail. The pay gap actually widened last year. That is why I am bringing this legislation before your Lordships’ House today, in this time of financial uncertainty for so many British women, so that we can give them the help and support they need now. A report from the TUC last summer made a direct link between low levels of women’s pay and child poverty. I ask your Lordships to consider these proposals in that light. Half of all children living in poverty are being raised in households where one or both parents work. If the working mother is trapped in a low-paid job, or one which affords her precious little quality time with her family, that will have a direct effect on the welfare of her children. The issue of flexible working goes hand in hand with this. In order to balance family commitments, women often return to work, after having their children, to lower paid and lower level jobs than they previously held, as that is the only employment available to them. If flexible working were available to all parents—crucially, that means fathers as well—the burden of childcare could be shared and work could fit more easily around family commitments. Flexible working does not have to be a burden on business. Working Families says that, "““flexible working is a resounding success, bringing benefits to employers and families””." In fact, many companies operate flexible working practice already, some without even realising it. Flexible work does not necessarily mean part-time work but can incorporate a variety of working practices, including flexi-time, home working or job sharing. It has been proven to increase staff commitment, productivity and retention. It can save on office costs, rehiring and retraining and enables companies to build a viable, committed team who feel immense loyalty towards their employer for respecting their right to family and other commitments outside work. I am very pleased that the noble Baroness, Lady Vadera, will respond to the debate on behalf of the Government and very much look forward to hearing her comments. I am sure that, as a former banker, many of the issues I have raised will have particular meaning for her. Personally, I am in favour of extending the right to request flexible working as widely as possible, although I hesitated to go so far as to say that the right should be extended to all workers under the Bill because I care about not overburdening businesses, especially small businesses, and a total right would need careful and detailed discussion. But the companies that have made it a general policy have reported greater productivity, better staff retention levels and an ability to adapt to the 24-hour culture that the modern business world demands. At the end of last year I had the privilege of attending a gathering at Manchester Town Hall organised by the Lord Lieutenant of Greater Manchester for all the women of Greater Manchester who had served so valiantly in the Land Army and Timber Corps during the Second World War. We had a great afternoon. We had a thanksgiving service, sang all the old wartime songs and then had tea. One of these remarkable women, to whom we owe so much, told me how back-breakingly hard the work had been and how the women had to do the same work as the men. ““Mind you””, she said, ““we didn’t get paid as much””. I beg to move.