My Lords, I thank the Minister for that very clear explanation of these amendments; we welcome them. There is a general consensus that these amendments are welcome, but the Minister will not be surprised to hear that we believe that the substantive issues needed to go further. I have a few questions to ask the Minister about the substantive issue of these subsections.
As the Minister will be aware, the EHRC advocates that time limits be imposed; the TUC contends, because of the difficulties that employees are likely to face in accessing pay information, that all employers should be required to carry out these orders, not just those taken to a tribunal. As my honourable friend Kate Green MP said on Report in the Commons,
“While the Government have made one or two grudging steps forward in relation to improving equalities, the proposal on equal pay audits is a watering down of our commitment to have such audits across the board for larger businesses, not only when they have been unsuccessful at tribunal”.—[Official Report, Commons, 16/10/2012; col. 252.]
The reason why that is necessary is that recent evidence shows, as the Minister will be aware that gender pay gap continues to persist. The 2012 annual survey of hours and earnings found that the mean pay gap between men and women’s average hourly earnings, excluding overtime, was 14.9% for full-time workers and 7.9% for part-time workers. The Equality and Human Rights Commission’s 2010 triennial view found that pay gaps also affect disabled people and some ethnic groups, and I am going to return to that in a moment. In its response to the modern workplace consultation carried out by Government, the EHRC noted that the power to impose pay audits needs to be as robust as possible in order to have maximum effect.
It seems to us that the tests for this legislation are, first: will it help employers? Carrying out an equal pay audit should be viewed as a positive means of enabling the employer concerned to eliminate pay inequality and minimise the likelihood of facing future equal pay tribunal court claims, rather than as a penalty. Secondly, will it avoid the possibility that, if equal pay audits are seen as a penalty, there is a risk that employers will settle equal pay cases outside court to avoid that penalty? This could be particularly true of those firms that can afford to settle and are anxious to avoid negative publicity.
Does the Minister acknowledge that conducting an equal pay audit will not in itself eliminate a gender pay gap? It will, however, bring to light and enable employers to address any equal pay issues that are uncovered. Employers will still need to draft an action plan to rectify any unjustifiable pay gaps they find, implement changes and regularly monitor the outcomes. It seems to us that implementing and monitoring the necessary changes are the most important aspect of any equal pay audit. Employers will need to be made aware that there will be an expectation on them to do this. Will the Minister assure the Committee that this is indeed the case? Employers will also need to be made aware of the time limits that will be placed on them to conduct and action their equal pay audits and of what sanctions will be taken if they are breached.
Finally, what are the Minister’s views on progress on pay gaps for other strands of discrimination; for example, religion or belief, age, race, disability, and sexual orientation? Do the Government intend to do any research or take any action on those matters too, and if so, when?
I welcome this part of the Bill and the amendments which will improve it significantly, but I do not believe that any of us can rest on our laurels on this matter. I am sure the Minister will agree.