Over two-thirds of private sector firms do not conduct equal pay reviews

11 December 2013

New research has shown that over two-thirds of private sector firms do not perform equal pay reviews, putting them far behind the public sector when it comes to action on equal wages.

The study, conducted by XpertHR showed that only 32% of private sector firms have carried out an equal pay review or are in the process of doing so, marking a slight increase from the 24% found in 2008, but still way behind the public sector, where 77% have conducted – or are currently conducting – a review.

Mandatory equal pay audits – a Coalition initiative – will be one of the areas debated in depth at the Institute of Employment Rights’ forthcoming Equality and Discrimination conference in January. The move will allow tribunals, under certain circumstances, to order employers that lose equal pay cases to conduct a review.

However, the new legislation – which it is thought will come into effect in October 2014 – is well-criticised for being weak and ineffectual, and it is expected that very few employers will actually be affected by it.

XpertHR accounted for the sharp contrast between the public and private sectors when it comes to equal pay audits by pointing to the existence of the Public Sector Equality Duty (the strength of which is now under threat following a government review) and “harmonised pay and grading structures” within state-run organisations.

This is another example of how negotiating pay structures on a national or sectoral scale and inviting trade union representatives to sit around the negotiating table improves terms and conditions, including equal pay. The IER has recommended in our latest report on the issue – Reconstruction after the Crisis: a manifesto for collective bargaining – that the next Labour government put statutory legislation in place to ensure that collective bargaining of this kind is encouraged nationwide.

For more on equality and discrimination within the workplace, book your place at our next equality law conference. As many as 62% of delegates to our last equality conference rated it ‘Good’ or ‘Excellent’, while 69% said they would recommend it to others.