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Equal Pay and Europe by Jill Rubery

The pursuit of equal pay in the UK has been hugely influenced by the European Union [EU].

This impact comes from:

The UK's road to equality has been strengthened and influenced by EU law but this impact depends upon key actors. The Equal Opportunities Commission now the Equality and Human Rights Commission and UK trade unions have made frequent use of European legislation and policy to promote gender equality. However, the UK has faced specific barriers to equality that mark it out from many other European member states. These relate to the characteristics of its regulatory, employment and welfare systems.

The EU and equal pay legislation

Equal pay was adopted as a core principle of the European Union when it was founded in 1957, originally as the European Economic Community. Article 141 of the European Treaty Article 141 of the European Treaty states that 'each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.' Although the UK introduced an Equal Pay Act in 1970, its impending entry to the EU in 1973 was undoubtedly one factor in this development. The 1970 Act only dealt with equal pay for the same work but in 1975 the EU directive on Equal Pay was passed based on article 119. A 1982 judgement by the European Court of Justice led to the UK amending the Equal Pay Act in 1983 in order to incorporate the concept of equal value into UK law. Other elements of EU legislation have had a more indirect impact on gender pay equality. These indirect effects come from directives requiring equal treatment in employment and training, equal treatment for part-time workers, protection of employment for pregnant women and rights to maternity and parental leave. Much of this legislation has had a stronger impact on the UK than many other EU member states. This is because legal employment rights were relatively underdeveloped in UK national legislation prior to the passing of EU directives on these topics.

The EU and gender equality as an objective of economic and social policy

The EU's commitment to gender equality as a social objective started with the legislative measures of the mid 1970s and continued with the launching, from 1981 onwards, of a series of action programmes for gender equality. During the 1990s, the EU also began to recognise the importance of gender equality for its economic objectives- particularly for employment policy:

  • In 1997, the EU developed its European Employment Strategy (EES) and declared equal opportunities between women and men to be one of its four pillars.
  • In 1998 an agreement was made to gender mainstream all of the employment policies within the EES: that is all measures should be considered for their impact, amongst other factors, on gender equality including the gender pay gap.

There are mixed views on the impact of these commitments on member states' actual policies and practices. The EES in principle promotes more and better jobs. In practice, more attention has been paid to raising the female employment rate than to generating the better jobs for women that are essential for narrowing the gender pay gap. The visibility of gender in employment policy has declined since 2005. However, the 2006 Roadmap for Equality between Women and Men and the 2007 Communication on Tackling the Pay Gap between Women and Men both renew the EU's commitment to reducing the gender pay gap.

The role of key actors in promoting the influence of the EU.

Trade unions in the UK have been actively involved in supporting cases relating to equal pay taken to the European Court of Justice and in the implementation of positive judgements. For example, six trade unions - public services union Unison, banking union Unifi and teaching unions, Association of Teachers and Lecturers, National Association of Teachers in Further & Higher Education, National Association of Schoolmasters/Union of Women Teachers and the National Union of Teachers -fought a six year and eventually successful campaign to establish that part-timers had equal rights to join an occupational pension scheme. This case relied on the notions established in European law that:

  • discrimination against part-timers is indirect sex discrimination
  • pensions constitute pay with respect to the equal pay legislation. These principles would not have been put into effect without trade unions and also the Equal Opportunities Commission supporting individual cases and campaigning for changes in both legislation and practice.

Equal pay in the UK: the key barriers to equal pay from a European perspective.

Women in all European countries face barriers to achieving gender pay equity. However, the precise nature of these barriers varies between EU member states Grimshaw and Rubery, 2001. The UK stands out as having one of the largest gender pay gaps in the EU15, particularly when all employees, full and part-time, are considered. Three problems in particular can be identified.

i) The low coverage of collective bargaining in the UK

The share of the workforce covered by collective bargaining in the UK is one of the lowest in Europe. Outside the public sector, collective bargaining is limited and takes place primarily at individual company or plant level. If a successful claim for equal pay is made in one company, there are no mechanisms for extending the benefits of this advance to female workers in similar jobs or companies. In the early 1970s, when the Equal Pay Act was implemented, the situation was very different. Trade unions actively and successfully campaigned to raise the female minimum rate to that of men's within industry-wide collective bargaining agreements. This increase for women in lower skilled jobs was paid throughout the whole industrial sector. It was this role of collective agreements in generalising the awards that resulted in a rapid increase in female earnings relative to men's. Between 1973 and 1977, the ratio rose for full-timers from 59% to 70% (Harkness, 1996) . Many of the EU15 countries have retained industry-level agreements and many even have mechanisms that extend agreements to all companies in the same sector, even if they are not direct signatories. UK trade unions have, however, introduced new gender sensitive grading structures into many public sector areas such as the NHS and Local authorities.

ii) The high overall level of wage inequality

One cause of the gender pay gap is that women tend to be concentrated towards thebottom of the wage distribution. Where the gap between the high and the low paid is very large, the penalty of being concentrated at the bottom is much higher. The UK has a high level of wage inequality by international standards and until 1999 there was no National Minimum Wage (NMW) to protect those at the very bottom of the wage distribution. It is primarily women, particularly those in part-time jobs, that have benefited from the introduction of the NMW. However, wage inequality continues to be a problem in Britain. Earnings inequality is increasing at the top end, primarily benefiting men.

iii) The high share of part-time work

Not only do a high share of UK women work part-time, but they also face the highest pay penalties for working part-time in Europe. Pay penalties for part-timers are lower in other countries with high levels of part-time work, such as the Netherlands, in part because of greater opportunities for part-time working in higher level jobs than in the UK. Part-time workers in the UK are often concentrated in specific firms or occupations, segregated from full-timers. Since 2003, parents of children under sixhave opportunities to request flexible working arrangements. This is leading to more women returning to their old jobs after maternity leave, but on a reduced hours basis. The long term effect could be to narrow the part-time pay gap. In the past, UK women frequently sought new jobs with new employers if they wanted part-time work after maternity leave. Factors that have kept many women in short hours and low quality part-time work include:

  • lack of affordable childcare
  • long hours working culture which makes full-time working difficult for those with care responsibilities.

The UK has been responding to the EU commitment since 2000 to improve childcare coverage, although there is still a long way to go. On working hours, however, the UK has insisted on maintaining a voluntary opt out from the 48 hours maximum working week stipulated in the EU Working Time Directive. It is the UK that is the main user of this opt out arrangement.

Professor Jill Rubery Professor of Comparative Employment Systems Manchester Business School

Further reading:

Damian Grimshaw and Jill Rubery 2001 The Gender Pay Gap: A Research Review Research Discussion Series Equal Opportunities Commission Manchester.

Damian Grimshaw and Jill Rubery 2007 Undervaluing Women's Work Working Paper Series no.53 Equal Opportunities Commission.

The European Industrial Relations Observatory (EIRO) Gender pay equity in Europe European Foundation for the Improvement of Living and Working Conditions.

Harkness, S. (1996) 'The gender earnings gap: evidence from the UK', Fiscal Studies, 17 (2): 1-36.

Alan Manning and Barbara Petrongolo 2004 The part-time pay penalty Women and Equality Unit, 2004

Janneke Plantenga and Chantal Remery The gender pay gap - Origins and policy responses A comparative review of 30 European countries European Commission Directorate-General for Employment, Social Affairs and Equal Opportunities Unit G.1

Jill Rubery, Damian Grimshaw and Hugo Figueiredo 2005 "How to Close the Gender Pay Gap in Europe: towards the mainstreaming of pay policy", Industrial Relations Journal, Vol. 36, 3, pp. 184-213