Employment Rights Bill

Committee (10th Day) (Continued)

Amendment 275

275: After Clause 140, insert the following new Clause— “Secretary of State: equal pay enforcement function(1) Payroll and other company information required by HMRC for the purposes of taxation may be used by the Secretary of State for the purpose of monitoring compliance with the equal pay duty under the Equality Act 2010. (2) The Secretary of State may conduct more detailed investigations into equal pay compliance on the basis of such monitoring of payroll and other information and an employer must take all reasonable steps to cooperate.(3) In the event that the Secretary of State is of the view that a particular employer is in breach of its duties to provide equal pay for like, equivalent or work of equal value, they may—(a) issue a private notice to the employer, advising of that view and recommending rectifying measures in relation to past discriminatory pay or future pay practices and policy,(b) issue a public notice with the type of advice set out in paragraph (a) above, or(c) seek such relief as would be open to individual employees in the appropriate court or tribunal, on their behalf.(4) A court or tribunal finding in favour of such an application may, in addition to awarding appropriate compensation to victims of discriminatory pay practice, impose a civil penalty, not exceeding 10% of the employer’s annual turnover, as it finds appropriate in all the circumstances.(5) The Secretary of State may employ algorithmic technology including artificial intelligence software in the monitoring of equal pay compliance but must provide any court or tribunal in which relief is sought, with details of any relevant software and evidence of the effective functioning of the computer system employed in the monitoring and investigation of the employer in question.”Member’s explanatory statement This amendment seeks to probe why equal pay laws have been left to individual employees to enforce by personal litigation, and how an element of state enforcement might assist such employees in achieving their rights to equal pay as provided for under the Employment Act 2010.

My Lords, I hope that the principle that sits behind my probing amendment, like the principle of equal pay for equal or equivalent work, is uncontroversial and therefore that I need not detain the Committee for too long—I am a sort of guest of this Committee, when some noble Lords have been really putting the hard yards in for so long. Over the years, I have been incredibly grateful to discuss my concern about equal pay legislation with a number of Members in this Committee and noble Lords in general. I have been particularly grateful to my noble friend Lady Jones of Whitchurch and her officials, who have been very generous with their time and responded to me by agreeing to consider my proposal as part of their preparations for a more specific Bill—not too long in the future—that will cover these issues.

There has been a broad consensus in British politics for some years that there should not be discrimination in pay. We have had the Equal Pay Act since 1970 and successor legislation; I do not believe it has been controversial in party-political terms. That will be 75 years of equal pay legislation in December, and still nowhere near equal pay. My own view is that, right from the beginning, there was a fundamental design fault in the legislation—which was so brilliantly “Made in Dagenham”—because the enforcement mechanism was wanting.

I have said before there is no other area of regulation in this country that we take seriously that we would leave to an individual citizen or consumer to enforce for themselves. Imagine school standards, food standards, nuclear safety standards, health and safety standards, environmental standards and so on if the only enforcement mechanism in the legislation was for the individual citizen to investigate the regulatory breach and then, with or without the support of a trade union or an NGO, to sue for themselves. That has been the position for individual workers under equal pay legislation from the very start, and that is problematic.

We are always having debates about the AI revolution. I am not a total Luddite, but I will be honest that I am occasionally a bit nervous about some of the potential implications of unregulated AI. However, there is enormous potential here. HMRC, as I nod to in my amendment, already has access to payroll information. With appropriate statutory gateways, it would not take much, working with software developers, to be able to do initial spot checks on payroll to look at potential inequalities. It is certainly not as simple as that but there is more that could be done, in particular at this moment with AI’s potential for examining and analysing payroll databases.

This kind of approach could be a very positive development. We could finally get a bit closer to achieving that dream made in Dagenham nearly 75 years ago, and closer to achieving equal pay for equal work. I beg to move.

My Lords, I will speak very briefly on this amendment. It is quite an ingenious and intelligent amendment that is quite superficially attractive. I know the Minister will give it proper and due consideration.

My only problem is that it draws an analogy that does not really stand up to close scrutiny. I defer to the noble Baroness’ greater legal expertise, but when you are employed, there is a personal contract between the employee and the employer that you have freely entered into. It may be that, in the course of that contract, your pay falls behind and there are societal and economic reasons why you are paid different amounts of money. We could be here all week discussing that.

However, it is not the same as the relationship you have with a nuclear power station, where you have the expectation that you will be kept safe from accidents and drastic events; with your local water authority and the expectation that you will not be flooded; or when you go on an aeroplane that, God forbid, that aeroplane will not crash. You do not have that direct contractual relationship with those bodies. In other words, you essentially defer that responsibility legally to other bodies to intercede on your behalf. Therefore, this amendment, in a circuitous way, undermines the very concept of a one-on-one contractual relationship, so I do not think it is analogous.

Having said that, I would not particularly oppose this amendment. It is ingenious and interesting but, with all due respect, I do not think the noble Baroness draws an accurate analogy between the two.

I am grateful to the noble Lord for taking the argument so seriously. Of course, I disagree with him. When you go to eat in a restaurant, go to school or buy a can of baked beans, you may well have a private, contractual relationship with the supplier of that good or service. None the less, the state has decided that it needs to intervene because these power relationships are not all equal and there is a public good in the baked beans being safe to eat, the school delivering a good service, et cetera.

So, from the moment the UK Government and the UK people took the democratic decision that there should be laws to protect school standards, food safety, health and safety and non-discrimination in pay—supported by people from all parties, including in your Lordships’ House—it is not just a matter of private contract between two parties anymore; it is actually a matter of public policy and a wider rule of law point. The non-discrimination point has been non-partisan in this country for some years.

Most equality legislation has, perhaps, been promoted by Labour Governments, but the disability rights Act is the obvious exception. There has been a bipartisan consensus that we should not discriminate against people because of their sex, including in pay. We just have not been delivering on pay as well as we have been delivering in other areas of women’s lives. Therefore, the analogy with school standards, health and safety standards and food standards works. If we want to achieve equal pay, we have to take it seriously in enforcement.

Just to come back to the noble Baroness, would she therefore extend the provisions of her amendment to all protected characteristics under the Equality Act 2010?

Yes, I would.

My Lords, that was a most interesting exchange, and I thank the noble Baroness, Lady Chakrabarti, and my noble friend Lord Jackson for it. As I have said many times, I am not a lawyer, but as a broader observation, there seems to be a slight philosophical discussion developing this evening between intervention and initiation when it comes to various state interventions in certain areas of law.

I have no doubt at all that the intention behind the noble Baroness’s amendment is to strengthen the enforcement of equal pay laws. As she rightly says, we all support that objective, but we feel that this particular proposal is somewhat flawed, not least because we just do not think it will work. At its core, the amendment risks conflating pay disparity with unlawful discrimination. It assumes that if a pay gap exists, there must therefore be wrongdoing. As the noble Baroness, Lady Chakrabarti, acknowledged, it is not that simple, because pay disparities can and often do arise for entirely legitimate reasons, such as differences in experience or qualifications, performance geography or even negotiated terms, to my noble friend Lord Jackson’s point. To suggest that a mere statistical difference is indicative of discrimination is to abandon the nuanced legal framework carefully set out in the Equality Act 2010. While paying a great deal of respect to the arguments—and there is considerable merit in this—we cannot support this amendment.

My Lords, like my noble friend Lady Chakrabarti, I am also an occasional visitor to this Committee, but I am very pleased to be here this evening to address her Amendment 275. I thank her for recognising the engagement there has been with the Government and others on this up to this point.

Certainly, the Government want to make very clear that we share the broad aims behind this amendment. Over 50 years after the Equal Pay Act 1970 and 15 years after the Equality Act 2010, it is clear that equal pay has not yet been achieved. That is why the Government have committed to strengthen the equal pay regime and end pay discrimination. I share the concerns of my noble friend in identifying the challenge of enforcement in this case. There is more we can do to ensure that the onus does not fall only on women to find out whether they are receiving the same pay as their male colleagues for equal work and to take enforcement action against employers in the case of a breach.

It is possible to envisage, in relation to the points made by the noble Lord, Lord Jackson, a system in which you have both the contractual arrangement and the ability to take individual action as is the case now and an enforcement body that supports people doing that in general terms and identifies thematic or consistent ways in which equal pay is being breached. That is why the Government are committed to establishing an equal pay regulatory and enforcement unit with the involvement of trade unions. As part of this, we will carefully consider how we can improve the enforcement of the equal pay scheme.

On 7 April we launched a call for evidence on this issue and wider equality law to ensure that any steps we take will lead to a meaningful strengthening of protections against pay discrimination—an objective that I am sure my noble friend will share. It is important that the Government are able to develop these changes in partnership with business, trade unions and civil society to ensure that the law works for everybody. For that reason, I hope my noble friend will recognise that this will be a more appropriate process through which to address these issues. As she suggests, we will give these areas very close consideration in advance of the equality, race and disability Bill.

My apologies to the Committee. It has of course been 75 years since the European Convention on Human Rights and 50 years since equal pay legislation—forgive that rather glaring howler. I am grateful to the noble Lord, Lord Jackson, in particular, and to my noble friend the Minister, whose officials have been very generous and thoughtful with their time. I look forward to watching their thinking develop on this forthcoming legislation. With that, I beg leave to withdraw.

Amendment 275 withdrawn.

Amendments 276 to 278 not moved.

Clause 141: Offences by bodies corporate

Amendment 279 not moved.