Co-authored by Catherine O'Flynn and Richard Smith of William Fry
On October 25, 2017, the Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill passed the Committee Stage of the Irish Senate. The bill seeks to improve upon the Anti-Discrimination (Pay) Act, 1974 and to close the existing pay gap between men and women in Ireland which, according to the most recent published figures, is 13.9 percent. The average pay gap across the European Union is 16.7 percent.
The bill contains provisions for increased monitoring and publication of gender pay gap data and is provisionally enforced by the Irish Human Rights and Equality Commission (IHREC).
If passed, the IHREC, which already has the power to require an employer to carry out equality reviews, would be given the power to prepare a scheme requiring companies with 50 employees or more to publish the results of such a review. Failure to comply could lead to a fine of up to €5,000 (USD 6,102: GBP 4,437). For most companies, more so than the fine, the real risk lies in reputational damage—either because of a failure to report or reporting a wide pay difference.
The equivalent legislation in the United Kingdom requires employers with more than 250 employees to disclose gender pay data.
Government amendments, to be compiled during the upcoming report stage, will likely see the bill focus, initially, on larger employers. Commentary surrounding the bill suggests that the government may seek to raise the qualifying threshold to 100 employees.
It is likely that, following the report stage, an amended bill will be put back to the Irish Senate early in 2018. While aspects of the bill are yet to be finalized, its central aim of eradicating the gender pay gap currently has cross-party support. It would, therefore, seem likely that government-led measures would be enacted in 2018.
Employers will want to assess any gender pay imbalance before this bill becomes law so they have time to address its implications and understand the cause of any differences. Practical steps that employers can take now in order to prepare for the potential commencement of this bill include reviewing criteria or parameters for the exercise of discretion in the award of pay increments or bonuses and assessment of the annual review process.
Some employers have found that introducing and internally publishing fixed salary and bonus bands has been beneficial in terms of avoiding the HR disruption that can follow pay reviews.
Currently, female employees who feel that they are not being paid the same as comparable male employees, may bring a claim for equal pay under the Employment Equality Acts 1998-2015 to the Irish employment tribunal, the Workplace Relations Commission (WRC). If the claim is successful, the employee may be awarded up to three years remuneration in arrears, prior to the referral of the claim to the WRC, attributable to the failure to provide equal pay in addition to an order for equal pay from the date of referral. One imagines employers whose gender pay reports show an unjustified gap will be more likely to face equal pay claims.
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