UK: The Government's New Approach To Voluntary Gender Pay Reporting (VGPR)

The Government's new approach to voluntary gender pay reporting (VGPR)

The Government has this month published a framework report entitled 'Think, Act, Report' to encourage a new voluntary approach to gender pay reporting. Whilst there was an expectation that this would be followed by a mandatory reporting regime, the Government has confirmed that the mandatory provisions in section 78 of the Equality Act 2010 will not be brought into force.

What is the aim of the new initiative?

The framework report has the stated aim of '"improving transparency on gender equality issues in the private and voluntary sector" and it is principally aimed at large and medium sized businesses with over 150 employees.

If you sign up what are you expected to do?

The report is not intended to be a panacea or a one-size fits all remedy, rather it is a step-by-step approach for employers to identify and analyse the barriers facing female employees, take action to address the issues, and report publicly on their progress. In particular, the report encourages employers to:

• Think about gender equality and check if they could do more using the workforce and pay measures
• Take action to address any differences that will ensure they get the best from their employees
• Report on what they have achieved through:

ACAS has also issued guidance for employers who are unsure about how to participate in the new initiative and breaks down the reporting into steps. The Equality and Human Rights Commission has also added a new section to its website to assist employers to understand how to achieve "equal pay".

How will the data be used and can it be misused?

Clearly, the object of VGPR is to reduce the gender pay gap (GPG) through accountability and transparency. Organisations can be, quite understandably, wary about firstly compiling data which might evidence a GPG, and secondly, publishing it internally and externally, for fear of promoting equal pay claims.

The fact is that, not knowing whether there is a GPR within your organisation does not mean that you do not have one or that will never become a problem. The initiative is therefore designed to encourage employers to find out whether they have a problem, and if they have one, to do something to resolve it.

Employers do however need to think about the consequences of compiling statistics because in any discrimination or equal pay claim, if the statistics are required by a claimant and exist, the employer will have a hard time avoiding disclosure. Only statistics collated for the purpose of taking legal advice may avoid disclosure. Employers are advised to seek legal advice in order to maximise privilege over sensitive data where practical.

What is the benefit of signing up to the initiative?

Disparities in gender pay can arise for many reasons, but employers may not always understand where differences have derived from. Actively understanding why certain people or roles attract different pay levels is necessary to remove any such inadvertent pay discrepancies. Addressing this may also reduce the risk of claims in the future.

The initiative is also well supported. As leading companies such as Tesco, BT, Unilever and National Grid have signed up to the government's new framework for voluntary equality reporting. As organisations sign-up to the initiative and gain positive publicity in doing so, for those that choose not to do so, they may be perceived as less attractive to existing and potential employees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.