I thank the committee for inviting the National Women's Council of Ireland to discuss the general scheme of gender pay gap information Bill. We appreciate the opportunity.
As committee members are probably aware the National Women's Council of Ireland is the leading national women's membership organisation. We are a feminist organisation campaigning for equality and advocating for women's rights. We have more than 180 member organisations throughout the country.
We believe that the gap in earnings between women and men, which stands at almost 14%, goes to the heart of economic inequality between women and men. It has serious implications for a woman's lifetime earnings, her life and career decisions and her ability to live in older years with a decent income. Unfortunately, there is no one solution to closing the gender pay gap. There are many complex and inter-related factors that influence women's employment opportunities and progress at work. These factors directly contribute to the existence of economic inequality and relate to issues of low pay and childcare.
We believe increased transparency and accountability around pay are vital in tackling the gap. In that respect we warmly welcome the Bill. Requiring employers to publish statistics on an organisational level will shine the spotlight for the first time on those organisations. An employer may even be unaware that it has a gender pay gap until it analyses pay information. Requiring employers to be more open about gender pay differences should bring pressure to bear on them to explain the reasons for those differences and to consider what they can do to eliminate them. Transparency around pay will ultimately help to improve the issue of gender-influenced pay.
Ireland is not alone in adopting this type of legislation. That is a positive point and to our advantage, as we have the opportunity to learn from other countries. While we warmly welcome the spirit and direction of the Bill, we call on the committee to consider a number of matters that we believe would serve to strengthen its overall scope. Currently, the proposed legislation will initially apply to companies with 250 or more staff. Then, on a phased basis, the provisions will extend to companies employing 50 or more staff. If this happens, the legislation is far less likely to have the same immediate impact on women in employment as the Private Members' Bill proposed by the Labour Party, which would have had immediate application to companies employing 50 or more staff, rather than having to wait for a given period.
Let us consider the threshold figures in more detail. The National Women's Council of Ireland sought to obtain the gender breakdown of those employed in small, medium and large businesses. It is rather difficult to get this data. We appreciate the fact that Senator Ivana Bacik raised this matter. The 2016 Central Statistics Office figures are from a certain sector of the business economy only. They cannot be disaggregated by gender. In any event, these are the figures we know. The total number of persons engaged in active small enterprises with fewer than 50 persons was 720,000. The number of persons engaged in medium-sized enterprises of between 50 and 250 persons is 290,000. The number of persons engaged in large enterprises, namely, those with 250 or more, is 467,000. Clearly, large numbers of people are working in small enterprises that will never be included within the scope of this proposed legislation.
We know from speaking to the members of the women's council and from speaking with women in general that they tend to be significantly represented in small and medium enterprises. In light of this we call on the committee to be more ambitious rather than rolling out this legislation starting with organisations with more than 250 employees. This type of legislation has long been signposted. The threshold for reporting should commence at a much lower figure. It should be extended to all those employers with at least 25 employees, the threshold adopted by our Icelandic neighbours.
Furthermore, organisations should be required to publish an explanation of any gender pay gap alongside the figures and, most important, an action plan for closing the gap, against which progress must be reported each year as part of normal reporting requirements. One of the major criticisms of the UK model is its failure to implement such a requirement. Civil penalties for non-compliance should be introduced at a level at which the cost of non-compliance is significant.
The Bill provides the ideal opportunity to address the discrimination inherent in wage negotiations. A person’s initial salary at an early job can affect salary at a later one because hiring managers often base their offer on previous pay. Research has shown that those who get lower salary offers are often women. The legislation should prohibit employers from asking about salary history or seeking that information through an agent or from other sources such as the applicant’s former employers. Employers should be legally required to state the minimum salary they are prepared to offer for an advertised role, regardless of whether it is advertised internally or externally, and generally prohibited from inserting terms in a contract that prevent employees from disclosing or discussing wages. Such measures would help to ensure that salaries reflect the qualifications, skills, experience and achievements of the particular employee and help to shift the emphasis from presenteeism to the quality and output of work done such that taking extended periods of time off of work would not unduly affect future wages. This is essential for women, who shoulder most of the burden of care and tend to have more career interruptions than men.
Increased pay transparency will, over time, improve fairness, and a more equal role for women in the workplace will contribute to equality and economic growth. Although the legislation is not sufficient to tackle the gender pay gap or its underlying causes, it is a very important step, and one we support, albeit with those reservations. It could be more ambitious.