I am pleased to address the House on the Second Stage of the Gender Pay Gap Information Bill 2021. The purpose of this Bill is to provide for a requirement that employers publish certain information on the differences in pay between female and male employees. The provisions of the Bill will initially apply to companies with 250 or more employees, with this threshold reducing to 50 or more over time. The requirement will apply in the private and public sectors once the employment threshold is met.
The gender pay gap is well documented globally. Recent research shows it is driven mainly by differences in working patterns between men and women but also by wage differences for gendered roles. It is hoped this legislation will go a long way towards improving understanding of the pay gap and incentivising employers to use whatever means they can to reduce it.
The gender pay gap has long been an issue of concern at EU level and in March 2021 the Commission published proposals for a draft directive "on strengthening the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms". Publication of the proposal meets a commitment in President von der Leyen's political priorities and in the EU gender equality strategy. The proposal focuses on two core elements of equal pay, namely, measures to ensure pay transparency for workers and employers and improved access to justice for victims of pay discrimination. The Council has commenced first reading of the proposals at working group level and first reading has also started in the European Parliament. I hope these proposals will complement the work we have begun with this Bill and enhance our efforts to address the gender pay gap.
In Ireland, the programme for Government, Our Shared Future, includes a suite of measures which will impact on the gender pay gap, with the most relevant to this debate being the commitment to legislate to require publication of the gender pay gap in large companies. The National Strategy for Women and Girls 2017-2020 also has a number of actions to address directly or indirectly the gender pay gap. The action relevant to this debate is No. 1.23 to "promote wage transparency by requiring companies of 50 or more employees to complete a wage survey periodically and report the results". Most recently, the report of the Citizens' Assembly made a recommendation to enact and implement this Bill without delay.
The work on preparing this Bill began with extensive consultations in August 2017 and I would like to acknowledge the work the former Minister of State, Deputy Stanton, did on this Bill. The views of interested parties were invited to inform the development of the package of measures to tackle the gender pay gap and to identify issues to be advanced through further discussion with union and employer stakeholders. Interested parties were invited to make submissions in writing, in particular to comment on the factors creating the gender pay gap and the actions needed to be taken. In all 38 written submissions were received by a wide range of individuals and organisations, which cited 14 specific factors and 253 suggested actions to tackle and address the existence of the gender pay gap. The top contributory factor, which attracted the largest number of suggested actions, was non-transparency in pay structures.
A national symposium of measures to address the gender pay gap was held in January 2018 and attended by more than 130 people. The symposium was addressed by an official of the European Commission, academics and other experts and representatives of the social partners, civil society and professional bodies. Following this, direct consultation on prospective wage transparency legislation with several key stakeholders, including IBEC, the Irish Congress of Trade Unions, the National Women's Council and Senator Bacik, took place. Officials also met the Irish Human Rights and Equality Commission, IHREC, the then Department of Business, Enterprise and Innovation and the Workplace Relations Commission, WRC. Many suggestions were put forward throughout these consultations.
On 7 February 2019, the Oireachtas Joint Committee on Justice and Equality issued its report on pre-legislative scrutiny of the general scheme. Since the publication of that report amendments to the enforcement framework set out in the Bill were made on Report Stage in Dáil Éireann. These amendments strengthen the Bill and ensure the enforcement provisions are both proportionate and workable, addressing a point raised in the report of the joint committee. I will discuss these amendments in more detail as I go through the main provisions of the Bill.
I would also like to acknowledge the work Senator Bacik and her Labour Party colleagues did on bringing forward the Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill, which was passed by this House under the previous Government. While the Government shares the objectives of that Bill, we are proposing a different mechanism for gender pay gap reporting and believe the Bill being brought forward today is the correct mechanism, which ensures IHREC has an oversight role and proportionate enforcement powers and provides individual employees with recourse to the WRC.
I will turn to the main provisions of the Bill. Section 2 provides for the insertion of a new section 20A in the Employment Equality Act 1998. This provides that the Minister shall, as soon as is reasonably practicable after commencement, make regulations requiring the publication of gender pay gap information. These regulations must include certain items of information and there is discretion to include additional items. The items that must be included are the mean and median gap in hourly gap between men and women, in bonus pay and in hourly pay of part-time male and female employees and the percentage of men and of women who receive bonus pay and benefits in kind.
Section 20A(1)(c) requires the publication of the reasons, in the employer's opinion, for any gaps and of the measures, if any, the employer is taking or proposes to take to eliminate or reduce gaps. This reflects a recommendation in the pre-legislative scrutiny report of the joint committee and came from other interests as well.
In addition to the required information which I have outlined, the regulations may provide for the publication of the following information: the mean and median pay gap between men and women on temporary contracts, the percentage of each pay quartile who are men and who are women and the publication of pay gap information by reference to job classifications.
Section 20A(2) provides that, in making regulations, the Minister shall have regard to the estimated costs of complying with and enforcing the regulations. Section 20A(3) provides for the threshold of employees above which the employer will be required to publish gender pay gap information. The key point is that employers with fewer than 50 employees will not be covered.
It also provides for the phased introduction of the requirements on certain employers to report, namely, that the regulations shall not apply to employers with fewer than 250 employees before the second anniversary of the making of the first regulations, nor to employers with fewer than 150 employees before the third anniversary. I will return to the thresholds and the phasing later.
Section 20A(4) provides that the regulations may prescribe, among other things, the classes of employer to which the regulations apply, subject to the thresholds I have just mentioned, the classes of employee and the classes of remuneration to be reported.
Section 20A(5) provides that the regulations may prescribe the form and manner in which and the frequency with which information is to be published in order to bring the information to the attention of the employees and the public. For example, the regulations might require the employer to send the information to the employees in addition to publishing it on the employer's website and uploading it on a central Government website. Publication will not be required more often than once a year.
Section 20A(6) provides for publication of gender pay gap information by public bodies. I amended the definition of a "public body" on the recent Report Stage in Dáil Éireann to provide the most complete and up-to-date definition. The amended definition of what encompasses a public body is based on section 10 of the Data Sharing and Governance Act 2019. The text of section 10 of the Data Sharing and Governance Act 2019 was chosen as it is the most complete and up-to-date definition of a "public body".
Senators may note that the definition states "a Department of State" rather than "a Minister of the Government" as provided for in section 10 of the Data Sharing and Governance Act. This move away from the precedent definition is to ensure that where a Minister has responsibility for more than one Department, an individual report for each individual Department is required. Essentially, the intention is that this legislation applies to the public as well as the private sector where the body in question is within the employment threshold.
Section 20A(7) provides for the situation in which the employer does not have access to pay information on employees. In that case, the regulations may require the person who has such access to give the information, or access to the information, to the employer so the latter can comply with the regulations. This arises in the education sector where teachers are employed by a school board but are paid by the Department of Education.
Section 20A(8) provides that the regulations may prescribe measures to ensure that personal data have undergone pseudonymisation before or when they are released. This means the processing of personal data in such a manner that the data can no longer be attributed to a specific person.
Section 3 is concerned with enforcement and inserts two new sections in the Employment Equality Act 1998. This section was amended on Report Stage in Dáil Éireann. The original section 85B provided for the appointment by the Minister of designated officers to investigate how employers prepare the information required to be published to ensure its accuracy. A policy decision was taken not to proceed with the appointment of designated enforcement provisions due to concerns around how this system would operate practically. This section was deleted on Report Stage in Dáil Éireann.
Section 85B contained in the Bill before Members was originally section 85C, with the deletion of the original section 85B it has been renumbered. I also brought forward an amendment to section 85B in the Bill before the House on Report Stage in Dáil Éireann. The section now enables the Irish Human Rights and Equality Commission, IHREC, to apply to the Circuit Court or to the High Court for an order requiring a person to comply with the regulations. A person who fails to comply with a Circuit Court order or High Court order is in contempt of that court. The Irish Human Rights and Equality Commission will have regard to the size of the company, the number of infringements, etc., when determining which court in which to issue proceedings.
Section 85C in the Bill before the House was originally section 85D, with the deletion of the original section 85B it has been renumbered. Section 85C allows for an employee to make a complaint to the Workplace Relations Commission, WRC, of non-compliance with reporting regulations by their employer.
The director general of the WRC or an adjudicating officer, to whom one would expect this function will be delegated, will investigate the complaint if satisfied that there is a prima facie case. If, on investigation the officer finds in favour of the complainant, he or she may make an order requiring the employer to take a specified course of action in order to comply.
This is the only remedy that may be ordered. For example, compensation may not be awarded, as it is not an appropriate remedy in this situation. Enforcement of WRC orders is through the District Court. This section was also amended on Report Stage in Dáil Éireann, subsection (4) of what was section 85D provided for an investigation to be carried out by the director general of the WRC in private. That was at odds with the findings of the Supreme Court in the recent Zalewski judgment which has implications for the procedures of the WRC in terms of proceedings held in private. The new section 85C removes the subsection requiring an investigation to be held in private. In addition subsection (7) provided for an appeal in the Labour Court to be heard in private, unless at the request of the complainant or respondent, the court determines to hold the appeal in full or so much of it as it does not consider should be treated as confidential, in public.
This has been amended at subsection (6) to allow for an appeal to be held in public, unless at the request of either party, the court determines there are special circumstances to hold the appeal, or part thereof, otherwise than in public.
Sections 85B and 85C adopt the approach of requiring a person to comply with the regulations rather than penalising the person for failure to comply. If they fail to comply they are in contempt of court. The Irish Human Rights and Equality Commission will have regard to the size of the company, the number of infringements, etc., when determining which court in which to issue proceedings. The Government believes that this more proportionate, court-based enforcement mechanism would ultimately prove more effective than a simple summary offence and fine system, which larger companies in particular might simply factor into costs instead of being motivated to comply.
Section 4 inserts a further category of "parties" into section 88 of the Employment Equality Act 1998. Section 88 of the 1998 Act provides for the form and content of a decision of the director general of the WRC or a determination of the Labour Court. Section 4 intends to include the complainant and the respondent where a decision or determination is made under section 85C, in the definition of "parties" to whom section 88 applies. Senators may note that section 4 in the Bill before the House incorrectly refers to section 85D which no longer exists. I intend to bring an amendment on Report Stage to remedy this.
Section 5 inserts a provision in the Irish Human Rights and Equality Commission Act 2014 to allow the Minister to request the IHREC to consider exercising its powers under section 82 of that Act. This section concerns the carrying out of equality reviews and the drawing up of equality action plans. It will be for IHREC to decide whether to exercise its section 32 powers following the Minister's request. For instance, the situation could arise that it becomes apparent to the Minister following publication of an employer's gender pay gap information on a central government website that the pay gap is abnormally large having regard to all relevant considerations. It would then be appropriate to draw it to IHREC's attention and ask it to consider using the powers I have mentioned.
Section 6 provides that the Minister shall review the Act before the fourth anniversary of commencement. This section was also amended on Report Stage in Dáil Éireann, with the fifth anniversary replaced by the fourth to ensure that reporting requirements are fit for purpose as we extend the reporting requirement to smaller organisations.
I look forward to hearing the views of Senators and to discussing the Bill in more detail on Committee Stage. I commend the Bill to the House.