Workplace Gender Equality – Will 2018 be a Tipping Point?

James Davies and Lucy Lewis, Lewis Silkin LLP

WWL Thought Leader James Davies and Lucy Lewis at Lewis Silkin assess the impact of recent movements towards and campaigns for gender equality on the workplace.

workplace

Two things happened in late 2017 and early 2018 which promise to transform the landscape of workplace gender equality.

On 5 October 2017, The New York Times published allegations, made by Rose McGowan and Ashley Judd, of sexual harassment against media mogul Harvey Weinstein. This unleashed a wave of further allegations against Weinstein and others, and the launch of the #MeToo movement around the world.

The second development was the coming into force in April this year of the obligation on UK employers of 250 or more employees to report pay gaps between men and women. While this law applies only in the UK, it is representative of initiatives in a number of jurisdictions to tackle stubborn inequalities that equal pay and discrimination laws have had only limited impact in addressing.

 

GENDER PAY GAP

Last year, the World Economic Forum published a report that looked at the gender pay gap in 144 countries. The Nordic countries lead the way, with Iceland having the smallest gap and Norway, Finland and Sweden following in second, third and fifth place respectively. Perhaps surprisingly, Rwanda breaks up this Northern European monopoly at the top of the chart with the fourth smallest gap. The UK came in 15th and the US 49th. Yemen lagged in 144th place.

Iceland is continuing to take proactive steps towards gender equality with a commitment to eradicate its gender pay gap by 2022, and the introduction of a new law requiring employers with more than 25 employees to prove they are paying men and women equally or face a fine.

Recent weeks have seen swathes of UK employers publishing their gender pay gaps, with the media drawing attention to those with the biggest ones. 

Employers have had to report on: the mean and median gender pay gap; mean and median gender bonus gap; the proportion of men and women receiving bonuses; and the proportion of men and women in each quartile of the organisation’s pay structure. There is the option for employers to add a narrative explanatory note and also a note on their proposed actions.

UK law requires that the information (and narrative) is published on the employer’s website and kept there for three years, allowing year-on-year comparisons to be made by current and prospective employees as well as clients or customers (and the media).

This has forced employers to look at how best they can meaningfully respond to the pay gaps that most of them face. Promises to do better echo far and wide, but it is not always easy to determine what concrete action to take. The reasons for the gap are likely to be complex and many. Some will be societal and require political fixes. In the UK, the introduction of shared parental leave has done little to change the reality that primary childcare responsibilities still fall disproportionately on women. 

Nonetheless, there is likely to be much that employers can do to address matters, including, for example: training managers to identify unconscious bias; supporting flexible working arrangements; identifying and supporting senior female role models; working within sectors to increase the talent pool of women in under-represented roles; and ensuring pay and promotion decisions are transparent, consistent and reasoned. 

UK gender pay gap reporting has highlighted not only the overall pay gap between men and women, but also the fact that the most significant contributing factor is the low numbers of women in senior positions. Cranfield University’s annual Female FTSE Board Report looks at the gender balance on the boards of the UK’s largest companies. The 2017 report showed that less than 10 per cent of executive director roles are filled by women, even if this figure continues to inch upwards each year.

 

REPUTATIONAL ISSUES

Gender pay equality has been propelled to become a top priority in British boardrooms to an extent that is rare for employment law reforms. In the UK, equal pay legislation has been in force for more than 40 years but, although progress has undoubtedly been made, few businesses were taking real and sustained steps to understand and address their gender pay gap until this year.

The risks and costs (both personal and financial) for potential claimants have resulted in few equal pay or discrimination claims being filed and even fewer pursued to a hearing. Equal pay law in the UK is also particularly complex, meaning it has often proved an ineffective remedy with claims taking many years to be heard.

The factor that is really driving change is the reputational damage from being seen not to take gender workplace issues seriously. Probably for the first time, companies’ most senior executives want to understand any pay disparity because they appreciate the potential adverse publicity from not being able to demonstrate year-on-year improvement in the reportable statistics. 

Reputational damage is proving to be a far more significant concern for most employers than the possibility of a legal claim. It can be more immediate, less controllable and far more costly.  

 

SOCIAL MEDIA

The focus on reputational damage reflects another development that is profoundly affecting employer attitudes, namely the facility for individuals to communicate globally through social media. 

In 2016, Nicola Thorp was sent home from her receptionist job for not wearing sufficiently high heels. This quickly attracted public and media attention after she posted her experience on Facebook and her resulting online petition attracted 150,000 signatures. 

The UK government became involved and the Women and Equalities Committee published a report on high heels and workplace dress codes. While recognising that the law covered discriminatory dress codes, the report found that it was not in practice always an effective tool to stamp out bad practices. Social media made Nicola’s Thorp’s story a catalyst for change and many employers were forced to address their dress code policies.  

The cascade of allegations arising from the #MeToo movement that have overwhelmed parts of certain industries could not have happened to the same extent if victims of harassment had not had such direct access to the public via Twitter and other social media channels. This aspect of the #MeToo phenomenon has forced employers to confront the reality that traditional grievance processes have failed to give many women a voice to report workplace sexual harassment. Clearly, a very significant number of women of varying ages, and across all sectors, have been the victim of such unreported behaviour at work. 

 

RESPONDING TO #METOO

So for employers, the challenge is to do all they can to provide a working environment in which the risks of harassment and discrimination are reduced as far as possible. In other words, an environment in which victims are empowered to speak up and decisive action is taken when harassment is discovered. 

The demand for specialist training for managers in handling allegations of sexual harassment has increased exponentially. These issues are invariably difficult to handle. Very often a complainant will want assurances of confidentiality, which are difficult to give if the alleged harasser is to be given a fair opportunity to defend himself or herself. Care needs to be taken because while the great majority of allegations are likely to be genuine, malicious or spurious claims do arise. These can, moreover, be difficult to detect where there is often no evidence apart from the accounts of two individuals.

Employers should act proactively to develop new pathways for employees to raise concerns internally, rather than on social media platforms. One of the biggest barriers to reporting sexual harassment has been an unwillingness to raise issues formally through an employer’s grievance process. The procedure is often not only cumbersome, but it allows little room for effective resolution (generally focusing on a grievance being upheld or not, rather than changing behaviour).  

One specific initiative that promises much is the Old Vic’s Guardians Programme. Responding to the Kevin Spacey harassment allegations, the Old Vic Guardians are a group of trained staff who offer a confidential outlet for colleagues to share concerns about the culture at work. The intention is clear: an employer can only effect real change if it is aware of the issues, so it needs to create an environment in which people are better able to speak up.

 

REOPENING OF HISTORIC MATTERS

#MeToo has resulted in individuals raising matters that occurred many years ago. This has created practical challenges for employers who recognise the importance of taking complaints seriously, but who also need to ensure that alleged harassers are entitled to a fair hearing before allegations are upheld.

Among these may be complaints that employers considered done and dusted years or even decades ago. Reopening matters dealt with in the past raises complex employment law issues. The changed environment has highlighted the limitations of confidentiality or non-disclosure agreements commonly entered into by employers and employees when resolving complaints. In the UK, the Solicitors Regulatory Authority has issued guidance to lawyers on the use of non-disclosure agreements. The purpose is to address some of the issues around perceived “silencing” of victims that have received much media attention in high-profile cases.

 

NEW SKILLS

Employment lawyers faced with this changing world need to adapt. Expertise in employment law alone is no longer enough and we must, for a start, develop a better understanding of criminal law. Claims of harassment may amount to allegations of a crime having been committed, so the lawyer’s advice must consider any duty to report this – but also the victim’s wishes, which will often be to avoid police involvement.

Lawyers dealing with allegations of harassment must also consider the reporting obligations to any relevant professional or regulatory body. In addition, managing reputational risk involves understanding defamation law and the scope for addressing confidential or false reports appearing on social media. 

Outside legal considerations, we need to be able to help our clients review and change their policies and procedures to drive the sort of cultural change which it is clear so many want to achieve. These are not (yet) areas with which many employment lawyers are familiar.

This year marks the 100th anniversary of women first being given the right to vote in the UK. The past few months have forced many to accept that, despite evident progress, we are not as far along the road to equality at work as we might have thought. Although the law has been (and will continue to be) an effective driver of sustained social change, the recent media scrutiny of workplace gender equality has held up a mirror to many employers’ complacency. That might be enough to make 2018 a tipping point. 

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