Equal Pay

Sandra Osborne Excerpts

Wednesday 18th March 2015 Westminster Hall

[Emily Thornberry (Islington South and Finsbury) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Weir. I thank hon. Members for taking the time to discuss this matter with me and to give their points of view. I hope that this debate will be part of a larger one. It is about time we had that.

Forty-five years ago, Barbara Castle’s Equal Pay Act 1970 inspired a generation of young women and girls, which included me. I was a member of St Mary’s church choir in Guildford the year the Act was passed and I was galvanised into action when I heard that the boys in a church choir in the same parish were getting paid twice as much as we were. With my friends, Bryony and Lesley, I wrote to the rector to complain about that great injustice. That did not go well. He showed what he thought of our protest in his next school assembly when he gave us an honourable mention in his sermon on avarice and greed. While I was inspired by that landmark law, I never imagined that I would be here today, talking about the need for a new one. However, like many other products of the 1970s—Status Quo, mood rings and cassette tapes—the Equal Pay Act has not really stood the test of time.

Thanks to the hit film and west end musical “Made in Dagenham”, many who were not around at the time are now familiar with the circumstances that helped the Equal Pay Act into being. In 1968, women sewing-machinists at Ford’s Dagenham plant walked out after their jobs were classified as less skilled, allowing managers to pay them 15% less than men doing comparable work. The women, who made car seat covers, managed to bring about a complete halt in the plant’s car production during their three-week strike. However, much more than that, they were the catalyst for a series of events that included a 1,000-strong rally for equal pay in Trafalgar square the following year, which culminated in the passage of legislation that, for the first time, explicitly outlawed the unequal treatment of men and women with regard to pay and terms and conditions of their employment.

On Second Reading, Barbara Castle rightly hailed the Equal Pay Act as an

“historic advance in the struggle against discrimination in our society”.—[Official Report, 9 February 1970; Vol. 795, c. 914.]

It certainly was an advance. Today, the wage gap between men and women is a quarter of the size it was at that time. I am afraid, however, that that was not a perfect solution, as Barbara acknowledged at the time. As anyone who was around then will know—as will those who have seen “Made in Dagenham”—the Equal Pay Act was a product of a time when, all too often, pay discrimination was blatant. Many women knew that they were being paid less than their male colleagues for no reason other than being women. The Act was crafted to fit the challenges the situation presented and the time of its passage. As such, its approach was essentially reactive. For example, a woman had to find a comparator: a male colleague who was paid more for similar work. She then had to marshal evidence to present to a tribunal. If successful, she would be compensated for loss of wages and achieve equal pay for the future.

That sounds like an entirely reasonable and simple solution, and at the time it was, but a law written to give women the tools to fight blatant discrimination was, perhaps inevitably and understandably, a blunt instrument. For a start, compensation paid to an individual was limited to that individual. At that stage there was no understanding of the importance of looking also at the impact on others affected in the same way and there was no requirement for offending employers to correct practices that led to such discrimination in the first place. Therefore, unless a claimant joined in an action at the outset, a sister colleague working in the same plant, doing the same work, would have to relitigate the matter from scratch even if her colleague had made a successful claim in identical circumstances. It has never been easy to take an employer to a tribunal, even before the near disappearance of legal aid for employment law cases and the introduction of tribunal fees that have led to an immediate 79% drop in the number of equal pay claims and that have been called—I think rightly—a tax on justice. However, there is more to it than that.

A fundamental problem with the Equal Pay Act is that its authors could not have predicted the extent to which the rise of fractured employment practices and insecure working have changed the context in which the law operates today. As Karon Monaghan, QC, a leading employment law specialist, has pointed out, the requirement that a male comparator be employed by the same employer, or an associated employer at the same establishment, causes

“very significant disadvantage to women employed in public sector services that have been contracted out to private contractors”.

Similarly, the increased fragmentation of pay setting in large organisations has undermined women’s ability to bring a claim under the Act. Robertson v. the Department for Environment, Food and Rural Affairs is a case in point. Civil servants employed by DEFRA sought to bring a claim using a male comparator at the Department for Transport. The Court of Appeal held that, although civil servants were all employees of the same Government, the claim could not be directed at a single source because pay was devolved for individual Departments to determine.

Many other loopholes have helped mire the legislation in inefficiency. Perhaps the most ridiculous is that the law explicitly states that a comparator must be someone employed at the time. Therefore, if a woman leaves a job and a man takes it and gets paid much more, that cannot be used as a comparator. Frankly, that is ridiculous and flies in the face of common sense. That is exactly the sort of thing that should be classed as discrimination and that any Equal Pay Act ought to deal with. I should clarify that I am not by any means blaming the authors of the 1970 Act for flaws that have bogged the legislation down in the intervening years. They were pioneers in the fight for equality and I applaud them. My point is simply that they were addressing the circumstances of their time and what has become increasingly clear to me and others who have studied this issue is that if we truly want to eradicate unequal pay once and for all, we need to follow their example and craft a new law that is fit to meet the new challenges of our time.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

I congratulate my hon. Friend on securing this important debate. When the Equality Act 2006 was passed, it was believed that voluntary pay audits would help to solve the problem. They have not, but she is illustrating how they are not the answer in any case. Does she agree that we need to take a whole new look at the law on equal pay?

[Emily Thornberry]

I agree completely. While I am pleased that, at last, the Government have now said that they will introduce that section of the Act, we have wasted a large amount of time on arguing over this matter. That minimal change could and should have been implemented much earlier than it will be. However, progress is progress and that should be recognised. I think that leaving it to the good will of companies to do audits led to only five of them doing them. Clearly that is not anything like sufficient.

To go back to Second Reading of the 1970 Act, Barbara Castle was prescient in asking, “What, then, of evasion?” She knew that there were circumstances—foreseen or unforeseen—that could allow the spirit of the law to be undermined. At the time, she said:

“I have no doubt that some employers will try it on…undoubtedly, pockets of discrimination will remain—unless women organise to put a stop to it.”—[Official Report, 9 February 1970; Vol. 795, c. 928.]

A number of women have followed on from Barbara Castle. Her fighting spirit has lived on through the generations of Labour women who succeeded her and in such a debate it is only right that I recognise them. My right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), who joined Parliament when it was 97% male in 1982, has led the way in fighting for many changes that we take for granted today, such as a national minimum wage; longer maternity leave; higher maternity pay; the Equality Act, as has been referred to; and measures to promote pay transparency, which are a vital tool in tackling pay inequality.

Transparency must be the bedrock of a renewed effort to close the wage gap. As my hon. Friend the Member for Rotherham (Sarah Champion) said when making the case for her Equal Pay (Transparency) Bill:

“Pay transparency would push companies to focus on why the pay gap still exists”.

Further, she said that it

“places the responsibility on employers to be actively conscious of the law on equal pay, and to have policies to address the gap.”—[Official Report, 16 December 2014; Vol. 589, c. 1301.]

She is absolutely right. Perhaps it is a call to action.

SportsDirect (USC Dundonald)

Sandra Osborne Excerpts

Tuesday 27th January 2015 Westminster Hall

[Mr Donohoe]

I am coming to that, but he does not care a damn. That is clear, given what I am about to say.

The USC Dundonald situation is a murky affair. It leaves unanswered a lot of questions about the way some businesses are allowed to operate. For instance, did Diesel seek a winding-up notice on USC as a result of unpaid bills, as claimed in some reports? That is an answer that I need this afternoon. If so, what alternative courses of action were considered by SportsDirect—such as, for example, paying the bill to its loyal workers at Dundonald? Was USC/SportsDirect’s action in seeking administration a response to the claim made by Diesel or was it initiated by the company separately? Was there a delay in the timetable for granting administration and, if so, what was the impact on the work force and the potential timetables for redundancy and required consultation on both redundancy and business plans? Was that brought to the notice of the Department for Business, Innovation and Skills? What will the cost to the public purse be of supporting the 245 people who are out of work without back pay, holiday or redundancy payments and who have bonuses of as much as £12,000 outstanding?

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

I congratulate my hon. Friend on obtaining the debate. He is working hard on the issue, and he knows that many of my constituents were also employed in the business, and have lost their jobs because of this debacle. Yet again, a company in Ayrshire has behaved disgracefully —my hon. Friend knows what happened with the former coalfield sites. Is there a need to look at the way companies are allowed to do such things, treating employees so despicably, and to hold them accountable?

[Mr Donohoe]

I am grateful to my hon. Friend, whose constituency neighbours mine, as does that of my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson). I thank them for their support. I do not see any difference between the cases referred to, which is why there is a need to examine the law to protect workers in such circumstances. It is blatantly obvious that that does not happen now.

How long is it likely to take for the employees to receive payments from the administrators? Will employees get 100% of the money due to them? I doubt it. What sanctions can be imposed on the company for failing to consult employees about the future of their roles at the Dundonald site, or about redundancy? Given that all the companies in the exercise are owned by SportsDirect, is not it just a scam to let SportsDirect off its financial responsibilities to a less successful part of Ashley’s estimated £3.3 billion fortune?

--- Later in debate ---

[Jo Swinson]

I will happily talk to the sports Minister about those issues, and obviously there are specific issues for the Scottish Football Association to consider. Insolvency Service investigators are already in contact with the joint administrators of USC. That is at an early stage because the administration is fairly new, which affects the information that can be provided, but there is a legal duty to provide a confidential return to the Secretary of State about the directors’ conduct. Although the administrators’ view about that is certainly relevant, ultimately their assessment of whether there are grounds for disqualification is based on the Insolvency Service’s independent view and conclusions.

Directors can be disqualified for anything between two and 15 years. It is also worth noting that, in addition to director disqualification proceedings, the Insolvency Service can exercise its powers to investigate any UK company where it suspects misconduct. We are making it easier for disqualification proceedings to be brought where other laws have been broken—it is currently possible, but we want to make it crystal clear that it should be easier. Measures in the Small Business, Enterprise and Employment Bill explicitly state that, in deciding whether someone should be disqualified, the criteria that courts will be required to consider will be extended to include breaches of legislation. That could include health and safety law, immigration law or employment law.

[Sandra Osborne]

I have been listening to what the Minister has said. In my constituency, directors walked away from coal mines leaving £140 million of damage. I have been pursuing that matter with the insolvency people for two years and nothing has happened, so she will forgive me if I am slightly cynical about what she is saying.

[Jo Swinson]

I will be happy to look into the specific issues that the hon. Lady raises. Although the powers already exist, we recognise that making it more explicit that breaches of law can be considered in the disqualification process will make such cases easier. That is why we are changing the law. I will happily look separately at the specific case that she is pursuing.

I turn now to pre-packaged administrations, or pre-packs. They have been discussed in this House on many occasions, because there are understandable concerns about them. In a pre-pack, the sale of the viable parts of an insolvent company’s business is arranged before the administration starts and concludes shortly after the administrator is appointed. In the case we are debating, the administration has allowed the majority of the business, including more than 600 jobs across the UK, to be transferred to the purchaser, Republic, although unfortunately another 84 employees have lost their jobs.

It is important that we establish whether the pre-pack represented a necessary step to save an insolvent business, or if, as has been suggested, it was an abuse of the insolvency process. I reassure hon. Members that officials are looking at that as a matter of urgency. The changes that we are making, following the review of pre-packs by Teresa Graham, will mean that by spring there will be new checks and balances on pre-pack administrations where the sale is to a connected party, so that there is independent evaluation of whether that party is a viable business with a viable underlying business model that will not simply run into the same problems as the business in administration; there will also be evaluation of whether the sale represents the best value.

Oral Answers to Questions

Sandra Osborne Excerpts

Thursday 24th May 2012 Commons Chamber

[Mr Prisk]

My hon. Friend is absolutely right. The primary authority scheme, which was started by Labour, will be extended under this Government to ensure that the enforcement of regulation, which is often just as burdensome as the red tape itself, will be appropriate in that locality.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

Sixty redundancies have been announced today at the open-cast mine at Kirkconnel. It is in the constituency of the Under-Secretary of State for Scotland, but it will affect my constituency in east Ayrshire. What are the Government doing to support the coal industry?

[Mr Willetts]

Earlier this week we produced our energy strategy, which involves ensuring not just a fair deal for consumers, but sustaining investment in energy in Britain.

Children’s Access to Parents

Sandra Osborne Excerpts

Tuesday 13th December 2011 Westminster Hall

[Andrew Percy]

rose—

[Sandra Osborne (in the Chair)]

Order. Not all hon. Members have given notice that they want to speak. I am sure that they will want the Minister to have adequate time to respond.