Over the course of December, as part of our GPG Reporting Countdown Series, we have been sharing our experience and insight into managing the trickier issues of running the numbers (see Crunching the numbers!), presenting the data and drafting the accompanying statement (see Mind the gap!). This last instalment addresses the key questions arising in respect of how best to communicate the Gender Pay Gap ("GPG") data to internal stakeholders.
Should We Present and Explain Our Figures to Our Employees First?
Although not legally required, it is certainly a good idea for employers to present their GPG data and roadmap to their employees prior to publishing their reports on their websites. We are seeing the majority of clients and companies taking this approach, whether by way of an internal town-hall style meeting or a company-wide email.
In terms of the numbers, this approach provides employers with the opportunity to explain their metrics with reference to a simple chart or graph and focus on any key point or message about the data they want to highlight. There is a risk that employees may not take the time to digest the numbers or the data if only provided in the written GPG report. The aim here is also to avoid any confusion or misinterpretation that may arise in respect of the various components that organisations are required to report on. The data is the end result of a one-size-fits-all set of regulations which, on certain points, are not the best measure of what they are actually intended to measure and so, there is scope for critical context to be missed. In practical terms, an internal communication plan allows an employer a more effective opportunity to ensure that any key messages it would like its staff to take away from the data are highlighted.
In terms of the explaining any internal or external factors driving the GPG and setting out the roadmap for shrinking the gap, informing the employees in advance of publication allows the organisation to contextualise data in accessible language and by reference to live examples that may be easier to initially convey in person. This may be, for example to draw out a not very obvious positive, explain a negative or emphasise what steps are already being taken to address the gap.
Crucially, by taking this approach, the organisation will get an advanced sense of how the data and narrative is being received before it goes more broadly to the market. This window of opportunity to prepare for comments and queries that may arise from external stakeholders when the report is published cannot be underestimated. Providing employees with an opportunity to ask questions is also a good way of gauging employees' understanding of the data and how the narrative of the accompanying statement is being received.
The key to benefitting from this approach all comes down to preparation. This will only be a worthwhile and beneficial exercise where sufficient time has been taken to understand the data and understand the factors driving such a GPG. It is also important that time is put into considering what types of questions are likely to arise so that the organisation can respond in a considered and thorough manner.
What Do You Suggest We Cover in This Internal Session?
In our experience of assisting clients prepare for these types of internal presentations, we suggest that the following topics are included:
- A clear explanation as to what the GPG is. This explanation should also very clearly distinguish between the existence of a GPG and the discriminatory concept of unequal pay for like work. This will be one of the most important messages to get across and should be reiterated at the conclusion of the meeting as one of the key take-away points of note.
- The GPG results should be presented in an easily accessible form. From our experience, visual aids are a much more efficient method of communicating this type of data. The key definitions should also be explained in layman terms.
- A clear narrative contextualising the reasons for the existence of a gap is crucial. It is important here that any internal structural factors that are driving the gap are addressed head-on and that any external factors that are outside of the employer's control are explained. We have delved into the detail of this in our previous briefing - Mind the gap!
- Where there is a particularly wide gap in respect of one certain component, employers may consider dealing with it as a stand-alone message so as to differentiate it from the narrower gaps, if applicable.
- Employers should highlight any positive numbers and outline the structures and / or measures in place that have contributed to that result. This may also include a "technical negative" where the female employees fare more favourably than the male employees on a particular metric.
- Some clients have been able to point to a year on year improvement of a particular component and this positive development is important progress to highlight. Employers should bear this in mind and take steps over the course of the year to ensure that they are in a position to report a good news story for a particular component in 2023.
- We have seen examples of where a particular factor disproportionately influences the reporting numbers and it is not clear whether to include it from the Gender Pay Gap Information Act 2021 ("Act") or the Employment Equality Act 1998 (Section 20a) (Gender Pay Gap Information) Regulations 2022 ("Regulations") or the Irish Government's most recent guidance document or FAQ. Where this is the case, clients have reviewed the calculations and determined its inclusion with an explanation as to why a certain approach was taken. It's important that an audit trail is retained setting out the rationale and basis for taking that approach. We have also seen some employers run the required calculation alongside a variation of the calculation e.g. without overtime or a shift premium to show how this is the key element disproportionately driving the number.
- Lastly, the organisation should outline to employees the measures that are currently in place to reduce the GPG. This may also include an overview of the current diversity and inclusion statistics, awards, measures or initiatives. It's also important to set out the proposed measures to be taken to eliminate or reduce that gap going forward. Organisations must bear in mind that they will be held to, and assessed against, what they report and commit to do so a realistic and achievable roadmap must be considered.
Is There an Obligation to Engage With Our Union in Relation to Publishing the GPG Report?
There is nothing in the Act or the Regulations which requires employers to consult with a union in advance of publication. However, any collective bargaining agreement or other governing documentation in place should be consulted. Consideration should also be given to the relationship with the union to determine if a better approach would be to communicate the GPG report and accompanying statement to the union before publication.
The same rationale would apply to any internal staff representative body.
Is There Anything Else on the GPG Horizon That We Should Be Aware of?
A press release by the European Parliament on 15 December 2022 announced that the European Parliament and the European Council reached political agreement that companies across the EU will be required to disclose information on salaries to expose any GPG within organisations. In short, a EU GPG directive may well add to or change the data currently required under the Irish rules in time. This agreement will need to be formally approved and we will update you on this as the matter progresses.
Please get in touch with your usual Matheson contact should you require further information in relation to the material referred to in this update. Visit our Employment, Pensions and Benefits page to stay up to date with the latest updates, articles and briefing notes.