[WATCH] Unions and employers clash on compulsory wage transparency to address gender pay gap

The incoming European Commission wants to introduce compulsory wage transparency as one step to address the gender pay gap, but while unions welcome the initiative, employers' representatives are cautious and warn of difficulties

Proposals for compulsory pay transparency to address Malta's growing gender pay gap have been met with mixed reactions from stakeholders
Proposals for compulsory pay transparency to address Malta's growing gender pay gap have been met with mixed reactions from stakeholders
Unions and employers clash on compulsory wage transparency to address gender pay gap

Stakeholders had mixed reactions to an EU proposal for compulsory pay transparency which would see employees’ salaries or pay levels being openly disclosed.

While the General Workers Union came out strongly in favour of wage transparency measures, the GRTU and the Malta Employers’ Association advocated a more cautious approach towards addressing the gender pay gap.

The issue was one of the subjects of debate during a conference on Monday on Malta’s gender and pensions gap, organised by the National Commission for the Promotion of Equality. Unions, employers’ representatives, and sector pundits participated.

The gender pay gap – the difference in remuneration earned by men and women – currently stands at 12.2%, an increase from the 7.7% registered in 2011. The rise in the number of women in the workforce has been attributed as one of the reasons for this.

High too is the pensions pay gap – the variation in pensions which men and women receive, which, at 44.1%, is a direct consequence of the gender pay gap.

European Commission president-elect Ursula von der Leyen has put forward a proposal for compulsory pay transparency at a European level, with this being touted as one of the best solutions to addressing the issue of unfairly lower salaries for women across the EU.

GWU secretary general Josef Bugeja said his union was in favour of the pay transparency proposals, highlighting that everyone should know who is being paid what.

Bugeja said that one of the arguments for universal union membership was that workers covered by collective agreements ensured that employees’ wages were clearly set and known.

“It’s disgusting that in 2019 we are still discussing that there is a pay gap based on gender – this shouldn’t be so, it’s totally wrong,” Bugeja said. “I can’t see how a person should pay employees differently because of their gender.”

“Where there is no collective agreement, we’ve seen many cases where an employer offers a wage and asks the employee not to disclose it because it is higher than others’. In reality, everyone is losing because nobody knows what their colleagues are actually being paid.”

UHM assistant director Mario Sacco echoed Bugeja’s views on the benefits of collective agreements.

“A collective agreement would avoid the gender pay gap,” he said, “Unions’ proposals that each worker in Malta be a trade union member would in effect trigger this solution.”

Being a member of a union meant all places of work would be organised through a collective agreement which by its nature would not make a distinction between a male and female employee.

Asked about the fact collective agreements did not cover managerial positions, he said some organised work places even had their own collective agreement for managerial posts.

Unequal pay for equal work not sole cause of pay gap

GRTU CEO Abigail Mamo said that while her organisation was doing its research on wage transparency, it had so far not been shown a framework or a detailed explanation of why it is being proposed.

Mamo emphasised that the gender pay gap was not solely a consequence of inequality in the pay of men and women for doing equal work in the same company.

Other issues were also behind it, such as the tendency of women to opt for lower-paying jobs, to undertake more part-time work and to take career breaks due to child-rearing.

“We need to carefully consider what we would like to achieve through wage transparency, and once we have established this, we should discuss the best way to get there,” she said.

She noted that, of the countries which had implemented obligatory wage transparency, results have been mixed.

Increased bureaucracy was amongst the most common negative points arising out of compulsory pay transparency, she said.

“As a female, I take gender issues very seriously,” she said, “I think there are many ways to get to a destination, and the route we choose makes all the difference.”

“I am very much against fixing gender issues by trying to alter the ultimate result instead of what leads to that result,” she said, underlining that the gender pay gap could only be fixed if its multiple root causes were first dealt with.

Mamo also asked if there was any statistic which show which element of the gender pay gap was attributable to men and women in the same company doing the same job and being paid different rates.

At the moment, it appeared this was unknown and was another piece of the puzzle behind understanding what caused the gender pay gap.

Employers obeying law need not worry

NCPE Renee Laiviera took a significantly more positive stance towards pay transparency, arguing that, since the law already prohibited gender pay discrimination, those employers who were obeying the law had nothing to worry about.

“It would simply show that they were obeying the law and treating their employees without discriminating between them,” she said of a compulsory wage transparency requirement.

“If you are not discriminating, you should have no problem with transparency.”

In reference to Mamo’s query, Laiviera said information on what what portion of the gender pay gap emanated from unequal pay for the same job, Laiviera said that such information didn’t exist, because there was no common or widely used system of audits of private sector salaries.

She said that the NCPE was looking into a simplified version of other countries’ models for compulsory pay transparency which would minimise the increase in bureaucratic work for companies.

Extremely complex problem

Malta Employers’ Association director general Joseph Farrugia said that while it was a fact that there was a gender and pensions pay gap, the reasons behind this were extremely complex.

Many of the factors causing it, such as culture and the education path women choose, take time to address, he said.

“We can try to reduce the gap by having a more accessible labour market, steering women to better paying careers… however the family influence on choice of career is still very strong,” he noted.

On the positive side, Farrugia said that a cultural shift was taking place, as evidenced by the increase in female workforce participation.

“Although some careers are still gender-stereotyped, this is not to the extent it was before. Nowadays we have more women in managerial post and  more qualified women professionals, so one would expect that in the coming years the gender pay gap would be reduced,” he said.

When it came to the pensions gap, a lot of women of pensionable age today did not work or joined the workforce later in life, which explained why they had lower pensions than males.

“But younger women today are more financially independent, and they will be entitled to significantly better pensions,” Farrugia added.

Current family-friendly measures exasperate gap

Economist Rose Marie Azzopardi seconded Mamo and Farrugia in drawing attention to the multiple factors behind the gender pay gap.

Amongst these were that women on average worked 30.3 years compared to men’s 40.9. Career breaks were also an issue behind limiting women’s pay, since taking a break in one’s career effectively meant the career was halted.

Azzopardi also held a dim view of the way family-friendly measures were devised, saying that most of these measures were in fact taken up only by women, effectively ending up limiting their pay.

“Career breaks are not taken by men but women. The same is true for reduced hours and flexi-hours,” she said.

“Any current type of family-friendly measures are being used by middle-grade workers, not those at the top, since they would be seen as career-stalling, nor by low-earners, since they would end up with a reduced salary which wouldn’t suffice.”

What was needed was family-friendly measures which could be made us of by the whole family, including men, she said.

She also underscored that the countries which adopted pay transparency measures usually made them applicable only to companies with a certain number of employees.

In Iceland, for instance, pay transparency only applies to companies with 25 or more workers, while in Canada it applies to those with 10 or over.

“Only 2% of Maltese companies employ over 25 people. If pay transparency doesn’t apply to SMEs, that means 98% of Malta’s company won’t be affected.”

“We need to find something which is suitable for a country were such a major portion of companies are SMEs. What is relevant for other countries might not be good for us.”

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