Tackling the Gender Pay Gap: a pathway for Trade Union Revitalization

Introduction: Trade Unions in Transformation

Trade unions have important challenges ahead of them to stay relevant in the rapidly changing world of work of today and tomorrow. This is particularly timely in a context of multiple uncertainties, such as the Covid-19 pandemic and other socio-economic and political crises, where trade unions’ resilience and ability to innovate and transform are key.

Whereas trade unions worldwide often work in very complicated environments, many positive experiences exist of trade unions that revitalize and transform through providing innovative services and representing those workers that need it the most, through advocating on those topics that matter, or through entering into campaigns and networks with other unions and civil society. Trade unions defending women’s rights and advocating for closing the gender pay gap are considered as positive examples of trade unions revitalization, addressing the needs of vulnerable workers on those topics that matter.

Addressing the Gender pay gap: a pathway for trade union revitalization

At the occasion of International Equal Pay Day, EPIC - the Equal Pay International Coalition - organized the international webinar to discuss main challenges and opportunities that governments, workers and employers face worldwide in addressing the gender pay gap. It is at this occasion that the ILO launches the report Pay transparency legislation: Implications for employers’ and workers’ organizations (available in English, French and Spanish) .

ILO instruments on non-discrimination and closing the gender pay gap

The goal to close the gender pay gap is set out in the ILO Constitution, in the Equal Remuneration Convention, 1951 (No. 100) , and in the Discrimination (Employment and Occupation) Convention, 1958 (No. 111). The 1998 Declaration on Fundamental Principles and Rights at Work declared equal pay a fundamental principle to be promoted, respected and realized by all ILO Member States. Most recently, the importance of achieving equal pay for women and men for equally valued work was reflected in the ILO’s Centenary Declaration (2019) and the Global call to action for a human centred recovery from the COVID-19 crisis (2021) , which reiterate the importance of public policy and enterprise practices to ensure equal pay for work of equal value, supported inter alia by pay transparency. The ILO Resolution concerning inequalities and the world of work (2021) further underlines that “measures for equal pay for work of equal value and pay transparency, among other measures, including in supply chains, are key for fair distribution of the fruits of economic progress”.

Pay transparency legislations: a new and innovative policy instrument

Although pay transparency is a rather new and innovative policy instrument to address the gender pay gap, an increasing number of countries worldwide have adopted, or are in the process of adopting, pay transparency legislations or policies. Pay transparency legislations and policies have the aim of narrowing the gender pay gap by enhancing access to information and by tackling potential information asymmetries.

Pay transparency measures, depending on how they are put in place, can serve as an effective tool in identifying existing pay differences between men and women, and as such can be vehicles to address the gender pay gap and reduce broader gender inequalities in the labour market. The paper offers a detailed mapping of existing equal pay legislations in countries worldwide. Furthermore, it assesses the impacts of these legislations and discusses arguments both in favour and against pay transparency legislations, while paying particular attention to the role of employers’ and workers’ organizations. In particular, the paper presents the findings of an online survey conducted with social partner organizations.

Pay transparency measures: a diverse set of tools

Pay transparency measures embody a rather diverse set of tools, encompassing periodic pay disclosure, regular gender pay gap reports or audits, and workers’ right to access pay data or digital tools.

• This paper finds that pay transparency reports are one of the most commonly implemented measures at the country level. Generally, employers are asked to report information about their workforce and differences in renumeration between men and women on a periodic basis.
• Equal pay audits, in turn, require employers to analyse and understand identified pay gaps and to take steps to address them.
• An increasing number of countries have implemented measures to enable employees’ right to request information on pay differences. A common characteristic of the countries that have adopted the right to request information on pay is that this right is generally exercised though a workers’ representative.
• The consultation of pay transparency measures between employers and workers’ representatives is a feature that is part of transparency legislations in most countries.
• More recently, some countries have been using online digital tools to assist employers to fulfil legislative requirements on pay transparency.

Furthermore, the majority of countries rely on combinations of measures to increase pay transparency rather than a single solution: pay transparency reporting may be a first step towards equal pay auditing; equal pay auditing may be linked to incentives such as tax deductions or sanctions such as fines; and information gathered through equal pay reporting may be discussed with workers’ representatives and feed into collective negotiations.

A workers’ view on pay transparency legislations

From the perspective of workers, pay transparency may provide workers with the relevant information and evidence that they require to negotiate pay rates and provide them with the means to challenge potential pay discrimination.

Ms Karen Palma, Vice President for Women and Gender Equality of the Trade Union Confederation of Chile (CUT) stressed the need to apply equal pay transparency legislation to all companies, while putting ILO’s Equal Remuneration Convention (No 100) front and center.

As such, workers’ organizations play a critical role in the design, implementation and enhancement of pay transparency measures. Through mechanisms of social dialogue, including collective bargaining, key points for workers can be addressed, such as targeting pay discrimination, promoting inclusive wage setting processes, and pursuing specific pay transparency measures. Workers’ organizations are well placed to incorporate equal pay into the collective bargaining process, to engage in the development of pay transparency reports or pay audits together with employers’ representatives, and in particular, to monitor the implementation of pay transparency measures. They are also the first contact for workers who have concerns regarding the gender pay gap or who want to have more information on pay practices in their enterprises.

Engagement between workers and employers

The consultation of pay transparency measures between employers and employees’ representatives is a feature that is part of transparency legislations in most countries presented in the paper.

• In relations to pay transparency reporting, in Belgium, works councils or union delegates examine the pay analysis report to assess whether the enterprise has a gender-neutral salary policy. In addition, workers’ councils may suggest appointing a workers’ mediator.
• In Denmark, the pay reporting duty entails compiling wage statistics in conjunction with the employers’ organizations involved in the process. The pay reports are then discussed with employees’ representatives.
• Concerning equal pay audits, employers in Germany inform Workers’ Councils of the pay audit and provide documents regarding the evaluation. Employees are informed of the final pay evaluation. Enterprises with collective agreements can refer workers to the terms of the agreement when exercising their right to obtain information regarding pay levels. Consequently, trade unions form a part of the transparency scheme, as a provider of information and also by ensuring collective agreements are gender-neutral and that job classifications are defined according to objective criteria.
• In Sweden, pay audits are executed in collaboration with workers’ representatives.
• In Portugal, workers’ representatives and trade unions can request an external authority in the area of gender equality (the Commission for Equality in Labour and Employment) to issue an opinion on any pay discrimination for equal work or work of equal value that is claimed on the grounds of sex. The applicant must indicate the group of workers of the opposite sex that serves as the comparator.

Conclusions and way forward

Overall, the paper finds that equal pay transparency legislations offer a potentially useful avenue to address the gender pay gap – and accordingly, broader gender inequalities in the labour market. Trade unions and active social partnership are crucial in delivering the results intended by legislative undertakings and – most importantly – to eliminate pay discrimination in the world of work.

To be relevant for all workers, trade unions should take an active stance in defending women’s rights and advocating for closing the gender pay gap.