Following yesterday’s debate among MPs regarding the introduction of mandatory ethnicity pay gap reporting, we are delighted to share some insight to the key issues discussed. The views below are from Ranjit Dhindsa, Head of Employment, Pensions, Immigration and Compliance at European law firm Fieldfisher.
The debate was a cross industry one, but pay gaps, especially related to ethnicity are as vital to resolve in hospitality as all other industries.
Ranjit Dhindsa, Head of Employment, Pensions, Immigration and Compliance, FieldfisherDhindsa reflected on the debate saying: “The point of any kind of pay gap reporting is to identify disadvantage, in the hope that this disadvantage can be alleviated.
“In the UK, we spearheaded gender pay gap reporting, which came into force 2017, and we are now trying to grapple with ethnicity reporting, which is what was debated today.
“This was not a debate in the traditional sense, in that there was general consensus that there should be mandatory ethnicity pay gap reporting in the UK. We saw both cross-party support and enough evidence that employer organisations feel uncomfortable with voluntary reporting and want it to be mandatory, because they feel nervous about creating risk or causing offence.
“The only bone of contention is how to move from that consensus to the detail of how to implement ethnicity pay gap reporting.
“Ethnicity reporting is going to be different to gender pay, and can’t simply follow the same template. Gender difference is more, though not exclusively, binary and more evenly spread throughout the UK than ethnic diversity. We also need to be careful about language – ethnicity means just that, heritage and cultural background, not colour.
“Even in the parliamentary debate, there was some confusion between ethnicity and colour.
“It is therefore important to ensure data is gathered on different ethnic groups to provide a firm basis for ethnicity pay reporting. For example, a UK company may employ predominantly white people, some of whom come from Romania and Germany as well as the UK and there could be pay gaps between those ethnicities, even though they are all white. This needs to be reflected.
“Whatever methodology is used, every employee in UK needs to be reassured that they belong here and that the aim of the data is to really understand the organisation, not to identify them. Without that reassurance, there will not be engagement from the workforce.
“The debate did not talk about how employees can be reassured, and this is something that needs to be considered.
“The fact that ethnic diversity is unevenly spread throughout the UK was identified as a challenge, and it may be that we need a trial in a particular city like London to iron out some of the challenges in the approach, and ensure there is statistical robustness and anonymity.
“In terms of ethnic categories, one of the strong arguments for mandatory reporting is to generate data that can be benchmarked and compared. It may be that we can’t do that with ethnicity as we do with gender, but rather we let employers and organisations, national and international, identify their own categories.
“This will help them decide what action plans to put in place. One size fits all not going to work.
“The ONS already reports nationally on pay gaps and should continue to do this to give an overall picture, and let employers scrutinise their own organisations.
“The debate did not address some of the challenges facing international organisations, which while they may be able to report on their UK workforce might not be able to collect ethnicity data for every country in which they operate. This could mean some action plans become UK-centric.
“To create some comparison, mandatory reporting could set guidelines for targets for companies of different sizes and thereby create goals for organisations to work towards.
“The debate did recognise the issue of intersectionality, where one individual can be disadvantaged in several ways and that we cannot ignore combined effect of ethnicity, gender and class.
“While the fact that this issue has been debated in parliament is good, and consensus on the need for mandatory reporting is encouraging, it is regrettable to see parliament continuing to look at the pay gap issue in such a narrow and piecemeal fashion.
“If we really want to create more equal workforces in the near term, we should be looking at more creative solutions, ideally ones that take account of disability and socio-economic background as well as gender and ethnicity.”
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Hospitality & Catering News: MPs debate introduction of mandatory ethnicity pay gap reporting. – 21 September 2021 – MPs debate introduction of mandatory ethnicity pay gap reporting.
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