Enquiries by Lewis Silkin have revealed that the Equality and Human Rights Commission (“EHRC”) is adopting a rigorous approach to enforcement of the gender pay gap reporting (“GPGR”) regime.
On 9 April, the EHRC said that that it would send letters to all employers who it believed had failed to comply with the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (“the Regulations”). Employers would be given 28 days to comply with the Regulations – i.e. until 7 May - before the EHRC would begin an investigation, with an “unlawful act” notice being issued shortly thereafter.
Was this just hot air or will the EHRC actually be getting tough on those who have failed to report their figures? Early signs suggest the latter…
EHRC approach to enforcement
The EHRC has confirmed, in a Freedom of Information Act request submitted by Lewis Silkin, that it sent 1,456 letters to employers that it believes have failed to comply with the Regulations. All letters were sent on 9 April, just as the EHRC had promised. A copy of this letter is below.
This means that if you have not received one of these letters by now, and did not report your gender pay gap, it appears you are off the EHRC’s radar (although of course that doesn’t mean you are legally compliant).
Sending out 1,456 letters is relatively straightforward and not a big job, but the next stage the EHRC has planned is potentially far more labour intensive. It has indicated that it will be investigating every single company that has failed to comply.
Does the EHRC have the power?
The EHRC derives its enforcement powers from section 20 of the Equality Act 2006, which empowers it to investigate and take action in relation to “unlawful acts” – namely, acts which are contrary to a provision of the Equality Act 2010.
The Regulations were made under section 78 of the 2010 Act, but that does not impose any obligation on employers to comply with the Regulations. It merely says that the Secretary of State has power to make regulations requiring publication of gender pay gap information, and that a method of enforcement may be prescribed in regulations. The Regulations are silent on this, however, leading some to argue that the EHRC actually has no powers at all.
The EHRC rejects this argument and has stated: "We have accepted the Government’s view that a company's failure to comply with the requirement to publish its pay gap will be an "unlawful act" within the meaning of section 34 of the Equality Act 2006."
When a public body acts outside its powers, the standard legal recourse is judicial review - a claim brought in the High Court involving a judge reviewing the lawfulness of a decision or action by the body in question. So far as the EHRC is concerned, the judge would be required to determine whether it does in fact possess the enforcement powers it claims to have at its disposal. Judicial reviews can often be heard very quickly.
It is clear that the GPGR regime is here to stay, at least in the medium term. The EHRC is clearly attempting to follow through on its threats to get tough on rogue employers who do not comply with the law. While there may be a question mark over whether the EHRC has the requisite powers, it is almost certainly cheaper and easier for employers simply to comply with the Regulations rather than mount a legal challenge – quite apart from the adverse publicity that would most likely result from such action.