news 21 October 2019

Partnering for Success – Business Prepares for Gender Pay Reporting in Ireland

Irish business leaders gathered in McCann FitzGerald this morning to share their experience and insights on the impact of gender pay reporting. Members of the Institute of Directors (IoD) in Ireland and experts from McCann FitzGerald and Powerscourt met to discuss the causes of the gender pay gap, how it can be remedied, and practical ways employers can prepare for mandatory gender pay gap reporting, given the publication of the Government’s Gender Pay Gap Information Bill 2019 (the “Bill”) in April.

Once enacted, the Bill will require employers to publish information relating to the remuneration of their employees by reference to gender. Employers with 250 staff or more will initially be obligated to report on their gender pay gap, applying to businesses with 150 employees after two years, and a year later to those who employee 50 people or more.

The Bill proposes to go further than the legislation introduced in the United Kingdom, as it requires the publication by the employer of a statement or narrative (concurrently with the publication of its gender pay gap data) setting out in the employer’s opinion, the reasons for its gender pay gap and the measures (if any) being taken by the employer to reduce or eliminate that gap.

Speaking at the event, Mary Brassil, Partner, Employment Law, at McCann FitzGerald, said: “Gender pay gap reporting will involve substantial work for employers, who may be exposed to legal action if they are not prepared for the legislation. As the Bill continues to move through the Oireachtas, companies should now start a process of introspection to ensure that they understand the data and can provide clear and concise explanations of same.”

“When we look at lessons learned from the United Kingdom, organisations that publish a narrative with their gender pay data often cite under representation of women in senior management roles as one of the main reasons for the gap. Once the legislation is enacted in Ireland, employers in scope will be required to explain the data produced, and as such, should undergo careful self-assessment of the practices in place to ensure that they are providing an accurate and reliable reflection of their gender pay data.”

Thora Mackey, COO of the Institute of Directors (IoD) in Ireland, commented that: “IoD Ireland have long been proactive advocates for diversity in Irish boardrooms, and we are proud to be part of the drive to narrow the gender pay gap in Ireland.”

“The IoD Ireland research ‘Diversity in the Boardroom 2019’, released over the summer, discovered an overwhelming recognition that board diversity in all its forms leads to enhanced board effectiveness and company performance. Business diversity is not just the right thing to do, it is the best thing to do for the success of a business.”

The morning was rounded off with unique insights into the challenges faced by employers in the United Kingdom who have already had to communicate their gender pay gaps.

Speaking about lessons learned, Eavan Gannon, Senior Consultant at Powerscourt said: “Irish businesses are recognising that this isn’t just a box ticking exercise. Narrowing the gender pay gap is a must for a company’s growth. Even without the legislation, business leaders truly believe that this is the right thing to do now, and, most importantly, the right thing to do for the future.

“When reporting gender pay data, companies must ensure that they have a robust and reflective rationale for their results, coupled with an action plan for change. From a reputational perspective, failure to have a plan in place will have a negative impact on the external perception of an organisation and the internal employee relations. Businesses must get their houses in order and start examining the culture of diversity and inclusion within the company at present.”

It is likely that the Bill will be signed into law in early 2020 and mandatory gender pay gap reporting will be applicable to employers from 2020 or 2021.