Implicating public companies in the equal pay debate
| Author | Roseanne Russell |
| Published date | 01 June 2012 |
| Date | 01 June 2012 |
| DOI | http://doi.org/10.1177/1358229112456587 |
| Subject Matter | Articles |
Article
Implicating public
companies in the
equal pay debate
Roseanne Russell
Abstract
The pay gap between men and women remains high and most acute in the private sector,
in which large public companies dominate. Following the recent fortieth anniversary of
the enactment of the UK’s Equal Pay Act, there have been renewed efforts to solve the
pay gap. Some have highlighted the ‘business case’ for equal pay. This article makes the
case for equal pay to be treated as a corporate concern but argues that reforms
appealing to the ‘business case’ are unlikely to lead to sincere progress. It analyses the
UK’s corporate foundation of ‘enlightened shareholder value’ captured in section 172 of
the Companies Act 2006, and key aspects of the internal governance structures of UK
public companies. The central argument introduced is that contradictions between the
causes of the pay gap and corporate aims and structures undermine the genuine pursuit
of pay equality. The article concludes by arguing that a more secure platform for reform
may be found by exploiting the flaws in the shareholder value paradigm and arguing for a
revised model based on principles of feminist legal theory, rather than appealing to the
business case for equal pay.
Keywords
Equal, law, pay, gap, company, business, gender
Introduction
The recent fortieth anniversary of the enactment of the UK’s Equal Pay Act has led to
renewed debate about how the persistent gender pay gap might be resolved (Fawcett
University of Bristol, UK
Corresponding author:
Roseanne Russell, University of Bristol, School of Law, Wills Memorial Building, Queens Road,
Bristol BS8 1RJ, UK
Email: Roseanne.Russell@bristol.ac.uk
International Journalof
Discrimination and theLaw
12(2) 81–98
ªThe Author(s) 2012
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DOI: 10.1177/1358229112456587
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Society, 2010; Gow and Middlemiss, 2011). Despite a narrowing of the pay gap over
previous decades (Perfect, 2011: 9), women continue to earn less than men. The median
hourly pay gap for full-time employees across all occupations is 9.1%, which increases
dramatically to 36.6%when the hourly pay of full-time male employees is contrasted
with that of part-time female employees. The pay gap is particularly acute in the private
sector (26.8%) compared with the public sector (18%) (Office for National Statistics,
2011), and especially so in the corporate worlds of law (25.4%) (Perfect, 2011: 13) and
financial services (39%) (Equality and Human Rights Commission, 2009: 10), in which
masculine, ‘gladiatorial’ behaviours are evident (O’Connor, 2006).
Although employees are ‘as a class in a more vulnerable position than employers’
(Gisda Cyf v Barratt [2010] IRLR 1073 per Lord Kerr at paragraph 35), women face par-
ticular dilemmas at work. Women’s increased presence in the workforce is suggestive of
progress (Gow and Middlemiss, 2011: 165–166) but there persists a clearly gendered
division of labour (Gottfried, 2006). Wajcman (2000: 196) explains that ‘the very nature
of jobs and the organization of the labour market are intimately tied to ... gender rela-
tions within the family’. This echoes Pateman’s thesis (1988: 131) that ‘the construction
of the ‘‘worker’’ presupposes that he is a man who has a woman, a (house)wife, to take
care of his daily needs’. Such radical separation of public and private life has arguably
resulted in women having more limited work choices than men (Olsen, 1983).
The legacy of the male ‘ideal worker’ with domestic support continues to shape
today’s paid labour market. Women remain primary care-givers (Breitenbach and
Wasoff, 2007: 102–113), for whom the only viable paid work is often part-time and
poorly paid. Occupational segregation is noticeable, with around two-thirds of women
condensed into 12 job groups (Women and Work Commission, 2006: 9). Of the 16 occu-
pations in which employees earn on average less than £8 per hour, 11 are dominated by
women (Perfect, 2011: 14–15), perhaps reflecting the fact that many low-paid jobs such
as caring and cleaning resemble the unpaid work of many women within the home.
Within corporations women are also segregated horizontally. The Equality and Human
Rights Commission (EHRC) inquiry into gender inequality within the financial services
sector found that women were concentrated into non-revenue-generating administrative
and cashiering roles, innately less valuable in a sector built on wealth creation (Equality
and Human Rights Commission, 2009). Limited opportunity to work flexibly in senior,
well-paid roles also clusters women at the bottom of companies (Fredman, 2004). More-
over, gender stereotypes about the rightful place of men and women inform ‘organisa-
tional structures that perpetuate the inequalities arising from ... biased evaluations’
(Villiers, 2010: 538). These complex factors all contribute to the pay gap.
Recent interventions to the equal pay debate have acknowledged the multi-causal
nature of the problem (Gow and Middlemiss, 2011) and the need for co-ordinated action
from ‘a wide range of players’ (Fawcett Society, 2010: 2). This has included ‘establish-
ing an effective business case for uniformly implementing equal pay practices’ (Fawcett
Society, 2010: 5–6). This article argues that, although companies must be engaged if
genuine progress towards pay equality is to be made, the ‘business case’ for equal pay
is a flawed foundation for doing so. It analyses section 172 of the UK Companies
Act 2006, which directs management to prioritise shareholders; and key aspects of the
internal governance structures of public companies which reinforce this pursuit of
82 International Journal of Discrimination and the Law 12(2)
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