Resolution: Collective bargaining - our powerful tool to close the gender pay gap

Adopted at the Executive Committee Meeting of 17-18 June 2015

 

Introduction

Since 1957 the European Union has committed to close the pay gap between women and men performing the same work or a work of equal value. One important political achievement has been the adoption of Recast Directive 2006/54 (slightly revising Directive of 1975) on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, which was due to be transposed by 2011. The European Commission reported on its implementation in December 2013[1]. The practical application of equal pay provisions in Member States were assessed to be one of the Directive’s most problematic areas.

The European Parliament request, contained in its resolution of 2012, calling the Commission to review Directive2006/54 by 2013 was disregarded. The EP also encouraged social partners to shoulder their responsibility in terms of creating a more gender-equal wage structure; to provide training courses on negotiation skills, including wage negotiation.

The Commission adopted instead a Recommendation strengthening the principle of equal pay between men and women through transparency in 2014[2]. The Recommendation aims to assist Member States and other stakeholders (including social partners) in finding tailor-made approaches to tackle pay discrimination and the persisting gender pay gap. Member States should notify the EU Commission of measures undertaken by 31 December 2015. 

A recent Eurobarometer survey indicates that three quarters of Europeans (76%) think that tackling inequality between men and women should be an EU priority. Europeans are most likely to say that “violence against women” is the gender inequality issue that should be dealt with the most urgently, followed by “women being paid less than men for the same work”.

ETUC main priorities to reduce the gender pay gap are spelled out in Resolution ‘Reducing the gender pay gap’ from June 2008. 7 years onwards the ETUC wants to reaffirm its commitment to eliminate pay discrimination between women and men and to underline the positive role that collective bargaining can play to close it.

This new resolution has a threefold objective: it stresses the role of collective bargaining in reducing the gender pay gap; it indicates collective bargaining practices that are successful in closing the gap; it gives an update on the gender pay gap at European level, by taking into account the effects of the economic downturn.

A strong and favourable regulatory framework on gender equality, requiring bargaining to tackle pay inequalities, is important as it stimulates a climate of equality awareness within the social dialogue, and it facilitates persuading reluctant employers to take gender equality issues seriously. However legislation alone is not enough. A multi-faceted approach, also enshrined in trade unions’ and collective bargaining, is strongly needed.

 

The crisis impact

Several negative developments in collective bargaining to reduce pay inequalities took place since the beginning of the crisis.  Measures introduced to counteract the economic downturn have not only undermined the autonomy of collective bargaining, but also exacerbated existing inequalities between women and men, with crisis policy interventions often neglecting to analyse or address the disproportionate impact on women of austerity measures and pay cuts. During the crisis years it became even harder to persuade union negotiators and employers to address gender pay inequalities in negotiations and to implement gender sensitive collective bargaining.

Despite this more hostile climate, unions remain nevertheless committed to achieve equality between men and women. Various actions, ranging from awareness raising campaigns to collective bargaining contracts were undertaken by unions address longstanding gender inequalities that existed before the crisis, including the gender pay gap.

The crisis has affected women and men in different ways. Women’s employment insecurity, lower working hours, part-time work, and occupational segregation have often increased. Austerity and reform measures included cuts in wages in the public sector (with a  predominant female workforce) and a pressure to freeze statutory and collectively agreed minimum wages; the curtailment of rights to maternity and parental leave and benefits; limitations on collectively negotiated agreements on reconciliation and flexible working hours. Countries hit the hardest from the economic crisis have had the greatest difficulties in protecting women’s pay.

In most countries no gender impact assessment has been carried out of austerity measures and wage cuts – the latter taken place against trade union’s fierce opposition.

 

The key role of collective bargaining in closing the gap

The gender pay gap is lowest in countries where overall equality is higher and in countries where collective bargaining coverage is high and/or in companies that are bound to a collective agreement. Estimates suggest that 1% increase in social dialogue ‘coverage’ reduces the gender pay by 0.16% and the higher the degree of coordination in wage formation, the more equal the distribution of pay.

There are significant variations across Europe in the scope and level of collective bargaining, on the legal recognition and enforcement of bargaining rights, and collective bargaining coverage. Despite the differences between countries, one evidence is common for all: systems with a focus on centralised bargaining (sectoral and cross-sectoral) and high collective bargaining coverage tend to have been more successful in integrating gender equality issues into collective bargaining.  At the same time the most successful gender equality outcomes are found where sectoral and company bargaining co-exist.

Trade unions play a key role in eradicating deep-seated and structural gender inequalities, although in the context of the crisis this requires new thinking about how gender can be more effectively integrated into union strategies, policies and representation. Some unions have reviewed their strategies and put in place negotiating positions to increase pay in female dominated sectors in an attempt to level out pay differences across sectors and/or to address how structural inequalities and women’s unpaid care roles can be factored into new bargaining strategies. 

Collective bargaining is trade unions’ key instrument to fight discrimination against women, not least as regards access to employment, pay, working conditions, career advancement and vocational training. It can impact and shape job classification systems and performance-related wages, pay and grading systems as well as bonuses or benefits.

The EU’s economic governance procedures are undermining collective bargaining, wage setting and gender equality. The recommendations from the European semester and governance process on collective bargaining, like moderation in increases of minimum wages, and linking wages more closely to productivity, have negatively impacted on the autonomy of collective bargaining and in some respects on the capacity of unions to negotiate to reduce pay inequalities between women and men.

Many challenges still exist in fully integrating gender pay inequalities into collective bargaining and in taking into account structural gender gaps. Some of them have been further exacerbated by the economic downturn.

 

The way ahead

The following list of possible actions and strategic decisions to be taken should be perceived as a set of recommendations to ETUC affiliates to strengthen their efforts and capacities in reducing the gender pay gap mainly through collective bargaining but also through political actions and commitmens.

The role of collective bargaining in reducing pay inequalities between women and men should be promoted at all levels (national, sectoral, local and company).

Priority should be given to sectoral level bargaining and to avoid fragmentation of bargaining systems. Sectoral agreements have shown to provide an important framework for gender equality across a sector based on a common understanding.

Gender mainstreaming tools and gender impact assessments to test whether bargaining is gender neutral and whether the outcomes of agreements have unintended gender impacts should be developed.

In integrating a gender perspective in all negotiations and collective agreements, consideration must be given to:

·         occupational segregation and the under-valuing of women’s work;

·         time taken out of the workplace for parents taking family leave entitlements (maternity, paternity, parental, adoption, etc.) in the award of pay increases or pension entitlements;

·         the rights of part-time workers and women working in precarious jobs;

·         training and career development opportunities for women, particularly for part-time workers and workers with flexible working time arrangements;

·         how women’s low pay can be addressed in female dominates sectors and through sector specific minimum wages;

·         how the situation of young women could be better addressed;

·         gender based violence,sexual and moral harassment in the workplace.

 

Ensuring gender balance in collective bargaining teams is crucial. When bargaining teams include a balanced representation of women and men not only issues specifically addressing the gender pay gap are negotiated but also measures that positively impact on women wage penalties (such as flexible working arrangements, childcare facilities/vouchers, paid family leaves, etc.). ETUC members must be determined to ensure equal or proportional representation of women and men in collective bargaining teams, especially in male dominated sectors.(see ETUC resolution 2008)

Improved data transparency is essential to enable unions to engage in discussions with their governments and in negotiations with employers. There is especially a need to reinforce access to gender disaggregated data (at national, sectoral, local and company level) that show and/or impact on pay inequalities. Good quality and gender specific data (i.e. on non-basic pay elements such as bonuses, overtime payments and other benefits, etc.)  is vitally important for negotiators to build a case and to challenge employers. Improving union capacity on how to collect and analyses transparent gender segregated wage data is also an important prerequisite to address the gender pay gap through negotiations. This should form the basis of agreeing gender-neutrality in job classification schemes.

Gender-neutral criteria for job evaluation should be drawn up by social partners jointly at national or sectoral level (ideally in cooperation with governments) with specific guidance on how to adopt and implement gender-neutral criteria and how to make equal value assessments in collective agreements that address the under-valuing of women’s work.

Wage transparency should be enhanced by EU, national legislation and social partners. Annual reports monitoring and assessing the evolution of gender pay gap are valuable tools in keeping a lens on inequalities in the wage systems and address them in negotiations. Wageindicators systems, are another tool to conduct pay comparison and detect possible discriminations

European Commission’s Recommendation on pay transparency should be implemented, with a specific emphasis on the inclusion of equal pay issues and pay audits in collective bargaining.

Much greater attention should be given to addressing gender stereotypes and cultural assumptions about women’s and men’s work, and how they impact on the value of women’s work and low pay, which is essential to ending gender segregation. This also requires more emphasis to tackling the impact of women’s care responsibilities so that women are not disadvantaged in terms of their pay or careers. Creating a climate where men share family responsibilities equally with women, including parental and paternity leave, alongside a commitment to strengthening public services in the provision of childcare and elder care is a societal prerequisite.

More efforts should be deployed to overcome occupational segregation, especially by negotiating larger wage increases for lower paid workers, particularly in female dominated sectors (the so-called 5 ‘C’s’: cleaning, catering, caring, cashiering and clerical work). This should be based on a strategy to level out pay differences between female-dominated sectors and male-dominated sectors.

An emphasis should be placed on negotiating increases in minimum wages, where they exist, as evidence shows that in low income sectors this can be one of the most important tools for narrowing the gender pay gap. Employers should be required to make an analysis of minimum pay on a scale that unions can use in bargaining.

Attention should be given to how low wages and the gender pay gap in earnings impacts on pension entitlements. In particular, this is relevant for women working part-time and atypical jobs (such as for instance ‘mini jobs’ or ‘zero-hours contracts’). Pension contributions and entitlements should be covered during absence from work if a worker is on maternity, parental and/or care leave.

For company and local level bargaining unions should formulate common positions in order to persuade employers to commit on gender equality, which may also require to formulate the ‘business case for equality’. Confederations should coordinate their efforts jointly in relation to other company and sectoral level bargaining on gender pay inequalities.

Workplace equality plans and/or income reports disaggregated by sex, equal pay surveys, “equality allowances” have proven to be successful tools in combatting direct and indirect discrimination against women and helped reduce the gender pay gap.  They can serve as an additional tool, but cannot replace collective bargaining.

Pay audits for employers should be made mandatory. Their criteria, content and implementation could be established through social dialogue at national level or through legislation, and where appropriate through collective agreements at sectoral levels. 

Unions should better exploit European works councils and transnational company agreements (TCA) to tackle the gender pay gap. Despite some notable examples (GDF Suez, Suez Environment, Areva, etc.) too few EWCs and TCA tackle the causes of gender pay gap and address the principle of equality between men and women. EWCs composition remain unbalanced and more should be done to increase women’s participation in these bodies.

A periodical assessment of collective agreements and applicable pay scales and job classification schemes is necessary to find if they have been successful in closing the gender pay gap. Such scrutiny should cover both primary and secondary working conditions and occupational social security schemes.

Notwithstanding the importance of bargaining for gender equality, legislation obliging employers to negotiate on equality (for example to implement wage transparency, transparent recruitment procedures, pay audits, surveys, etc.)  is also key to close the gender pay gap. Nevertheless, legislation in this field is not everywhere equally effective. Regular assessment of the legislation should be carried out and effective, proportionate and dissuasive sanctions should be foreseen in case of inappropriate implementation of the principle of equal pay for work of equal value.

Training remains key to improve knowledge and negotiating skills to eliminate the gender pay gap. A number of successful trainings have been put in place at cross-industry and sectoral level. ETUC members should continue to provide education and training for women and men delegates. Training courses on gender mainstreaming, gender-neutral criteria for bargaining, what to include in negotiations and how to bargain to reduce inequalities in pay should target negotiators, members of collective bargaining teams, unions’ officials and workplace representatives. Trade unions at all levels should deploy adequate resources and means to put in place tailored training courses.

At EU level, this should be taken up and developed further through research as well as training courses and training materials by the ETUI. The Institute should consider developing a training-the-trainers programme and training materials on collective bargaining and gender pay inequalities and undertake more specific research on collective bargaining practices addressing the gender pay gap and gender equality in general.

Cooperation amongst all trade union organisations in the public and private sector and a real commitment from the employers is key in reducing pay inequalities. The European social dialogue both at sectoral and cross-sectoral level through agreements, toolkits, guidelines on gender equality plans, and exchange of good practices should continue to provide means to make progress.

Coherent action and strategic cooperation between collective bargaining and gender equality/women’s committees must be ensured. This also applies to the ETUC Collective Bargaining and Women’s Committees. 

The ETUC Toolkit for Coordination of Collective Bargaining and Wages (collective.etuc.org) will include a section on how to address and assess the gender pay gap in the coordination work at EU level and how to develop strategies to reduce the gender pay gap through collective bargaining. Gender pay inequalities in annual surveys should be monitored and joint cooperation in formulating policies and actions to reduce pay inequalities between women and men should be strengthened.

The ETUC can play a key role in assisting unions with guidance and mutual learning activities on how to integrate gender issues into collective bargaining, including issues like transparency in gender-segregated data, gender-neutral job evaluation and job classification. In this regard the development of good practice guidelines for collective bargaining teams could be drawn up (covering practical tips and strategies on disaggregated data, gender neutral job classification and job evaluation tools, low pay and the undervaluing of women’s work).

The ETUC will continue to stand against the negative interference from the Commission in wage setting and bargaining. As well as opposing this intervention to reduce the autonomy of collective bargaining and wage setting, it will be important in the future that these issues are addressed through gender-sensitive policies that take account of structural gender inequalities and that more attention is given to gender impact assessment of macro-economic policies.  Respect for national level bargaining is paramount.

Country Specific Recommendations should regularly include targets to reduce the gender pay gap, and that a strong gender dimension is integrated into the implementation of the EU2020 objectives. The ETUC will continue to monitor the CSRs directly or indirectly addressing gender equality.

Governments, together with social partners, should carry out gender impact assessment of the crisis and austerity measures introduced, in order to take account of structural gender inequalities, women’s more vulnerable position in the labour market and the continued gender pay gap.

An assessment of the implementation of this resolution will be undertaken by the Executive Committee, and in the context of next ETUC Mid-term Conference, due in 2017 and ETUC Congress in 2019.

 

Background: The gender pay gap: an overview of data and trends

The gender pay gap reflects ongoing discrimination and inequalities in the labour market, which, in practice, mainly affect women. Its causes are complex, multiple and interrelated:

·         direct discrimination and the lack of pay transparency;

·         the undervaluing of women’s work, skills and competence;

·         women over representation in low-paid, casual and part-time work;

·         horizontal segregation of the labour market: women are concentrated in sectors and occupations which are generally lower paid and less valued;

·         vertical segregation: women hold lower paid positions, have less job security and face more career obstacles;

·         lack of flexible working arrangements and biased family-leave schemes (including unpaid parental leave; no statutory paternity leave; low-paid maternity leave);

·         unequal division of paid and unpaid work between women and men;

·         gender roles and traditions, which may influence the choice of educational paths

 

The ILO Global wage report 2014/15 shows that wage gaps between women and men can be divided into an “explained” part, which is accounted for by observed human capital and labour market characteristics, and an “unexplained” part, which captures wage discrimination and includes characteristics (e.g. having children) that should in principle have no effect on wages. The report shows that this unexplained component substantially increases wage penalty of women and if eliminated it would close the gap in about half the developed countries.

On average, in 2014 women the EU earned around 16% less per hour than men. The overall gender pay gap has slightly narrowed since 2007. Nevertheless the unexplained and discriminatory component of the gap has remained largely the same (on average 9%). According to the European Commission, at this pace it will take over 70 years to eliminate the pay gap across Europe.

Progress is not only extremely slow, but the crisis is undermining the small results achieved until now. In fact, the gender pay gap has widened in countries affected by the economic downturn.

Where reductions have been registered, they can be attributed to a mix of negative and positive factors:

·         levelling down of men’s pay levels (rather than an upward trend in women’s pay);

·         cuts in non-basic wage components, such as bonuses and overtime premia, which predominate in male dominated sectors/occupations;

·         sectoral segregation of women in low-wage occupations and professions;

·         decline in male wages at the lower end of the earnings distribution and an increase in women’s participation in managerial positions;

·         successful policy related developments to reduce the gender pay gap.

 

The gender pay gap varies across Europe, ranging from 2.5% to 30%. The majority of countries have a wider gender pay gap in the private sector, compared to the public sector. However, austerity measures, wage cuts and freezes, ongoing privatisation, contracting out, public underinvestment, and individualisation of wages, which is not part of a collective agreement, are jeopardising equality gains for public sector workers.

Men’s earnings are higher in every occupation group, however pay gap are wider in white-collar male-dominated occupations. Across sectors, the higher gap is in the financial and insurance sector, in the business economy and manufacturing industry.

The pay gap tends to increase with age and it particularly affects women with children. The level of education obtained, hierarchical responsibilities, years of service, migrant status and ethnic background also impact negatively on the gender pay gap.

There is a growing concern about the level of the gender pension gap – estimated to be an average of 39% across the EU. Most of EU Member States have gender gaps in pensions greater or equal to 30%, almost twice the figure of the gender pay gap and there appears to be no correlation with the gender pay gap.

There has been a systematic rise in earnings inequalities across Europe. The decline of collective wage bargaining has contributed to a rise of wage inequality, but is not the only explanation. Data shows that between 2008 and 2012 income distribution inequality grew in countries affected by the economic downturn, resulting from pay cuts in the public and private sectors, and a growth of in-work poverty due to the cutting or freezing of minimum wages. Earnings inequality between the highest and lowest income earners has profound implications for the gender pay gap. 

Across the EU Member States, disposable income is also lower for women than for men and, as a result, women on average are more likely than men to be at-risk-of-poverty. Finally, income inequalities are more marked among men than women in the majority of Member States.

According to the ETUC study ‘Bargaining for Equality’[3] despite a significant number of agreements that have addressed gender pay inequalities some countries have not addressed gender pay inequalities through collective bargaining, either because of lack of union commitment or capacity, or because of a negative context and climate to reduce pay inequalities between women and men.

 

 

 

 

[1] http://ec.europa.eu/justice/gender-equality/gender-pay-gap/files/131209_directive_en.pdf

[2] http://ec.europa.eu/smart-regulation/impact/ia_carried_out/docs/ia_2014/c_2014_1405_en.pdf

[3] http://www.etuc.org/publications/bargaining-equality