The Element of Equal Employment Opportunities - Essay Example

Employee Relations Table of Contents Executive Summary 3 This report is intended to evaluate the extent to which the National Minimum Wage has been successful in bridging the gap between male and female workers in the retail catering sector of the UK. While undertaking extensive literature review and drawing ideas from relevant sources, the report has discussed the employment conditions prevalent in the nation and has also tried to throw light upon the element of equal employment opportunities. It has further analysed the British workforce, and while evaluating the provisions for equitable payment of wages has discussed the role that the National Minimum Wage. In order to support the topic a case study pertaining to the UK retail catering sector has been provided. The report is concluded through personal views and ideas that had been generated during the course of the research. 3 Introduction 4 Employment Conditions in the UK 5 Equal Employment Opportunities 8 The British Workforce 9 Equitable Payment of Wages 10 The Role of National Minimum Wage (NMW) 11 Case Study: The UK Retail Catering Sector 13 Conclusion 15 References 17 Executive Summary This report is intended to evaluate the extent to which the National Minimum Wage has been successful in bridging the gap between male and female workers in the retail catering sector of the UK. While undertaking extensive literature review and drawing ideas from relevant sources, the report has discussed the employment conditions prevalent in the nation and has also tried to throw light upon the element of equal employment opportunities. It has further analysed the British workforce, and while evaluating the provisions for equitable payment of wages has discussed the role that the National Minimum Wage. In order to support the topic a case study pertaining to the UK retail catering sector has been provided. The report is concluded through personal views and ideas that had been generated during the course of the research. Introduction Gender discrimination in workforce in UK has been in existence for many decades. Women workforce was primarily found in low paid, part-time and low status jobs. There were relatively less number of women working in managerial, higher levels of judiciary and politics and senior level jobs. The reason behind such low concentration of women was the fact that women were assumed to have a different role in the society. They are traditionally known to look after the family and rise up the child (Goldsmith & Nickson, 1997). However the numbers has changed drastically in the 21st and more and more women are joining the workforce which is a consequence of an increasing number of women pursuing higher education. In 2005 number of working women in UK was 70%. Work can be categorized as Part time and Full time. Women mainly undertake part time work. In UK the percentage of women and men involved in part time work is 42% and 9% respectively. Discrimination in pay between women engaged in part time work and men engaged in full time work stands at a whopping 41% (Taylor, 2009). The Equal Pay Act, 1970 and The Sex Discrimination Act, 1975 have been able to bridge the gap to a large extent. In the span 1975 – 1994, the number of women in senior management has increased from 5% to 13% compared to men which increased from 20% to 28% (Connolly & Smith, 2004). The report tries to find out the effect Minimum Wage Rate plan has on parity of pay among male and female workers. It studies the employment conditions of UK in the past and the current trends. It identifies the gender discrimination that dominated the UK labour market. The report will then describe the Minimum Wage Plan in detail. It will end with a case study which highlights the implication of Minimum Wage Plan in bridging gender gap. Employment Conditions in the UK As this report aims at diagnosing the employment relations that are prevalent in the UK, it is necessary to scan the employment conditions in the nation. It has been observed that at the beginning of the twenty first century, UK had realised the benefits of flexible working. This particular condition promotes business activities “by encouraging higher levels of productivity and increasing staff retention” (Great Britain: Parliament: House of Commons: Trade and Industry Committee, 2005). Owing to the fact that the number of temporary workers in the UK is more than that in any other member state of the European Union (EU), it was projected that “full parity of benefits and conditions between temporary and permanent workers would raise the cost of hiring temporary staff, making them much less attractive prospect for employers, and leading to fewer employment opportunities” (Great Britain: Parliament: House of Commons: Trade and Industry Committee, 2005). Literature review had revealed that the UK runs short of skilled employees and this in turn impedes national productivity as well as competitiveness. The fundamental elements that require due attention are employment regulations and the costs associated with them, the impact of working time on the flexibility of labour market, National Minimum Wage (NMW) and its amendments, work life balance, temporary employment, age discrimination, availability of skilled workforce. Dynamic business environments that characterise the changing times necessitate the UK to adapt itself to the frequent changes. It has been observed that the UK is strongly responsive to the changes and simultaneously it has also shown “some initiative in adaptation by developing innovative policies and practices” (Vaughan-Whitehead, 2005), that aim at catering to all the aspects of employment conditions. As is the nature of implementing any change, such adaptations to stringent situations “has clearly led to a number of excesses and has often generated extreme behaviour” (Vaughan-Whitehead, 2005). These fallouts can easily be observed in the areas of employment status, working time, remuneration systems, etc. The changes that have taken place in the UK as well as the EU indicate the following trends: 1. Enhanced Ability to React to Difficult Situations. An incremental shift to an economy that is predominantly centred on free market has introduced “radical changes in patterns of employment and working conditions” (Vaughan-Whitehead, 2005). As the private sector is developing more, restructuring has become a commonly observed phenomenon. However, dismissals as well as unemployment have also increased. 2. Temporary Employment has Increased. With the rapid changes in employment conditions it has been observed that “fixed-term work has become a major form of employment and is increasingly being used (as in the other EU countries) as an important source of flexibility” (Vaughan-Whitehead, 2005). The employees benefit from this as it reduces costs when employment is terminated. 3. Interim Agencies have Developed Significantly. Owing to the fact that temporary employment as well as dismissals are on a rise, there is a constant need for employees. In order to address to this problem, organisations are resorting to interim agencies that provide them “with a constant stock of employees” (Vaughan-Whitehead, 2005). 4. Self-Employment has been Enhanced. This employment option has been found to augment flexibility. Employers tend to support it as it provides them with convenience coupled “with maximum avoidance of social contributions and labour regulations” (Vaughan-Whitehead, 2005). 5. Part-Time Work has Gained Popularity among Specific Classes of Employees. This trend has been observed to have gained significant popularity in the UK over the last couple of decades. It has been observed that instead of reconciling work life with personal life, “it has been developing more as a flexible form of employment” (Vaughan-Whitehead, 2005). 6. Working Time has Increased Remarkably. It has been observed that the average number of weekly working hours for British employees was 43.8 in 2003 (Vaughan-Whitehead, 2005). This is mostly due to the fact that an increased demand for productivity calls for optimal utilisation of available labour. 7. Employers are Resorting Increasingly to Civil as well as Multiple Contracts. With the aim to curtail the costs associated with regulations, employers have been found to patronise self-employment and “this not only means that the employees get a new employment status – of self employed – but also that their normal labour contract is replaced with a civil contract – with many obvious implications for them” (Vaughan-Whitehead, 2005). This implies that the employees are covered by a civil code instead of labour code, and hence they lose their rights as workers. 8. Violations of Statues Pertaining to Occupational Health and Safety. Though this has not been observed at alarming levels in the context of the UK, it is a common practice among employers to violate these statutes in order to cut employment costs. 9. Unpaid Overtime. This is again an area of concern because it takes a toll on the employees and in turn leaves them dissatisfied. Unpaid overtime leads to the demoralisation of employees and simultaneously enhances the turnover rates. 10. Wage Payments in the Form of Undeclared Cash-in-Hand. In most of the EU nations it has been observed that a number of employers “insist in declaring a majority of their employees on the minimum wage and providing them with extra payments ‘under the table’, that is, undeclared cash-in-hand” (Vaughan-Whitehead, 2005). Quite obviously, this allows the employers to save huge amounts on social contributions as well as other taxes. Equal Employment Opportunities According to Michael Armstrong (2006), “the equal opportunity policy should spell out the organisation’s determination to give equal opportunities to all, irrespective of sex, race, creed, disability, age or marital status” (Armstrong, 2006). The policy is also necessitated to “deal with the extent to which the organisation wants to take affirmative action to redress imbalances between numbers employed according to sex or race, or to differences in the levels of qualifications and skills they have achieved” (Armstrong, 2006). In the UK, the Sex Discrimination Act was enforced in the year 1975 in order to ensure equal employment opportunity (EEO). The act had undergone amendment in the year 1986. The enforcement machinery that takes care of the enactment of this legislation comprises the Equal Opportunities Commission (EOC) and Industrial Tribunals (Sainsbury, 1999). While scanning the British employment relations, it has been observed that its legislation has “provided a stimulus to practices of equal opportunity policies in organisations” (Wrench, 2007). As had been illustrated by Kelly and Dobbin (1998) there has been a development of “a body of expertise, a tradition of consultants and a class of experts within management similar to the human resource professionals in the US” (Wrench, 2007). These facts lead to the inference that this European nation is highly conscious when it comes to ensure EEO. The UK has also made substantial efforts in creating awareness about the benefits that organisations may receive through diverse workforces. However, the main drawback that the UK suffers from with reference to EEO is that the organisations are not subjected to legal pressure that makes compliance mandatory, and this is an extension of the fact that “within Europe, the great variety in legal and institutional context between countries led to enormous differences in anti-discrimination cases regarding employment” (Wrench, 2007). The research findings of Silius (2002) reveal that EEO as well as women’s studies has gained high degrees of importance in the UK. This phenomenon may be attributed primarily to the fact that the UK has a long history of “equal opportunities development and democracy” (Griffin, 2005). However, Griffin and Hanmer (2002) has also reported that EEO is institutionalised at varying degrees and this in turn “has widespread implications for women since all manner of provision disproportionately affecting women, from child care and nursery provision, to other forms of care support, enforcement of anti-discrimination legislation etc. is dependent upon the political configuration of the local council where women live” (Griffin, 2005). Hence, it becomes strikingly apparent that the area where a British woman resides is a vital determinant of the amenities that she may enjoy. The British Workforce In the backdrop of the twenty first century, it has been realised that the most invaluable natural resource that the UK is endowed with is its people. Simultaneously it has also been recognised that their vast prospective is largely untapped. Under such circumstances it is highly necessary for the nation to become a global leader in terms of skills. This will facilitate the achievement of higher productivity, social justice and wealth creation, and “will enable the UK to compete with the best in the world” (Letich, 2006). It has been further indicated in the Letich Report (2006), that the economy of the UK is stable as well as growing. The nation is ahead of many other countries in terms of employment rates and this again points at the need for skills that may arise in the future. The challenges are significant because the UK has an ageing population and the nation runs short of world class skills. The country finds itself strangulated by social disparities that include income inequality, regional disparities, employment inequality, etc. (Letich, 2006). In the context of the British catering sector, it has been observed that hotel work is generally low skilled as well as labour intensive. Moreover, as Guerrier and Shepherd (1992) has opined, “long and unsociable hours, in jobs typically lacking a formally defined career structure, are worked by ‘marginal groups’ such as women, ethnic minorities and young people, a high percentage of whom are foreign” (Jefferys, Beyer & Thörnqvist, 2001). The related workforce is characterised by a low status that is generally attached by the society. Owing to this aspect, the UK experiences high levels of employee turnover in this particular sector. Industry data reveals that “women part-time workers were more numerous in the UK than in continental Europe” (Jefferys, Beyer & Thörnqvist, 2001). However, the players within this sector should identify the potentials of a diversified workforce and employ the same in order to perform optimally in a competitive environment that is characterised by an extremely diversified customer profile. Equitable Payment of Wages In order to comply with the tenets of EEO, it is extremely necessary for any nation along with the organisations therein to ensure an equitable payment of wages to its workforce. This not only helps in recognising and rewarding the skills on an unbiased basis, but also promotes a working environment that is free from the vices of financial discrimination on grounds of gender difference. Equitable payment of wages facilitates the harmonisation of organisational processes, especially in the catering sector, because most of the departments have both male and female workers as process partners. It has been observed that “women experience greater gender parity” (Rubery, 1998) in the UK mainly due to the fact that the nation practices a compensation system based on flat rate. It has further been observed that the unemployed British men “receive additional compensation for a dependent spouse” (Rubery, 1998). However, it is noteworthy that “receipt of a dependent spouse allowance by the male claimant equates the man’s recalculated replacement rate with that of a female single claimant” (Rubery, 1998). The flat-rate benefit that is provided by the UK to its employees actually offers enhanced replacements rates for workers that are part-time. Correlating these facts with the catering sector of the UK it may be comprehended that equitable payment of wages is a vital necessity for the employees associated with this sector because it has a predominance of part-time as well as female workers. Moreover, provisions for equitable payment will add further fillip to the current trend wherein the UK is witnessing a huge inflow of immigrants from Asian economies who are interested to join the hospitality sector. The Role of National Minimum Wage (NMW) The NMW is a scheme of the UK government which provides a legal right to the working class of Britain to be eligible for a certain minimum wage for their job. It came into existence in April, 1999 which obliges the employer to pay a certain minimum wage to his employees. An autonomous body called Low Pay Commission regularly reviews that NMW is maintained. It sets per hour wages which must be paid to worker’s in UK (Anonymous-a, n.d.). There are three levels of pay which are: 1. The Main Rate: This is applicable to everyone aged 22 and above. The present NMW per hour for this segment is £5.80 up from £5.05 in 2006. 2. The Development Rate: This is applicable for the age group 18 to 21. The present NMW per hour for this segment is £4.83. Workers aged 22 and above who are taking up a fresh job are also entitled to this scheme. 3. The New Development Rate: This category was introduced later in 2004 which covered workers in the age group 16 to 17. The present NMW per hour for this segment is £3.57 (Anonymous-b, n.d.). Entitlement to Minimum Wage Plan: Most workers of UK are entitled for the NMW. It is applicable irrespective of whether: 1. The worker is paid on a weekly basis or monthly basis, by cheque or in cash; 2. The worker works full time or part time; 3. The worker works from home or from office; 4. The size of the employer is big or small; 5. The worker works in any part of UK (Anonymous-c, n.d.). A worker is entitled to NMW even if he signs a contract agreeing that he need not be paid the NMW. Apprentices under the age of 19 are not eligible for the NMW. If an apprentice aged 19 or above is in the initial year of their higher education are not eligible for NMW. Critical Analysis of the NMW: The NMW was introduced by the Blair government to bridge the inequalities in income seen mostly in 1980’s and less in 1990’s. However the success of NMW depended on certain critical issues which are: 1. The amount at which NMW is set, and 2. Anticipatory measures by employers. The amount at which the NMW was set was very low than it was planned initially. The level of income of worker’s was already equal to the NMW. For example in 2001, before NMW a worker was earning £3.60. After NMW came into effect, the level of NMW was set at £4.10 which was not a major jump for the worker. Secondly the employers were anticipating a move like NMW by the government even before it came into effect. Hence most employers raised their wages in advance. Thus the introduction of NMW didn’t have a significant impact on the workers. The NMW in UK since 2003 has been increasing at a faster pace compared to other EU and OECD countries. When NMW is calculated based on Purchasing Power Parity and Exchange Rates UK was behind France, Australia and Ireland (Low Pay Commission, 2008). NMW only guarantees the minimum wage that should be paid to a worker. However there are other contractual and non contractual clauses associated with employment which NMW does not address. The Equal Pay Act, 1970 and The Sex Discrimination Act, 1975 were much more powerful legislations which ensured parity among male and female workers. They Equal Pay Act prohibited any kind of discrimination on contractual grounds which laid emphasis on matters not related to direct wages but indirectly related to wages like bonus, incentive etc. The Sex Discrimination Act addresses issues related to gender bias. It made it mandatory for employers to pay the same wages to workers doing the same kind of work, irrespective of their gender. It considered non contractual issues i.e. issues related to benefits which complimented the wage. These legislations were much stronger which ensured that there was parity in the wages of male and female workers. NMW is not as powerful a legal right as the above two. Hence it can be concluded that NMW has not been able to bring about parity in pay among male and female workforce in UK (Anonymous-d, n.d.). The most recent Bill that the government is planning to implement is The Equality Bill which is expected to be effective from autumn, 2010. This might be a significant move to ensure that parity of pay is maintained between men and women (Rehman, 2009). Case Study: The UK Retail Catering Sector The Hospitality Industry is a highly profitable venture in UK. Hotel and Catering forms a major portion of the hospitality industry. It is an industry which is highly labour intensive. In the eighties the UK hotel and catering segment employed more than 2,400,000 people which comprised 10% of the population. The wages in the catering industry were comparatively lower than other industries. With exception of few, catering industry does not adapt new technologies easily. Hence it is a high labour intensive industry. The government from time to time has taken various steps to bridge the gap between the rich and the poor. Till the end of 1980’s it was controlled by minimum wage regulation. These councils protected the interest of the worker’s where trade unions were weak. The catering industry being highly labour dependent, protection of their conditions was important. However with the Conservative government coming in power, these regulations were banned. With the Labour government coming in power in 1997, the NMW plan and Working Time Directive which fixed the total working time of a worker again came into force. The catering industry employs a diversified mix of people. The distribution of wages also varies widely depending on the type of work that an employee does. For example a highly competent chef has very high incomes whereas delivery boys and cleaners have extremely low incomes (Boella & Goss-Turner, 2005). We take the example of a particular area of UK, Waltham Forest and the hotel and catering sector of that place. The total resident population employed in this area in the hotel and catering segment is 4550. The workforce can be divided under two broad headings: 1. Male v/s Female Workers: Female workers constitute 43.6% compared to 56.4% male workers. Female workers are mostly engaged in administrative and elementary operations. The total population of female workers in administrative and elementary operation is 60.9%. All other areas of work are filled by male workers. 2. By Age Group: It has the second highest employees among all industries in the age group 16-19. In the age group 20-29, there are 20.3% male and 13.9% female. It employs the maximum population of youth workforce after retail segment. This is due to the fact that most students take up catering as a part time source of income. 3. Part time v/s Full Time Workers: Female workers are mainly engaged in part time work and it has been observed that most of them are not highly qualified. However, it has also been found that the under qualified male workers are present in a higher proportion as compared to their female counterparts. This calls for proper training and development for the male workers in order to strike a balance between the genders. The Minimum Wage Plan guarantees a minimum wage to all the workers involved in the catering industry. The male and female workers are entitled to a minimum wage based on the hours worked. Based on the age group the workers in the age group 16 to 17 would earn £3.57 per hour, those in the age group 18 to 22 would earn £4.83 and those in the age group 22 and above would earn £5.80. Hence the NMW ensures a minimum amount for all groups. Irrespective of whether a worker works full time or part time, he is entitled to a minimum wage under the NMW scheme. However it does not address any issue regarding the pay for the same kind of work for a male and a female worker. For example wages of a male chef and a female chef is not addressed by NMW. Conclusion The UK as a nation is committed towards ensuring that equality in wages is maintained among its citizens. It is a nation that is implementing various policies to bridge the gap between the rich and the poor. The NMW is an example of the government’s concern for its workers to ensure that they are at least paid what they deserve. Moreover the UK government has also implemented various laws to ensure that there is no discrimination on gender basis in the salaries drawn by the employees. The Equal Pay Act, 1970 and The Sex Discrimination Act, 1975 bans all forms of discrimination based on gender. This is one reason why women are increasingly being absorbed in top managerial roles. NMW only guarantees the minimum wage that should be paid to a worker. However there are other contractual and non contractual clauses associated with employment which NMW does not address. The Equal Pay Act, 1970 and The Sex Discrimination Act, 1975 were much more powerful legislations which ensured parity among male and female workers. They Equal Pay Act prohibited any kind of discrimination on contractual grounds which laid emphasis on matters not related to direct wages but indirectly related to wages like bonus, incentive etc. The Sex Discrimination Act addresses issues related to gender bias. It made it mandatory for employers to pay the same wages to workers doing the same kind of work, irrespective of their gender. It considered non contractual issues i.e. issues related to benefits which complimented the wage. These legislations were much stronger which ensured that there was parity in the wages of male and female workers. Moreover The Equality Bill which is expected to be effective from autumn, 2010 might be a significant move to ensure that parity of pay is maintained between men and women. NMW is not as powerful a legal right as the above two. Hence it can be concluded that NMW has not been able to bring about parity in pay among male and female workforce in UK. The extent to which parity between men and women workers would be established after the passing of The Equality Bill is something that has to be waited and watched. References 1. Anonymous-a. No Date. National Minimum Wage. Safe Workers. [Online]. Available at: http://www.safeworkers.co.uk/NationalMinimumWage.html [Accessed on April 12, 2010]. 2. Anonymous-b. No Date. The National Minimum Wage Rates. Directgov. [Online]. 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