The Ministry of Social Affairs and Health has on 15th of November published a working group report on legislation on mandatory pay transparency. The proposals in the report are essentially the same as those put forward by the Gender Equality Unit of the Ministry of Social Affairs and Health, which headed the working group, to be signed off at the start of its term. The working group’s preparations did not bring any changes to the outcomes that had been decided upon in advance.
The working group’s proposal is not unanimous. Organisations representing employers expressed a joint dissenting opinion on the proposal.
The Confederation of Finnish Industries (EK) strongly supports equality and is prepared to develop legislation on pay transparency. There is still much that remains to be done to achieve labour market equality, and we are keen to be involved in this work. However, we believe that the proposals in the disputed report of the Ministry of Social Affairs and Health are not the appropriate solution to the identified problems.
What exactly does the Ministry of Social Affairs and Health propose?
The Ministry of Social Affairs and Health proposes that:
- Each employee would have the right to obtain detailed information regarding the pay of any other colleague at any time without the colleague’s consent. An employee would be entitled to obtain pay information from their employer solely for the purpose of substantiating their suspicions of possible pay discrimination based on gender. The employer would not have the right to refuse to disclose the pay information.
- Shop stewards and other employee representatives, such as occupational safety and health representatives, would have the right to obtain detailed information on employees’ pay without their consent when preparing a pay survey in accordance with the Equality Act. Shop stewards and other employee representatives would have the right to obtain employees’ pay information from the employer regardless of whether or not they represent the employees in question. It would also be possible to obtain information on pay in situations where an employee representative does not even suspect discrimination.
The Ministry of Social Affairs and Health’s disputed report is promoting the most draconian legislation on mandatory pay transparency in Europe.
This year, the EU Commission published its proposal for a directive on pay transparency. The proposal does not contain either of the Ministry of Social Affairs and Health’s proposals.
What would be the outcome of the Ministry of Social Affairs and Health’s proposals?
The legislative amendments proposed by the Ministry of Social Affairs and Health are highly unlikely to lead to any improvement in the general atmosphere at the workplace, and instead would only serve to increase tensions and invasions of privacy. The legislative amendment could lead to unfair standardisation of pay as employers would no longer venture to reward employees for their personal competence and achievements in fear of unfounded claims of discrimination.
The legislative amendments advocated by the Ministry of Social Affairs and Health would be in conflict with public opinion. According to a survey commissioned by EK from Taloustutkimus in 2019, some two-thirds of working-age people oppose the disclosure of their pay information to their colleagues without their consent. Furthermore, the amendments would significantly and without any necessary or justified reason compromise the protection of privacy provided for in the Constitution.
Rights under current legislation have been forgotten
When discussing the issue of pay transparency, we must bear in mind that, under current legislation, an employee already has the right to obtain detailed information regarding the pay of a colleague in situations where there is a justified reason to suspect pay discrimination. In these situations, a shop steward or other employee representative must request the pay information on behalf of the employee through the Ombudsman for Equality.
The Ombudsman for Equality must provide the pay information if they consider the suspicion of discrimination to be well-founded. Providing access to the information through a competent authority prevents, for example, inquiries into pay information based solely on curiosity and adequately safeguards the protection of privacy.
It is possible to promote labour market equality in various ways. However, the proposals of the disputed report of the Ministry of Social Affairs and Health do not provide a feasible way to proceed. At this point, it would be sensible to wait for the finalisation of the EU directive on pay transparency and only then move forward with the amendment of our national legislation, in compliance with the directive.