The principle of equal pay for equal work or work of equal value has been part of the European Union’s DNA since the beginning. Already in 1957, a specific article laying down that principle was inserted in the Treaty of the European Community.

From the seventies, a couple of directives were already adopted to give legal teeth to that principle. A recast directive was adopted in 2006 to provide a single instrument over gender discrimination in employment and occupation.

Why then so much fuss about pay equality in the EU if the legal framework to enforce has been in place for such a long time? Because the commission came recently to the conclusion that a gender pay gap continues to exist in the EU.

The gender pay gap in the EU stands at 12.7 % in 2021 and has only changed minimally over the last decade. It means that women earn 13.0 % on average less per hour than men. There are considerable differences between EU countries. The gender pay gap ranges from less than 5% in Luxembourg, to more than 18% in Germany. Belgium and France sits somewhere in between with 5 and 15%.

So something had to be done. By proposing the Pay Transparency Directive, the commission believed that further transparency would facilitate the use by women of their right to equal pay.

The Parliament and Council approved the Directive in May 2023, and it entered into force in June 2023, giving Member States three years to implement it, until 7th of June 2026.

What are the changes that will be brought by the Directive in terms of:

• Access to information,
• Reporting obligations,
• Remedies and enforcement?

And why does it matter now to develop an EU wide approach on the matter without waiting for the first national legislations to be adopted? In our conference panel, we will discuss how this new directive has influenced the development of pay transparency policy in the UK and how the issue is being handled in Asia, taking a global look at this developing area.

Article written by Heidi Watson, Partner, Clyde & CO.

Meet Heidi at this year’s Spinnaker Conference Maritime HR Conference | Event | Spinnaker where she will be speaking on the topic alongside colleagues Thomas Choo and Gautier Busschaert.