Equal Remuneration for Equal Value of Work: A Step Towards Economic Equality?

Introduction

The upheaval caused by the pandemic has left a dent in all arenas of life. While most social and economic disruptions have been widely felt, the reversing trend of economic independence of women due to COVID-19 has remained covert until a recent examination into the issue. The Global Gender Gap Report 2021 published by the World Economic Forum reflects that the period to close the global gender gap has increased by a generation, from 99.5 years to 135.6 years. More importantly, the report indicates that the gender gaps in labour force participation have been wider since the outbreak of the pandemic. The early projections by the International Labour Organization also suggests that 5% of all employed women lost their jobs, compared to 3.9% of employed men. Nevertheless, the reality is that even if women participate in the labour market, they are paid less than their male counterparts. India ranked 140 among 156 countries with the economic participation gender gap widening by 3 percent according to the Global Gender Gap report. Moreover, data based on a 2017 survey shows that the average daily wage rates for general agricultural labourers were ₹264.05 for men and ₹205.32 for women. It means that women workers in the sector get 22.24 per cent less than men. Thus, at the core of the broad spectrum of economic independence of women lies the problem of the inability to attain equal pay for equal work, something that remained a distant goal for most countries even before the pandemic. Studies show that women make 72 cents for every dollar earned by men, with the gender pay gap estimated at 23 per cent globally.

The reasons for this gap are complex and varied, with the most apparent one being the embedded gender stereotypes that undervalue and underpay the work done by women. In this context, Part I of this article aims to analyse the international legal framework for providing effect to the principle of equal pay for equal work. Part II examines the implementation of the same in India and critiques the existing legal framework. Part III contrasts this with the measures taken by Iceland, a country that has adopted an innovative approach and is leading the path towards gender equality.

Equal Remuneration Convention, 1951

The principle of equal pay for equal work concerns two individuals who perform the same job activity in the same enterprise. Arguably, this would not include cases where men and women do different work i.e., are engaged in different job activities, even if the value of their work is the same. As occupations are often segregated according to gender (with women traditionally being restricted to caregiving roles), a restrictive standard of “equal work” would not fix the gender gap in society. In order to address the income disparity caused by this, the International Labour Organization at the Equal Remuneration Convention of 1951 introduced the principle of equal remuneration for work of equal value which included cases where men and women do different work. To determine whether two different kinds of work have the same value, the ILO released a Guide that contained an evaluation method. Thus, even when men and women perform work that is different in content, requires different qualifications, and is performed under different conditions, if the overall value of the work is the same, then they should receive equal remuneration. Taking an example from this Guide, caterers and cleaners who are mostly women, should get the same pay as gardeners and drivers, who are mostly men. This new concept broadens the scope of “equal pay” by shifting the focus from ‘similar work’ to ‘work which is inherently of the same value’, thus allowing for a lesser opportunity for pay-gap to exist. However, this Guide is neither authoritative nor does it provide a clear-cut formula, leaving it entirely to the employer’s discretion to decide upon the value of a certain kind of work. Unfortunately, this creates room for an employer’s bias to seep in. While the Convention is an important tool, it fails to take notice of its own ambiguity and neglects various other factors that might act as an obstacle to the principle of equal pay. The problem of equal pay is strongly connected to wage-setting practices. For example, minimum wages in sectors or occupations where women predominate are often lower than those of men. Dismally, the situation does not change even if they do identical work in the same sector. This demands a resolution to increase the minimum wages, especially in sectors or occupations that are dominated by women, something which the Convention failed to address. 

Effect of Ratification on India

While India ratified the Convention on 25th September 1958, it waited for 18 years before enacting the Equal Remuneration Act to meet its obligations under the Convention. The Act obligated equal pay for men and women without any discrimination and was a much-needed step towards the economic empowerment of women. However, the scope of the law was narrower and was limited to those situations where they do work of “a similar nature”, thus not fully giving effect to the principle of “equal value” contained in the Convention. Further, Section 16 of the Act allowed the government to declare that an employer would not contravene the Act if the government felt that the pay difference was based on a factor other than sex. It essentially gave the government power to deem unequal to be equal without sufficient explanation. Based on this Section, the Supreme Court of India in Air India etc vs Nergesh Meerza stated that air hostesses and male air stewards were separate classes of employees even though they performed similar work. This judgement has been criticised as being conservative and endorsing gender stereotypes. 

In 2019, the Parliament introduced the Code of Wages, 2019 that would replace the Equal Remuneration Act of 1976. This Code is more inclusive in its approach and rectifies some of its predecessor’s flaws by scrapping Section 16. It also uses the term “all genders”, thereby moving away from the binary of men and women and extending benefits to other genders Unfortunately, Section 3(1) of the Code retains the same standard of “same work or work of similar nature”, losing out on an opportunity to address the gender pay gap existing in India. In retaining the old standard, India is diluting its obligations under the 1951 Convention and acting inconsistently with the goals of the ILO. India’s deviation from its commitments under international law, more than 60 years after ratifying the 1951 Convention, is unfortunate. By not incorporating this new standard, India will probably struggle to bridge the gender gap that has only increased during the pandemic. 

Breaking Barriers: Iceland 

In contrast to the disappointing case of India, the island country of Iceland has been successful in closing its gender gap to a large extent. It has secured the top position in the Global Gender Gap Index for over five years. This position can be attributed to their robust laws and a strong commitment to gender equality. The courts of Iceland have recognized and enforced the principle of “equal pay for work of equal value”, as distinct from “equal pay for equal work”. In 2005, a claim for equal pay between a female manager of the social affairs department of a municipality and a male engineer was successful before the Supreme Court. The standard of equal value also has statutory recognition and finds place in the Gender Equality Act 10/2008.

In 2018, Iceland amended the Gender Equality Act and became the first country to require an employer to prove that they pay men and women equally – not just for a similar job, but for a job of equal value. According to the amendment to Article 19, companies with 25 employees would be forced to pay daily fines if they are unable to show compliance with this law. A transparency measure like this compels corporations to be fair by reversing the burden of proof and requiring them to show that their practices are not discriminatory. The reversal is particularly beneficial in an employer-employee relationship that generally carries a power imbalance in favour of the employer. 

Thus, Iceland’s ground-breaking policy facilitates the enforcement of equal pay in its truest sense. The progressive approach taken by the Iceland Supreme Court stands in stark contrast to the position taken by the Indian Supreme Court. As Iceland’s approach fully captures the ethos behind the 1951 Convention, it should be considered as a model for other countries that have ratified the 1951 Convention.  

Conclusion

There is no one solution to a problem as complex, stubborn, and multi-layered as that of gender pay disparity. Possibly due to this, the 1951 Convention falls short of being properly implemented in countries like India. Nevertheless, its importance cannot be stressed enough and its principles must be brought to life. This would only be possible with the collective efforts of international organizations, national governments along with a much-needed change in the outlook of society on the value of work done by women. Gender pay equality will not only cater to women’s financial independence but would also benefit the economy of a nation. Thus, the phrase “equal renumeration for work of equal value” albeit difficult to achieve provides the building blocks to a more equal and progressive society.  


Anoushka Anand is a second-year law student at National Law University, Jodhpur.


Image: Rosie the Riveter, cultural icon of World War II and the inspiration behind the war propaganda in the United States. You can read more here.

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