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Principle of Equal Pay for Men and Women in Ukraine

Date of publication: 20 July 2018

Leonid Gilevich, Lawyer

Source: HeadHunter.ua

Principle of equal pay for men and women in Ukraine: a declarative norm or an operative rule?

Pursuant to Article 23 of the Universal Declaration of Human Rights, everyone, without any discrimination, has the right to equal pay for equal work. The issue of equal pay is so important that in 1951 the International Labor Organization (Ukraine being a member whereof) adopted the Convention Concerning Equal Remuneration for Men and Women Workers for Work of Equal Value. In accordance with Article 2 of the said Convention, each member of the organization shall encourage and ensure the application to all workers of the principle of equal remuneration for men and women workers for work of equal value.

Over the past 70 years, numerous regulatory acts have been adopted – both at the international level and at the level of individual states – to eliminate inequalities in the pay of men and women workers. There is such law in Ukraine as well, namely, the Law of Ukraine “On Ensuring Equal Rights and Opportunities for Women and Men”. Pursuant to Article 17 of the said Law the employer is obliged to ensure equal pay for men and women workers having equal qualifications and equal working conditions. Article 18 of the same Law provides that equal opportunities may also be ensured through collective agreements.

However, despite all declared requirements for equal pay, this equality principle is scarcely ever adhered to. For example, even in Iceland, which ranks first in the Global Gender Gap Index 2017 (developed by the World Economic Forum), the difference between wages of women and men is between 14 and 18 percent (in favor of men). Ukraine ranks 61st in this Index and the difference in wages between women and men, by various estimates, may be up to 25 percent.

Thus, the mechanism used by a particular state to actually struggle against discrimination in the field of labor remuneration is of first and foremost importance.

Initiatives of the Cabinet of Ministers of Ukraine

By its Order No. 229-р dated April 5, 2017 the Cabinet of Ministers of Ukraine approved the Concept of the State Social Program for Ensuring Equal Rights and Opportunities for Women and Men by 2021. The document says that, according to official statistics, the average monthly wage of women is 25.1 percent lower than the one of men in 2015, and Ukraine has not yet regulated the mechanism for protection of and assistance to victims of discrimination.

It is proposed to resolve these problems, in particular, by improving the regulatory framework, mechanisms for exercising the right to protection against discrimination, consideration of such discrimination cases, and also taking measures on the results of such consideration.

On April 11, 2018 the Cabinet of Ministers approved the State Social Program for Ensuring Equal Rights and Opportunities for Women and Men by 2021, which contains a detailed list of tasks and measures aimed at the program implementation.

However, the adoption of program does not yet mean creating a real opportunity for women to protect their rights. To this end, it is useful to get acquainted with the best foreign experience in the field, which should be taken into account by our legislators and the Government during implementation of the program.

Effective state control and penalties

The Government of Iceland set the task to completely eliminate the pay gap until 2022. To this end, all employers having 25 or more employees will be required to undergo the state certification for compliance with the equal pay policy. The absence of such certification is punishable by daily fines (of approximately EUR 400 per day). The certification is carried out by the accredited state auditors responsible for remuneration system inspection, and includes the classification of different positions, the assessment of the scope and significance of work at each position, analysis of the structure of wages, etc. The obligation to undergo certification is introduced gradually: for instance, all companies with more than 250 employees are obliged to pass it by the end of 2018, and all companies with less than 90 but more than 25 employees – by the end of 2021.

Right to information

A slightly different approach is developed in German legislation, where, in mid-2017 a new law on transparency of wages entered into force. Pursuant to that law, every employee of a company having more than 200 employees, who has a reason to suspect that at least six of his colleagues of the opposite sex get higher salary for the same amount of work, has the right to address the employer with a request to compare the terms of remuneration. Such check takes into account not only wages, but also two additional components of remuneration, such as benefits or the right to use the company car for personal purposes. As a result of the aforementioned check the employee receives information about the average income of his/her colleagues only (individual data of a particular colleague is not reported). A request for such check may be filed by the employee every two years. Companies with more than 500 employees are also obliged to submit regular reports on their compliance with the equal pay principle.

Right to apply to court or any other competent authority

The employee believing that the equal pay principle in respect to him/her has been violated may apply to a court with a claim against his/her employer. In Germany this may be done based on the results of the aforementioned check. In the UK, before filing a lawsuit the employee usually addresses the special State Conciliation and Arbitration Service, which advises the employee on the validity of his/her claim and provides mediation services in resolving the disputed issue with the employer.

Legal perspectives of the employee’s demand for equal pay in Ukraine

By contrast with the aforementioned states, Ukrainian legislation does not currently offer more or less effective mechanism to satisfy the employee’s reasonable demand for equal pay. The relevant demands are usually satisfied individually or via trade unions. There is no substantial judicial practice related to this issue.

In addition, the fact that a significant part of employees receive their salary (or its substantial part) unofficially is of crucial importance. It is difficult to talk about equal pay and violation of the equal pay principle in a situation where, according to various estimates, about 35 percent of Ukrainian employees receive the ‘envelope wages’.

After all, as compared with European countries, Ukraine still has a fairly low level of sensitivity to offenses related to various types of discrimination (including on grounds of gender identity).
Consequently, in order to make the equal pay principle work in Ukraine the State needs to ensure an effective wages control mechanism (reduction and, in the long term, elimination of the ‘envelope wages’ practice), as well as to introduce rules for the effective protection by the employees of their rights (taking into account experience of other states as described above). At the same time, the employees themselves have to learn to defend their right to officially declared salary and get sufficient information about the equal pay principle and how it works.

Recommendations for employers

Despite the fact that employees in Ukraine currently have no possibility to protect their rights to equal pay, existing in a number of other countries, the employers should still remember that the employer’s obligation to prevent discrimination in pay on grounds of gender identity is envisaged by the effective normative acts of Ukraine. In addition, the adoption of the State Social Program for Ensuring Equal Rights and Opportunities in Ukraine, as well as the existing tendencies in the legislation of the developed countries testify to the fact that Ukrainian legislation in this field will develop towards protection of the employees’ rights.

To this end, the employers should now adhere to the principle of equal pay for women and men for equal qualifications and equal working conditions. Moreover, in case of obtaining a demand (regardless of its form) for increase in wage based on a supposed violation of the equal pay principle, the employer may use the following arguments:
– working conditions and work performed by the comparable workers are not the same;
– difference in the amount of pay is due to the essential factor not attributed to sex.

Such factors may be experience or qualifications, place of work (geographic factor), work schedule, etc.