A common phenomenon in several Nordic countries is state involvement in tripartite commissions on the theme of equal pay. This applies to Finland, Denmark, and Iceland. In Sweden, a commission on equal lifetime earnings resulted in a comprehensive report. What these commissions have in common is that the proposals presented, at a later stage, have all too rarely resulted in specific measures to address gender-related imbalances in the labour market. Social partners have generally shown little ambition to integrate the concept of work of equal value into their own collective agreements and to see it as a concept that requires practical application. In one of the Finnish reports, this problem is exemplified as follows. While labour market organisations generally declare that they are committed to promoting gender equality and that they evaluate the effects of their own collective agreements on women and men, there is a contradiction in that these declarations rarely seem to be translated into specific actions that produce measurable results.
The realisation that a voluntary approach has regularly been used to avoid taking action that results in change is the basis for the adoption of the EU Pay Transparency Directive 2023/970. The adoption of the directive into national law will require change from both government regulators and social partners at local and central level. A much more active approach to the concept of equal work and work of equal value will be required compared to what has so far been applied. The directive must be implemented by 7 June 2026.
The implementation of the directive means that large amounts of payroll data will need to be compiled and analysed at the organisational level, reported to a monitoring body, analysed at the authority level, and compiled to be made available to the public and for further reporting to the European Commission. To reduce costs for employers, simplify their administrative burden and ensure that all reporting and evaluation at the authority level is carried out as smoothly as possible, it is essential that the State takes overall responsibility in this area. The actual development work, with the possibility of sector-specific solutions, should preferably take place in consultation with the social partners.
A key aspect of ensuring compliance with provisions for equal pay for work of equal value is effective and adequately funded enforcement. The EU Pay Transparency Directive risks becoming a paper tiger if reporting requirements are not combined with an effective system of penalties. This includes the requirement to report pay differentials for equal work and work of equal value.
Knowledge and ability to analyse pay structures from a gender perspective is another important aspect of the implementation of the principle of equal pay. Such knowledge is not automatically acquired through the completion of human resource management studies, by functioning as a trade union representative or member of an anti-discrimination authority. The issue of imparting such knowledge needs to be addressed at a number of different levels, including in the content of university HR programmes, by social partners in the development of individual or joint training materials and guides adapted to their respective sectors and in internal training for government employees with supervisory responsibilities for the principle of equal pay.
A key issue not addressed in the Directive is defining cases in which reference to the ‘market pay situation’ can constitute substantive grounds for departing from the principle of equal pay. It is important that both legislators and social partners show an ambition to distinguish between documented difficulties in retaining and recruiting staff from situations in which a reference to market forces reflects gender discriminatory values. The issue requires clearer guidance than is currently the case.
The assessment of work requirements is a key element of classifying work of equal value. The concept of work requirements appears in three unrelated contexts that are relevant to the social partners: in discrimination legislation, indirectly in legislation on statistics and in related collective agreements on the reporting of pay statistics, and in recurring formulations in collective pay agreements that state that work requirements should constitute a basic reference point when setting pay. Social partners play an important complementary role in making the concept of work of equal value understandable and manageable by aligning collective agreements with the terminology of EU law. The EU Pay Transparency Directive defines a number of specific concepts that are relevant for analysing gender pay differentials.
Particular attention should be paid to the design of procedural rules with respect to consultation and cooperation under the EU Pay Transparency Directive. The concept of cooperation in these contexts has a different purpose than traditional co-determination in the labour market. The collaboration group is expected to take joint responsibility in relation to the renumeration of all employees, regardless of union affiliation. Thus, there are broad similarities with the role of a safety representative in the context of work environment issues. The purpose of the cooperation group is not to establish an extra round of negotiations. Instead, the correction of unwarranted pay differentials is about preventing violations of individuals’ human rights, which is a joint task for employers and employee representatives.
The EU Pay Transparency Directive includes a specific rule to address pay differentials of at least 5 per cent within a “category of workers”. To prevent misunderstandings about the meaning of the principle of equal pay, when this rule is to be applied, provisions for pay surveys should be supplemented in the manner set out in the Swedish Discrimination Act, Chapter 3, § 9, cl. 3.