EQUAL PAY – THE TIME-BOMB UNDER PAY STRUCTURES IN ROMANIA

One of the major consequences of Romania joining the European Union is its obligation to implement European Directives with regard to employment protection. One aspect of that is likely to have major social and cost implications is the legislation regarding equal pay for men and women. The dimension of equal pay for work that is the same or broadly similar is relatively straightforward. The more complicated and more far reaching requirement is for equal pay for men and women for work of equal value. In determining whether jobs are of equal value regard has to had in particular to effort, skill and decision making. Comparisons are valid with other jobs in the same organisation but not between organisations. In addition comparisons are only legally valid if they are on the basis that a person of the opposite sex is being paid more for work of equivalent value. Such comparisons are subjective and often very complicated. Job evaluation schemes can help in creating a framework for comparison but being inherently subjective are open to challenge. The situation is further complicated by the fact that comparisons can also be made on any one element of the remuneration package. Experience in the U.K. and other member EU countries is that equal pay claims are very much on the rise, can take years to resolve and can be hugely expensive. Although legal costs can be significant the main costs are in settling group claims and the ‘knock-on’ effect on the rest of an organisation’s pay structure. Whilst it may take time for this development to gather pace in Romania now is the time for organisations to review their pay structures and take preventative action to try and reduce the conflict that will inevitably occur.