New developments and obligations in equality plans and remuneration registers to be implemented in companies

Royal Decrees 901 and 902/2020 regulating equality plans and their registration and legislating on equal pay for men and women were published on 14 October.

Royal Decree 901/2020: Equality plans and their registration

The purpose of this Royal Decree is the regulatory development of equality plans, as well as their diagnosis, including the obligations of registration, deposit and access, in accordance with the provisions of Organic Law 3/2007, of 22 March, for the effective equality of women and men.

Certainly, all companies must respect equal treatment and opportunities in the workplace and, to this end, they must adopt, after prior negotiation, measures aimed at avoiding any type of discrimination between women and men in the workplace, as well as promoting working conditions that prevent sexual harassment and harassment based on sex and establish specific procedures for its prevention and for dealing with any complaints or claims that may be made by those who have been subjected to it.

However, the implementation of an equality plan is only compulsory for companies with 50 or more employees. This implementation must be effective for companies with more than 100 workers and up to 150 by 8 March 2021 and for companies with more than 50 workers and up to 100 by 8 March 2022 (it should be remembered that for companies with more than 150 workers the implementation of an equality plan should already be in place and for companies with less than 50 workers it will be voluntary unless expressly provided for in the collective bargaining agreement).

In this sense, and for the purposes of calculating the number of people that give rise to the obligation to draw up an equality plan, the total workforce of the company will be taken into account, whatever the number of workplaces and whatever the form of employment contract, including people on permanent contracts, with fixed-term contracts and people on stand-by contracts. It should be noted that each person with a part-time contract will be counted, regardless of the number of working hours, as an additional person.

With regard to the deadline for negotiation, and without prejudice to any improvements that may be established in collective agreements, companies must initiate the procedure for negotiating their equality plans and prior diagnoses by setting up a negotiating committee within a maximum period of three months from the time when they have reached the number of people on the workforce that makes it mandatory.

Companies not covered in the previous section and which are obliged by collective agreement to negotiate an equality plan must initiate the negotiation procedure within the period established in the collective agreement or, failing this, within three months of the publication of the agreement. In any case, companies must have negotiated, approved and submitted the application for registration of their equality plan within a maximum period of one year from the day following the date on which the deadlines set out above expire.

Equality plans, including prior diagnoses, must be subject to negotiation with the legal representatives of the workers. To this end, a negotiating committee shall be set up in which the company’s representatives and the workers’ representatives shall participate on a parity basis.

As a general rule, the workers’ representatives on the negotiating committee shall be the works council, the personnel delegates, if any, or the trade union sections, if any, which together make up the majority of the members of the committee.

In companies where there is no legal representation, a negotiating committee shall be set up, made up, on the one hand, of representatives of the company and, on the other hand, of representatives of the workers, made up of the most representative trade unions and of the trade unions representing the sector to which the company belongs and with the legitimacy to form part of the negotiating committee of the applicable collective bargaining agreement. The negotiating committee shall have a maximum of six members on each side.

The powers of this negotiating committee are as follows:

1. Negotiation and preparation of the diagnosis, as well as the negotiation of the measures that will make up the equality plan.
2. Preparation of the report on the results of the diagnosis.
3. Identification of the priority measures, in the light of the diagnosis, their scope of application, the material and human resources necessary for their implementation, as well as the persons or bodies responsible, including a timetable of actions.
4. Promoting the implementation of the equality plan in the company.
5. Definition of the measurement indicators and instruments for collecting information necessary for monitoring and evaluating the degree of compliance with the measures of the equality plan implemented.
6. Any other functions that may be attributed to it by the applicable regulations and collective bargaining agreement, or agreed by the committee itself, including the submission of the approved equality plan to the competent labour authority for the purposes of its registration, deposit and publication

Prior to the equality plan, an analysis of the company’s situation, known as a diagnosis of the situation, shall be carried out, which shall include at least the following matters:

1. Selection and recruitment process.
2. Professional classification.
3. Training.
4. Professional promotion.
5. Working conditions, including the salary audit between women and men in accordance with the provisions of Royal Decree 902/2020, of 13 October, on equal pay for women and men.
6. Co-responsible exercise of personal, family and working life rights.
7. Under-representation of women.
8. Remuneration.
9. Prevention of sexual and gender-based harassment.

The diagnosis must extend to all the company’s jobs and work centres, identifying the extent to which equal treatment and opportunities between women and men are integrated into its general management system, and analysing the effects on women and men of all the activities of the technical and productive processes, the organisation of work and the conditions in which it is carried out.

After carrying out this diagnosis of the situation, the equality plan must be implemented in order to achieve equal treatment and opportunities between women and men in the company and to eliminate discrimination on the grounds of sex, if any.

The Royal Decree sets out how these plans should be structured and what content they should cover, including all of the company’s employees:

1. Determination of the parties to the agreement.
2. Personal, territorial and temporal scope.
3. Report on the diagnosis of the company’s situation
4. Results of the remuneration audit, as well as its validity and periodicity in the terms established in Royal Decree 902/2020, of 13 October, on equal pay for men and women.
5. Definition of qualitative and quantitative objectives of the equality plan.
6. Description of specific measures, implementation period and their prioritisation, as well as the design of indicators to determine the evolution of each measure.
7. Identification of the means and resources, both material and human, necessary for the implementation, monitoring and evaluation of each of the measures and objectives.
8. Calendar of actions for the implementation, monitoring and evaluation of the equality plan measures.
9. Monitoring, evaluation and periodic review system.
10. Composition and functioning of the committee or joint body responsible for the monitoring, evaluation and periodic review of the equality plans.
11. Modification procedure, including the procedure for resolving possible discrepancies that may arise in the implementation, monitoring, evaluation or review, insofar as legal or conventional regulations do not require their adaptation.

With regard to the duration and validity of the equality plans, they shall be in accordance with what the negotiating parties decide, and in any case, they may not exceed 4 years. However, they must be compulsorily reviewed when certain circumstances arise, such as, for example, a merger or takeover, or when the Labour Inspectorate takes action.

During the period of validity, the monitoring and evaluation of the measures envisaged in the equality plan must be carried out periodically as stipulated in the calendar of actions of the equality plan or in the regulations governing the composition and functions of the committee in charge of monitoring the equality plan. However, at least one intermediate and one final evaluation shall be carried out, as well as when agreed by the monitoring committee.

With regard to the registration of these plans, the Royal Decree stipulates that they must be registered. Registration is to be carried out in a public register, regardless of their origin or nature, obligatory or voluntary, and whether or not they have been adopted by agreement between the parties. In this register, which is none other than the Register of Collective Bargaining Agreements, measures and protocols to prevent sexual and gender-based harassment may also be voluntarily deposited.

Finally, it should be noted that this Royal Decree comes into force three months after its publication, i.e. 14 January 2021.

Royal Decree 902/2020: Equal pay for women and men

The aim of this Royal Decree is to establish specific measures to enforce the right to equal treatment and non-discrimination between women and men in terms of pay, developing mechanisms to identify and correct discrimination in this area and to combat it.

It also refers to the concept of the principle of pay transparency, which aims to identify both direct and indirect discrimination, particularly that due to incorrect job evaluations, and which will be applied, at least, through the instruments regulated in this royal decree: the pay registers, the pay audit, the job evaluation system of the professional classification contained in the company and in the applicable collective agreement, and the workers’ right to information.

Related to the previous point, the criterion is again established that one job will have the same value as another when the nature of the functions or tasks effectively entrusted, the educational, professional or training conditions required for their exercise, the factors strictly related to their performance and the working conditions in which these activities are actually carried out are equivalent.

Therefore, in order to guarantee these precepts and in accordance with the provisions of Article 28.2 of the Workers’ Statute, all companies must have a remuneration register for their entire workforce, including management and senior management.

The purpose of this register is to ensure transparency in the configuration of remuneration and, to this end, it must include the average values of salaries, salary supplements and non-wage payments of the workforce, broken down by sex and distributed in accordance with the provisions of article 28.2 of the Workers’ Statute. The reference period shall generally be the calendar year, without prejudice to any modifications that may be necessary in the event of substantial alterations to any of the elements that make up the register. Likewise, the workers’ legal representatives must be consulted, at least ten days in advance, before the register is drawn up.

Employees shall have access to this wage register through the company’s legal representatives. In the event that access to the register is requested by the worker due to the absence of legal representation, the information to be provided by the company will not be the averaged data with respect to the effective amounts of the remuneration included in the register, but rather the information to be provided will be limited to the percentage differences that exist in the averaged remuneration of men and women, which must also be broken down according to the nature of the remuneration and the applicable classification system.

Remuneration audit

Companies that draw up an equality plan, whether or not they are obliged to do so because of the number of employees, must include a pay audit for the effective equality of women and men, prior to the negotiation required by these equality plans. Likewise, this pay audit will be valid for the duration of the equality plan of which it forms part, unless a shorter period is determined in the plan.

The purpose of the pay audit is to obtain the necessary information to verify whether the company’s remuneration system, in a transversal and comprehensive manner, complies with the effective application of the principle of equality between women and men in terms of remuneration. It should also make it possible to define the needs to avoid, correct and prevent obstacles and difficulties that exist or that could arise in order to guarantee equal pay, and to ensure the transparency and monitoring of this pay system.

To this end, the pay audit entails the following two obligations for the company: a) a diagnosis of the company’s pay situation with the evaluation and assessment of jobs and the relevance of other factors triggering the pay gap (reconciliation measures, professional promotion, etc.) and b) the establishment of an action plan for the correction of pay inequalities, with the determination of objectives, specific actions, timetable and person or persons responsible for its implementation and monitoring.

It should be added that this pay audit will have some peculiarities that differ from the mandatory wage register of companies. Thus, the register must also reflect the arithmetic averages and medians of the groupings of jobs of equal value in the company, even if they belong to different sections of the professional classification, broken down by sex and disaggregated, and justification must be provided when the arithmetic average or median of the total remuneration in the company of workers of one sex is higher than that of the other by at least twenty-five per cent.

In order to carry out the assessment of jobs (equal pay for jobs of equal value) respecting the criteria of suitability, completeness and objectivity, within six months of the entry into force of Royal Decree 14 April 2021, a procedure for the assessment of jobs shall be approved by means of an order issued at the joint proposal of the heads of the Ministries of Labour and Social Economy and of the Ministry of Equality.

The Labour Management and Labour Law Departments of AddVANTE remain at your disposal for further information or to resolve any queries that may arise in connection with this article.