Importance of Equal Pay in Organisations

The assignment discusses the significance of equal pay in organisations, emphasizing that it is not only a legal compliance but also an ethical requirement. It highlights the importance of establishing appropriate frameworks to ensure equal pay to employees for equal work, which reflects the moral and ethical values of the organisation. The role of managers in promoting ethical decision-making and ensuring fair compensation practices is also stressed. The document references various laws, regulations, and guidelines related to equal pay compliance, providing a comprehensive overview of the topic.

Running Head: Ethics and sustainability 1
Ethics and Sustainability

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Introduction:
Equal pay for Equal work is considered as concept which highlights the rights of labor, as
workers working in the same workplace must get equal pay. Generally, it is an issue related to
sexual discrimination in context of Gender pay gap. Equal pay is considered as complete range
of payments and benefits which include basic pay of employee, non-salary payments, and
bonuses and allowances. There are number of countries which address this problem in effective
manner (Joseph, n.d.).
Act related to the equal pay requires that both men and women working at the same workplace
must get equal pay for equal work. Jobs done by them must be equal but there is no such
requirement which state that job must be identical. If there is any such inequality in wages
between the men and women, then employer has no right to reduce the wages of either sex for
the purpose of equalize their pay (SMH, 2010).
This paper states the regulations, law and business ethics related to the business organization,
and it also demonstrates the understanding related to the values adopted by the organization for
the purpose of supporting ethical decision making. Lastly, paper is concluded with brief
conclusion.
Equal pay regulations & law:
In Australia, laws related to the equal opportunity are operated at the federal and state/territory
levels. These laws restrict the treatment which is unfair and unfavorable, with any person in the
organization who belongs to any specific group of people or because such person have a specific
characteristic or element. Unlawful discrimination at the workplace on the basis of sex of the

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person is restricted by the federal Sex Discrimination Act 1984 (Cth). Laws related to equal
opportunities also provide protection to other type of workers (Huamn rights, n.d.; WGEA, n.d.).
Direct discrimination:
Organization cannot treat any of its employees of one sex in less favorable manner as compared
to other employee of different sex, either in similar situations or in those situations which are not
materially different. Therefore, it is important for the organization to identify any existing gender
pay gaps and take actions to close these gaps, otherwise organization bear the risk of a claim
related to the sex discrimination. This can be understood through example, in direct sex
discrimination organization offer higher starting salary to the male graduate but lower starting
salary to the female graduate for the similar work.
Indirect discrimination:
Organizations are under obligation to make sure that they are not imposing any condition,
requirement, or practice which is unreasonable in nature. If any gender pay gaps are exists in the
organization, then it is necessary to access whether there are any practices exists at the workplace
which have uneven on one sex, and whether these practices are reasonable in nature. This can be
understood through example, indirect sex discrimination exists when organization impose any
such condition in which only full-time employees can take part in the discretionary bonus
scheme of the company, and this condition is applicable in those situations when organization
has more number of women employees on part-time basis as compared to male employees
(FWO, n.d.).

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General protections:
There are numbers of general protections which are introduced by the Fair Work Act 2009 for
the purpose of provide protection to the employees, and this includes:
 Employees get protection from being treated in adverse manner because they exercise or
want to exercise any workplace right, such as they want to take benefit of the parental
leave.
 Employees also get protection from the practices of unlawful discrimination.
It must be noted that, general protection laws apply in same manner as equal opportunity laws
applied to the wide range of workers including other workers also. Organizations must fulfill
their duties carefully under the Fair Work Act 2009 while making their decisions. Equal
remunerations provisions under the Fair Work act 2009 states, power is imposing under the Fair
Work Commission to make any order they consider right against an employer, if they believe
that equal remuneration for equal work is not paid in the organization. This can be understood
through example; the Fair Work Commission has power to make order for changing the pay rates
stated in the awards and enterprise agreements (FWO, n.d.).
It must be noted that in case organization fail to comply with the provisions and regulations
related to the equal remuneration then Fair Work commission has power to make order which
impose penalties on the organization. Requirements related to reporting stated under the
Workplace Gender Equality Act 2012 (Cth), organization engaged in non-public sector with
more than 100 employees must report to the agency in context of six gender equality indicators.

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Equal remuneration to both men and women requires that organization must report on whether it
frames any formal policy or strategy related to the remuneration. Organization must ensure that
they include objectives related to gender pay equity in remuneration policy and strategy.
Organization is also under obligation to ensure whether they conduct gender remuneration gap
analysis on timely basis and if any issues are identified in this analysis then take appropriate
action on the same (Mondaq, 2012).
Business ethics related to equal pay:
Ethics in business are referred as rules and patterns related to the behavior, and these rules and
patters are useful when any job in the organization is conducted by management. Ethics related
to business also highlight honesty, trust, respect, and fair treatment in all business relations
(Workplace ethics advice, 2011). Business life throws different challenges related to the moral
dilemmas such as accepting a holiday gift from the company from which person purchased
goods or sell those products to the customers that they actually need instead of those products
which include higher commission.
Ethics related to work has been increasingly important now a day in the literature of the
management and business life. Interest of ethics in business culture can be understood through
socioeconomic changes and also changes occurred in the dominant values, principles, norms, etc.
related to business management approaches. Ethics related to business and management fields
has related to the:
 Requirements related to the economic, technological, and legal requirements.
 Responsibility related to environment and society.

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 If there is no obligation related to above areas then optional implementation of moral
principles in the organization (Bloom, 2004).
Pay is considered as most important cost item for the business organization, and basic source of
income for the employees working in the organization. In other words, pay is also known as
relationship of exchange between the employer and employee. In this exchange employees sell
their skills and time to the employer and in return employer provides compensation to the
employees. Generally, this exchange is shaped as per the four alternative norms such as
maximization of profit, equity, fairness, and need of employees. Applicable rules for the purpose
of determining the pay from the perspective of business ethics changed as peer the characteristics
of society. Generally, values and sources related to religious highlight the concept of equity as
more effective and efficient approach, and this approach mainly support the equality,
contribution, effort, and fairness. Previously, different studies are conducted by the experts and
these studies stated that variables of demographic nature (age, education, profession, and
gender), organizational factors (size of the organization and systematic compensation
management system), and organizations’ social and cultural values directly affects the rules
related to pay determination. From ethical point of view, key factor related to the compensation
management is the payment of equal remuneration for equal work, and difference in the
remuneration related to the value of work (Cascio, 2010).
In context of ethical management perspective the main issues related to equal pay are equality of
pay at external level. Additionally, remuneration related to the business ethics is sometime not
fall under the scope of legal requirements, because it might be possible that some applications
may not be legal but they are ethical in nature.

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From the point of view of business ethics, first stage related to the establishment of
compensation management system is development of objectives related to remuneration and
specifies structure related to pay, pay system, and duties and responsibilities related to the
remuneration.
In 1989, Strasbourg Summit introduces special European social cause, and this clause is
considered as important clause while developing remuneration objectives and policies.
Additionally, in 1999, OECD proposes different policies and these policies are revised,
recognized, and adopted worldwide in 2004. These policies specify policies and objectives
related to the organization pay.
Generally, two questions are asked by the employee in context of compensation, and these
questions are related to fundamental rights of the employees. First question states whether
payments made by employer to the employees are fair and the second question states in which
manner employees can compare their pay to other employees in the enterprise, region, and
industry?
Above stated questions provide guidance to the organization for establishing objectives and
policies in terms of remuneration. Additional aspects in this context are profitability, pay costs,
competitiveness, and remuneration which are paid to employees so that employees are able
improve their daily live and secure their future. In ethical manner, ideal remuneration related to
the objectives and policies satisfy the needs of the employees and motivate them and this is done
by complying with the approaches related to the utilitarianism, reliability, integrity, legal
compliance, equity, balance, timeliness, objectivity, and clarity (Demir & ACAR, 2014).

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Values adopted by organization for ethical decision making:
There are number of approaches which can be adopted by the organization for ensuring ethical
decision making in the organization and some of these approaches are stated below:
Ethical programs: organizations can implement the program related to the compliance and
ethics for the purpose of guiding the decision making and behavior of the employees. It must be
noted that for managing the risk in the organization it is necessary to ensure compliance with the
regulatory requirements and the organization’s own policies. Monitoring and maintenance of
compliance are not just to keep the regulators happy, but it is the path through which
organizations can maintain its ethical health and promote its values.
Programs related to compliance and ethics not only promote values, but it also provides support
to the objectives of the business. These programs also set boundaries for organization in context
of their legal and ethical behavior. It frame the system which alert the management of the
organization whenever organization getting close to cross the legal and ethical boundary (Kidder,
n.d.).
Whistleblower protection: whistleblower is the person who blow whistle in the ears of the
management of the organization. In other words, whistle blower tells the public or the
organization authorities about the alleged misconduct occurring in the organization. This alleged
misconduct is occurred in different forms such as violation of any law, rule, or regulation, etc.
whistle blowers can make their allegation against internal or external management, etc. there are
number of organizations which ensure protection of the whistleblowers by establishing accurate
framework for this purpose.

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Role of mangers: another most important aspect in this is the role played by managers in the
ethical decision making. Managers must ensure that they are conducted ethical and legal
behavior in the organization because if they conduct such behavior it becomes trend of the
organization and ensure ethical decision making (Lumen, n.d.).
Conclusion:
After considering the above facts, it can be said that organization must establish appropriate
framework which ensure equal pay to the employees for equal pay. Equal pay is not only the
legal compliance but it is also an ethical compliance. It reflects the moral and ethical values of
the organization.
References:
Bloom, M. (2004). The ethics of compensation systems. Journal of Business Ethics, 52(2), 149-
152.
Cascio, W. F. (2010). Managing human resources (8th ed.). New York: McGraw Hill.

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Demir, R. & ACAR, A. (2014). Compensation Management System from a Business Ethics
Perspective, Turkish Journal of Business entry, Volume 7(1), Pp 133-148.
Fair Work Act-2009.
FWC. General protections dismissal. Retrieved on 17th March 2018 from:
https://www.fwc.gov.au/termination-employment/general-protections-dismissal.
FWO. Gender pay equity. Retrieved on 17th March 2018 from:
https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/best-practice-
guides/gender-pay-equity.
FWO. Protections at work. Retrieved on 17th March 2018 from:
https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/rights-
and-obligations/protections-at-work.
Human Rights. Equal Pay Handbook. Retrieved on 17th March 2018 from:
https://www.humanrights.gov.au/sites/default/files/content/pdf/sex_discrim/
equal_pay.pdf.
Joseph, S. What Are the Benefits of Equal Pay for Women & Men?. Retrieved on 17th March
2018 from: http://smallbusiness.chron.com/benefits-equal-pay-women-men-11771.html.
Kidder, E. Ethical Decision Making and Behavior. Retrieved on 17th March 2018 from:
https://uk.sagepub.com/sites/default/files/upm-binaries/39590_Chapter7.pdf.
Lumen. Maintaining Ethical Standards. Retrieved on 17th March 2018 from:
https://courses.lumenlearning.com/boundless-management/chapter/maintaining-ethical-
standards/.
Mondaq, (2012). General Protections in the Fair Work Act - Best Practice Guide. Retrieved on
17th March 2018 from:
http://www.mondaq.com/australia/x/200446/employee+rights+labour+relations/
General+Protections+in+the+Fair+Work+Act+Best+Practice+Guide.
SMH, (2010). Equal pay is the law, but it is not yet a reality. Retrieved on 17th March 2018 from:
https://www.smh.com.au/politics/federal/equal-pay-is-the-law-but-it-is-not-yet-a-reality-
20100302-pg9m.html.
WGEA. Pay equity and legal risk management. Retrieved on 17th March 2018 from:
https://www.wgea.gov.au/sites/default/files/Legal-framework-and-pay-equity.pdf.
Workplace ethics advice, (2011). Pay Equality in the Workplace. Retrieved on 17th March 2018
from: http://www.workplaceethicsadvice.com/2011/08/this-piece-was-first-posted-on-

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my-ethics-sage-blog-on-july-28-since-it-has-particular-application-to-workplace-thics-i-
wa.html.