Initiative

Equal Pay: a collective agreement for bank employees

Summary of the initiative

The Employer’s Association of the Swedish Banking Institutions (BAO) organises almost all the banks in Sweden, as well as companies closely related to the banks such as insurance, finance, brokers, credit, IT and real estate companies. BAO also includes some other types of companies such as building societies and stock brokers. It has around 150 members who employ about 45 000 employees. Finansförbundet is the biggest trade union organisation within banking and finance in Sweden. The Financial Sector Union of Sweden (FSU) organises all who work in the financial sector regardless of educational background or job position. FSU is politically independent and is present everywhere – from the big banks with several thousand employees to the small broker with a niche business.

BAO and FSU agreed to undertake a specific task in order to tackle non-objective pay gaps in the banking and finance sector during the agreement period of 2011-2014. This joint initiative is to be carried out as a project named “Equal Pay”.

The background is that during negotiations concerning the new agreement, the social partners noticed that when they looked at the common pay statistics there was a pay gap between men and women that was hard to explain. According to common equality statistics for the banking and finance sector in 2011, female employees had a median pay of 91 % in relation to men. A difference in pay is objective so long as it may relate to differences in an individual’s competence, skills, effort etc. in accordance with the bank/company pay principals for setting salaries. BAO and FSU agree that non-objective pay gaps should not occur. Objective pay is also one of the preconditions of being an attractive employer. Efforts to deal with non-objective pay differences are therefore also a strategic business issue. The objective for this joint initiative is that the statistical pay gap between women and men that perform the same work – and that cannot be explained – should be considerably reduced.

Pay structure reviews are important, but the reviews previously undertaken in the companies were not effective enough. BAO and FSU have therefore agreed to add a new working method to complement the traditional pay structure reviews. The new method consists of companies specifically highlighting and examining certain groups of employees with jobs considered as equal, calculate the measured capacity for equality and put an increased responsibility on the pay-setting managers during the pay reviews. The new method can thus be divided into three steps:

1. Particular focus on certain groups with job considered being equal;
2. A framework calculation to measure the capacity for equality;
3. The pay-setting manager´s role and increased responsibility at pay reviews;

The new approach means that non-objective pay gaps are to be rectified by the pay-setting manager in the individual pay talk. Ordinary pay reviews are to be carried out in the customary manner at companies - with the additional instruction to focus on and rectify erroneous wages. In this manner, the efforts to address non-objective pay gaps are integrated into the pay reviews and become a natural element of the normal pay-setting process. The starting point for setting wages is the pay criteria to be applied. Both the pay-setting manager, and the employees should be familiar with the pay criteria.

The collective agreement is based on the fact that pay talks are used as the method for setting wages, unless the local parties agree otherwise. The pay talk is a dialogue between the pay-setting manager and the employee. You as a pay-setting manager are ultimately responsible for the talk, which should be of a high standard. The talk is also where efforts must be made to permanently overcome the matter of non-objective pay gaps once and for all.

The manager will receive statistical support prior to the pay talks. These statistics will be relevant for the company and presented separately for women and men. Access to statistics presented separately for women and men is essential to be able to assess whether inaccurate pay gaps exist between the genders. The local parties must determine what statistics are required at the company. The statistics must be presented both as an overall view and in detail. Companies with operations all over Sweden may also use statistics presented by geographical location.

Further to the agreement, a handbook has also been produced. It describes how the employers’ representatives and the local organisation of FSU should apply the method of working. There are opportunities to adapt the method locally within the framework of the agreement. 

Pay structure reviews should be undertaken annually during 2011-2014 in accordance with the Discrimination Act. This involves annually surveying and analysing both the regulations and practice concerning pay and other working conditions that are applied by the employer, as well as pay gaps between women and men that perform work considered to be equal, or of equal value. The survey should include all employees in the company and the result is to be reported in an action plan.