COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 17.07.1996 
COM(96) 336 final 
COMMUNICATION FROM THE COMMISSION 
A CODE OF PRACTICE ON THE 
IMPLEMENTATION OF EQUAL PAY FOR WORK 
OF EQUAL VALUE FOR WOMEN AND MEN 

SUMMARY 
INTRODUCTION 
PART I: ADDRESSEES OF THE CODE 
A. Businesses 
B. Partners in wage-negotiation 
C. Individuals 
PART U: STUDY OF PAY STRUCTURES 
A. Relevant information 
B. Assessing the general information 
C. Particular aspects of the pay system 
PART ffl: FOLLOW-UP WORK WITH A VIEW TO SECURING EQUAL PAY 
A. Approach 
B. Aspects which could be part of a follow-up action 
C. Evaluation of the follow-up work 
CONCLUSION 
INTRODUCTION 
The principle of equal pay for men and women for work of equal value is based on 
Article 119 of the Treaty of Rome and on the 1975 directive relating to the application 
of the principle of equal pay for men and women1. 
Despite these provisions of Community law having been adopted and transposed into the 
legislations of the Member States 20 years ago, the differences in pay between women 
and men remain considerable. Indeed, information available on the manufacturing and 
retail trade sectors (by way of an example) shows a significant disparity between women 
and men's wages in all the Member States. 
What is more, it is confirmed that these pay differences are even greater for non-manual 
than they are for manual workers, which reflects the many different types of job available 
and the tendency for men to occupy managerial positions and women to be secretaries, 
whereas in the case of manual workers, the distribution of jobs, and therefore of pay is 
more restricted (the calculation of the disparity of women and men's pay is based on 
gross average hourly pay for manual workers and on gross average monthly pay for non-
manual workers). 
However, it is worth noting that the average wage is calculated on a general base which 
includes the pay both for full and part time workers. The fact that the proportion of 
women with a part-time job is greater than that of men could partly explain why they 
make up a greater proportion of those on low pay. 
The difference between women and men's incomes is due to many factors and in 
particular: 
to the vertical and horizontal segregation of jobs held by women and men 
(so-called female jobs are still generally less well paid), 
to the numerous sectors of the economy where mainly men work, offering extra 
pay, working time bonuses etc, all of which widen the pay disparities between the 
sectors outside of the base rates, 
to the considerable differentiation in pay resulting from collective agreements 
linked to the recognition of skills, to the type of business and the type of industry 
or sector. Gender-specific segregation in employment applies to each of these 
divisions, increasing the potential for such differentiation, 
to the systems of collective agreements which allow salary structures to reflect the 
negotiating power of different groups of employees. As a result, women are 
generally weaker in negotiations. 
'Directive (EEC) N. 75/117 of the Council OJ N. L 45, 19.2.1975, p.19 
3 
In order to help lessen this difference, the Commission has decided to adopt this code of 
practice which follows on from its Memorandum on Equal Pay for Work of Equal Value, 
published in June 19942. 
The Code aims to provide concrete advice for employers and collective bargaining 
partners at business, sectoral or intersectoral level to ensure that the principle of equality 
between women and men performing work of equal value is applied to all aspects of pay. 
In particular it aims to eliminate sexual discrimination whenever pay structures are based 
on job classification and evaluation systems. 
The Code is intended to be applied in the workplace both in the public and the private 
sector. Employers are encouraged to follow the recommendations in the Code, adapting 
them to the size and the structure of their businesses. The nature of the approaches and 
measures set out in the Code is neither exhaustive nor legally binding but provides 
models for action which could be taken in the area in question. The Code should be read 
in conjunction with the memorandum, which illustrates the principle of equal pay in the 
light of the decisions of the Court of Justice of the European Communities. 
Codes of practice are more widely and effectively applied when they have been conceived 
in close co-operation with the intended users. This is why the Commission consulted the 
social partners on the content and drafting of the current code. It was essential for the 
Code to reflect, as far as possible, the approach proposed by the social partners, which 
was that the Code should be short, its use voluntary and effective and that it should be 
capable of being used during different stages of collective bargaining. 
Essentially the Code proposes two things: 
* that negotiators at all levels, whether on the side of the employers or the unions, 
who are involved in the determination of pay systems, should carry out an 
analysis of the remuneration system and evaluate the data required to detect sexual 
discrimination in the pay structures so that remedies can be found , 
* that a plan for follow-up should be drawn up and implemented to eliminate any 
sexual discrimination evident in the pay structures. 
2COM {94) 6 final 
PART II 
ADDRESSEES OF THE CODE 
A. BUSINESSES 
The Code is principally aimed at employers regardless of whether they are from the 
public or private sector because the principle of equal pay for work of equal value must 
in the first instance be applied by employers, who are required to pay equal wages 
whenever work of equal value is being carried out by male and female workers and 
whenever a difference in pay cannot be explained or justified other than on the basis of 
the worker's sex . 
It is worth noting the particularly important role played by the public authorities as 
employers. Indeed, the full application of the principle of equal pay in the public sector 
would have an added value by serving as a good example. 
Businesses, are of course invited, in agreement with their staff and/or their 
representatives, to apply the measures proposed in the Code, in the manner most suited 
to their size and structure. 
B. PARTNERS IN WAGE NEGOTIATION 
The Code targets the social partners directly. Indeed, most pay scales are the result of 
collective bargaining at sectoral or intersectoral level. The Court of Justice of the 
European Communities has also stated on a number of occasions that collective 
agreements must respect the principle of equal pay for the same work or work of equal 
value. 
The task is therefore one of helping the parties in wage negotiations to remove all direct 
or indirect discrimination from the collective agreements concerned, thereby obtaining 
equal recognition for the work of women and men when the job requirements to be met 
are equal. 
Indeed it would be desirable if at this level and subject to any necessary adjustments, the 
type of approach proposed could also be applied in relation to analysis of pay structures 
and follow-up action. 
C. INDIVIDUALS 
Finally, the Code also aims to assist women and men who believe their work is 
under-valued because of sexual discrimination to obtain the necessary information to 
resolve their problem through negotiation or, as a last resort, to bring the matter to the 
national courts. 
It should be noted in this respect that the question of equal pay goes far beyond a mere 
study of pay structures within any one business, sector or group of sectors. It also 
requires action at national level not only on behalf of employers' and employees' 
associations but also by governments. To this end, for example, a national-level statistical 
apparatus allowing a survey to be carried out concerning the relative pay rates found in 
various branches, sectors or regions could prove to be an effective instrument in the 
measurement of the extent to which a worker's sex accounts for the differences 
established. 
PARTE 
STUDY OF PAY STRUCTURES 
The study of pay structures aims to reveal any possible under-valuation of work 
typically carried out by women in comparison with that typically carried out by men and 
vice-versa. To this end the employer must determine, preferably in agreement with the 
staff and/or their representatives, what useful pieces of information should be gathered 
and then evaluate this information to see if there are signs of any procedures and 
practices relating to pay which are at the root of instances of discrimination. 
This study should comprise three phases. First the relevant information should be 
collected and then it should undergo a two-stage evaluation. The first stage would be to 
draw up a general table showing the sex and pay of workers, and then the second stage 
would consist in analysing those pay-related elements identified as potentially 
discriminatory. 
A. THE RELEVANT INFORMATION 
Information relevant for the purposes of the analysis should be collected across the whole 
of the organisation's workforce. Pay analysis within one establishment or within an 
individual grading or bargaining structure is not adequate as problems of sex 
discrimination may well arise between employees who work at the same or separate 
establishments, across grading structures or in different bargaining units. The focus of 
the information collected will vary according to the structure of the company and its pay 
system. Some of the information set out below will not be relevant to some 
organisations. It is for the organisation to determine, in conjunction with its employees, 
what information is relevant and necessary for the analysis. 
1. Employees 
Information about employees should be obtained from personnel and payroll 
records to show:-
gender 
grade 
job title 
hours of work excluding breaks 
bargaining unit or collective agreement 
required entry qualification 
other relevant qualifications 
length of service with organisation 
length of service with other relevant organisations 
basic pay 
additional payments and contractual benefits 
The information should include temporary staff as well as those who are on 
permanent contracts and any employees who work as homeworkers/outworkers. 
2. Pay arrangements and practices 
Information about pay arrangements and practices should be obtained from the 
organisation's rules, handbooks and collective agreements. This will vary from 
organisation to organisation but may include: 
job descriptions 
grading, classification and evaluation systems 
grading/classification criteria 
pay provisions of collective agreements 
rules governing entitlement to pay and other contractual benefits 
job evaluation manual 
performance pay handbook 
rules governing the operation of bonus and incentive schemes 
piece work or contract work pay arrangements 
information on the market situation of individual jobs where 
relevant. 
It is important that information is also obtained on pay arrangements and 
pay practices which follow custom and practice as well as formal rules. 
B. ASSESSING THE GENERAL INFORMATION 
The first stage of the assessment of the information should be the establishment 
of a general picture on gender and pay. An analysis may reveal that the pay 
system rewards employees by reference to qualifications. It may be that the 
qualifications rewarded do not reflect the informal qualifications which women 
have acquired. For example, in some Member States sewing skills might not 
attract a certificate but sewing machinists could not undertake the work without 
such skills. The definition of qualifications may need to be reviewed and in some 
cases expanded. Are the qualifications necessary for the jobs performed? 
Where a large organisation has a complex pay structure, a clear course of action 
to address discrimination identified may not emerge. Therefore the wage structure 
chniiM h*» trî>ncr»ar«ant should be transparent. 
The general picture will provide an overview of pay arrangements and will assist 
in the identification of areas for priority attention. Particular aspects of the pay 
system will require a greater depth of analysis. 
Examples of key indicators of potential sex bias are given below: 
women have lower average earnings than men with the same job title. 
women have lower average earnings than men in the same grade. 
women in female dominated unskilled jobs are paid less than the lowest 
male dominated unskilled job. 
jobs predominantly occupied by women are graded or evaluated lower than 
jobs predominantly occupied by men at similar levels of effort, skill or 
responsibility. 
women are paid less than men with equivalent entry qualifications and 
length of service. 
where separate bargaining arrangements prevail within one organisation 
those dominated by men receive higher pay than other bargaining groups 
dominated by women. 
the majority of men and women are segregated by different grading, 
classification and evaluation systems. 
part-time or temporary workers, who are mainly women, have lower 
average hourly earnings than full-time or permanent employees in the 
same job or grade. 
part-time or temporary workers, who are mainly women, have access to 
fewer pay and other contractual benefits. 
different bonus arrangements, piece rate and other "payments-by-result" 
systems, apply in different areas of production affecting disproportionately 
one gender. 
different bonus, piece rate and other "payment by results" calculations 
apply to different jobs in the same department affecting disproportionately 
one gender. 
different overtime rates apply in different departments affecting 
disproportionately one gender. 
holiday entitlements vary between jobs in the same grade affecting 
disproportionately one gender. 
Whilst the findings above do not in themselves mean that there is unlawful sex 
discrimination in the pay system, they all merit further investigation. Each 
element in the make-up of pay or in the entitlement to pay and other contractual 
benefits needs to be analysed to ensure that there is an objective justification 
which is not affected by the sex of the workers explaining the differences in pay. 
C. PARTICULAR ASPECTS OF THE PAY SYSTEM 
Practices will vary from organisation to organisation and this will affect the 
outcome of the analysis. Set out below are examples of practices which might 
prove to be discriminatory together with guidance on how to address them. 
However, it should be stressed that these practices are only mentioned as 
examples and that it is in no case implied that they are to be found in all 
organisations. 
1. Basic Pay 
Women are consistently appointed at lower points in a pay scale than 
men are. 
Examine recruitment and promotion records to see if different treatment 
is objectively justifiable irrespective of sex. 
Are qualifications rewarded by allowances necessary for the posts? Is the 
way qualifications are defined affecting women adversely? 
Women are paid less than male predecessors in the job. 
Check if job duties and responsibilities are the same or have changed. Do 
the changes justify any pay reduction? 
Women progress more slowly through incremental scales and/or 
seldom reach higher points. 
Check whether service pay is linked to ability to do the job rather than 
length of service. Where women have broken or shorter periods of service 
because of family responsibilities, they may be less able to meet length of 
service criteria. 
Investigate criteria by which employees are progressed through a scale. 
Men are paid more, by supplement or by a higher grading, because 
of "recruitment and retention" problems. 
Adopt measures to deal with recruitment and retention problems eg: 
existing staff could be trained and then avail of development initiatives. 
The pool from which staff are normally drawn could be expanded. For 
example clerical and non-manual staff might be considered for 
management training and apprenticeships through the use of positive 
action. 
2. Bonus/Performance Pay and Piece Rates 
Female and male manual workers receive the same basic pay but men 
have access to bonus earnings. 
Check if the differences in access to bonus can be objectively justified 
irrespective of sex. Do the differences in earnings reflect real differences 
in productivity? Investigate how access to overtime, weekend and shift 
working is provided. 
Performance pay is only available to senior posts/full 
timers/employees covered by the appraisal system. 
Check if the coverage of the scheme and the exclusions are objectively 
justified. 
Women consistently receive lower performance ratings than men. 
Review the criteria for performance rating to identify direct and indirect 
sex discrimination. 
3. Pay Benefits 
A smaller percentage of women employees than men are covered by 
the organisation's pay benefits. 
Check the eligibility requirements for pay benefits (such as sick pay, 
pensions, low interest loans, share options scheme or other allowances) to 
ensure there is no indirect discrimination in particular in the criteria. 
4. Part-time workers 
Part-time workers receive lower hourly pay rates or they are 
excluded from bonuses and benefits. 
Part-time workers are often excluded from pension and sick pay schemes. 
They may be required to work many more years than full time workers 
before they are eligible for training or service payments. Unless a clear 
and objective explanation is provided, the exclusion of part-time workers 
is likely to amount to sex discrimination. Check whether part-time 
workers are treated differently and, if so, why. 
5. Job Classification. Grading. Evaluation and Skills/Competencv-based systems 
Job evaluation, grading classification and skills/competency-based systems 
are mechanisms which are used in some Member States to determine the 
hierarchy or hierarchies of jobs in an organisation or group of 
undertakings as the basis for pay systems. The following comments are to 
assist those organisations which use such schemes to analyse them to check 
they do not inadvertently discriminate against typically female workers in 
particular. Pay systems based on such schemes may have been in place 
in organisations for many years, without any review and many incorporate 
features which contribute to the undervaluing of work undertaken by 
women. 
10 
a. Nature of the organisation 
What is the objective of the organisation? What is its nature? 
What services and/or products does it provide? 
Asking these questions will contribute to a determination of whether the 
design of the scheme reflects reasonably the priorities of the organisation. 
It may transpire that by valuing certain elements in work the priority of 
the organisation is not reflected. For example, a scheme in a hospital 
which fails to value at all the care of patients but over-emphasises financial 
skills and responsibilities may require review. 
b. Type of Scheme 
Is the scheme capable of measuring the different elements in 
diverse work or does it rank jobs without such assessments? 
Are different jobs covered by different schemes, for example one 
for manual and one for clerical workers, or are all jobs covered by the 
same scheme? In the latter case, is the system capable of evaluating 
evenly the work performed by different groups of employees? 
Is it appropriate to the jobs covered? 
Because of gender segregation in the labour market and the argument that 
traditional job evaluation and classification schemes are not capable of 
classifying inherently different work on a uniform scheme, often there has 
been no common yardstick for measuring typically male and female jobs. 
Schemes which do not cover certain types of predominantly female work 
obviously cannot determine whether such work may be equally demanding, 
albeit in different ways, as male work. The concept of equal pay for work 
of equal value requires the measurement of diverse work by reference to 
a common standard. Whilst this approach is not common, some 
organisations are attempting to integrate manual and clerical jobs into 
unified systems. If such a scheme is put in place it assists in the removal 
of sex bias normally associated with gender-segregated pay structures. 
c. Job titles 
Are different job titles given where similar work is undertaken? 
Different job titles may be given to the same or similar jobs distinguished 
only by the gender of the job holder eg: Storekeeper, Stores Assistant. 
This may have implications for status and pay levels. 
11 
d. Job Content 
Do the job descriptions describe all the work of the jobs and of 
typically female jobs in particular? 
Do the job descriptions accurately describe the content of the tasks 
performed? In particular, is traditionally female work adequately captured? 
Is attention drawn to aspects of women's work which have previously gone 
unrecognised? 
Is the work content of jobs consistently described? 
Job descriptions should be constant in format irrespective of the sex of the 
person carrying out the occupation. There are often inconsistencies in the 
way male and female work is described. 
e. Factors 
A factor in a formal job evaluation scheme is an element of a job which 
is defined and measured, such as skill or mental effort. A factor may in 
turn be divided into sub-factors which go into greater detail under a 
particular heading. Jobs to be evaluated are assessed against the factors 
and sub-factors chosen. 
Have any significant job features been omitted? 
Some factors may favour one sex only. It should be ensured that factors 
capture both male and female work. 
Factors which are more likely to be present in female jobs may not be 
identified at all by a scheme and therefore not valued at all, for example 
caring skills and responsibilities, human relations skills, organisational 
skills/responsibilities, manual dexterity and/or co-ordination, etc. 
Categorising jobs by reference to light or heavy work or weighting 
different factors without taking account of other elements in female as 
opposed to male work impacts adversely on women. 
Does the job classification based on factors, or the weighting of 
these factors, respond to objective criteria? 
Classifying work by reference to formal qualifications alone can in some 
instances impact adversely on women. There are skills which cannot be 
learned by experience alone but which benefit from formal education and 
qualifications. However, the qualifications or skills which many women 
have gained are frequently not identified as qualities to be counted 
positively when classifying work in the labour market. For example, 
nurturing, cleaning and caring skills may be assumed in certain types of 
work and not rewarded in pay systems. A kindergarten nurse's training 
may be school-based and therefore less well rewarded than typically male 
jobs which may be apprenticeship based. 
12 
Formal qualifications are generally rewarded but those learnt through a 
different process are frequently ignored. For example, experience learned 
in the home or by example from another worker may not be credited in 
the payment system. Thus the basis on which training and qualifications 
are rewarded may need to be reviewed. 
Further to this assessment, the determination of the pay rates to be attached to the 
final job evaluation should reflect the relativities of actual demands of the work 
not "the rate for the job" which may be influenced by traditional sex-based 
assumptions of worth. Therefore women should attract the pay levels enjoyed by 
male occupations with which their work has been found to be equivalent. 
PART HI 
FOLLOW-UP ACTION TO TARGET EQUAL PAY 
A. APPROACH 
Once the pay-structure study is completed , follow-up action is needed to tackle every 
instance of sexual discrimination detected in the pay structure. The aim of this action 
should be the elimination of all discrimination by applying, as soon as possible, the 
principle of equal pay for work of equal value. The options chosen to tackle any 
discrimination ascertained will depend on many factors including the size and the 
structure of the business as well as the nature and extent of the discrimination. 
The level of collective bargaining involved will also have a considerable impact on the 
measures for eliminating pay discrimination. When the pay structure under consideration 
is the result of a collective agreement concluded at a higher level, (eg sectoral or 
national) it is at that level that action needs to be taken in cases where sexual 
discrimination is detected. If the agreement covers a number of very different 
workplaces with different proportions of women and men on the pay-roll, other studies 
may be needed to determine whether the problem of pay discrimination applies to all, 
or most, of the workplaces concerned. 
This follow-up action must be evaluated in order to establish how the matter of equal pay 
is progressing. Whenever pay structures are subsequently adjusted a study will be needed 
to ensure that sex-based discrimination does not reappear. Regular reviews of pay 
structures are then recommended - every three years for example - to verify that the 
principle of equal pay for work of equal value is being respected. 
B. POINTS WHICH COULD FEATURE IN A FOLLOW-UP ACTION 
The follow-up action to remedy the problems of discrimination found to exist in a given 
pay system could comprise: 
* a merging of those jobs which are gender-specific in terms of the workers who 
carry them out and application of the higher rate of pay which the men receive; 
13 
* efforts to harmonise pay systems which create barriers between different types of 
job (eg: office jobs and production jobs); 
* a redefinition and re-evaluation of formal qualifications. For example, certain 
skills which women are likely to acquire in an informal manner could be taken 
into account and put on an equal footing with formal skills that are traditionally 
male (plumbing, stone and brickwork, etc) 
* a re-evaluation of the skills which traditionally are more women's than men's 
(eg: manual dexterity); 
* a reorganisation of work by broadening the employment categories to allow 
women to access typically masculine jobs where conditions are better; 
* the organisation of active training measures to allow access to jobs where the 
other sex predominates; for example the organisation of courses allowing women 
to take up apprenticeships for mechanical jobs, which until now have attracted 
mainly men; 
* an extension of the various advantages to include part-time workers. 
C. EVALUATION OF THE FOLLOW-UP ACTION 
To evaluate the implications of the proposed follow-up action and to avoid perpetuating 
sexual discrimination, the following questions need to be asked: 
* What is the effect, for each sex and the workforce as a whole, of the proposed 
follow-up action aimed at securing equal pay for work of equal value? 
(1) how many women are better paid as a result? 
(2) how many women see their pay blocked or remain at the same level of 
pay? 
(3) how many women are worse paid as a result? 
(4) how many men are better paid as a result? 
(5) how many men see their pay blocked or remain at the same level of pay? 
(6) how many men are less well paid as a result? 
(7) what are the movements of men and women in any grading, classification, 
evaluation or competence system? 
* What levels of pay does the follow-up action propose? 
* Are groups of employees, such as the part-time workers, excluded from certain 
procedures and conditions of employment? 
* What proposals does the action plan make concerning bonuses, piece work and 
other pay systems based on results or output? 
* Will there be a period of transition for the application of equal pay? If so, how 
long? Is it reasonable? 
* What procedures are proposed with regard to the schedule for regular pay 
negotiations? 
14 
* What levels of pay and employment conditions are proposed for new staff? 
It must be ensured in every case that the follow-up action brings about an improvement 
in pay and other work conditions and does not have the opposite effect. 
15 
CONCLUSION 
The aim of the Code is to serve as a working tool for the greatest possible number of 
social actors who are likely to be in a position to further the principle of equal pay for 
women and men for work of equal value. 
This initiative should therefore be seen as part of a dynamic follow-up exercise involving 
management and labour plus other parties concerned at all levels capable of ensuring both 
a wide dissemination and an effective use of the Code. 
At European Union level and in the context of the Fourth Community Action Programme 
on equal opportunities for men and women (1996-2000), which was adopted by Council 
Decision 95/593/EEC3, the will to mobilise all those who are concerned with the 
economic and social questions of everyday life as well as those who work in the legal 
sphere to focus on this problem has already been clearly expressed. 
In the light of the recommendations made by the European Parliament in its Report on 
the Memorandum on Equal Pay for Work of Equal Value (PE 213.161/final), adopted 
on 21 December 1995, the Commission in cooperation and/or jointly with the social 
partners and other appropriate authorities, will be able to develop further and/or support 
initiatives aimed at promoting such schemes as: 
campaigns to raise awareness and provide information on equal pay for work of 
equal value, targeting, in particular, employers, employees and/or their 
representatives, as well as the parties involved in collective bargaining; 
the training of experts who can study and propose practical solutions to resolve 
problems affecting equal pay; 
the greater involvement of women in the processes of collectively negotiated wage 
settlements; 
the identification, examination and exchange of best practice likely to enrich the 
Code by providing concrete examples of the type of measures that it proposes, as 
well as their practical implementation. 
3OJL 335, 30.12.1995 p.37 
16 
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