Equality Plans in Companies

On 14 January 2021, Royal Decree 901/2020, of 13 October, which regulates equality plans and their registration, came into force.

All companies, regardless of the number of workers, must: adopt, after prior negotiation, measures aimed at avoiding any type of labour discrimination between women and men; promote working conditions that prevent sexual harassment and harassment based on sex; and establish specific procedures for its prevention and to channel complaints or claims that may be made by those who have been subjected to it (protocols against sexual harassment or harassment based on sex).

All companies with 50 or more workers are obliged to draw up and implement an equality plan, although there are the following transitional periods for adaptation (ex Transitional Provision Twelve Second of LO 3/2007, introduced by Royal Decree 8/2019):

• Companies with 250 employees or more: it is compulsory to have an equality plan since the entry into force of LO 3/2007.
• Companies from 201 to 250 workers: it is compulsory to have an equality plan from 7-3-2019.
• Companies from 151 to 200: it is compulsory to have an equality plan from 7-3-2020.
• Companies from 101 to 150 workers: must have equality plans from 7-3-2021;
• Companies with 50 to 100 workers: must have equality plans in place as of 7-3-2022.
• In addition, companies with fewer than 50 workers are obliged to implement and draw up an equality plan if they are obliged to do so by the collective bargaining agreement applicable to them, or when imposed by the labour authority in the framework of a disciplinary procedure in substitution of the accessory sanctions for the drawing up and application of the plan.

In companies with fewer than 50 employees, the drafting and implementation of equality plans will be voluntary, following consultation or negotiation with the workers' legal representatives.

For groups of companies, it is possible to implement a single equality plan when the diagnosis of the situation of the companies in the group has an identical result and when this is agreed with the parties entitled to negotiate them. In this case, the appropriateness of having a single plan for several companies in the group must be justified.

With regard to the way in which the number of employees is calculated for the purposes of the obligation to draw up the equality plan, the following rules are established:

• The entire workforce of the company shall be counted, regardless of the number of workplaces and the type of contract; and
• Fixed-term contracts in force and those which, having been in force during the previous 6 months, have been terminated at the time of the calculation shall be counted, so that every 100 days worked or fraction thereof shall be counted as one additional worker.
• Workers who provide services under a stand-by contract shall be counted.

This calculation must be carried out twice a year (on the last day of June and December). Once the threshold that makes the plan mandatory has been reached, the obligation to negotiate, draw up and implement the plan will arise, which will be maintained even if the number of employees falls below fifty once the negotiating committee has been set up.

Royal Decree 901/2020 establishes the obligation to negotiate the equality plan with the workers' legal representatives or, failing that, with a negotiating committee.

In companies that have legal workers' representatives (RLT), the legitimisation to negotiate on behalf of the workers will be held by the works council, the personnel delegates and, where appropriate, the trade union sections that make up the majority of the members of the committee.

In companies where there is no legal representation, a negotiating committee will be set up, comprising, on the one hand, company representatives and, on the other hand, workers' representatives, made up of the most representative trade unions in the sector to which the company belongs and which are entitled to form part of the negotiating committee of the applicable collective agreement.

However, this trade union committee shall be validly made up of those organisations that respond to the company's call within 10 days.

If there are workplaces in the company with legal representation and workplaces without such representation, the social partners shall be made up, on the one hand, of the legal representatives of the employees of the workplaces that have such representation and, on the other hand, of the trade union committee constituted in accordance with the above.

What is the new agreement of the Equality Plan?

The diagnosis of the situation, the starting point of the Equality Plan, must be extended to all the company's jobs and work centres and will refer at least to the following matters:

• a) Selection and recruitment process.
• b) Professional classification.
• c) Training.
• d) Professional promotion.
• e) 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.
• f) Co-responsible exercise of personal, family and working life rights.
• g) Under-representation of women.
• h) Remuneration.
• i) Prevention of sexual and gender-based harassment.

Equality Plans (voluntary or compulsory) must have the following minimum content and structure:

• Determination of the parties to the contract.
• Personal, territorial and temporal scope.
• Diagnostic report on the situation of the company (or, in groups of companies, of each of the companies in the group).
• Results of the remuneration audit, as well as its validity and periodicity (RD 902/2020, of 13 October, on equal pay for women and men).
• Definition of qualitative and quantitative objectives of the equality plan.
• Description of specific measures, implementation period and their prioritisation, as well as the design of indicators to determine the evolution of each measure.
• Identification of the means and resources, both material and human, necessary for the implementation, monitoring and evaluation of each of the measures and objectives.
• Calendar of actions for the implementation, monitoring and evaluation of the equality plan measures.
• Monitoring, evaluation and periodic review system.
• Composition and functioning of the committee or joint body responsible for the monitoring, evaluation and periodic review of the equality plans.
• Modification procedure, including the procedure for resolving possible discrepancies that may arise in the application, monitoring, evaluation or review, insofar as legal or conventional regulations do not require their adaptation.
• The Equality Plan must include a specific committee or body for monitoring and follow-up of the plan (follow-up committee).

The period of validity of the equality plans will be determined, where appropriate, by the negotiating parties, although it may not exceed four years, and must be reviewed periodically when certain circumstances arise that justify their modification, including in the event of a merger, takeover or change in the legal status of the company.

Equality plans must be registered in the Register of Collective Bargaining Agreements and Collective Labour Agreements within 15 days of the signing of the plan, which will allow public access to the content of the equality plan document.

For those equality plans in force at the time of the entry into force of RD 901/2020, a transitional regime of 1 year (from 14 January 2021) is established for them to be reviewed and, if necessary, to adapt their content to the new regulation, following a negotiation process.

Royal Decree 902/2020 on equal pay for men and women was published in the Official State Gazette of 13 October, and will come into force six months after its publication (14/04/2021).

What do the principles of transparency and equal pay mean for companies?

The main novelty of this royal decree is the regulation of two key principles for achieving equal pay in companies: the Principle of pay transparency and the Principle of equal pay for work of equal value:

The principle of transparency is defined as the principle of obtaining sufficient and meaningful information on the value attributed to employees' pay.

Companies and collective agreements must integrate and apply this principle in order to identify any (direct or indirect) discrimination that may exist, through: (a) pay records, (b) pay audits, (c) the job evaluation system, and (d) employees' right to information.

The definition of work of equal value is established when the nature of the functions or tasks, the educational, professional or training conditions required for their exercise, the factors related to their performance and the working conditions under which such activities are actually carried out are equivalent.

All companies, regardless of the number of employees, must have a remuneration register for their entire workforce, including management and senior management, in order to guarantee transparency in the configuration of remuneration, in a faithful and up-to-date manner.

The remuneration register should be suitably broken down by sex, the arithmetic mean and median of what is actually received for each of these concepts in each professional group, professional category, level, post or any other applicable classification system.

Within a period of six months, a procedure for job evaluation will be approved by Ministerial Order.

The Women's Institute, in collaboration with the most representative trade union and employers' organisations, will draw up a guide with indications for carrying out pay audits with a gender perspective.

It is also established that companies that draw up an equality plan must include in it a pay audit, after the negotiation required for such equality plans.

The remuneration audit involves the following obligations for the company:

(a) Carrying out a diagnosis of the remuneration situation in the company. This diagnosis shall require:

1. The evaluation of the jobs.

2. The relevance of other factors triggering the pay gap, as well as possible deficiencies or inequalities that may be observed in the design or use of reconciliation and co-responsibility measures in the company, or the difficulties that workers may encounter in their professional or economic promotion as a result of other factors such as discretionary company actions in terms of mobility or unjustified availability requirements.

b) Establishment of an action plan for the correction of pay inequalities, with the setting of objectives, specific actions, timetable and person or persons responsible for its implementation and monitoring. The action plan must contain a system for monitoring and implementing improvements based on the results obtained. The action plan must contain a system for monitoring and implementing improvements based on the results obtained.

What are the offences and sanctions for non-compliance with equality legislation?

• The automatic loss of aid, bonuses and, in general, of the benefits derived from the application of employment programmes, with effect from the date on which the offence was committed.
• Automatic exclusion from access to such benefits for six months.
• In the case of very serious infringements referring to cases of direct or indirect discrimination on grounds of sex, the sanctions referred to in the previous section may be replaced by the drawing up and implementation of an equality plan in the company, if so determined by the competent authority.
• Failure to comply with the obligations regarding equality plans and measures established in Organic Law 3/2007, of 22 March, for the effective equality of women and men, the Workers' Statute or the applicable collective bargaining agreement, constitutes a serious offence with penalties of between 626 and 6250 euros (art. 7.13 LISOS).
• Failure to draw up or implement an equality plan, or doing so in manifest failure to comply with the terms of the plan, is a very serious offence, with penalties of between 6,251 and 187,515 euros.
• Prohibition from contracting with public sector entities in accordance with article 71.1.d) of Law 9/2017 on Public Sector Contracts.
• Increased fines and possible imposition of a surcharge on benefits in the event of a situation of sexual harassment or harassment based on sex that is disabling for the employee.