Equal pay and equal treatment at work (Article 157 of the Treaty of the Functioning of the European Union (TFEU) and Recast Directive 2006/54)

• Author: Anu Laas
• Pages: 24-35

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4 Equal pay and equal treatment at work (Article 157 of the Treaty of the

Functioning of the European Union (TFEU) and Recast D irective 2006/54)

4.1 General (legal) context

4.1.1 Surveys on the gender pay gap and the difficulties of realising equal pay

Estonia has the highest gender pay gap recorded in the EU. Several studies by sociologists,

economists and statisticians have been carried out, but legal analysis and legal changes

have not taken place. According to Paats and Lunev (2014) and Marling (2017) confirm

that the explained part of gender wage gap is relatively small and the unexplained part is

high.78 The variables that increase the unexplained part of the gap and therefore favour

men are state sector, occupation, and enterprise ownership and management

responsibilities. The variables that decrease the unexplained part of the gap and therefore

favour women are enterprises’ economic activity and location, also size, field of speciality,

education and marriage status. Lower pay for women among managers and teachers

compared with their male counterparts shows that the gender wage gap is not just due to

the gender segregated labour market.

The Gender Equality and Equal Treatment Commissioner, in cooperation with universities,

carries out the research project Income, Wealth and Gender ( InWeGe), which explores

gender differences in income and wealth over a person's life cycle. The first articles have

already been published. Masso et al. (2020) found that firm-specific pay differentials are

an important source of wage ine quality and can be decomposed into a combination of

sorting (women are less likely to work at high-paying firms) and bargaining (women

negotiate worse wage bargains with their employers than men) effects.79

According to preliminary data of Statistics Estonia, in October 2018, there was a gender

pay gap in all economic activities. The pay gap was biggest in financial and insurance

activities (32.2 %) and smallest in transportation and storage (1.9 %). In October 2018,

the gross hourly earnings of female employees were 18.7 % lower than the gross hourly

earnings of male employees. Statistics Estonia carries out the ‘Structure of Earnings

Survey’ every four years in October. The data from the survey reflect the number of

employees, structure and earnings by occupation, economic activity, age, sex, type of

contract, full-time and part-time work and education.80

During the years 2018-2021, the wage survey is targeted at uncovering the reasons for

the gender wage gap. Measures to tackle the gender wage gap are detailed in the Welfare

Development Plan 2016-2023 and highlighted in the National Action Plan for 2015-2020.81

4.1.2 Surveys on the difficulties of realising equal treatment at work

The Welfare Development Plan 2016-202382 is coordinated by the Ministry of Social Affairs.

The plan is seen as a gender equality strategy document and provides research findings

for national action plans.83 The strategy points out shortcomings in policies and the legal

framework, including a need to achieve a substantial reduction in the gender pay gap and

78 Paats, M., Lunev, M. (2014), Palgaerinevuste statistika parem kättesaadavus: kasutatavad andmeallikad,

Statistikaamet; Marling, R. (2017), Gender Equality in Estonia, in: Örtenblad, A., Marling, R. and Vasiljević,

S. (Eds.). Gender Equality in a Global Perspective. New York: Routledge, pp. 246−260.

79 Masso, J., Meriku祭ll, J., Vahter, P. (2020), The role of firms in the gender wage gap,

https://majandus.ut.ee/sites/default/files/mtk/dokumendid/febawb120.pdf.

80 https://www.stat.ee/news-release-2019-122.

81 https://www.riigikantselei.ee/sites/default/files/content-

editors/Failid/eesti2020/eesti2020_action_plan_en_05.05.16.pdf.

82 Sotsiaalministeerium (2016) Welfare Development Plan 2016-2023 (adopted on 30 June 2016),

https://www.sm.ee/sites/default/files/content-

editors/eesmargid_ja_tegevused/welfare_development_plan_2016-2023.pdf.

83 Estonia Beijing +25,

https://www.unece.org/fileadmin/DAM/Gender/Estonian_national_Beijing25_review_report.pdf.