Gender affects severance pay: study

Women often receive less pay over fewer months than men

Women dismissed from their jobs are likely to receive less severance pay than men, whether they take the case to court or negotiate a settlement on their own, new research shows.

University of Victoria professor Ken Thornicroft is preparing to publish two studies that reveal how gender bias harms female employees.

In one study, he examined provincial and territorial appeal court decisions from 2000 to 2011 and found that women received, on average, about 1.7 months less in severance pay than men in wrongful dismissal cases.

The study controlled for factors such as occupation, salary and years of service, so the results single out how gender influences judges’ decisions, Thornicroft said.

“Then you get into the ticklish area of saying, ‘ Well, why is this so?’” he said. “And I personally don’t want to say, ‘ Well, it’s just old men judges sticking it to women.’ I’m not for a moment suggesting that.”

Thornicroft believes the bias is more unconscious than that and reflects society’s views.

“I think it just shows how sticky some of these stereotypes are, how embedded they are in the way we operate on a day- to- day basis.”

The other study supports that idea by showing that even young students display a similar bias.

In an experiment conducted over seven years, Thornicroft, who teaches business law and employment relations at the Gustavson School of Business, gave pairs of his students a scenario in which an employee was dismissed. One student acted for the employee and the other for the employer in negotiating a settlement. The scenarios for each pair were identical except that in some cases the employee was a man and in others a woman.

In the well over 600 separate sets of negotiations, women, on average, received two months less severance than men. And the worst- case scenario was a female student negotiating on behalf of a female employee, Thornicroft said.

“The results of this experiment should give rise to some considered reflection, if not outright consternation,” Thornicroft writes. “There is no principled reason why gender, per se, should affect severance pay settlements.

“Further, the fact that women are apparently themselves the source of an anti- female bias is particularly troubling. If any cohort ought to be free of a gender bias toward women, it should be the current generation of young adult females enrolled in business schools. And yet, this is apparently not the case.”

Thornicroft notes that women face a double disadvantage, because they often have lower salaries than men.

So if they also get fewer months of severance multiplied by a low salary, they’re getting hit twice.

He suggests that governments consider creating a formula for determining severance pay and enshrine it in law. The formula could include factors like age, salary, years of service and size of the employer.

“And that wouldn’t be very far off what judges are doing in any event, and then of course there wouldn’t be any discretion,” he said.

A legal formula would also free up court time by reducing the number of wrongful dismissal suits, he said.

The study on gender bias in negotiations is slated for publication this summer in the Journal of Workplace Rights.

The study of appeal court decisions is being considered for publication by the Canadian Labour and Employment Law Journal.