The UK Government has published the long awaited Equality Bill, the aim of which is to harmonise and consolidate discrimination legislation and also tackle inequality and discrimination which continues to persist in employment and in the provision of services. Aspects of the Bill which have attracted media attention include the new public sector duty to consider reducing socio-economic inequalities and the banning of “gagging clauses” in employment contracts so that employees can be free to talk about their pay packages. The Bill also extends the concept of positive action to enable employers to recruit or promote people who are from groups which are under-represented in their workforce. Despite concerns of commentators and employers about the difficulties employers may face, the real practical impact of some of these provisions might be low. Other proposals may however have a greater impact. Large employers should note the proposed requirement to report on their gender pay gap, and the recasting of the definition of disability related discrimination should help to redress the balance between the protection of disabled persons and providing employers with the opportunity to defend the treatment that they have given. Many aspects of the Bill fall outside the employment law field but the main issues which will affect employment law are as set out below.

http://services.parliament.uk/bills/2008-09/equality.html

1. Consolidation and harmonisation of previous legislation

The Bill consolidates nine existing pieces of discrimination legislation and around 100 statutory instruments into a single piece of legislation, with the aim of providing straightforward practical guidance for employers, service providers and public bodies.

2. New socio-economic duty on certain public bodies

The Bill introduces new public sector duty to consider reducing “socio-economic inequalities”. This duty on Government ministers, departments and key public bodies such as the NHS and local authorities will affect how public bodies make strategic decisions about spending and service delivery. An individual will not be entitled to bring a claim for damages against a public authority for its failure to perform this duty in a manner favourable to himself.

3. Equality duty on public bodies

A new equality duty will replace the current race, disability and gender equality duty and extend it to gender reassignment, age, sexual orientation and religion or belief. This new equality duty will require a range of public bodies to consider the needs of diverse groups in the community when designing and delivering public services so that people can benefit from fairer opportunities and better public services. The duty will also apply to private bodies that deliver a public function, such as a private firm running a prison. The full list of public bodies will be published in due course.

4. Using public procurement to improve equality

The Bill makes it clear that public bodies will be able to use procurement to support the aim of greater equality. Some public authorities already do this using their public sector equality duties to ask potential contractors for information on equality, such as what percentage of their staff are from ethnic minorities. The Bill enables Ministers to set out how public bodies should go about using procurement to support equality and the Government will consult on the specific issues which underpin the new equality duty over the course of the coming summer. An example given in the Government supporting paper A Fairer Future – The Equality Bill and other action to make equality reality suggests a few examples of what using procurement to promote and support equality could mean. In the employment context it cites the following example:

“A Government department contracting out its recruitment requires that all jobs must be advertised on either a part-time basis or with flexible working unless there is a business reason why this is not possible. This will help to ensure that its work is available to all groups of people, in particular women.”

5. Gender pay and equality reports

For the private sector, clause 73 of the Bill contains a power to require private sector employers with 250 or more employees to produce reports on the gender pay gap in their organisation. The Government’s aim is for employers to publish this information voluntarily on a regular basis. So in order to give voluntary arrangements time to work, it proposes not to use this power before 2013. The Equality and Human Rights Commission will develop set metrics for gender pay reports in consultation with business, unions and others over the summer. The Commission will monitor progress on reporting within the private sector annually and will only use the power contained in the Bill if the voluntary arrangements have not worked. In the public sector, the Bill does not contain details of the reporting duties but subject to consultation, it is expected that public bodies with over 150 employees will be required to publish annual details of:

  • their gender pay gap;
  • their ethnic minority employment rate; and
  • their disability employment rate.

6. Banning secrecy clauses on pay

The Bill proposes to ban pay secrecy or “gagging” clauses (i.e. clauses in employment contracts banning employees from discussing their pay or bonuses). It is not clear how many UK employees outside the financial sector have such gagging clauses in their contracts. It could be that the current lack of transparency is cultural rather than down to what appears in employees’ contracts of employment. It is possible therefore that this provision will have relatively minimal impact in practice.

7. Positive action

The Bill widens the scope of permitted positive action to take advantage of EU law which allows measures to “compensate for disadvantages”, undertaken “with a view to ensuring full equality in practice”. This means employers will be permitted (but not required) to pick someone for a job for an under-represented group when they have the choice between two or more candidates who are equally suitable, provided the employer does not have a general policy of doing so in every case. The permission would not extend to the selection of a less well qualified candidate. “Positive action” of the type envisaged should not be confused with positive discrimination, which will remain unlawful. Positive discrimination means employing or promoting people because they are from an under-represented group, even if they are less suitable. This particular provision has attracted more media attention than any other in the Bill. There will be difficulties in establishing how two candidates are ever “equally qualified” because in practice it is rarely possible to establish empirically that this is the case. It is easy to see that this provision could give rise to claims by disappointed white candidates and by all male candidates who feel that they were slightly better qualified but lost out on discrimination grounds. The risk of such claims could discourage many employers to take advantage of this new provision.

8. Powers of Employment Tribunals to make recommendations in discrimination cases

The Bill will allow Employment Tribunals to make recommendations in discrimination cases which benefit the whole workforce and not just an individual who has won a claim. This would help to prevent similar types of discrimination occurring in the future. For example, the Tribunal might recommend to an employer who has lost a sex discrimination claim, that the employer makes its promotion procedures fair and transparent by having a written policy or by training managers. Failure to follow the recommendation will not attract a financial penalty but would be capable of being considered in future Employment Tribunal proceedings, if relevant.

9. Representative actions

Representative actions would enable bodies such as trade unions, or the Equality and Human Rights Commission to take cases to Court or an Employment Tribunal on behalf of a group of individuals as a single claim. The Government does not propose to include this in the Equality Bill and has stated that any proposals for reforming this area of discrimination law would be subject to a full consultation.

10. Associative and perceptive direct discrimination (eg carers)

The Bill will strengthen the law, protecting people from discrimination when they are associated with someone who is protected themselves, e.g. as their carers. It is currently unlawful to discriminate against or harass someone because they are “linked” or associated with a person who is of another sexual orientation, race or religion or belief. For example, it is unlawful for an employer to discriminate against an employee because she is married to an Asian man. The Bill proposes to extend this protection to across all strands of direct discrimination and harassment so as to include age, disability, sex and gender reassignment. For example, an employer will not be able to refuse to promote a member of staff just because he or she cares for an older relative.

11. Changing definitions

The Bill has changed the definition of “disability-related” discrimination, thereby extending the protection of the law for discrimination for disabled people. Following the House of Lords’ decision in London Borough of Lewisham v Malcolm [2008] UKHL 43 it was apparent that the law did not give sufficient protection to disabled people. Clause 14 of the Bill attempts to redress the balance between enabling a disabled person to make out a case of experiencing a detriment in terms of treatment which arises because of his or her disability, and providing an opportunity for an employer or other person to defend the treatment.

In the definition of direct discrimination, the Bill replaces the phrase “on grounds of” with the word “because”. The Bill also provides for the possibility of direct sex discrimination claims in respect of pay and conditions based on hypothetical comparators.

12. Third party harassment

Employers are currently liable for the sexual harassment of its employees by third parties provided certain conditions are met. The Bill extends an employer’s liability for harassment by third parties in the workplace to other protected characteristics such as race, sexual orientation, age etc (with the exception of marriage and civil partnership, pregnancy and maternity).

13. Next steps

The Bill is expected to receive Royal Assent in Spring 2010 with the majority of its provisions coming into force in Autumn 2010. The “socio-economic” duty on public bodies and the new public sector Equality Duty are likely to come into force in 2011.

During the course of the coming Summer the Government will consult on this new public sector equality duty and other proposals concerning age discrimination in the provision of services. It will also consult with businesses and unions on gender pay gap reporting for larger private sector employers.