As we have been reporting in recent editions of Employment Brief, much of the Equality Act 2010 comes into force on 1 October 2010. But how do the provisions of the new Act differ from the legislation that was already in place? And what does the new Act mean for employers in practice? In this extended article, we draw together previous Employment Brief guidance and set out the key issues arising from the legislation along with advice on practical steps that employers can take to ensure they don’t fall foul of the new provisions.

Why an Equality Act?

Legislation already exists in respect of discrimination in the areas of race, sex, maternity & pregnancy, marital status, disability, sexual orientation, religion or belief and age. However, this legislation has developed over 4 decades, from the equal pay legislation of 1970 to the prohibition on age discrimination in 2006. That journey has had many twists and turns, with often different legal tests and concepts applying to different strands of discrimination.

The stated aim of the Equality Act is to “simplify and strengthen the law”. The Act covers the same “protected characteristics” catered for in previous discrimination legislation but aims to create a harmonised and consistent approach. Despite the fanfare around the new Act, it does not, generally speaking, radically change the legal landscape that employers will already be familiar with. It does, however, introduce some important changes which we explore in this article.

What’s new?

Direct discrimination based on perception and/or association

The case of Attridge LLP v Coleman in 2009 (reported in our December 2009 Employment Brief) held that a party can discriminate against another on the basis of a third party’s disability. However, there remained uncertainty and inconsistency as to whether this concept of “associative discrimination” could apply in other areas of discrimination where unfavourable treatment of a person was because of another person’s protected characteristic rather than any protected characteristic of the victim. Whilst, for example, the race discrimination legislation was couched in such terms as to cover associative discrimination, the equivalent sex discrimination legislation was not.

The Equality Act has resolved this by adopting a common approach whereby direct discrimination “because of a protected characteristic” (i.e. not necessarily the victim’s protected characteristic) is rendered unlawful. This broad language means that direct discrimination because of a third party’s protected characteristic or because of an incorrect perception that the victim had a particular protected characteristic, will be unlawful. By way of example, a heterosexual employee will be able to claim direct discrimination if he is treated less favourably because he is friends with a homosexual person or because he is incorrectly perceived to be homosexual himself. The only exception to the concepts of associative and perceptive discrimination is marriage/civil partnership status, where the victim must have the protected characteristic.

Harassment

As with direct discrimination, the concept of harassment has also been extended to include treatment based on perception and association. Under the new Act, a person, ‘A’, will be found to have harassed another person, ‘B’, if they engage in “unwanted conduct related to a relevant protected characteristic and the conduct has the purpose or effect of violating B’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for B.”

The other important change to harassment law is that, as from 1 October 2010, an employer can be found liable for harassing an employee if it fails to take reasonable steps to stop third parties (e.g. a client, customer or contractor) from repeatedly harassing the employee because of a protected characteristic. Provided that the employer is aware that the employee has been harassed by a third party (not necessarily the same third party) on at least two previous occasions and the employer failed to take reasonable steps to prevent the third party harassment, the employer may be directly liable for the harassment. Previously, this additional potential liability only applied in respect of sexual harassment but the Equality Act has extended the concept so that it now covers age, disability, gender reassignment, race, religion or belief, sex and sexual orientation.

Disability discrimination

Disability discrimination is the area which has arguably seen most change as a result of the Equality Act:

  • The definition of disability

The Equality Act retains the DDA definition of disability as “a physical or mental impairment” which has “a substantial and long-term adverse effect on [the person’s] ability to carry out normal day-to-day activities.” However, the Equality Act does not include the requirement that one or more of the specific capacities previously listed by the DDA (e.g. mobility, concentration, manual dexterity etc) be affected in order for an individual to qualify as disabled. It remains to be seen whether this will lead to an increase in the number of successful disability discrimination claims, but it is likely to make it easier for those with mental impairments to establish disability.

  • New types of discrimination

As we reported in our September 2008 edition of Employment Brief, the ability of employees to successfully pursue ‘disability-related’ less favourable treatment claims was significantly weakened following the case of London Borough of Lewisham v Malcolm. The Equality Act has sought to remedy this by scrapping the concept of ‘disability-related’ discrimination and introducing in its place the concept of discrimination where there is unfavourable treatment “because of something arising in consequence of” a person’s disability. This concept will only apply where the employer knew, or should reasonably have been expected to know, that the employee had the disability.

Forthcoming case law will tell, but this wording is likely to mean that we are back to the position commonly understood prior to the Malcolm decision; an employee dismissed because of sickness absence arising from a disability will be able to pursue an “arising from” claim (in addition to any other claim, such as failure to make reasonable adjustments) and the employer will need to ‘justify’ the treatment by demonstrating that it was a proportionate means of achieving a legitimate aim.

Does this mark a radical change in practice? Not in our view; cases of this nature are still going to depend heavily on whether the employer has properly considered and explored reasonable adjustments – if so, and there is still no viable alternative to dismissal, the “arising from” claim should be successfully defended at the justification stage.

The Equality Act has also extended the concept of indirect discrimination to disability discrimination law for the first time. There will be indirect disability discrimination if the employer applies a provision, criterion or practice (“PCP”) to an employee which is discriminatory in relation to the disability of the employee; the PCP will be ‘discriminatory’ if (a) the employer applies or would apply the PCP to persons who do not share the employee’s disability, (b) the PCP puts or would put persons who do share the employee’s disability at a ‘particular disadvantage’ compared to others, (c) the PCP does put or would put the employee at that disadvantage and (d) the employer cannot show the PCP to be a proportionate means of achieving a legitimate aim.

One potential headache for employers here is that, unlike with the new “arising from” type of disability discrimination and the duty to make reasonable adjustments, the employer does not need to have had knowledge of the employee’s disability to be liable for indirect disability discrimination.

  • Duty to make reasonable adjustments

The duty to make reasonable adjustments concept remains largely as before. The Equality Act 2010 does however introduce a new strand that, in addition to making reasonable adjustments to avoid disadvantages caused by physical features of premises or by PCPs, an employer may be obliged to provide an “auxiliary aid” if the absence of such an aid places the disabled employee at a substantial disadvantage. An auxiliary aid could be a piece of equipment, such as an adapted keyboard, or even (according to the current draft Code of Practice of the Equality and Human Rights Commission) a service such as a sign language interpreter.

The Act also specifically provides that the cost of making any reasonable adjustments may not be passed on to the employee. There has been some commentary that this provision might be used by employers as a reason not to offer adjustments that would involve a loss of pay to an employee (such as moving to reduced hours or a different job) but in our view that is not the intent of the provision and would receive short shrift before an employment tribunal.  

  • Pre-employment health enquiries

The Equality Act introduces completely new provisions that restrict what an employer may ask a job applicant about their health before offering work.

Under the new provisions, an employer may not ask a prospective employee about their health save for some limited circumstances, such as to determine whether any reasonable adjustments will be required for an assessment or to monitor diversity.

Perhaps the most contentious permissible line of enquiry will be the permission for an employer to ask health questions for the purposes of “establishing whether [the applicant] will be able to carry out a function that is intrinsic to the work concerned.” So what is an “intrinsic” function of a job? The example given in the Equality Act’s explanatory notes is of a warehouse job involving heavy lifting, where the employer would be permitted to ask questions relevant to establishing whether the employee is able to cope with such duties. But clearly that is a simple example and time (and case law) will tell quite what the boundaries of “intrinsic” mean for these purposes.

The prohibition on pre-employment health questions has caused some employers serious concern. But is this a storm in a tea cup? Probably. It was always risky to ask broad health questions, as such could provide evidence to suggest that the reason for the non-recruitment of an applicant was a disability and breach of one of the main strands of disability discrimination law. The new Equality Act regime reinforces that and provides that, where prohibited questions have been asked leading to a claim of direct disability discrimination, the burden of proof shifts to the employer to show that no discrimination took place. The applicant will not be able to pursue a specific claim about breaching the prohibition on health questions; only the Equality and Human Rights Commission will be able to enforce the provisions.

Justification

Unlike direct discrimination (other than age discrimination), indirect discrimination is able to be justified in particular circumstances. Previously, most, but not all, legislation adopted wording to the effect that where a provision, criterion or practice caused a disadvantage to an employee in a protected group, e.g. women or people of a particular ethnicity, this could only be justified where it was a “proportionate means of achieving a legitimate aim.” In order to achieve consistency, this wording has now been applied to all strands of indirect discrimination (including the new concept of indirect disability discrimination discussed above), as well as to direct age discrimination.

Pay secrecy clauses

As we reported in the September 2010 edition of Employment Brief, in an attempt to encourage transparency about pay, the Equality Act will introduce provisions that protect employees who make “relevant pay disclosures” where discrimination about pay is suspected.

What’s still to come?

The following changes are included in the Equality Act but are not due to come into force until April 2011 at the earliest. Look out for future editions of Employment Brief for updates.

Combined discrimination

The Equality Act introduces the concept of combined direct discrimination.

At present, where, for example, an employee brings claims of direct race and sex discrimination, an employment tribunal must consider the two claims separately and apply their individual burden of proof tests.

However, the Equality Act proposes that employees will in future be able to bring a single claim of direct discrimination because of a combination of two (but not more than two) protected characteristics.

So where an employee alleges, for example, that she was treated less favourably because she is black and female, she will in future be able to claim for combined discrimination in addition to any single strand discrimination claims she may pursue.

These provisions are likely, when introduced, to prove complex in practice. Watch this space.

Positive action

The Equality Act also seeks to expand the concept of “positive action” so that an employee with a protected characteristic may in future be treated more favourably than an employee without that particular characteristic in respect of recruitment and promotion opportunities. However, in order for such positive action to be lawful, the two candidates must be as qualified as each other and the legislation does not suggest that a disabled person should be offered a position ahead of a more qualified, non disabled person.

Practical steps Any discriminatory acts which took place wholly before 1 October 2010 will continue to fall under the relevant, pre Equality Act, legislation.

However, any acts which take place on or after 1 October 2010 will fall under the new regime. Continuing acts which started before 1 October 2010 but continue past 1 October 2010 and are unlawful under the Equality Act will most likely be determined by reference to the Equality Act.

Employers are advised to review their current policies, procedures and standard contracts of employment in light of the new provisions on pay secrecy clauses, the harmonisation and, in some cases, extension of discrimination and harassment concepts, and the removal of the requirement to show effect on particular capacities to establish disability. Updated equal opportunities training should be provided where appropriate.

Application forms and recruitment processes should also be reviewed in light of the new provisions about pre-employment health enquiries and managers who conduct interviews should be briefed accordingly.

Employers, particularly those with large numbers of customer-facing employees, should also be mindful of the broadened scope for third-party harassment claims and should review whether adequate steps have been taken to prevent harassment by third parties and whether such steps have been documented.

The above is intended to be an overview of the most relevant developments introduced by the Equality Act from an employer’s perspective.