Introduction and aims

The Equality Bill is a bold piece of legislation that will revolutionise anti-discrimination law as we know it today. It arrives following the most extensive review of equality in Britain for decades.

The Bill has two primary aims:-

1. To harmonise and consolidate the law

The Equality Bill aims to create a single act covering all forms of discrimination.

The UK's anti-discrimination laws have developed in a piecemeal fashion over the last 30 years, and are located in multiple sources. Various principles have also developed from case law and the law is complex as a result.

It is hoped that the Bill will simplify the law and make it more accessible for employers and employees.

2. To strengthen the law

The Bill will introduce significant changes to the law with the aim of promoting equality. This includes the creation of new rights for individuals and increasing the enforcement powers of Employment Tribunals. More on this is set out below.

Current position

It is no secret that the Conservative Party is highly opposed to the Bill. The party tried to strike it down during its second reading in the House of Commons when all but one of their MPs voted against it.

It appears therefore that we have a race against time for the Bill to become law before the next general election. If the Conservatives gain power in time, they are likely to veto the Bill.

However, our research indicates that the Bill is on a tight timetable and may gain Royal Assent by the end of the year. It is likely therefore that it will be brought into force, as planned, in August 2010.

This feature summarises the key provisions of the Bill that we believe are likely to have the most significant impact on the private sector. We have also set out below suggested steps that employers can take to prepare for the Bill's implementation, and as a matter of equal opportunities best practice generally.

Key changes

1. Introducing "protected characteristics"

The Bill will re-enact each of the 9 characteristics that attract legal protection under existing anti-discrimination laws.

They are i) age; ii) disability; iii) gender reassignment; iv) marriage and civil partnership; v) pregnancy and maternity; vi) race; vii) religion or belief; viii) sex; and ix) sexual orientation.

For the first time however, it will present them all under the united definition of "Protected Characteristics". This forms the bedrock of the Equality Bill and represents a dramatic simplification to the law as currently drafted. The Government hopes that this approach will also assist in providing clarity and focus on the "status" that attracts protection.

2. Expanding the concept of "direct discrimination"

A wider definition of direct discrimination will be applied to all protected characteristics. The words "because of" will replace the phrase "on grounds of" within current legislation, with the intention that claims for "associated" and "perception-based" discrimination, will be supported.

This means that it will no longer be necessary for the victim of discrimination to possess the protected characteristic in question, and places on a statutory footing principles of associative discrimination which have emerged from recent case law, such as the decision in Coleman v Attridge Law (click here for details). The wider definition will, for example, offer protection where an employee is treated less favourably on the basis that he or she cares for a disabled or elderly person, or is teased about being gay or of a certain racial origin when he or she is not.

3. Disability Discrimination – new rights for workers

The scope of protection available to disabled workers will, for the first time, be expanded to cover the right not to suffer indirect discrimination. In addition, the Bill plans to introduce a new right for workers not to be subjected to "discrimination arising from a disability".

The latter represents the Government's response to the House of Lords' decision in London Borough of Lewisham v Malcolm (click here for details), which dramatically narrowed the scope of protection available to workers under the "disability-related" discrimination provisions of the Disability Discrimination Act 1995. These provisions will be replaced by this new right.

Concerns have been expressed however that the wording of this aspect of the Bill is unclear, that the protection it proposes to introduce is too wide in scope and the concept of indirect discrimination does not sit comfortably with disability discrimination. The Government is looking more closely at this part of the Bill, and we are waiting to see what changes will be made to these provisions before reporting further.

The duty on employers to make "reasonable adjustments" for the benefit of disabled workers has also been expanded, to include an additional duty to take reasonable steps to provide an auxiliary aid in circumstances where the disabled person would be at a substantial disadvantage without it.

Employers will welcome the fact that the Bill encapsulates the principle upheld in the Malcolm decision that knowledge of a disability is required in order for an employee to suffer unlawful discrimination. Accordingly, employers will have a defence to claims if they can show that they did not know, and could not reasonably be expected to know, that a worker had a disability.

4. An expanded definition of "Harassment"

The definition of "harassment" will be harmonised across all strands, and widened to cover actions "related to" a protected characteristic.

As with the new definition of direct discrimination, there will be no need for the victim to possess the particular characteristic in question, and protection will be extended to cover those who witness potential acts of harassment, even though the treatment may not be directed at them.

Further, acts believed by the perpetrator to be merely "teasing" a colleague could give rise to a successful harassment claim. For an example of how such rights could manifest in practice, please see our report on the decision in English v Thomas Sanderson Blinds (click here for details).

5. Third Party Harassment – wider application of the "3 strikes" test

Anti-harassment protection for workers will be extended further, as the "3 strikes" test, currently applicable to claims of sex-based harassment (only) will be applied to all protected characteristics covered by the new harassment provisions. In broad terms, the test (which has attracted heavy criticism) is that an employer can be held liable where an employee is harassed by an external party (such as a customer, contractor or supplier) on at least 2 earlier occasions, and the employer has failed to take reasonably practicable steps to stop it.

The protected characteristics for harassment claims will be the same as under the existing law however, meaning that marriage and civil partnership, and pregnancy and maternity, will not constitute grounds for unlawful harassment under the new law.

6. New ground for sex discrimination

Unlike other areas of anti-discrimination law, the use of "hypothetical comparators" is not permitted under the Equal Pay Act 1970. Instead, a woman must be able to rely upon the existence of an actual male comparator, carrying out equal work, to bring an equal pay claim.

The Bill proposes to remove this requirement by introducing a new ground for supporting a sex discrimination complaint. The new right will allow a claimant to bring a claim where there is evidence of direct sex discrimination in relation to contractual pay issues, but no male comparator upon which to base an equal pay complaint.

7. Pay secrecy clauses

Female workers are still believed to receive significantly less than male colleagues as a whole (approximately 17% and 36% less, for full and part-time work respectively), and the Bill seeks to introduce a number of measures designed to tackle this gender pay gap. Part of this package is a new provision to combat the use of pay "secrecy" clauses by employers.

By way of background, some employers include provisions in their contracts of employment that prevent employees from discussing their pay levels with colleagues. Such clauses will be rendered unenforceable by the Bill in circumstances where staff enter into discussions with colleagues to identify if any differences in pay exist due to discriminatory factors. It will not affect the enforceability of confidentiality provisions covering general discussions of pay levels.

Further, staff will have the right not to be victimised by the employer for taking part in relevant discussions about pay.

8. Publishing annual gender pay gap figures

One of the most controversial aspects of the Bill is the proposal to require companies with over 250 employees to publish annual reports on gender pay gaps within their own organisation.

The Conservatives are highly opposed to this proposal and it has also caused unrest in the business community where there is concern that the new measures will trigger a wealth of retrospective equal pay claims when the figures are required to be published.

The Government has requested the Equalities and Human Rights Commission to devise a system to regulate how this information is to be compiled and presented by employers. The EHRC has launched consultation which closes on 28 October 2009. We are waiting on the results of their progress in this regard before reporting further.

The Government does not propose to use this power until 2013 at the earliest although employers will be encouraged to provide this information on a voluntary basis prior to this deadline.

9. Positive action

Under current law, positive action by employers is only permitted in very limited circumstances and the provisions are rarely relied upon by employers in practice.

The Bill will extend the use of positive action to give employers new rights in connection with decisions concerning the recruitment and promotion of staff. For the first time, employers will be able to treat a person who possesses a protected characteristic more favourably than another who does not, but only in circumstances where both candidates are "as qualified" as the other for the position in question.

The drafting of this aspect of the Bill has been criticised. First, it is not clear from the Bill as to how employers are to determine when two people are "as qualified" as each other, or what criteria this ought to be assessed upon.

Secondly, the Bill does not specify how employers are to determine that a particular group is under represented or suffers a "disadvantage" connected to a protected characteristic, whether this assessment should be limited to workplace issues only, or if wider societal factors should also be considered. This is likely to force the employer into making some difficult decisions before the positive action measures can be relied upon.

Until these issues are resolved, employers will be unlikely to rely upon the new positive action measures in practice.

10. Multiple discrimination

The concept of "multiple discrimination" relates to a particular disadvantage suffered by an individual who is subjected to discrimination based on two or more protected characteristics. Using the Government's example of a black woman who was ignored for promotion, in these circumstances she would have to rely upon individual claims of race and sex discrimination to succeed at an Employment Tribunal. This could be problematic for her as neither claim may be representative of the type of discrimination that took place, which may be because she is a black woman as opposed, for example, to a white woman or a black man.

Earlier this year, the Government launched consultation on whether multiple discrimination claims should be allowed by the Bill. This resulted in a new clause being added at the Commons' Committee stage.

The new provision allows for direct discrimination claims to be brought based on a combination of two (but no more) protected characteristics. The Government decided not to extend this protection further as it believed that it would be too burdensome to do so.

However it is unclear how these provisions will work in practice, and whether restricting the scope to cover two protected characteristics only will give rise to problems in its own right. What is clear however is that a multiple discrimination claim may succeed where discrimination based on any one protected characteristic cannot be established, and this is a potentially significant development that employers need to be aware of.

Pregnancy and maternity, and marriage and civil partnership, are not protected characteristics for the purposes of the multiple discrimination provisions, as the Government is of the view that adequate legal protection already exists in connection with these characteristics.

11. Enforcement

The Bill will introduce new enforcement powers for Employment Tribunals which include the power to make action recommendations for the benefit of the workforce as a whole (and not just the individual Claimant), following a finding of discrimination.

With their new powers Tribunals could, for example, recommend that a particular provision, criterion or practice is discontinued, or that the employer must provide training to its staff on equal opportunities matters. The Government's aim is to introduce measures with wider application that will assist with preventing similar acts of discrimination from arising in the future.

These recommendations will not be enforceable however, but could be used as evidence against a company in future discrimination claims. These wider powers will not apply to equal pay claims.

Action plan – What can you do to prepare for the bill?

The Bill delivers a very clear message to employers that they will need to look carefully at their workplace practices and take greater steps to achieve equality in specific areas. This is essential if costly discrimination claims are to be avoided.

We always recommend that a proactive approach is taken when dealing with equality and diversity issues. We have set out below some steps that employers can take to prepare for the Bill's introduction. Whether or not the Bill ultimately becomes law, taking these steps will give rise to a number of legal and commercial benefits:

1. Review and update your policies and procedures – ensuring that an organisation has up-to-date and robust policies in place dealing with equal opportunities matters is the starting point for building a successful equal opportunities practice. Employers should review their other policies and procedures as well to ensure that they are up-to-date with the law and do not operate in a way that could give rise to discrimination claims.

This is likely to reduce the likelihood of discrimination claims arising in the first place, and it will be useful when defending claims to refer to the fact that the employer has such documentation in place. This is often viewed by Tribunals as evidence that the employer takes equality and diversity issues seriously. If no such policies are in place, we recommend that they are implemented without delay.

We are able to supply up-to-date policies dealing with equal opportunities matters designed for rapid implementation into the workplace and can carry out useful "Equality and Diversity" audits of current practices and policies in operation. Please let us know if any assistance is required.

2. Carry out a "gender" pay review – the Bill plans to introduce a wealth of provisions to combat the gender pay gap and it should not be forgotten that equal pay claims based on current legislation are prevalent.

We recommend that employers carry out an audit of pay levels, salary increases and, for example, bonus awards (and the rationale for such) in connection with a person's gender, to determine the extent of any pay gaps, and the reasons for them.

Action should be taken to address any pay gap that runs the risk of being associated with a person's gender. Please let us know if any assistance is required.

3. Training - delivering equal opportunities training to staff is likely to reduce the risk of discrimination claims arising. Existing training programmes will need to be updated to deal with the sweeping changes to be introduced by the Bill, and if training is not currently being provided, this should be considered.

4. Keep up to date with the law – we believe that keeping abreast of changes to the law and matters of best practice in this area is now more important than ever. In particular, employers will need to become aware of how the new rights for workers introduced by the Bill may impact upon them in practice. Understanding the law now will allow employers to take precautionary measures to minimise the impact of the Bill when it comes into force next year.