News -

- April 2010

Employment: Equality Act passed

On 6 April 2010 the Equality Bill as amended by the House of Lords was passed without further change by the House of Commons.  It received Royal Assent on 8 April and the majority of its provisions are expected to come into force in October 2010

In a press release, issued by the Government when it first published the Bill last spring, it stated that “the Bill will simplify the law which, over the last four decades, has become complex and difficult to navigate.  Nine major pieces of legislation and around 100 other measures will be replaced by a single Act written in plain English to make it easier for individuals and employers to understand their legal rights and obligations”.

We have reported previously on the passage of the Bill through Parliament (see related links); however, given its far-ranging implications, we summarise the key provisions now that the legislation is in its final form.

Key provisions

The Act is designed to simplify, harmonise and extend existing anti-discrimination legislation in relation to the 9 “protected characteristics” of gender, marital/civil partnership status, sexuality, transgender, race, religion or belief, pregnancy or maternity, disability and age.  However the Act is not simply a restatement of existing laws.  It contains a number of new measures which will have far-reaching consequences for all businesses.

New public sector duties from April 2011

The existing public sector equality duties in relation to race, gender and disability will be consolidated into a single public sector equality duty from April 2011 and extended to cover all 9 “protected characteristics”.  Public sector bodies will have a specific requirement to consider these characteristics when delivering public services.

The existing equality duties (a mixture of action plans to promote equality and specific steps required of public authorities) have already had an influence on how private sector companies contract to provide services to the public sector.  The Equality Bill aims to make public procurement a proactive tool to improve equality.

Extension of age discrimination to the service sector

The Equality Act will extend age discrimination to the provision of services.  Insurers and other businesses who distinguish the type and price of service provided based on age will be required to objectively justify such differentiation.

Action to promote equal pay freedom and obligations to disclose pay data

The Equal Pay Act which requires men and women to be paid the same for doing the same or equivalent work came into law almost 40 years ago, yet the gender pay gap remains around 20%.  The Government will be using the power of the public sector as an employer and purchaser of services to try and address this issue and in addition proposes two measures that will impact private employers (see items immediately below).

Limits on enforceability of “pay secrecy” clauses

Employers who impose contractual obligations on employees not to discuss their pay and benefits with third parties will be unable to enforce such clauses where an employee is taking part in a “protected disclosure”- broadly, where the discussion is taking place for the purpose of establishing whether there may be any unlawful discrimination in pay practices.

Obligations on employers to disclose gender pay gap

The Act contains a power enabling the Government to introduce regulations to force private sector employers with more than 250 employees to publish information on pay differences between the genders.  However, the Government has confirmed its intention not to issue such regulations unless voluntary measures currently being promoted by the Equality and Human Rights Commission do not achieve the desired progress, with a review date of 2013.

Limited positive discrimination - if all things are equal

Although positive discrimination in favour of a protected characteristic will generally remain unlawful, the Equality Bill allows an employer with two candidates for a job who are equally capable of performing the role to prefer one candidate if they have a protected characteristic which is from a group under-represented in the work force.  In other words, if there is a male and a female candidate, both of whom are equally competent to perform the role, the employer may prefer the female if the majority of the workforce is male.  Employers, however, must not decide to use this option in every case.

Direct “discrimination by association” becomes unlawful

A recent test case established that unfair treatment of a mother because she was the carer for her severely disabled child attracted protection under EU discrimination directives.  The Bill now codifies and extends this principle to cover all 9 protected characteristics.  It will be unlawful for an employer to treat an employee unfairly because the employee has connections to someone with a protected characteristic.  For example, it will be prohibited to treat a white employee unfairly because they are married to a black person.

Discrimination based on perception will also be unlawful. Employees who experience discrimination because they are wrongly thought to have a protected characteristic, e.g. less favourable treatment by their employer because they believe them to be homosexual even if they are in fact heterosexual.

Greater protection for disabled people

The Equality Bill will override the effect of a House of Lords judgment that has made it much harder to prove discrimination for a reason related to disability.  Rather than requiring that the disabled person is compared to a non-disabled person in the same situation, the test will be whether or not the treatment of an individual amounts to a detriment because of a disability that they suffer.  If it does, and the employer (or service provider) knew or ought reasonably to have known that the individual was disabled, they will be liable for indirect discrimination unless they can objectively justify the treatment and regardless of whether or not reasonable adjustments have been made.

Employers will also be prohibited from asking job applicants or applicants to join a labour pool (such as an employment agency database) questions about their health and whether they have a disability, other than in prescribed circumstances (which include asking whether the applicant will be able to carry out a function that is intrinsic to the work concerned).  Employers will be allowed to ask about the health of a future employee after a job offer has been made.

“Combined discrimination”

One of the most controversial proposals when the Act was going through Parliament is the new right to bring discrimination claims based on a combination of any two of the “protected characteristics”, (excluding pregnancy/maternity and marital/civil partnership status).  The Government initially rejected this concept as unnecessary but was persuaded by lobby groups that there are some instances of unfair treatment which are based on a combination of protected characteristics and which would not otherwise be protected under “single cause” claims.  There is some doubt as to the actual number of cases which would not receive any redress unless a combined discrimination claim is brought and individuals bringing a claim of multiple discrimination will still be able to bring “single head” claims based on the same characteristics.  For example, a person may claim that they have been unfairly treated because they are female AND over 50, and/or because they are female and/or because they are over 50.  Employers are understandably concerned about the increased complexity and cost involved in this proposal.

Commentary

Although at 251 pages the Act is a weighty read, businesses should ensure that they are fully aware of the provisions relevant to their business.  The new provisions are wide ranging and cover all aspects of discrimination.  Employers should examine their existing practices and policies to consider any potential changes which may be required to comply with the new legislation when it comes into force as well as training requirements for both HR and the wider workforce.

Resources

The Act

Government Equalities Office factsheet on the Equalities Bill

Government Equalities Office “A Fairer Future” document April 2009

“Equality Bill 2009 - a wide-ranging reform of discrimination legislation 21 July 2009”

 “Publication of proposals from EHRC to reduce gender pay gap - voluntary participation encouraged from employers “straight away” 12 March 2010”

For further information or to discuss the issues raised, please contact Colina Greenway (colina.greenway@abbisscadres.com) on +44 (0) 203 051 5711.