The Equality Act 2010 ("the Act") received Royal Assent in April, just before the general election and after a period of intense discussion and debate. The new coalition government has recently announced that most of the Act's provisions are due to take effect, as planned, from October 2010. However, despite this, questions remain over the more controversial provisions, such as the socio economic duty, gender pay reporting and positive action.
Employers need to act now in order to prepare for the Act, and the action we recommend is set out at the end of this note. As regards those provisions of the Act where a question mark remains, there is no need to jump the gun - keep a close eye on developments, but be prepared to act as soon as any announcements are made.
The Act introduces some significant changes in the law concerning disability discrimination, and the government has said that these will come into force in October. The changes have come about because of a recent decision of the House of Lords (London Borough of Lewisham v Malcolm (2008)), which rendered the existing protections against disability-related discrimination inadequate. The changes make it easier for people to show they are disabled and are protected by disability discrimination law. Two new types of disability discrimination are recognised as unlawful by the Act:
Some aspects of disability discrimination law are not changed by the Act. For example, the Act still requires employers to make reasonable adjustments for disabled employees and does not change the extent to which these are required. However, it may be necessary to review your organisation's policies to ensure that they are up to date and compliant with the current interpretation of "reasonable adjustments." It will also be advisable to review your policies and practices to ensure that they cover the new definitions of disability discrimination referred to above.
We find it useful to ask prospective employees to fill in a pre-employment health questionnaire before we offer a job. Does the Equality Act 2010 say anything about this?
Under Section 60 of the Act, it will only be lawful to ask questions on health before a job has been offered in a very small number of exceptional circumstances, such as when those questions are necessary in order to establish whether the candidate will be able to carry out an "intrinsic function" of the job he or she is applying for. For example, where a job requires heavy lifting, the employer will be permitted to ask the candidate whether he or she could manage the heavy work involved. Other permitted reasons might be the need for diversity monitoring or to make reasonable adjustments in the selection process. The purpose of the new provision is to make it more difficult for disabled people to be unfairly screened out when applying for jobs. Once the applicant has been interviewed and has received a conditional or unconditional offer, further health questions can then be asked. This new provision is likely to be in force from 1 October 2010.
I have heard that we will need to take part in complicated and time-consuming gender pay audits. Is this true?
One of the more significant new legal requirements in the Act is the proposed "gender pay audit" obligation that may be imposed on private sector employers. If this provision is brought into force, the government will be able to require all private sector employers with more than 250 staff to produce reports on the gender pay gap in their organisation. This new provision was designed to be part of measures to encourage more transparent pay reporting in the private sector, and the Labour Government's aim was to encourage private companies to publish this information on a voluntary basis. For this reason, the measure was not set to come into force until 2013 and, even then, was only intended to be used if sufficient progress on voluntary reporting had not been made.
It is currently not clear if the new coalition government will ever implement voluntary pay reporting, or bring this new requirement into force.
Accordingly, if your organisation has more than 250 employees you will need to keep a close eye on developments. In the meantime, you should be prepared for the possibility that you may, at some time in the future, be required to publish gender pay data. In order to avoid any nasty surprises (and as a matter of good practice), prudent employers should analyse their pay structures with a view to establishing whether there is a gender pay gap problem. Any potential problems revealed by this analysis will enable you to rectify them now, before you find yourself in the embarrassing and potentially costly situation of having to fight equal pay claims.
Will we have additional equality obligations toward a larger number of our employees?
Whilst "protected characteristics" (such as age, race, sex, etc.) remain the same, the Act will strengthen and expand the law protecting people from discrimination in certain categories:
The Act will strengthen the law protecting people from discrimination when they are associated with someone from a protected group. This concept is not new - it is already 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 and belief. A recent decision of the European Court confirmed that European law also protects against direct disability discrimination by association. The Act now extends the protection from discrimination by association across all the strands of discrimination or harassment so as to include age, disability, sex and gender reassignment.
Therefore, the Act does, to some extent, extend equality obligations to those employees who themselves are not within a protected group, but who are linked or associated with someone who is within a protected group. The Act would therefore protect an employee making a request to work flexibly for an elderly relative or a disabled child, from being less favourably treated than an employee making a similar request to care for another adult who is not elderly or a child who is not disabled.
Under current UK discrimination law, persons are protected from discrimination on grounds of race, sexual orientation or age if they are perceived to be of a certain race, sexual orientation or age that is the subject of the discriminatory treatment when, in fact, they are not of that race, orientation or age. The UK Court of Appeal will also soon be considering whether someone can claim discrimination on the grounds of a perceived disability.
The Act will extend the current law as it will protect anyone who is perceived to have a protected characteristic from discrimination because of that perception. The Explanatory Notes to the Act gives some practical examples to help indicate the types of situations in which this applies. One example they give is, "If an employer rejects a job application form from a white man whom he wrongly thinks is black, because the applicant has an African-sounding name, this would constitute direct race discrimination based on the employer's mistaken perception." So, if an employee is treated less favourably because of a protected characteristic (whether perceived or actual), that employee will have a claim for direct discrimination.
Under current UK discrimination law, different levels of protection from harassment are given to employees depending on the protected characteristic involved. The Act corrects this by harmonising the law on harassment, as well as by extending the protection from harassment to people with any protected characteristics (except pregnancy and maternity and marriage/civil partnership). Furthermore, as the Act protects people from unwanted conduct "related to" a protected characteristic, employees are protected from harassment to which they are subjected because they are associated with someone with a protected characteristic or they are perceived to have a protected characteristic. This means that an employee who, for example, is harassed because of her son's disability or because she is wrongly perceived to be Jewish, is protected under the Act.
In addition, as regards employer liability for third-party harassment, current legislation restricts this to cases relating to sex discrimination, but the Act will extend this across most protected characteristics. An employer will therefore be liable for harassment where a third party harasses an employee in the course of their employment and the employer fails to take reasonable steps to prevent the harassment, where the employer knows that the employee was harassed by the third party on at least two other occasions during the course of his or her employment.
What do these changes mean for employers?
An employer following good practice should already have equal opportunities and disciplinary policies in place that address any form of discrimination or harassment. These may need to be slightly reworded to take account of the expansion of the meanings of discrimination and harassment. However, the additional protections should not require a dramatic shift in culture. The area we think will be likely to require the greatest caution is that of disability, particularly in the case of people who may be perceived to be disabled. For example, an employee with a poor sickness record who is not given a promotion may not be "disabled" within the meaning of the Act, but may be able to argue discrimination arising out of perceived disability.
The above new provisions are likely to be in force from 1 October 2010.
If we're recruiting for a job and we've got two candidates who are equally employable and one is from an ethnic minority background, do we have to recruit the minority candidate?
Under the Act, it is proposed that employers will be permitted (but not required) to take "positive action" with regard to recruitment and promotion. There is no date set for when this provision will come into force. If and when in force, an employer will be allowed to pick someone who has a "protected characteristic" (e.g., a particular race/ethnic minority background) for a job when the employer has a choice between two or more candidates who are equally suitable, provided that the employer "reasonably thinks" that people with that candidate's protected characteristic are disadvantaged or disproportionately badly represented.
However, employers may only do this where they are faced with two candidates who are "as qualified" as each other. They are not entitled to select a less well-qualified candidate purely on the basis that he or she is from an under-represented group. In addition, an employer must not have a policy of treating people in a protected group more favourably. Each decision must be made on a case-by-case basis, assessing whether this positive treatment is a proportionate means of enabling a protected group to overcome the disproportionate under-representation.
If employers wish to take advantage of this provision once it is in force, they need to proceed with caution. Because it is open to dispute as to whether any two candidates are ever "as qualified as each other,, employers will be open to the risk of discrimination claims by unsuccessful candidates, brought on the basis that they felt that they were better qualified but lost out purely on discrimination grounds. For this reason, it is likely employers may be reluctant to use this provision.
I've heard that we need to ensure that we don't discriminate against someone because of their class. Is this true and, if so, will we need to introduce a new policy on this?
No, there is no new obligation on private employers not to discriminate on a socio-economic basis. There is, however, a proposed new public "socio-economic" duty that requires public authorities, when making decisions of a strategic nature about how to exercise their functions, to "have due regard to the desirability of exercising them in a way that is designed to reduce the inequalities of outcome which result from socio-economic disadvantage." This duty will fall upon government ministers, the NHS and local authorities, amongst other bodies. This new duty will affect some private employers indirectly. Private companies that provide services to government departments under outsourcing agreements might be required to ensure that they work in a way that complies with their client's public sector duties.
Prior to the General Election, the Conservative Party was not in favour of this duty, and the Liberal Democrats also expressed some concern. Accordingly, it is doubtful as to whether it will come into force.
Some of our employment contracts contain provisions restricting our employees from disclosing information relating to pay - are these now unenforceable?
The Act will render unenforceable any term in an employment contract that prevents or restricts an employee from discussing his or her pay with other colleagues or any other person (such as a trade union) if the purpose of the disclosure is to find out whether there is a connection between any difference in pay and a protected characteristic (such as age, race or sex). Furthermore, if a man (for example) who is asked by a woman to disclose the details of his pay does so, and is then disciplined by his employer, the Act makes it clear that he could make a victimisation claim. The new provisions do not mean, however, that all pay secrecy clauses are unenforceable. If, for example, an employee discloses his pay to a competitor in breach of a confidentiality clause in his contract, his employer will be entitled to enforce the contractual obligation in the usual way through the courts.
This new provision is likely to be in force from 1 October 2010.
I read that the Act allows "dual discrimination" claims. What does this mean?
The Act proposes to make it possible to bring a discrimination claim based on a combination of two protected characteristics. For example, an Asian woman who feels she has been less favourably treated, may bring a claim that she has been discriminated against specifically because she is an Asian woman. This is to be distinguished from a person who brings two concurrent claims, one for race discrimination and one for sex discrimination. The Asian woman who claims dual discrimination may be unable to show that she has been discriminated against because she is Asian (because male Asians are not suffering less favourable treatment) or that she has been discriminated against because she is a woman (because non-Asian women are not suffering the same less favourable treatment).
The purpose of this provision in the Act is to recognise that people do suffer less favourable treatment on account of stereotypes relating to, for example, women from a particular race.
It remains to be seen whether this new category of claim will be brought into force. There are doubts amongst discrimination lawyers as to whether the coalition government will keep this provision. So again, it is a question of watch this space.
What immediate steps should we be taking?
Given the uncertainty as to whether certain provisions of the Act will ever come into force, it is advisable not to act over-hastily. However, since most of the main provisions of the Act will come into force in October 2010, including certain key provisions such as those relating to disability discrimination, we do not recommend simply waiting until October. A prudent employer can do certain things now:
- Review the three draft Codes of Practice (Employment, Equal Pay and, if relevant to your organisation, Services, Public Functions and Associations) to check for areas where new compliance measures will be required.
- Amend current policies in order to refer to the Act and the Codes.
- Ensure that your policies cover the extended definitions of disability, as well as the extension and harmonisation of associative and perception of discrimination and harassment. Consider adding specific examples to your policies to illustrate these issues.
- Research the impact that any requirement to publish pay would have on your organisation. Will it cause issues? If so, it would be prudent to consider redressing these in advance of any obligations.
- Consider what additional training is required to ensure that employees in management or supervisory roles are aware of their obligations.
Click on the following link for the Government Equalities Office website, which contains all the latest news from the government on the Equality Act 2010 and its implementation, as well as links to the text of the Act and the Explanatory Notes.
Click on the following link for the Equality and Human Rights Commission website, which gives more information the Equality Act 2010 and the draft Codes of Practice.