New equality rules could increase claims

The UK government has shown its intention to beef up equality duties on employers by publishing a new set of proposals for inclusion in the Equality Bill.

Among the governments raft of proposals is an indication that it would like to promote ‘positive discrimination’ at the recruitment stage. Employers will be encouraged to promote or recruit minorities when deciding between two equally qualified candidates.

Moves are also afoot to give employees tougher redress by widening the powers of Employment Tribunals, and improve transparency so that colleagues can compare wages more easily—intended to tackle problems like the gender pay gap. According to government statistics women are paid on average 12.6% less per hour than men.

Harriet Harman, Minister for Women and Equality, said the proposals would ‘streamline’ and ‘strengthen’ existing laws. The Equality Bill will replace nine major pieces of legislation and around 100 other measures.

Unions welcomed the government initiative. TUC general secretary Brendan Barber called it a ‘landmark’ towards delivering equality.

The Bill is due to be tabled at the next Parliamentary session and should be announced in the Queen’s speech in November.

The law has been on the cards for some time, but exactly what motivated the government is questionable. Simplifying the tonnes of anti-discrimination legislation is well overdue. Unfortunately the plans may also spell some disruption for business. As anyone can tell you, new laws tend to mean more paperwork.

‘I don’t think it’s necessary. Employers don’t really need any more legislation in this area,’ said Alison Love, a partner in the employment department at Hugh James solicitors. Besides, she said, if two candidates are equally qualified employers are already free to decide between them.

The government said it wants to address what it sees as discrimination against women, disabled people, the elderly and ethnic minorities. But the measures to positively discriminate in favour of under-represented groups are unlikely to have the desired effect.

Elizabeth Slattery, an employment partner at Lovells, thinks the rule changes could lead to more litigation from over-represented groups who themselves feel discriminated against. ‘It’s counter intuitive,’ she said, ‘given that this is all about stopping discrimination.’

Should an employer take positive action, for example recruiting more black, Asian or ethnic minority candidates, the conventional ‘white male’ might demand the employer justify their position by proving both candidates were ‘equally’ qualified.

“Unless employers have significant under representation they may feel exposed by following the proposals.

Elizabeth Slattery, an employment partner at Lovells

‘Unless employers have significant under representation they may feel exposed by following the proposals,’ said Slattery.

Employers should make sure they show exactly why they are choosing a specific candidate, warned Love.

The plans include another contradiction, in that powers to ban unjustified age discrimination, things that help older people, such as free bus passes, will still be allowed.

Already a problem

Discriminatory claims are already a serious problem for employers but things could get even worse. Trade unions, law firms and other groups increasingly help workers bring grievances. Today, Employment Tribunals offer easy access to the courts and award increasingly high sums of money for discrimination.

Under the new plans, the government wants to extend the powers of these bodies so the recommendations they make benefit the whole workforce not just the individual who brought the case. Employers could be made to implement policies to ensure the same thing doesn’t happen again. And subsequent claimants could point to the failure as part of their suit.

Nevertheless, the power to make a recommendation that would benefit others seems like a good idea given that around 70% of people who bring a claim against their employer end up leaving the organisation.

Worrying still is the blueprint raises the shadow of representative actions and sector enquiries that could further disturb businesses. Regulators already have their sights set on financial services firms who could be on the receiving end of recommendations made as a result of an inquiry into the pay gap between male and female workers.

The Bill will ban ‘gagging clauses’, so that work colleagues can compare wages and challenge employers who unlawfully pay them less. ‘If employers have that provision and rely on information not being shared then that is something they may want to address,’ said Slattery.

In real terms, one of the biggest impacts for business could be in the area of public sector procurement—an industry now worth £150bn a year. Those companies that provide services to the government may have to show a good diversity record in order to stand a chance of securing future contracts.

The UK government has faced a hard time of late, Prime Minister Gordon Brown has born the brunt of criticism, but political moves aimed at shoring up support in one area could have the reverse in another.