On 8 April 2010 the Equality Bill received Royal Assent and became the Equality Act 2010 ("the Act").  Except where otherwise stated, the majority of the Act's provisions are expected to come into force in October of this year.

The aim of the Act is to harmonise discrimination law and strengthen the legal framework supporting equality in the UK.  As well as introducing a number of new concepts, it brings together and restates much of existing UK discrimination legislation derived from statutes dating back as far as 1970.  The following is a summary of the changes that will impact on employers.

Protected Characteristics

The Act has not introduced any new "protected characteristics", and as such, UK law will continue to protect against discrimination based on an individual's age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, religion or belief, sex or sexual orientation.  However, the definition of race for the purposes of discrimination law has been made non-exhaustive (i.e. race now includes colour, nationality and ethnic or national origin).  The definition of "gender reassignment" has also been widened such that there is no longer any need for an individual to be under medical supervision to be protected against discrimination.  Other protected characteristics suggested during the course of the consultation process, such as genetic predisposition and being a parent or carer, have not been incorporated.

Direct Discrimination

The Act will change the definition of "direct discrimination" in relation to all protected characteristics from being treated less favourably "on grounds of" a certain characteristic to being treated less favourably "because of" a certain characteristic.  This change will mean that an individual cannot be directly discriminated against and/or harassed:

• because of their association with another individual with a protected characteristic (an example would be, an individual being directly discriminated against because their child was disabled); or
• because they are perceived to have a protected characteristic, even if it is proved they do not in fact have that characteristic (an example would be, an individual being discriminated against because it was believed they were homosexual even though it transpired they were not gay (or were not willing to confirm whether they were homosexual)).

Indirect Discrimination

While no significant changes have been made to the definition of "indirect discrimination", the Act does introduce a new concept of indirect discrimination based on disability and gender reassignment and, now includes a global "objective justification" test.  This global test of whether the alleged discriminatory treatment is "a proportionate means of reaching a legitimate aim", will apply to indirect discrimination based on any of the protected characteristics (as well as to direct age discrimination and discrimination arising from disability).

Combined Discrimination

The Act recognises that some of the worst discrimination is suffered by those falling into more than one disadvantaged group, and now permits claims of direct discrimination on the basis of two (but no more) protected characteristics.  As of April 2011, Tribunals will be allowed to make global findings, for example, that a claimant was discriminated against on the grounds of her race and gender, rather than having to consider the grounds separately, as is currently the case.

Employment Tribunals – Recommendations

The Act gives Tribunals powers to make more wide-ranging recommendations than they are able to under the current legislation.  If a discrimination claim is successful a Tribunal may in the future make a recommendation to counter the effect of matters dealt with in the claim on any person, not just on the claimant, who in any case may have left the respondent's employment by the time a claim is resolved.

Disability Discrimination

The Act introduces a new concept of "discrimination arising from a disability". Such discrimination will take place if:

• an individual is treated unfairly because of something arising as a consequence of his or her disability;
• the employer cannot show that the treatment was a proportionate means of achieving a legitimate aim; and
• the Tribunal is satisfied the employer knew, or could reasonably be expected to have known, that the claimant had the disability. 

Crucially, this new head of claim does not require the claimant to point to another individual as a comparator in showing less favourable treatment.

Third Party Harassment

The Act harmonises the existing anti-harassment provisions in respect of the majority of the protected characteristics.  In the future, employers will be liable for third party harassment of their employees by a customer or client, for example, where:

• the employer knows the employee has been harassed;
• harassment by a third party has occurred on at least two occasions (it is irrelevant if the third party is the same or a different person on each occasion); and
• the employer did not take reasonably practical steps to prevent the harassment recurring.

Pre-employment Health Questionnaires

The Act renders it unlawful for employers to require employees to fill in pre-employment health questionnaires except in very limited circumstances, e.g. to ascertain whether the applicant will be able to carry out functions which are intrinsic to the job.  There is nothing though in the Act which prevents employers asking health-related questions of new staff once recruitment decisions have been made.

Positive Action

A controversial measure introduced by the Act is a potential defence for employers accused of discrimination in making recruitment or promotion decisions.  When faced with a choice of two equally qualified candidates, employers may, in limited circumstances, choose to treat the candidate possessing a certain protected characteristic more favourably.  The defence is only available though if:

•  the employer does not have a general policy of discriminating in favour of under-represented groups; and
• individuals with that protected characteristic tend to suffer a disadvantage or participation in that field by persons with the characteristic is low, and the employer has acted to overcome the disadvantage or encourage participation.

The Act does not define "qualified" and this may well result in litigation by the unsuccessful candidate on the grounds that the two candidates were not "equally qualified".  It should be noted that the provisions in no way create an obligation to engage in positive discrimination - they merely permit employers to do so on limited occasions.

"Pay Secrecy" Clauses and Gender Pay Gap Information

The Act introduces two new measures which aim to address the persistent gender pay gap by encouraging transparency regarding pay.

First, the Act renders unenforceable contractual clauses requiring employees to keep their pay a secret providing the employees seek or make a pay disclosure for the purpose of assessing (or enabling someone else to assess) whether there is a connection between pay and any protected characteristic (not just gender).  This provision does not apply to conversations between colleagues as to the general fairness of pay or a disclosure of pay information to competitors or journalists (the conversation/disclosure must relate, to some degree at least, to the possibility of discrimination). 

Secondly, the Act contains a power for the Government to require organisations with 250 or more employees to publish information to show whether there is a gender pay gap.  However, the Government has committed not to use this power until 2013 in relation to private employers, and then only if sufficient progress on voluntary pay reporting has not been made.

What Employers Need to do Before October 2010

In preparing for the Act coming into force, employers should:

• review policies and procedures, in particular in relation to equal opportunities and recruitment;
• educate staff on the new provisions and definitions introduced by the Act;
• remove/amend any "pay secrecy" clauses; and
• consider what, if any, gender pay gap information should be published.

For further information please speak to David Hunt or your usual contact at the firm on 020 3375 7000.

This publication is a general summary of the law.  It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co July 2010