With a general election to come in 2024, it is vital that employers keep up to speed with the proposals of both major parties that are likely to affect the day-to-day operation of their business. The Labour Party has published plans for a variety of changes to employment law and workers’ rights, some of which they have committed to introduce within the first one hundred days of winning the election.
One such change that has been widely promoted is the proposed Race Equality Act which would, amongst other aspects, extend the equal pay rights (which are currently only available in relation to sex) to Black, Asian and minority ethnic workers. The draft legislation would also, following a period of review, extend this right to cover discrepancies experienced by disabled people. The proposal also includes provisions to protect against “dual discrimination” which is already included in the Equality Act 2010 wording, though not yet in force.
The proposed act would also impose a duty on public bodies including the NHS, schools, police and councils to collect and report data on staffing, pay and outcomes by ethnicity. This appears to be designed as a first step to replicate the current gender pay gap reporting which is mandatory for employers with over 250 employees.
Extension to Equal Pay Rights
The plan to extend equal pay rights, while appearing to be a powerful and necessary addition to discrimination law, brings limited additional rights and options to employees and workers who are already protected by existing discrimination legislation.
To be successful with an Equal Pay Act claim, an employee must show that someone of the opposite sex is paid more than them for doing equal work. The employer, in order to defend itself, must then demonstrate that this difference in pay is for a genuine reason other than sex. The burden is placed on the employer, rather than the worker needing to show discrimination. However, the first hurdle is often challenging for an employee, because it is rare to find two employees who carry out equal work and are not in some way differentiated in role, experience or ability. This means that these claims can be slow and difficult for individuals to bring without extensive written and expert evidence.
This comparison is likely to be even more difficult to manage for employees bringing equal pay claims on the basis of a disability, where it will be difficult to establish who the comparator ought to be. Conventional discrimination law only requires that the worker make a comparison with a hypothetical colleague, i.e. that if they were a white/male/non-disabled worker they would have been paid more. The requirement to have an actual colleague who the claimant knows is paid more and who is not of the same race or does not have the same disability may be a challenging hurdle for an employee to meet.
There are some advantages to the proposal for employees, despite the limitations. There is a longer time limit to bring an equal pay claim, six months from the end of the employment instead of three months from the act of discrimination as in a standard discrimination claim, and a successful claim will automatically change the worker’s contract to ensure it is no longer discriminatory.
Equal Pay claims can be complex and costly. However, they tend to yield better results when pursued as collective actions against large employers. When successful, these claims can have significant financial implications for employers, especially since damages can be retroactively applied over several years.
It’s important to note that Equal Pay claims offer a distinct form of restitution to employees compared to conventional discrimination claims. Nevertheless, for most claimants in most situations, the Equality Act already provides more effective protection against discriminatory treatment.
Dual Discrimination
The proposed changes would also bring into force Section 14 of the Equality Act 2010. This provision was included in the original act but has never been implemented. This section provides that an act of discrimination could occur where “because of a combination of two relevant protected characteristics, A treats B less favourably than A treats or would treat a person who does not share either of those characteristics”.
For example, a ban on face coverings would be discriminatory against Muslim women who wear a niqab, where they would not have been treated detrimentally had they been Muslim men, or non-Muslim women. However, employment tribunals have not historically needed this Section 14 provision to find such situations to be discriminatory. They more frequently find that workers and employees are already protected by the already-in-force provisions of the Equality Act 2010 because the prescribed characteristic does not need to be the sole or even principal reason behind any detrimental treatment for discrimination to arise.
Conclusion
Both of these measures demonstrate the Labour Party’s desire to be seen to make a difference to employment rights but are themselves unlikely to materially impact the types or quantity of claims brought by workers and employees. However, in the period before the election, both parties will be forced to provide more detail as their proposals are scrutinised. For example, the Labour party may decide to offer to broaden the requirements for pay gap data collection and reporting to private businesses. This could place a noticeable burden on businesses. Employers need to be prepared for these potential changes, so being pre-warned can avoid a potential rush to be compliant in the immediate aftermath of the election.
As these plans are given more detail, we will assist employers with their preparation for an election which could herald significant changes to the employment relationship.