The government has launched a consultation on reforms to eight areas of equality law, which include a new equal pay enforcement body, expanding equal pay laws for race and disability, and enacting dual discrimination provisions in the Equality Act. Rob Moss examines the new equality law proposals.

New equality laws consultation

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1. Expanding equal pay to race and disability
2. Adding outsourced workers to equal pay rules
3. Establishing an equal pay enforcement body
4. Improving pay transparency
5. Enacting combined discrimination provisions
6. Ensuring the Public Sector Equality Duty is met by all public service providers
7. Adding volunteers to sexual harassment protections
8. Implementing socio-economic duty

Women and equalities ministers Seema Malhotra and Baroness Smith of Malvern announced a call for evidence on equality laws yesterday in Parliament to shape future policies and potential legislative reform.

“Equality is a key factor in delivering long-term and sustainable growth across the UK economy,” they said. “It is essential that individuals can achieve according to their talents, irrespective of their background.

“This not only maximises individual opportunity but enables businesses to employ the best person for the job, leading to increased productivity, innovation, and economic resilience, driving up household incomes and putting more money in working people’s pockets.”

The proposed reforms could bring back to life legislation that has lain dormant in the Equality Act, together with new policies promised in the government’s Plan for Change.

The call for evidence will help shape the measures included in the draft Equality (Race and Disability) Bill and the Employment Rights Bill and follows a separate consultation launched last month on mandatory ethnicity and disability pay gap reporting.

Minister for social security and disability Stephen Timms said: “I’m proud to support this call for evidence, which will help inform the Equality (Race and Disability) Bill in line with the government’s manifesto commitment to put disabled people’s views and voices at the heart of all we do.

“I encourage people to take part and help shape plans that boost individual opportunity for disabled people, increase household incomes and support businesses in employing the best person for the job.”

Here, we summarise the key aspects of the call for evidence on equality law, which closes on 30 June, and what they could mean for employers:

1. Expanding equal pay rights to race and disability

The government wants to make the right to equal pay effective on the basis of race and disability, as well as sex. Discrimination differs due to race, disability and sex, and the government is seeking to better understand these differences.

The government cites the Deaton Review of Inequalities, which found that Black Caribbean men were paid 13% less than white British men in 2019, while Pakistani and Bangladeshi men earned 22% and 42% less, respectively. It also draws on the latest disability pay gap figures from the Office for National Statistics (ONS), which showed a 12.7% pay difference between disabled and non-disabled employees.

At present, sex discrimination claims about pay are predominantly brought as equal pay claims, while race and disability discrimination claims do not have this option. Accordingly, there are far fewer cases. This discrepancy could suggest that the equal pay laws offer stronger redress than is available for pay discrimination because of race or disability.

The government is looking at whether to enable new avenues for race and disability claims, such as the ability to make comparisons with colleagues doing work that is different but of equal value. 

2. Including outsourced workers in equal pay rules

Existing requirements under the Equality Act 2010 prevent many outsourced workers from comparing their contractual terms with those of ‘in-house’ employees.

Although many employers have very high employment standards, the government cites an EHRC report on the health and social care sector as evidence that some outsourcing exacerbates inequalities, including underpaying staff.

It wants to ensure that such practices cannot lead to pay discrimination by removing barriers and potentially enabling comparisons between outsourced workers and ‘in-house’ employees in equal pay claims. It wants evidence about where liability should lie (direct employer or the contracting employer) for equal pay claims made by outsourced workers.

This could include the use of traditional outsourcing of services through an external service provider but also the use of arrangements such as subcontracting, umbrella companies, labour providers or employment agencies.

3. Establishing a new equal pay enforcement body

The government is considering how enforcement of the equal pay scheme could be improved, including through the establishment of an “Equal Pay Regulatory and Enforcement Unit” with the involvement of trade unions.

At present, equal pay is mainly enforced through claims in the employment tribunal, with more than 10,000 claims typically made each year. However, less than 1% of equal pay claims typically go to a full hearing, and of those, less than a third are successful.

While the Equality and Human Rights Commission (EHRC) occasionally uses its powers to make important interventions in support of equal pay, the call for evidence considers how the government could go further to enforce it.

The government is considering the best institutional home for the new unit, as well as its functions, and is exploring a number of ways that a new unit could strengthen equal pay provisions, whether by building on the EHRC’s existing role or through new functions.

The new unit could take actions including: undertaking litigation by providing legal advice and representation to others; bringing legal proceedings in its own name; or intervening in legal proceedings brought by others; making use of other enforcement powers, such as by pursuing investigations, entering into statutory agreements with employers, seeking injunctions, or issuing compliance notices.

It could also offer non-legal advice and assistance to individuals or groups who think they may have suffered from pay discrimination, or facilitate informal dispute resolution.

4. Improving pay transparency

The government is examining a broad range of potential options to end pay discrimination, including pay transparency measures. It wants to learn from best practices already used by some employers, research from academics and the experience of other countries.

Measures to improve pay transparency could involve employers:

• providing salary ranges in job adverts or prior to interview
• not asking candidates for their salary history
• publishing information on pay, pay structures and progression criteria
• providing employees with pay information and how this compares to those doing the same role or work of equal value.

The government is also seeking views on the effectiveness of equal pay audits. These are ordered by employment tribunals when employers have breached equal pay regulations. These could be expanded to pay discrimination cases relating to race and disability.

5. Enacting combined discrimination provisions in Equality Act

The government has committed to commencing section 14 of the Equality Act 2010, which prohibits direct discrimination because of a combination of two protected characteristics. As far back as 2014, the Labour Party has called for the “dual discrimination” provisions in Section 14 to be enacted.

In 2009, the Citizens Advice Bureau conducted research to inform the provisions of the (then) Equality Bill. Of 28 potential cases considered, 15 were found to meet the statutory definition set out in section 14.

Combined discrimination claims could come, for example, from a woman experiencing the menopause (sex and age) or a Muslim woman (religion and sex). The government is concerned that legislation does not currently provide adequate protection for people who experience discrimination based on a combination of protected characteristics.

As the law stands, an employee who is treated less favourably because of a combination of protected characteristics must bring discrimination claims based on each separate protected characteristic, even if they relate to a single alleged act of discrimination.

6. Ensuring the PSED is met by all public service providers

The Public Sector Equality Duty (PSED) requires public authorities and non-public bodies exercising public functions to have due regard to the need to eliminate discrimination, advance equal opportunity, and foster good relations between different people.

The government wants to ensure that the PSED is working effectively where non-public bodies are exercising public functions, including those in the private and voluntary sectors. It is particularly interested in:

• overall compliance by non-public bodies when exercising public functions
• outcomes of compliance or noncompliance
• barriers and enablers for non-public bodies in complying with the PSED
• levels of clarity as to when a non-public body is or is not exercising a public function
• the effectiveness of enforcement of the PSED for non-public bodies.

7. Including volunteers and interns in sexual harassment protections

Despite protections in the Equality Act 2010 against sexual harassment in the workplace, ONS figures showed that for the year ending March 2023, 26.5% of people aged 16 and over who said they had experienced sexual harassment in the last year said that they had experienced it at their place of work

Through the Employment Rights Bill, the government will strengthen the law so that it requires employers to take all reasonable steps to stop sexual harassment before it starts, and to maintain workplaces free from harassment, including by third parties.

The government feels a 2019 consultation under the Conservative government (which led to last year’s Worker Protection Act) provided a “clear picture” of the range of matters that needed to be taken into account when considering extending sexual harassment protections to interns. However, it wants to further explore the issues raised in relation to extending protections to volunteers.

It is also seeking evidence on other interventions that should be considered to prevent workplace sexual harassment.

8. Implementing a socio-economic duty for public authorities in England

The socio-economic duty requires specified public authorities to give “due regard” to how decisions might help to reduce the inequalities associated with socio-economic disadvantage.

The government is seeking evidence on how to commence the socio-economic duty in the Equality Act 2010 in England. Both Scotland (2018) and Wales (2021) have already enacted the provisions.

Reaction to the equality laws consultation

Ben Willmott, head of public policy at the CIPD, said: “We welcome proposals to improve the enforcement of equal pay rights by establishing an Equal Pay Regulatory and Enforcement Unit or by building on the existing role of the EHRC.

“However, there also needs to be a strategy to improve the effectiveness of the labour market enforcement system overall. The establishment of a Fair Work Agency, as proposed in the Employment Rights Bill, will go some way towards this, but will only prove effective alongside other reforms to the system including increased funding and staffing for the different enforcement bodies. There is also a need for more resources for Acas to support its ability to provide advice and guidance to small firms to help them comply.

“We welcome proposals to close loopholes that allow organisations to use outsourcing to avoid equal pay obligations. No worker should earn less for doing the same job simply because their role has been contracted out. Equal pay must follow the work – not the employer’s legal structure.

“Proposals to improve pay transparency are also welcome, and employers should be open about how their pay structures are set. Being transparent about salary ranges in job adverts can help candidates make informed decisions about whether a role is right for them.

“The CIPD has long advocated for large employers – those with 250 or more employees – to voluntarily report on their disability and ethnicity pay gaps. However, addressing any gaps requires more than just reporting on numbers – employers should also be required to provide a clear narrative that explains their findings, and deliver measurable action plans to tackle disparities.”

Chief people and inclusion officer at the Co-op, Claire Costello, said: “For the Co-op, promoting equality is fundamental to how we do business. We believe it’s the right thing to do and a way to promote economic growth. Our Social Mobility campaign has focused on the impact we believe socioeconomic background can have on individual life chances.

“Fifteen years on from the introduction of the Equality Act in 2010, we welcome this call for evidence as an opportunity to consider what more as a society we must all do. This is an important moment for everyone to contribute and ensure that whoever you are and wherever you’re from doesn’t determine what you can become.”

Ann Francke, chief executive of the Chartered Management Institute (CMI), said: “This is a welcome step in improving conditions for people working across the UK economy, breaking down barriers and creating workplaces where everyone can thrive.

“CMI welcomes the government’s collaborative approach in working alongside employers to get this right. The key will be ensuring that leaders and managers have the skills they need to deliver inclusive workplaces that treat individuals fairly and deliver better outcomes.

“CMI’s report on the subject, Filling in the Gaps, found that those firms that do the work of tackling inequality in their ranks retain their talent and deliver for their shareholders. We look forward to working closely with the government to ensure managers and leaders are equipped with the skills they need to navigate these important pieces of legislation.”

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