As promised in Issue 36 of the Bottom Line Express, the Masterclass in this issue takes a look at indirect discrimination, victimisation and equal pay under the Equality Act 2010. These provisions are expected to come into force on 1st October 2010.

INDIRECT DISCRIMINATION

The Equality Act harmonises the various definitions of indirect discrimination found in previous equality legislation. Under the Act indirect discrimination occurs when:

• A applies a provision, criterion or practice (‘PCP’) to B;
• A applies, or would apply, the PCP to persons with whom B does not share the relevant protected characteristic;
• the PCP puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share the characteristic;
• the PCP puts, or would put, B at that disadvantage; and
• the PCP is not a proportionate means of achieving a legitimate aim.

It is already unlawful to indirectly discriminate on the grounds of age, race, religion or belief, sex, sexual orientation and marriage and civil partnership. The Act will now make it unlawful to indirectly discriminate because of disability and gender reassignment.

It is worth noting that, because the definition covers claimants who would be put at a particular disadvantage, as well as those who are disadvantaged, it protects people who choose not to apply for jobs which they are otherwise qualified for. However, this does not cover situations where an individual has no intention of applying for that particular job or is not qualified to undertake the job in question.

Currently, an act of indirect discrimination will not be considered an unlawful act if an employer can justify it. Justification can be shown is the employer can demonstrate that the PCP is ‘a proportionate means of achieving a legitimate aim’. A legitimate aim might be any lawful decision an employer makes in running their business or organisation, but a tribunal is unlikely to accept the excuse that it was simply cheaper to do it that way. Generally, a tribunal will look at how fair and reasonable an act was, including looking at whether other ‘less discriminatory’ options have been considered in making decisions.

VICTIMISATION

In the past, for an employee to prove they had been victimised, they had to show that the employer had treated, or would treat, them less favourably than other people, and the reason for the treatment was because they had done or were going to do a ‘protected act’. Protected acts include claiming discrimination at tribunal or making an allegation of discrimination.

The definition of victimisation under the Equality Act is slightly different. It no longer stipulates that a person has to compare their treatment with that of another person to show that they have been victimised (although comparisons will still be a good way to establish the reason for the treatment).

Pay secrecy clauses (clauses that prevent employees from discussing their pay with each other) in employment contracts will also be classed as a ‘protected act’ (see under Equal Pay below).

As previously, an employee will not be protected from victimisation if they have maliciously made or supported an untrue complaint.

EQUAL PAY

Previous equality legislation meant that claims of discrimination in contractual matters – pay, for example – could only be brought if the claimant could identify an actual real-life person who they could compare their treatment with. On the other hand, non-contractual matters – discrimination in selection or promotion – could be argued with the use of a hypothetical comparator. This meant that there need not be a flesh and blood person to be used as a comparison.

This will stay the same in the Equality Act 2010, but the one major change is the possibility of bringing a contractual claim in certain circumstances without having to identify a real life person to be compared against.

As currently, employers can win equal pay claims if they can show that a difference in pay is not because of sex, but is because of a ‘material factor’ that creates a difference in the circumstances of the claimant from those of his or her comparator. The Equality Act expressly says that not only must a material factor not be sex, it must not involve indirect sex discrimination either. Under the Act, if the material factor means that one sex is favoured over another, then it will have to be objective justified. The long-term aim of reducing inequality between men’s and women’s terms and conditions will always be legitimate aim, potentially justifying indirect discrimination. This means that employers who use pay protection measures to remove discrimination from their pay structures will be able to continue this, even if the protection temporarily prolongs the discriminatory pay practice.

PAY SECRECY CLAUSES

The Equality Act includes provisions which mean that any term in a contract that tries to prevent or restrict colleagues from talking about contractual terms, in so far as that person may subsequently make a relevant pay disclosure, is unenforceable. A ‘relevant pay disclosure’ is one made in order to find out whether sex, race or age etc has a connection with how much someone earns. However, pay confidentiality clauses have not been outlawed altogether.

As mentioned above, asking about pay in order to see if there is any discrimination involved, or receiving that information is also a ‘protected act’ covered by the victimisation part of the Act. So, employees will potentially have a remedy if their employer takes actions for discussing pay differences. As with the restrictions on secrecy clauses, this only applies where the employer punishes ‘relevant pay disclosures’ – salary discussions between colleagues that are not for the purpose of finding out if there is any discrimination involved with pay are not protected. However, any employee facing action for having pay discussions is likely to claim that they were discussing whether there may be pay discrimination, which it would be difficult for the employer to disprove.

WHAT SHOULD EMPLOYERS DO?

Steps to consider include:
• reviewing job adverts, job descriptions, person specifications and terms of employment to ensure that any potentially discriminatory provisions, criteria and practices, such as requirements for full-time working, can be objectively justified;
• ensuring that employees, particularly line managers, know about the provisions regarding victimisation – don’t assume that just because a grievance procedure has been properly followed that that is the end of the matter – check that the employee isn’t suffering in the aftermath.

Whilst pay secrecy clauses are not particularly common, and the Act does not require them to be removed from contracts, employers that do have them should make sure that they are no longer enforced in circumstances which would breach the provisions of the Act.

The Masterclass article in the next Issue of the Bottom Line Express will, subject to any last minute U-turn by the Government, confirm the implementation of various core provisions of the Equality Act 2010 and summarise some provisions that will or may be brought into force at a later date.

For more information or advice on the Equality Act, call the Advice Service on 0844 892 2772.