Sweet talking

Well, it’s here at last. After all the debate, political positioning and repositioning, the majority of the Equality Act 2010 became law on 1 October. Arguably, the controversial parts of the Act are still waiting in the wings (or perhaps in the long grass). The likes of dual discrimination claims, the publication of gender pay gap information and positive discrimination in relation to recruitment and promotion, for example, are yet to be implemented. So in relation to what’s in force now the question is: will it achieve what it set out to do?

According to the Government Equalities Office: “The Equality Act 2010 provides a new cross-cutting legislative framework to protect the rights of individuals and advance equality of opportunity for all; to update, simplify and strengthen the previous legislation; and to deliver a simple, modern and accessible framework of discrimination law which protects individuals from unfair treatment and promotes a fair and more equal society.”

Big talk. I have read the Act – all 218 sections and 28 schedules of it (well, most of them). It made my head hurt and I had to read certain sections several times to try and elucidate the meaning. I can’t honestly say that it struck me as “simple” or “accessible”.

“Less favourable treatment because of a protected characteristic” replaces the classic “less favourable treatment on the grounds of [a protected characteristic]” as the definition of direct discrimination, but changing such words and expressions is not going to make discrimination claims easier to bring or defend or let employers know what to do to prevent such claims arising in the first place. It will, however, inevitably lead to a new line of authority through the EAT, Court of Appeal and probably even the Supreme Court on the difference, if any, between those two simple everyday expressions.

Territorial scope

Under the ‘old’ discrimination regime, an employer knew they must not discriminate on the majority of the prohibited grounds against a person employed by them “at an establishment in Great Britain”. The relevant ‘old’ legislation went further to explain that this referred to someone who works wholly or partly in Great Britain or works wholly outside Great Britain but who is ordinarily resident in Great Britain and whose employer has a place of business at an establishment in Great Britain for which their work is carried out.

This relative clarity has been wiped away by the Equality Act, which is now entirely silent on its territorial scope – a position it shares with the Employment Rights Act 1996.

It seems inevitable, therefore, that the tribunals will need to look to the common law and the wisdom of the House of Lords in the group of cases known as Lawson v Serco Ltd [2006] IRLR 289, in which the territorial scope of the right to unfair dismissal was decided. Indeed, the Equality Act’s explanatory notes state expressly that, following the precedent of the Employment Rights Act 1996, the Equality Act leaves it to tribunals to determine whether the law applies, depending, for example, on the connection between the employment relationship and Great Britain.

Applying the Lawson test would mean employees entitled to the protection of the Equality Act are those working in Great Britain, based in Great Britain (although working elsewhere intermittently) or working abroad for a British employer for the purposes of a business carried on in Great Britain, or with other “equally strong connections with Great Britain and British employment law”. This is generally regarded as a definition with narrower scope than the old discrimination law statutory test for territorial jurisdiction.

Nothing is ever that simple in employment law, however. In Bleuse v MBT Transport Limited [2008] IRLR 264, a German national persuaded the EAT to allow his claim under the Working Time Regulations 1998 to proceed against a UK-registered company when he worked in Austria, in deference to directly effective EU rights. A similar principle of EU law helped the claimant found jurisdiction in the UK to bring unfair dismissal proceedings in Dunscombe v Secretary of State for Children, Schools and Families [2009] EWCA Civ 1355.

Where discrimination law is concerned there are plenty of EU principles to found an argument to extend the Lawson test. Add to this the fact that, although the House of Lords in Lawson was eager to point out such issues are fact-sensitive, it had to admit the question is one of law, and the ingredients necessary for a further series of appeals are all present.

Amid this lack of clarity, spare a thought for the UK-based multinational company with customer-facing staff stationed all over the world working within different climates, cultures and against different religious backdrops. Does it need to devise a strategy to manage its new Equality Act risk of claims of harassment against its employees by third parties such as its customers or members of the public, or will its staff be forced to bring claims for discrimination under local law?

Equal sympathy must lie with its employees who, if harassed at work because of their sex, race, age, disability, religion or other protected characteristic, will face the choice of funding a difficult EU argument in the UK courts or an attempt to seek redress in a foreign jurisdiction.

Equal pay

It can be no coincidence that Made in Dagenham, the UK film about the story of the female Ford workers whose strike to gain equal pay with men in 1968 heralded the Equal Pay Act 1970, was released on the same day that the Equality Act came into force. Regardless of the coalition government’s coyness in relation to its plans for implementing section 78 of the Act (regarding gender pay information), there is little doubt that the issue of gender pay is set to remain firmly on the legal and public agenda in the years ahead.

In the last ten years equal pay claims in the Employment Tribunal have risen steadily in number. The higher courts have spent a great deal of time in the last few years grappling with the finer details of the Equal Pay Act 1970. The dawning of a new legislative age in discrimination law provided a perfect opportunity for the law of equal pay to get a much-needed makeover – but the Equality Act falls short.

The language has again changed a little – “sex equality clauses” replace “equality clauses” and “equal work” becomes the generic description for like work, work rated as equivalent and work of equal value. The basic structure of the legislation and the cumbersome equal value claims procedure, however, remain.

The most promising potential change is in section 69 which deals with the defence available to employers facing an equal pay claim – namely that the difference in pay is due to a material factor that is not gender-related (directly or indirectly). If an employer can show that its pay policy has the “long-term objective of reducing inequality between men’s and women’s terms of work” that will always be justification enough. This looks suspiciously like a licence to employers to use pay protection as a means of moving out of unequal pay structures towards the goal of full equality of pay.

The Court of Appeal’s judgment in Redcar & Cleveland Borough Council v Bainbridge & ors [2008] IRLR 776 frightened both unions and many public sector employers alike into viewing pay protection as a means of bringing in more equal pay structures with circumspection. This slowed down even further the movement towards equal pay, certainly in the public sector. The wheels may have been oiled by section 69 of the Equality Act, but, of course, it’s not clear, and once again there is fertile ground for legal challenge in an area of law that is also shrouded in eurolaw and is in any event complex enough.

Enforcement

In the white paper that preceded the Equality Act, Framework for a Fairer Future – The Equality Bill, the government stated that one of its main aims was to strengthen enforcement. This has been translated in practice into giving employment tribunals power to make recommendations to employers of specified steps they must take within a particular timescale designed to reduce the effect not only of discrimination experienced by the claimant but to reduce that effect “on any other person” (section 124).

The power to make recommendations was always there in the ‘old’ discrimination law, albeit more narrowly defined. Tribunals rarely used it. They were seldom invited to. The sort of recommendations that may now be more frequently sought are most likely to relate to the training of staff (arguably the only real way to reduce the effect of discrimination in the workplace), reviewing and developing better equality policies and monitoring their impact.

While important and usually helpful steps to take in any event, these fall within the areas in which business budgets are at the moment being particularly stretched. There is therefore once again likely to be a considerable incentive to employers to seek to avoid such recommendations and once again the language of the statute gives scope for such challenges. “Nothing we do will obviate the impact of sex discrimination by drunken passengers towards our female stewards” might be one such example.

However, maybe because of their deep connection with the complex workings of the human mind, concepts of discrimination will always be difficult to define. I’m certainly glad I wasn’t tasked with the job of drafting this piece of legislation and hats off to those who did. In terms of its sheer size and achievement as a harmonising statute it deserves respect. Its efficacy as a piece of law and an instrument of social change will depend not on where the commas have been placed but on how it is used and applied in the workplace and elsewhere. As lawyers, we have an important role to play in that.