Equality Bill

House of Commons

Session 2008 - 09
Internet Publications
Other Bills before Parliament

Equality Bill

Equality Bill
Part 5 — Work
Chapter 2 — Occupational pension schemes

(h)
a county council in Wales;
(i)
a community council in Wales;
(j)
a county borough council in Wales;
(k)
a council constituted under section 2 of the Local Government etc.
(Scotland) Act 1994;
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(l)
a community council in Scotland.
(3)
A Minister of the Crown may by order amend subsection (2) so as to add, vary
or omit a reference to a body which exercises functions that have been
conferred on a local authority within paragraph (a) to (l).
(4)
A reference to the carrying-out of official business by a person who is a
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member of a local authority is a reference to the doing of anything by the
person—
(a)
as a member of the authority,
(b)
as a member of a body to which the person is appointed by, or
appointed following nomination by, the authority or a group of bodies
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including the authority, or
(c)
as a member of any other public body.
(5)
“Member”, in relation to the Greater London Authority, means—
(a)
the Mayor of London;
(b)
a member of the London Assembly.
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Chapter 2
Occupational pension schemes
57
Non-discrimination rule
(1)
An occupational pension scheme must be taken to include a non-
discrimination rule.
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(2)
A non-discrimination rule is a provision by virtue of which a responsible
person (A)—
(a)
must not discriminate against another person (B) in carrying out any of
A’s functions in relation to the scheme;
(b)
must not, in relation to the scheme, harass B;
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(c)
must not, in relation to the scheme, victimise B.
(3)
The provisions of an occupational pension scheme have effect subject to the
non-discrimination rule.
(4)
The following are responsible persons—
(a)
the trustees or managers of the scheme;
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(b)
an employer whose employees are, or may be, members of the scheme;
(c)
a person exercising an appointing function in relation to an office the
holder of which is, or may be, a member of the scheme.
(5)
A non-discrimination rule does not apply in relation to a person who is a
pension credit member of a scheme.
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(6)
An appointing function is any of the following—
(a)
the function of appointing a person;
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Equality Bill
Part 5 — Work
Chapter 2 — Occupational pension schemes

201. The non-discrimination rule does not apply where an equality rule operates or would
operate, but for the exceptions in Part 2 of Schedule 7.
Background
202. Occupational pension schemes are already required to have non-discrimination rules
in respect of age, disability, religion or belief and sexual orientation. When this provision
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comes into force, they will also have to have non-discrimination rules in respect of gender
reassignment, marriage and civil partnership and sex.
203. Exceptions to the non-discrimination rule in relation to age are currently set out at
Schedule 2 to the Employment Equality (Age) Regulations 2006 (SI 2006/1031).
Example
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• A disabled person is refused membership of an occupational pension scheme because
the trustees believe it is not in the person’s best interest to join. This is because the
person has a short life expectancy and is unlikely to build up a reasonable pension.
Although the trustees believe they are acting reasonably, they may be liable to
challenge because they have breached the non-discrimination rule.
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Clause 58: Communications
Effect
204. This clause applies clause 114, 120 and paragraph 19 of Schedule 8 and the provisions
of this Chapter, in their application to communications, to a disabled person who is:
• entitled to the present payment of dependants’ or survivors’ benefits under an
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occupational pension scheme, or
• entitled to a pension derived from a divorce settlement (pension credit member).
Background
205. This clause replaces the current provisions in the Disability Discrimination Act 1995.
Chapter 3: Equality of terms
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Clause 59: Relevant types of work
Effect
206. This Chapter contains provisions designed to achieve equality between men and
women in pay and other terms of employment where the work of an employee and his or her
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Equality Bill
Part 5 — Work
Chapter 3 — Equality of terms

(b)
the function of terminating a person’s appointment;
(c)
the function of recommending a person for appointment;
(d)
the function of approving an appointment.
(7)
The breach of a non-discrimination rule is a contravention of this Part for the
purposes of Part 9 (enforcement).
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(8)
It is not a breach of a non-discrimination rule for the employer or the trustees
or managers of a scheme to maintain or use in relation to the scheme rules,
practices, actions or decisions relating to age which are of a description
specified by order by a Minister of the Crown.
(9)
An order authorising the use of rules, practices, actions or decisions which are
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not in use before the order comes into force must not be made unless the
Minister consults such persons as the Minister thinks appropriate.
(10)
A non-discrimination rule does not have effect in relation to an occupational
pension scheme in so far as an equality rule has effect in relation to it (or would
have effect in relation to it but for Part 2 of Schedule 7).
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(11)
A duty to make reasonable adjustments applies to a responsible person.
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Communications
(1)
In their application to communications the following provisions apply in
relation to a disabled person within subsection (2) as they apply in relation to
a disabled person who is a member of an occupational pension scheme—
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(a)
section 57;
(b)
section 114;
(c)
section 120;
(d)
paragraph 19 of Schedule 8 (and such other provisions of that Schedule
as apply for the purposes of that paragraph).
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(2)
A disabled person within this subsection is a disabled person who is—
(a)
entitled to the present payment of dependants’ or survivors’ benefits
under the scheme, or
(b)
a pension credit member of the scheme.
(3)
Communications include—
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(a)
the provision of information;
(b)
the operation of a dispute resolution procedure.
Chapter 3
Equality of terms
Sex equality
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59
Relevant types of work
Sections 61 to 65 apply where—
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Equality Bill
Part 5 — Work
Chapter 3 — Equality of terms

comparator of the opposite sex is equal. It does so by providing for a sex equality clause to be
read into the employee’s contract of employment. This is designed to ensure parity of terms
between the employee and his or her comparator. A similar provision – referred to as a sex
equality rule – is implied into the terms of pension schemes.
207. This clause explains that the clauses mentioned which impose the equality clause and
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equality rule apply to employees, office holders and, by virtue of subsection (3) of clause 78,
members of the armed forces, where one person’s work is equal to the work of another.
208. Background
208. This is a new provision that is designed to clarify to whom the equality clause and
equality rule provisions of the Bill apply. The reference to colleague and its definition clarify,
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but do not widen the existing provisions on who a person can use as a comparator for the
purpose of a claim for breach of an equality clause or rule.
Examples
• A female employee can compare her work with that of a male colleague employed by
the same employer.
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• A male police officer can compare his work with that of a female police officer in the
same force.
Clause 60: Equal work
Effect
209. This clause sets out when the work of two people, whose work is being compared, is
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taken to be equal so that an equality clause or equality rule can operate. For work to be equal,
a claimant must establish that he or she is doing like work, work rated as equivalent or work of
equal value to a comparator’s work. The clause also sets out the factors which determine
whether a person’s work is within one of these categories. The fact that a discriminatory job
evaluation study has been carried out which gives different values to the work of men and
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women is not an obstacle to the operation of an equality clause if an evaluation that set the
same values for men and women would have found the jobs to be of equal value.
Background
210. This clause is designed to replicate the substance of definitions contained in the Equal
Pay Act 1970.
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Examples
• Male and female supermarket employees who perform similar tasks which require
similar skills will be doing like work even though the men may lift heavier objects
from time to time. This is because the differences are not of practical importance in
relation to their terms of employment.
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• A job evaluation study rated the jobs of women and their better paid male comparators
as not equivalent. If the study had not given undue weight to the skills involved in the
men’s jobs, it would have rated the jobs as equivalent. An equality clause would
operate in this situation.
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Equality Bill
Part 5 — Work
Chapter 3 — Equality of terms

(a)
a person (A) is employed on work that is equal to the work that a
colleague of the opposite sex (B) does;
(b)
a person (A) holding a personal or public office does work that is equal
to the work that a colleague (B) of the opposite sex does.
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Equal work
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(1)
For the purposes of this Chapter, A’s work is equal to that of B if it is—
(a)
like B’s work,
(b)
rated as equivalent to B’s work, or
(c)
of equal value to B’s work.
(2)
A’s work is like B’s work if—
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(a)
A’s work and B’s work are the same or broadly similar, and
(b)
such differences as there are between their work are not of practical
importance in relation to the terms of their work.
(3)
So on a comparison of one person’s work with another’s for the purposes of
subsection (2), it is necessary to have regard to—
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(a)
the frequency with which differences between their work occur in
practice, and
(b)
the nature and extent of the differences.
(4)
A’s work is rated as equivalent to B’s work if a job evaluation study—
(a)
gives an equal value to A’s job and B’s job in terms of the demands
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made on a worker, or
(b)
would give an equal value to A’s job and B’s job in those terms were the
evaluation not made on a sex-specific system.
(5)
A system is sex-specific if, for the purposes of one or more of the demands
made on a worker, it sets values for men different from those it sets for women.
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(6)
A’s work is of equal value to B’s work if it is—
(a)
neither like B’s work nor rated as equivalent to B’s work, but
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Equality Bill
Part 5 — Work
Chapter 3 — Equality of terms

Clause 61: Sex equality clause
Effect
211. This clause requires that a sex equality clause be read into the terms under which
people are employed. The effect of this is that any term in the contract which is less
favourable than that of the comparator of the opposite sex is modified so as to ensure that both
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have the same effect. Where the comparator benefits from a term which is not available to the
employee, the effect of the sex equality clause is to include such a term in the employee’s
contract of employment.
212. A sex equality clause will operate similarly on the terms of a person who is an
appointee to an office or a member of the armed forces, as it does in relation to an employee.
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213. Subsection (3) is intended to ensure that the provisions relating to equality of terms at
work and the provisions governing pension schemes in clauses 62 and 63 operate effectively
together so that action can be taken against an employer as it could against a trustee, to ensure,
for example that a defence that operates in relation to one, will operate in relation to the other.
214. Where a job evaluation study has rated the work of an employee and comparator as
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equivalent, the equality clause will give the employee the benefit of all of the comparator’s
terms, including those which have not been determined by the rating of the work.
215. Background
215. This clause is designed to replicate the effect of definitions contained in the Equal Pay
Act 1970.
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Example
• A male employee’s contract includes a term that he can use his employer’s car for
private purposes. His female colleague who does equal work does not benefit from this
term. A sex equality clause will have the effect of including in her contract a term
corresponding to that of her male colleague.
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Clause 62: Sex equality rule
Effect
216. This clause requires that every occupational pension scheme is to have a sex equality
rule read into it.
217. The rule requires that men and women are treated equally to comparable members of
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the opposite sex in relation both to the terms on which they are permitted to join the scheme,
and to the terms on which they are treated once they have become scheme members.
218. The rule, insofar as it applies to the terms on which a person is treated once they have
become a member of the scheme, does not apply to pensionable service before 17 May 1990.
This was the date of the European Court’s decision in Barber v Guardian Royal Exchange
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Equality Bill
Part 5 — Work
Chapter 3 — Equality of terms

(b)
nevertheless equal to B’s work in terms of the demands made on A by
reference to factors such as effort, skill and decision-making.
61
Sex equality clause
(1)
If the terms of A’s work do not (by whatever means) include a sex equality
clause, they are to be treated as including one.
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(2)
A sex equality clause is a provision that has the following effect—
(a)
if a term of A’s is less favourable to A than a corresponding term of B’s
is to B, A’s term is modified so as not to be less favourable;
(b)
if A does not have a term which corresponds to a term of B’s that
benefits B, A’s terms are modified so as to include such a term.
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(3)
Subsection (2)(a) applies to a term of A’s relating to membership of or rights
under an occupational pension scheme only in so far as a sex equality rule
would have effect in relation to the term.
(4)
In the case of work within section 60(1)(b), a reference in subsection (2) above
to a term includes a reference to such terms (if any) as have not been
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determined by the rating of the work (as well as those that have).
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Sex equality rule
(1)
If an occupational pension scheme does not include a sex equality rule, it is to
be treated as including one.
(2)
A sex equality rule is a provision that has the following effect—
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(a)
if a relevant term is less favourable to A than it is to B, the term is
modified so as not to be less favourable;
(b)
if a term confers a relevant discretion capable of being exercised in a
way that would be less favourable to A than to B, the term is modified
so as to prevent the exercise of the discretion in that way.
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(3)
A term is relevant if it is—
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