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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.

25

(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.

40

(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

5

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

10

• 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

25

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

E45


 

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

10

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.

58      

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

35

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

5

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,

10

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.

15

• 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

20

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.

30

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.

E46


 

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.

60      

Equal work

5

(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

5

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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E47


 

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).

62      

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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