Equality Bill

House of Commons

Session 2008 - 09
Internet Publications
Other Bills before Parliament

Equality Bill

Equality Bill
Part 10 — Contracts, etc.

137
Removal or modification of unenforceable terms
(1)
A county court or the sheriff may, on an application by a person who has an
interest in a contract, or other agreement, which includes a term that is
unenforceable as a result of section 136, make an order for the term to be
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removed or modified.
(2)
An order under this section must not be made unless every person who would
be affected by it—
(a)
has been given notice of the application (except where notice is
dispensed with in accordance with rules of court), and
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(b)
has been afforded an opportunity to make representations to the
county court or sheriff.
(3)
An order under this section may include provision in respect of a period before
the making of the order.
138
Contracting out
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(1)
A term of a contract is unenforceable by a person in whose favour it would
operate in so far as it purports to exclude or limit a provision of this Act.
(2)
A relevant non-contractual term (as defined by section 136) is unenforceable by
a person in whose favour it would operate in so far as it purports to exclude or
limit a provision of this Act, in so far as the provision relates to disability.
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(3)
This section does not apply to a contract which settles a claim within section
108.
(4)
This section does not apply to a contract which settles a complaint within
section 114 if the contract—
(a)
is made with the assistance of a conciliation officer, or
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(b)
is a qualifying compromise contract.
100

Equality Bill
Part 10 — Contracts, etc.

Background
453. This clause replaces similar provisions in current legislation.
Examples
• A woman who thinks she may have a claim for unlawful discrimination upon being
made redundant may give up any right to pursue the claim under the Act in return for
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payment. She will not then be able to ask a court to modify or remove that term so as
to pursue the claim at a later date.
• However, if the agreement was not reached with the assistance of a conciliation officer
or was not a qualifying compromise agreement, it would be unenforceable (and thus
would not prevent the claimant pursuing the claim before an employment tribunal).
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Clause 139: Void and unenforceable terms
Effect
454. This clause deals with collective agreements (which are defined in the Trade Union
and Labour Relations (Consolidation) Act 1992).
455. It also deals with rules of undertakings of employers, trade organisations and
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qualifications bodies (which are defined in Part 5).
456. Any term of a collective agreement is rendered void to the extent that it discriminates
against a person or would otherwise lead to conduct prohibited by the Bill. Terms of collective
agreements are made void rather than unenforceable because making them unenforceable
would be of no help to those affected, since they are unenforceable in any case unless
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incorporated into a contract. The term is therefore made of no effect at all, leaving the
interested parties to renegotiate.
457. A rule of an undertaking which discriminates against a person or would otherwise lead
to conduct prohibited by the Bill is made unenforceable. A rule of an undertaking is defined in
clause 142 as a rule made by a qualifications body or trade organisation in relation to
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membership or conferral of a qualification, or a rule made by an employer for application to
employees and prospective employees.
Background
458. This clause replaces similar provisions in current legislation.
Example
30
• A collective agreement which required jobs in a particular part of a factory to be given
only to men would be void, so a woman who applied could not be refused on those
grounds.
• An indirectly discriminatory rule of a qualifications body (providing for example a
professional qualification for plumbers) which required that applicants must have two
35
years’ previous experience with a British firm would be unenforceable against a
person who had the equivalent experience with a foreign firm. It would still be
enforceable against a person who did not have the required experience at all (provided
it was justified).
E101

Equality Bill
Part 10 — Contracts, etc.

(5)
A contract within subsection (4) includes a contract which settles a complaint
relating to a breach of an equality clause or rule or of a non-discrimination rule.
(6)
A contract within subsection (4) includes an agreement by the parties to a
dispute to submit the dispute to arbitration if—
(a)
the dispute is covered by a scheme having effect by virtue of an order
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under section 212A of the Trade Union and Labour Relations
(Consolidation) Act 1992, and
(b)
the agreement is to submit the dispute to arbitration in accordance with
the scheme.
Collective agreements and rules of undertakings
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139
Void and unenforceable terms
(1)
A term of a collective agreement is void in so far as it constitutes, promotes or
provides for treatment of a description prohibited by this Act.
(2)
A rule of an undertaking is unenforceable against a person in so far as it
constitutes, promotes or provides for treatment of the person that is of a
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description prohibited by this Act.
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Equality Bill
Part 10 — Contracts, etc.

Clause 140: Declaration in respect of void term, etc.
Effect
459. This clause enables an employment tribunal to declare a term of collective agreement
void, or a rule of an undertaking unenforceable, as set out in clause 139, when a person thinks
that it might in the future have the effect of discriminating against him or her. Because
5
collective agreements apply to many people in many (possibly varying) situations, it is not
appropriate for a tribunal to modify them and so they are made void, rather than subject to
modification or amendment, and the parties are left to renegotiate, bearing all those potentially
affected in mind.
460. The clause sets out who can make a complaint in each instance. Terms of
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discriminatory collective agreements can be challenged by employees or prospective
employees. Rules of undertakings of employers can be challenged by employees or
prospective employees; those of trade organisations by members or prospective members; and
those of qualifications bodies by persons seeking or holding relevant qualifications (clause
51).
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Background
461. This clause replaces similar provisions in current legislation.
462. Examples
• A person who is studying for an engineering qualification who is told he will only be
eligible for it if he passes a test of his ability to write English can ask a tribunal to
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declare that the rule requiring the test is indirectly discriminatory and therefore, if
unjustified, unenforceable.
E102

Equality Bill
Part 10 — Contracts, etc.

140
Declaration in respect of void term, etc.
(1)
A qualifying person (P) may make a complaint to an employment tribunal that
a term is void, or a rule is unenforceable, as a result of section 139.
(2)
But subsection (1) applies only if—
(a)
the term or rule may in the future have effect in relation to P, and
5
(b)
where the complaint alleges that the term or rule provides for treatment
of a description prohibited by this Act, P may in the future be subjected
to treatment that would (if P were subjected to it in present
circumstances) be of that description.
(3)
If the tribunal finds that the complaint is well-founded, it must make an order
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declaring that the term is void or the rule is unenforceable.
(4)
An order under this section may include provision in respect of a period before
the making of the order.
(5)
In the case of a complaint about a term of a collective agreement, where the
term is one made by or on behalf of a person of a description specified in the
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first column of the table, a qualifying person is a person of a description
specified in the second column.

Description of person who
Qualifying person

made collective agreement

Employer
A person who is, or is seeking to be,

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an employee of that employer

Organisation of employers
A person who is, or is seeking to be,

an employee of an employer who is a

member of that organisation

Association of organisations
A person who is, or is seeking to be,

25

of employers
an employee of an employer who is a

member of an organisation in that

association

(6)
In the case of a complaint about a rule of an undertaking, where the rule is one
made by or on behalf of a person of a description specified in the first column
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of the table, a qualifying person is a person of a description specified in the
second column.

Description of person who
Qualifying person

made rule of undertaking

Employer
A person who is, or is seeking to be,

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an employee of that employer

Trade organisation or
A person who is, or is seeking to be, a

qualifications body
member of the organisation or body

A person on whom the body has

conferred a relevant qualification

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A person seeking conferment by the

body of a relevant qualification

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Equality Bill
Part 10 — Contracts, etc.

Clause 141: Meaning of “qualifying compromise contract”
Effect
461. This clause sets the conditions under which a compromise contract settling a case can
be lawful, even though it seeks to limit the application of the Bill under clause 138.
462. It must be a written contract which meets each of the following conditions (and says
5
that it does). The conditions are that the complainant in the case has received independent
advice from a named person who is insured or indemnified against the risk of a claim against
him arising from that advice.
463. The clause describes who can be an independent adviser and includes a power to add
new descriptions of people who may be independent advisers in the future. It makes clear that
10
a conflict of interest prevents a person being an independent adviser and defines what a
conflict of interest is.
Background
464. The clause replaces provisions in current legislation which have the same purpose.
The power to add to the kinds of person who may be independent advisers could be used to
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add, for example, Fellows of the Institute of Legal Executives employed by a solicitors’
practice.
465. Examples
• An employee who settled a claim at employment tribunal on the advice of a lawyer
who works for the employer he was seeking to sue would still be able to pursue the
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claim (assuming a conciliation officer was not involved in the settlement). The
settlement agreement would be unenforceable because the lawyer had a conflict of
interest and therefore the agreement would not be a qualifying compromise contract.
• Relying on advice from an advice agency which is not insured against being sued as a
result of giving bad advice would be risky for both claimant and adviser. Because of
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this, a settlement contract agreed on the advice of such an agency would not be a
qualifying compromise contract so any term in it limiting the person’s rights under the
Bill would be unenforceable.
E103

Equality Bill
Part 10 — Contracts, etc.

Supplementary
141
Meaning of “qualifying compromise contract”
(1)
This section applies for the purposes of this Part.
(2)
A qualifying compromise contract is a contract in relation to which each of the
conditions in subsection (3) is met.
5
(3)
Those conditions are that—
(a)
the contract is in writing;
(b)
the complainant has, before entering into the contract, received advice
from an independent adviser about its terms and effect (including, in
particular, its effect on the complainant’s ability to pursue the
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complaint before an employment tribunal);
(c)
on the date of the giving of the advice, there is in force a contract of
insurance, or an indemnity provided for members of a profession or
professional body, covering the risk of a claim by the complainant in
respect of loss arising from the advice;
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(d)
the contract identifies the adviser;
(e)
the contract states that the conditions in paragraphs (b) and (c) are met.
(4)
Each of the following is an independent adviser—
(a)
a qualified lawyer;
(b)
an officer, official, employee or member of an independent trade union
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certified in writing by the trade union as competent to give advice and
as authorised to do so on its behalf;
(c)
a worker at an advice centre (whether as an employee or a volunteer)
certified in writing by the centre as competent to give advice and as
authorised to do so on its behalf;
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(d)
a person of such description as may be specified by order.
(5)
Despite subsection (4), none of the following is an independent adviser in
relation to a qualifying compromise contract—
(a)
a person who is a party to the contract or the complaint;
(b)
a person who is connected to a person within paragraph (a);
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(c)
a person who is employed by a person within paragraph (a) or (b);
(d)
a person who is acting for a person within paragraph (a) or (b) in
relation to the contract or the complaint;
(e)
a person within subsection (4)(b) or (c), if the trade union or advice
centre is a person within paragraph (a) or (b);
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(f)
a person within subsection (4)(c) to whom the complainant makes a
payment for the advice.
(6)
A “qualified lawyer”, for the purposes of subsection (4)(a), is—
(a)
in relation to England and Wales, a person who, for the purposes of the
Legal Services Act 2007, is an authorised person in relation to an
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