CBI RESPONSE - WORK AND PENSIONS COMMITTEE INQUIRY ON THE EQUALITY BILL
1. The CBI is pleased to submit evidence to the Work and Pensions Committee inquiry on the Equality Bill and the steps that the Department for Work and Pensions should take to achieve greater equality. Employers are already convinced of the business benefits of a diverse workforce to fill skills gaps, to attract and retain the best talent and to explore new markets. Businesses are now looking to the Government for assistance and guidance on their responsibilities and limitations: with tight definitions and clear wording, the Government has the opportunity to create a workable and effective piece of legislation. The Department for Work and Pensions must use its experience of the Disability Discrimination Act to inform and shape the new Equality Bill.
2. The terms of reference of this inquiry are wide ranging and this CBI response concentrates on the following key points:
· There is a potential for 'scope creep' without tighter definitions of discrimination in the EU non-discrimination directive on equality in goods, facilities and services
· Business will require targeted guidance from the Government to understand their responsibilities under the widening of duties in goods, facilities and services
· Equality through procurement can be effective if the focus is on outcomes not processes
· The CBI supports the Government's efforts to open further the labour market for disabled people
· UK employers are already convinced of the business case for diversity.
There is a potential for 'scope creep' without tighter definitions of discrimination in the EU non-discrimination directive on equality in goods, facilities and services.
3. The CBI believes that the draft EU directive on implementing the principle of equal treatment is fundamentally an unsuitable legislative approach to the area of non-discrimination. The horizontal method cannot account sufficiently for the different types of discrimination that require differentiated solutions. We have concerns that the complex drafting, filled with exceptions and conditions, would make the legislation indecipherable to business. Furthermore, we are alarmed at the potential for 'scope creep' in the Commission's definitions of discrimination. The European Court of Justice's method of interpretation of existing discrimination definitions at EU level can lead to the widening of the concept of discrimination as set out in the directives. As such, it is essential that definitions are clear.
4. The risk of 'scope creep' in connection with the definitions of discrimination is well demonstrated by the Coleman v Attridge judgement. The aims and objectives of legislation of this nature are to assist those who are disadvantaged and to improve their access, engagement and fair treatment within society. This case clearly illustrated that no one should feel that they have to accept degrading treatment due to their relationship with a disabled person - in this regard, the judgment fits the directive's aims. However, the implications of this case go further. The reality is that the Coleman judgement, by extending the realm of associative discrimination, creates questions about how close the association has to be with the disabled party in order to gain discrimination rights under this legislation. Presumably, greater specification would be necessary, particularly in the areas of:
· the level of care given;
· the relationship with the disabled person being cared for;
· who would determine the status of the relationship.
for Work and Pensions needs to set out clearly how the
5. CBI members have expressed concerns about the implications that an extension of discrimination by association would have on UK flexible working regulations. When granting requests, employers might have to give priority to parents of disabled children over parents of non-disabled children, and to carers of disabled people over carers of non-disabled people. There would be a greater risk of accusations of discrimination if individuals consider that they are refused or treated less favourably in relation to a request made for a disabled person. The same situation would potentially arise in relation to carers of elderly people through age discrimination by association. However, provided that an employer can demonstrate that accepting a particular request would prove detrimental to the business, claims of discrimination by association would still fail because the operational requirements were such that no request would have been agreed. On this point, the law would remain unchanged; however, employers will require detailed and unequivocal guidance from the Government on their responsibilities.
Business will require targeted guidance from the Government to understand their responsibilities under the widening of duties in goods, facilities and services
6. Article 4 in the draft EU directive introduces the concept of a service provider having to put in place measures which enable disabled people effective non-discriminatory access to goods and services "by anticipation". This differs from the current UK legislation is this area. Under the goods and services provisions in the Disability Discrimination Act, the duty to make reasonable adjustment arises where the existence of a practice, policy or procedure, or a physical feature makes it impossible or unreasonably difficult for disabled people to make use of the service provided by the service provider. Whilst the current UK provisions are designed to be anticipatory in nature - the duty that service providers owe is to disabled people at large, unlike in the employment sphere where the employer's duty is to a particular disabled person - the EU concept seems to go further. Although the explanatory memorandum to the draft directive states that the concept of "reasonable accommodation" should already be familiar to business - having been established in Directive 2000/78/EC - it fails to note that the concept of "by anticipation" is a new one which will undoubtedly lead to a body of EU case law to determine its meaning. Although the Department for Work and Pensions does not have the lead on this piece of EU legislation, it should make the case for clear definitions to ensure that the individual who gains the right to reasonable accommodation is the person with the protected characteristic. Businesses and service providers will find this legislation incredibly problematic if they are not given adequate assistance by the Government and equality bodies, such as the Equality and Human Rights Commission.
7. CBI members have also expressed concern about the financial and bureaucratic implications for companies of the reversal of the burden of proof in the context of access to goods and services. The CBI recognises the potential difficulty for claimants in proving discrimination in an employment context, where the respondent will often have access to the necessary evidence, and accepts the rationale in the reversal of proof in these discrimination cases. It is not so problematic in the context of employer-employee relationships, where records are more likely to be kept and for longer periods. The sheer volume of transactions occurring between businesses and customers, however, are bound to lead to evidential issues for service providers if they are forced to defend a discrimination claim. As such, both the challenges involved in keeping elements of proof in a customer relationship and the limited administrative capacities of SMEs for this function must be acknowledged.
Equality through procurement can be effective if the focus is on outcomes not processes
1. The CBI believes that the Government's proposal to introduce a single equality duty to replace the existing separate duties on gender, race and disability could help public bodies respond to the requirements more effectively. Streamlining the process could cut bureaucracy and render the different requirements more manageable. However, lessons should be learned from the existing duties before the new single duty is introduced. CBI members believe that the current duties place too great a focus on processes - such as recruitment targets and audits - at the expense of value for money outcomes. Such a situation merely creates compliance rather than commitment. As the Equalities Review recognised, there is little evidence that the public sector duty on race, for example, has been effective in improving outcomes:
"although it has had value in forcing public authorities to confront some of their shortcomings, it is too bureaucratic and process-laden to provide a really effective vehicle for change".
2. Against this background, there is little evidence that the extension of the duty to the private sector would be necessary or effective. The additional bureaucracy would have a disproportionate impact on SMEs who are unlikely to have the financial and administrative capacities to prove compliance. The CBI believes that the Government should continue to stand firm on this issue and concentrate on creating a workable public sector equality duty.
3. The CBI agrees that procurement can be an effective lever to promote social objectives. It is essential, however, that the Government commits to developing procurement practice that makes clear the requirements placed on contractors. If procurement is to support social goals, the right procurement skills need to be in place. Too many public authorities are still not clear about the relative importance of equality criteria in the tendering process and still adopt a 'lowest cost' mentality when awarding contracts. Contracts need to be well designed - too many still demand specific processes which have little impact on the overall outcome. Such processes reduce equality duties to a tick-box exercise in compliance. The requirements need to strike a balance between 'making the public pound work harder' and impinging on the private sector business process: to do this, the CBI believes that the requirements need to be related to contract delivery not procedures. The Equality Bill proposals have not yet found this balance, intruding instead into the internal HR structures of the tendering company.
The CBI supports the Government's efforts to open further the labour market for disabled people.
4. The CBI welcomes initiatives designed to help those with disabilities into the workforce. There has been marginal progress made in the last decade: the 2008 Equalities White Paper, Framework for a fairer future, reports that the employment rate of people with disabilities has risen from 38% in 1998 to the current figure of 48%. Despite this improvement, however, a disabled person is still two and a half times more likely to be out of work than a non-disabled person. The 2007 Equalities Review further notes that disabled people are not only more likely to be out of work but they are also more likely to exit work and, once out of work, less likely to move back into employment than individuals without a disability.
5. The CBI supported the introduction of the Employment Support Allowance (ESA) in October 2008 to replace the Incapacity Benefit (IB). We believe it can play a significant role in placing those IB claimants that can and want to work in sustainable employment. A shift in ESA assessment to focus on what claimants can do, rather than what they cannot, is appropriate to reflect the change in people's working environments. However, the Government must ensure that medical professionals conducting the Work Capacity Assessment (WCA) have the appropriate occupational health understanding and take into consideration the adjustments employers would need to hire individuals with a fluctuating health condition. It must not be assumed that all individuals with such conditions will be capable of sustained work.
6. People with permanent disabilities can often face physical barriers in returning to employment due to an unsuitable working environment, and employers can face considerable financial costs making appropriate adjustments. As such, the CBI welcomes the proposals to double the Access to Work budget. However, concerns remain that there are no proposals for funding adjustments for individuals on work placements, such as those placed through Local Employment Partnerships. This deficiency creates difficulties for disabled people to demonstrate their potential value to employers.
UK employers are already convinced of the business case for diversity
7. The 2008 CBI/Pertemps Employment Trends Survey shows that 82 per cent of our members have a diversity policy or equality practices in place. One of the most consistent findings over the ten years of this survey is the importance that employers attach to diversity issues and their recognition of both the moral and business imperatives. The CBI/TUC report Talent Not Tokenism shows that promoting diversity in the workplace need not be expensive or time-consuming but does require a commitment from the top to trigger a change in culture and attitude. However, employers still face barriers: for the fifth consecutive year, the survey shows that the lack of applicants from disadvantaged groups is still the greatest obstacle to creating a more diverse workforce. Furthermore, too much regulation (27%) and lack of practical support from equality bodies and the Government (11%) were also highlighted as hurdles to overcome. These findings illustrate the key role that the Department for Work and Pensions can play in creating a clear and workable legislative framework - with responsibilities and opportunities are clearly defined - in which employers can easily comply with regulations and take positive action as necessary.
Employment Policy Directorate
 Fairness and Freedom: the Final Report of the Equalities Review, 2007, p. 37.