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Clause 56: Interpretation

Effect

207.     This clause explains what the provision of an employment service includes (such as the provision of training for employment or careers guidance), and what it does not include (such as education in schools), for the purposes of clause 55.

Example

  • Examples of the types of activities covered under this clause include providing CV writing classes, English or Maths classes to help adults into work; training in IT/keyboard skills; or providing work placements.

Clause 57: Trade organisations

Effect

208.     This clause makes it unlawful for a trade organisation to discriminate against, harass or victimise a person who is, or is applying to be, a member. It also requires trade organisations to make reasonable adjustments for disabled people.

209.     A trade organisation is an organisation of workers (such as a trade union) or employers (such as the Chambers of Commerce); or an organisation whose members carry out a particular trade or profession (such as the British Medical Association, the Institute of Civil Engineers and the Law Society).

Background

210.     This clause is designed to replicate the effect of similar provisions in current legislation. It also extends the protection to cover discrimination in the arrangements made for determining to whom membership should be offered.

Examples

  • A trade union restricts its membership to men. This would be direct discrimination.

  • An organisation of employers varies membership subscriptions or access to conferences because of a person’s race. This would be direct discrimination.

Clause 58: Official business of members

Effect

211.     This clause makes it unlawful for local authorities to discriminate against, harass or victimise their members in relation to providing access to facilities such as training which relate to the carrying out of their official business. This does not apply to election or appointment to posts within the local authority. It imposes a duty on local authorities to make reasonable adjustments for disabled members.

Background

212.     This clause extends protection currently in the Disability Discrimination Act 1995 to all protected characteristics.

Example

  • A local authority does not equip meeting rooms with hearing loops for a member who has a hearing impairment, in order to enable her to take full part in the business for which she has been elected. This would be discrimination if provision of hearing loops were considered to be a reasonable adjustment.

Clause 59: Interpretation

Effect

213.     This clause explains the meaning of various terms used in clause 58. In particular, it lists the various bodies which are included in the term “local authority” and provides a power for a Minister of the Crown to add to this list of bodies. It also explains what is meant by reference to the carrying-out of official business by members of a local authority.

Example

  • A local authority member who is considering an application for planning permission whilst sitting on a council's Planning Committee would be undertaking “official business”.

Clause 60: Enquiries about disability and health

Effect

214.     This provision means that, except in the situations specified in this clause, an employer should not ask whether a job applicant is disabled until that person has been able to successfully pass an interview, or other assessment, to show that they meet some of the non-health requirements for the job. The specified situations where health and disability related enquiries can be made are for the purposes of:

  • making reasonable adjustments to enable the disabled person to participate in the recruitment process;

  • monitoring diversity in applications for jobs;

  • supporting positive action in employment for disabled people; and

  • enabling an employer to identify suitable candidates for a job where there is a genuine occupational requirement for the person to be disabled.

215.     The clause also allows questions to be asked where they are needed in the context of national security vetting. The clause provides that where an employer makes a health or disability related enquiry which falls outside the specified situations, and the employer then rejects the job applicant before he or she is either:

  • short listed after an assessment, such as an interview, for the next recruitment stage, or

  • receives an offer of a job, where there is no interview or assessment process.

  • and the candidate makes a claim to the Employment Tribunal for direct discrimination, it will be for the employer to show that it had not discriminated against the candidate.

216.     As well as applying to recruitment to employment, the clause also applies to recruitment to other occupations covered by the Equality Bill, such as contract work, business partnerships, office holders and barristers and advocates.

Background

217.     This is a new provision. Currently, the Disability Discrimination Act 1995 does not prevent an employer from making health or disability related enquiries of applicants for a job. However, it is unlawful to use such information subsequently to discriminate against a candidate because their disability. This provision will deter employers from asking questions and therefore opportunities for direct discrimination in recruitment. It will help to tackle the disincentive effect that an employer making such enquiries can have on some disabled people making applications for work.

Examples

  • A disabled person is asked on the application form whether he has a disability that requires the employer to make a reasonable adjustment to the recruitment process, for example a person with a speech impairment requiring more time for interview. This enquiry would be permitted.

  • A disabled person applies for a job as a delivery driver, which has a specific fitness requirement because heavy manual lifting is an essential part of the job. The employer would not be able to ask about the candidate’s health or fitness unless he either made him a conditional offer of employment or until the candidate had successfully completed an assessment of his ability to meet some of the non-health requirements of the job. Once the employer had short listed the candidate for the next selection stage, he would be permitted to ask the candidate health and fitness related questions, and/or require the candidate to undergo a fitness assessment.

  • An applicant is asked on the initial application form whether he has a disability. The question is not asked for one of the reasons permitted by this clause. The disabled person declares his disability and the employer decides not to continue to process the application. The disabled person brings a claim to an Employment Tribunal. The burden of proof is on the employer to show that it has not directly discriminated against the applicant because of his disability.

CHAPTER 2: OCCUPATIONAL PENSION SCHEMES

Clause 61: Non-discrimination rule

Effect

218.     This clause requires that every occupational pension scheme is to have a non-discrimination rule read into it. The rule prohibits “a responsible person” from discriminating against, harassing or victimising a member or a person who could become a member of the scheme.

219.     A responsible person is a scheme trustee or manager, an employer, and the person responsible for appointing a person to a public office, where the office holder can be a scheme member.

220.     The rule does not apply to pension rights built up or benefits payable for periods of service before the commencement of this clause. Periods of service prior to this date will be subject to the previous discrimination legislation.

221.     Where there has been a breach of a non-discrimination rule, proceedings may be brought against the person responsible for the breach under Part 9 of the Bill.

222.     Pension credit members are not protected from discrimination because their rights are derived from an order of the court, rather than directly from employment.

223.     It would not be a breach of a non-discrimination rule if an employer or the trustees or managers to maintain certain practices or make decisions in relation to age that are specified by order by Ministers.

224.     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

225.     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 comes into force, they will also have to have non-discrimination rules in respect of gender reassignment, marriage and civil partnership and sex.

226.     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

  • 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.

Clause 62: Non-discrimination alterations

Effect

227.     The clause gives trustees and managers of an occupational pension scheme the power, by resolution, to alter their scheme’s rules to conform to the non-discrimination rule in clause 61.

228.     They may use the power if:

  • they lack powers to alter the rules for that purpose, or

  • procedures for altering the rules, including obtaining consent, are unduly complex or would take too long.

Background

229.     This clause is based on similar provisions which allow trustees and managers to secure conformity with the non-discrimination rules in the Disability Discrimination Act 1995, the Employment Equality (Religion or Belief) Regulations 2003, the Employment Equality (Sexual Orientation) Regulations 2003, and the Employment Equality (Age) Regulations 2006.

Example

  • Changes to the scheme rules of a large scheme require consultation with all the members before they may be made. This is impracticable, particularly as some deferred members cannot be traced. Scheme trustees may make the necessary alteration to scheme rules relying on this power.

Clause 63: Communications

Effect

230.     This clause applies to clause 61, 119, 125 and paragraph 19 of Schedule 8, in their application to communications, to a disabled person who is:

  • entitled to the present payment of dependants’ or survivors’ benefits under an occupational pension scheme, or

  • entitled to a pension derived from a divorce settlement (pension credit member).

Background

231.     This clause replaces the current provisions in the Disability Discrimination Act 1995.

Chapter 3: Equality of terms

Clause 64: Relevant types of work

Effect

232.     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 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.

233.     This clause explains that the clauses mentioned which impose the equality clause and equality rule apply to employees, office holders and, by virtue of subsection (3) of clause 83, members of the armed forces, where one person’s work is equal to the work of another.

Background

234.     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, 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.

  • A male police officer can compare his work with that of a female police officer in the same force.

Clause 65: Equal work

Effect

235.     This clause sets out when the work of two people, whose work is being compared, is 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 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

236.     This clause is designed to replicate the substance of definitions contained in the Equal Pay Act 1970.

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.

  • 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.

Clause 66: Sex equality clause

Effect

237.     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 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.

238.     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.

239.     Subsection (3) is intended to ensure that the provisions relating to equality of terms at work and the provisions governing pension schemes in clauses 67 and 68 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.

240.     Where a job evaluation study has rated the work of an employee and comparator as 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.

Background

241.     This clause is designed to replicate the effect of definitions contained in the Equal Pay Act 1970.

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.

Clause 67: Sex equality rule

Effect

242.     This clause requires that every occupational pension scheme is to have a sex equality rule read into it.

243.     The rule requires that men and women are treated equally to comparable members of 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.

244.     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 17th May 1990. This was the date of the European Court’s decision in Barber v Guardian Royal Exchange Insurance Group, which established that occupational pensions were equal pay for the purposes of Article 119 of the Treaty of Rome. Where the application of the rule relates to the terms on which a person becomes a member of the scheme, it has effect from 8th April 1976. This was the date of the judgment in Defrenne v Sabena, where the Court, in holding that the principle of equal pay was directly effective, indicated that Article 141 (formerly Article 119) of the Treaty of Rome should not be applied to periods of service prior to the judgment.

245.     Where there has been a breach of a term modified by a sex equality rule, proceedings may be brought against the person responsible for the breach under Part 9 of the Bill.

Background

246.     The clause replaces equivalent equal treatment provisions in section 62 of the Pensions Act 1995.

Example

  • A scheme rule requires employees to work full time before they may join the scheme. There may be a breach of the equality rule because the scheme rule may have an adverse impact on female employees, who are less able to comply with the requirement to work full-time.

Clause 68: Sex equality rule: consequential alteration of schemes

Effect

247.     This clause gives trustees and managers of an occupational pension scheme the power, by resolution, to alter scheme rules to conform to the sex equality rule in clause 67.

248.     They may use the power if:

  • they lack the power to alter rules; or

  • procedures for altering rules, including obtaining consent from another person (for example the employer), are unduly complex or would take too long.

249.     In line with clause 67, where the operation of an equality rule relates to the terms on which a person becomes a member of the scheme, any alteration made relying on this section may only have effect from 8th April 1976. Where the alteration relates to a term on which a member of the scheme is treated, reliance on this section may have effect only from 17th May 1990.

Background

250.     The clause replaces equivalent equal treatment provisions in Section 65 of the Pensions Act 1995.

Example

  • The scheme rules of a large scheme require consultation with all the members before an amendment to the rules may be made. This is impracticable, particularly as some deferred members cannot be traced. Scheme trustees may make the necessary alterations to scheme rules relying on this power.

Clause 69: Defence of material factor

Effect

251.     As a general rule, if the work of two colleagues of the opposite sex is equal but their terms are not, the sex equality clause takes effect. This clause provides that neither a sex equality clause nor a sex equality rule will apply if the employer can show that the difference in terms is due to a material factor which is relevant and significant and not simply because one is male and the other female.

252.     If there is evidence that the factor which explains the difference in terms is indirectly discriminatory because of sex, the employer must show that it is a proportionate means of meeting a legitimate aim or the sex equality clause will apply. For these purposes, the long-term objective of reducing pay inequality will always count as a legitimate aim.

253.     Subsection (4) deals with the application of the material factor defence to occupational pension schemes.

Background

254.     The Equal Pay Act 1970 and Pensions Act 1995 made similar provision permitting employers and trustees to objectively justify differences to which an equality clause or rule would otherwise apply. This clause draws those separate provisions into one clause and clarifies the way in which they are to be applied. The reference in the former legislation to a difference being “genuinely” due to a material factor has not been repeated in this clause since the adverb added nothing to the meaning of the requirement, which is that the employer’s obligation is to show that the reason for the difference is genuine and not a sham. The clause incorporates the effect of EC law in respect of objective justification of indirectly discriminatory factors.

255.     The reference to an employer’s objective of reducing pay inequality between men and women always being considered a legitimate aim is new.

Examples

  • An employer introduces a bonus payment to encourage staff doing the same work to work a new night shift to maximise production. Only a small number of female staff can work at night and the bonus payments go almost entirely to male employees. Despite the disparate effect on the female employees, the employer’s aim is legitimate and the payment of a bonus to night workers is a proportionate way of achieving it.

  • A firm of accountants structures employees’ pay on the basis of success in building relationships with clients (including at after hours client functions). Because of domestic responsibilities, fewer women than men can maintain regular client contact and women’s pay is much lower. The employer is unable to show the way it rewards client relationship building is proportionate, taking into account the disadvantage to women employees.

  • In imposing a new pay structure which seeks to remove pay inequalities between men and women employees, and to accommodate the interests of all the various groups, an employer includes measures which seek to protect the pay of the higher paid group for a short period of time. The intention to remove pay inequalities is a legitimate aim, and the question will be whether the imposition of the particular temporary pay protection arrangements is a proportionate means of achieving it.

Clause 70: Exclusion of sex discrimination provisions

Effect

256.     This clause ensures that the sex discrimination provisions of the Bill do not apply where an equality clause or rule operates (or would operate in the absence of a defence of material factor or the exceptions set out in Part 2 of Schedule 7).

257.     The sex discrimination provisions prohibit sex discrimination in relation to non-contractual pay and benefits such as promotion, transfer and training and in relation to offers of employment or appointment.

258.     The equality of terms provisions operate only in relation to the terms of a contract of employment, the terms of appointment to a personal or public office and the terms of service of members of the armed forces.

Background

259.     This provision brings together sex discrimination and equality of terms provisions previously found in the Equal Pay Act 1970 and the Sex Discrimination Act 1975 and explains how they work together.

Example

  • A female sales manager is entitled under her contract to a bonus every year in proportion to the number of sales her team achieves. She discovers that a male sales manager for the same firm doing the same job has a contract which includes a larger bonus payment in relation to the same number of sales. Her claim will be dealt with under the equality clause provisions.

 
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Prepared: 4 December 2009