The Equality Act 2010, which brought together all UK discrimination laws in one place, was developed under the previous Labour Government and has been in force since October 2010. However, the Conservative/Liberal Democrat Coalition Government which came to power that year decided not to implement certain parts of the Act, including the provisions allowing a claim for discrimination based on a combination of protected characteristics (e.g. sex and race). It also put on hold the requirement for larger companies to report on their gender pay gap.
Now it looks like the Government is planning some substantive changes to discrimination protection under the Act. The aim of the proposed reforms is said to be reducing “bureaucracy” in equality law. But while these changes will no doubt be welcomed by many employers, on a closer look they may not be as helpful as they first appear.
The first major change is a proposal to abolish the rules on third-party harassment. Employers are currently liable for harassment of their employees by third parties, such as clients and contractors, if they know an employee has already been harassed twice before and fail to take reasonable steps to prevent a third incident. This is known as the “three strikes” rule.
The Government regards these provisions as “unworkable” and wants to repeal them. Its consultation paper suggests that employees are adequately protected by constructive dismissal, the Protection from Harassment Act 1997 and health and safety legislation. However, none of those give anything like the same level of protection. The consultation paper also suggests that employees harassed by third parties could rely on the general anti-harassment provisions in the Equality Act, although previous case law suggests otherwise.
It is understandable for employers to be concerned about being held liable for acts of third parties over whom they have no control. However, it seems that abolishing the three strikes rule would leave employers in a position of uncertainty. Although unwieldy, the current provisions do make clear that an employer who finds out about third-party harassment needs to consider what it can do to stop it happening again. Without this framework, employers will still need to have effective policies to prevent this type of harassment, while employees will be uncertain about how far they are protected.
The second significant change is the proposal to scrap discrimination questionnaires. Employers who have had to deal with lengthy requests for statistics, documents and explanations for decisions going back over years will probably be breathing a huge sigh of relief.
The main purpose of questionnaires is to assist employees in obtaining information to assess the strength of a claim and whether to bring one at all. On that basis, there is certainly an argument for removing the right to put in a questionnaire after the claim has been submitted.
Otherwise, this is not necessarily all good news for employers either. It is undeniable that, before a claim has been issued, questionnaires can be misused as a “fishing expedition” which causes the employer a lot of work and expense. But they can also provide an opportunity for the employer to provide information showing that an employee’s complaint is relatively weak. This can arise particularly in equal pay cases, where there are often misunderstandings about what colleagues are paid and the basis for pay differentials.
In any kind of discrimination case, the information provided can potentially discourage an employee from submitting a claim, or at least reduce its scope. Without questionnaires, there is a risk that employers will find themselves defending broader, unmeritorious claims. That means spending more time on steps like disclosure, not to mention more in legal fees.
In addition, the abolition of discrimination questionnaires will not stop employees from asking questions to find out whether they have a claim – it will merely remove the formal, structured process for doing so. Although questionnaires can seem onerous to deal with, they do at least provide a clear format for questions and answers, together with time limits for both submitting and replying to the questionnaire. Without this structure, employers could find themselves bombarded with questions at any time, and still risk the tribunal drawing an inference of discrimination from a failure to reply to those questions.
The third significant proposal concerns remedies in discrimination cases. The Government intends to repeal employment tribunals’ new powers to make recommendations.
The Equality Act widened the tribunals’ powers in this area, allowing them to make recommendations which benefit the employer’s wider workforce. The law previously only allowed recommendations to be made which would assist the claimant. This was of limited use as claimants who had been discriminated against would in many cases have left the employer’s employment, so no recommendations could be made.
It is rather early to assess the effect of this new rule, as the first cases under the Equality Act are only just making their way through the tribunal system. However, there have been at least a couple of cases where the tribunals have exercised their new powers to make recommendations about matters such as training and review of policies in order to help ensure that discrimination does not reoccur.
The Government’s consultation paper suggests that employers fear “inappropriate or excessive recommendations” being made. Employers may rightly be wary of tribunals telling them what to do in their own organisations. However, it is worth remembering that the power only applies where an employer has fought and lost a discrimination case.
In addition, there is no direct sanction for a failure to comply with tribunal recommendations aimed at the entire workforce. Such a failure can be used as evidence in any future discrimination claim against the same employer, but employers do have the option of rejecting an impractical recommendation and achieving the same result in a different way. An alternative way of looking at these recommendations is that the employer has the benefit of an experienced, independent tribunal panel giving advice on how to avoid similar claims in the future.