Equal Pay and Discrimination Update Andrea Tishler and Joanna Lada-Walicki 28 April 2009

1. Equal Pay and Discrimination Update Andrea Tishler and Joanna Lada-Walicki 28 April 2009

2. Programme • Equal pay • Equality Bill • Sex Discrimination • Sexual orientation • Disability Discrimination • Race Discrimination • Religious Discrimination • Age Discrimination

3. Equal Pay • Most complex employment cases • Prohibitively expensive to run • 17.1% gender gap for hourly earnings excluding overtime (April 1997 – April 2008) • 44,000 equal pay claims in 2008 – rise of 50% on 2005

4. Equal Pay • Right to equal pay contained in:- • Article 141 of the EU Treaty • Equal Pay Act 1970 • Codes of Practice (published by European Commission/Equality and Human Rights Commission) – not legally binding but may be used in evidence

5. Equal Pay Act • Four stage approach • Select appropriate comparator of opposite sex • Prove they carry out “equal work” • Compare terms and conditions of employment • Assess whether any discrepancy in pay can be justified (“genuine material factor defence”)

6. The Comparator • Working “in the same employment” – at same establishment or common terms apply AND employed by the same or associated employer • Can use predecessor as comparator but cannot speculate about likely future pay increases • BUT cannot use more highly paid male successor - Walton Centre for Neurology NHS Trust v Bewley (EAT)

7. Types of Claim • A “like work” claim • A “work rated as equivalent” claim • Rated the same under job evaluation scheme (JES) • JES must:- • be “thorough in analysis and capable of impartial application” (Eaton Ltd v Nuttall 1977 EAT) • cover the claimant and comparator • be free from discrimination • A “work of equal value” claim • Usually evaluated by independent expert

8. What is compared? • All elements of contractual pay including overtime, bonus, allowances and benefits • Under EU law non contractual benefits may also be covered e.g. travel concessions and discretionary bonuses • If claimant demonstrates work is equal then an equality clause is implied into her contract to bring her contractual terms in line with her comparator

9. Genuine Material Factor Defence • Employer’s reason for the pay difference must be:- • Genuine • Significant and relevant • Not due to sex discrimination • A material difference • If evidence of indirect sex discrimination in pay system employer has to objectively justify by showing that the pay practice:- • Corresponds to a real need of the business • Is appropriate and necessary to achieve that need • Is proportionate to that need • Focus on aim of employer (Blackburn and Anor v Chief Constable of West Midlands Police 2008 Court of Appeal)

10. Time Limits • Claim must be lodged within 6 months less 1 day of termination of contract of employment • Termination includes:- • substantial change in terms • TUPE transfer • Sodexo Ltd v Gutridge & Ors EAT • Successive contracts (Slack & Ors v Cumbria County Council 2009 Court of Appeal)

11. Impact of Repeal of SGP • Action started before 6 April 2009 -SGP applies • Employee must lodge written grievance and wait 28 days before submitting claim • 3 month extension to time limit • Action started on or after 6 April 2009 – SGP does not apply • Employee can still raise grievance • No extension to time limit

12. Compensation • Equality clause • Back pay • Up to a maximum of 6 years (5 in Scotland) • Interest on back pay • No compensation for injury to feelings

13. Other Recent Developments (1) • Unions get a bloody nose - Allen v GMB (2008 Court of Appeal) • Union heavily criticised for “mis-selling and manipulation” in promoting compromise deal • Deal affected more women than men • Unions less likely to want to broker deals?

14. Recent Developments (2) • NHS “Agenda For Change” pay system validated - Hartley and Ors v Northumbria NHS Foundation Trust and Ors (2009 ET) • Pay protection is a risky strategy-Redcar & Cleveland Borough Council v Bainbridge & Ors (Court of Appeal) • “It’s time for new legislation, fit for this century, to help sort out this age old problem” (The Equality and Human Rights Commission)

15. The Equality Bill (1) • To “fight discrimination in all its forms and help to make equality a reality for everyone” (Government Equalities Office) • To be enacted during the next year? • 4000 responses received to Government consultation

16. The Equality Bill (2) • Consolidate discrimination legislation and simplify law on discrimination and equality • Extend protection against associative discrimination • Create Equality Duty on public bodies • To tackle discrimination, promote equality of opportunity and encourage good community relations • Not an absolute duty but should consider and address equality duties in all their functions

17. The Equality Bill (3) • Ban age discrimination in the provision of goods, facilities or services • Further consultation and transition period expected • Increase transparency • Introduce compulsory gender pay audits • Companies with 250 staff or more/public sector bodies with 150 staff or more • Have until 2013 to comply • Comparison of average hourly earnings in annual report • Ban secrecy clauses that prevent colleagues comparing their salaries

18. The Equality Bill (4) • Require public bodies to report on equality issues • Extend scope for positive action e.g. when choosing between two candidates of equal merit • Extend period during which women-only shortlists are allowed • Allow ET’s to make wider recommendations in discrimination cases

19. Sex Discrimination • Relevant legislation • Sex Discrimination Act 1975 • Sex Discrimination (Indirect Discrimination and Burden of Proof) Regulations 2001 • Sex Discrimination Act 1975 (Amendment) Regulations 2003 • Employment Equality (Sex Discrimination) Regulations 2005 • Sex Discrimination Act 1975 (Amendment) Regulations 2008

20. Sex Discrimination • Four types of discrimination:- • Direct • Indirect • Harassment • Victimisation

21. Direct Sex Discrimination • Less favourable treatment on grounds of :- • sex or marital status (s.1(2)(a)SDA) – comparator required • pregnancy/maternity leave (s.3A SDA) – no comparator required • No defence available

22. Indirect Sex Discrimination • Applying a provision, criterion or practice that:- • Puts women at a particular disadvantage compared with men • AND disadvantages the claimant • AND is not a proportionate means of achieving a particular aim • Defence of objective justification available – “proportionate means of achieving a legitimate aim”

23. Harassment • Three grounds:- • Unwanted conduct related to your sex that has purpose or effect of violating dignity/creating intimidating, hostile, degrading or offensive environment (broader definition under Reg. 3 SDA 1975 (Amendment) Regulations 2008) OR • Unwanted verbal, non verbal or physical conduct of a sexual nature that has the same purpose or effect OR • Less favourable treatment due to rejection of unwanted conduct • No financial/other loss required • Liability for harassment by a third party – Reg. 4 SDA 1975 (Amendment) Regulations 2008

24. Victimisation • Unlawful to treat less favourably for “Protected Act” • Brought/intends to bring discrimination claim; • Gives evidence/information in connection with claim; • Made allegations/raised a grievance of discrimination

25. Genuine Occupational Requirement • Employer must establish that:- • Requirement for a person of a particular sex is a genuine and decisive requirement for the job • Requirement is proportionate • The person does not meet the requirement/employer not satisfied that they meet it

26. Other Exceptions • Positive Action • Not the same as positive discrimination (more favourable treatment on grounds of sex) • Can provide training to/encourage recruitment of a particular sex if in past 12 months there were none or very few of them doing that particular work • Employment for the purposes of religion • Employment limited to one sex to comply with doctrines of religion/avoid offending significant number of followers

27. Sex Discrimination • Burden of proof • Employee establishes, on balance of probabilities, that there has been discrimination • Burden shifts to employer to show they did not discriminate • Use of questionnaires • Time limit and effect of repeal of SGP

28. Sex Discrimination • Remedies • Declaration – states rights of claimant and unlawful acts of employer and/or any employee • Compensation for injury to feelings and financial losses - unlimited • Recommendations – limited to actions that will benefit individual employee and lessen effect of the discrimination • Applies to other areas of discrimination

29. Other Developments • Discrimination on grounds of gender reassignment • Same rights during AML and OML (Reg. 5 SDA 1975 (Amendment) Regulations 2008) • Extension to flexible working rights • Right to request extended to parents/carers of children under 17 • Territorial scope – cannot claim for act committed outside of UK but may be relevant as supporting evidence (Tradition Securities And Futures SA v X And Anor EAT 2008)

30. Sexual Orientation • The Employment Equality (Sexual Orientation) Regulations 2003 • Prohibit discrimination on grounds of sexual orientation in:- • Employment • Training • Provision of goods, facilities and services

31. Sexual Orientation • Covers direct/indirect discrimination, harassment and victimisation • Exceptions:- • Genuine Occupational Requirement (only likely to apply in limited circumstances) • Working for organised religion • Positive action • Benefits dependant on marital status – can still provide certain benefits to opposite sex/same sex married couples e.g. survivor benefits in occupational pension schemes

32. Recent Developments • Competing protected rights (London Borough of Islington v Ladele EAT 2009) • Protection includes discrimination due to perceived sexual orientation • Heterosexual subjected to homophobic taunts protected (English v Thomas Sanderson Ltd Court of Appeal 2008)

33. Protection afforded by Disability Discrimination Act 1995 (as amended) (DDA) What is a disability under DDA? A person is disabled if they have “a physical or mental impairment which has a substantial and long term adverse effect on their ability to carry out normal day to day activities” Effect of medical treatment is disregarded Certain impairments excluded: Alcohol/drug addiction Certain personality disorders Hay fever Disability Discrimination

34. Disability Discrimination (2) • To have a long term effect the disability must: • Have lasted at least 12 months; or • Be likely to last at least 12 months; or • Be likely to last for rest of life • Sufferers from cancer, HIV, MS are disabled from the point of diagnosis

35. Examples of normal day to day activities: Mobility Physical co-ordination Manual dexterity Continence Ability to lift, carry or move everyday objects Speech, hearing, eyesight Memory or ability to concentrate, learn or understand Perception of risk of physical danger NB Activities in daily life relevant not generally activities at work Disability Discrimination (3)

36. (1) Direct Discrimination i.e. solely because of the disability and usually based on stereotypical assumptions – no defence (2) Disability related Discrimination i.e. For a reason that relates to the disabled person’s disability the employer treats the employee less favourably than they treat or would treat others to whom that reason does not or would not apply i.e. the comparator The employer cannot show that the treatment in question was justified N.B. House of Lords decision in the case of London Borough of Lewisham v Malcolm (2008) overturned long-established case law on 'disability-related discrimination' Direct and Disability Related Discrimination

37. Disability Related Discrimination • Pre Malcolm • Comparator = non-disabled person to whom the reason did not apply e.g. disabled person absent from work on long term sick leave was compared to someone not absent when considering difference in treatment • Post Malcolm • Comparator = non-disabled person to whom the reason does apply e.g. someone else who was absent and on long-term sick leave by reason of an illness which is not a disability

38. Disability Related Discrimination (2) • Effect of Malcolm: • Much harder for disabled employee to bring disability related discrimination claim i.e. much less likely that employee will be able to show less favourable treatment • Claimants will now need a direct claim BUT • Reasonable adjustments claims will cover most situations • Government consultation proposing to rectify difficulties caused by Malcolm in Equality Bill

39. Reasonable Adjustments • (3) Duty to make reasonable adjustments where a provision, criterion or practice and/or any physical features of premises cause a substantial disadvantage for a disabled person in comparison with persons who are not disabled • Duty to adjust only applies where the employer either knows or reasonably ought to know of the disabled person’s disability • Objective reasonableness test • Good practice to conduct assessment of adjustments and consult the employee

40. Reasonable Adjustments (2) • Examples of adjustments: • Altering working hours – flexitime /avoiding rush hour travel • Allowing time off for rehabilitation or treatment • Allocating some of the disabled person’s duties to someone else – changing job description • Different work place – ground floor or different building • Giving or arranging training to the disabled person or others • Providing a reader or interpreter • Modifying reference manuals or procedures • Adjusting the premises – ramps, lifts, signs

41. Reasonable Adjustments (3) • What is “reasonable”? Consider: • Effectiveness • Does it work? • Practicality • Is it practical and affordable? • Would it be affordable with assistance? Investigate this. • Size and resources of employer are important • Best evidence from an assessment and trial period

42. Harassment and Victimisation • (4) Harassment • A person is unlawfully harassed for a reason related to their disability if they are subjected to unwanted conduct that has the purpose or effect of violating their dignity or of creating an intimidating, hostile, degrading, humiliating or offensive environment • (5) Victimisation • It is unlawful for employers to victimise someone because they brought a discrimination claim, gave evidence in a case or made an allegation of disability discrimination

43. Discrimination by Association • In Coleman v Attridge Law the ECJ held in July 2008 that ‘discrimination by association’ can be illegal – direct discrimination not limited to those who are disabled • Sharon Coleman claimed she was forced to leave her job after she requested time off to look after her disabled son • Implications for other areas of discrimination • Equality Bill will make discrimination by association unlawful

44. Race Relations Act 1976 protects against discrimination on the basis of race, ethnic or national origins, colour or nationality It applies to: arrangements for deciding who should be offered a job inc. refusal of a job terms on which employment offered Access to promotion, transfer or training or benefits Dismissal where someone subjected to other disadvantage Employers are liable for acts of employees whether they knew or approved of them UNLESS they can show they took all reasonable steps to prevent the behaviour from happening Race Discrimination

45. Direct and Indirect Discrimination • (1) Direct discrimination – employer treats employee less favourably than another employee on racial grounds • No defence • (2) Indirect discrimination – employer operates a ‘provision, criterion or practice’ which applies to all but works to disadvantage of a racial group

46. Indirect Discrimination • Irrelevant whether employer intended to discriminate • Justification defence if provision, criterion or practice is a proportionate means of achieving a legitimate aim – balancing exercise between importance of employer’s aim and discriminatory effect of the means chosen to achieve it • Amendment to Regulations (December 2008) makes it clear that a “deterred” applicant is now protected i.e. a person who would have applied for a job for which he/she was qualified but was deterred from doing so because of a discriminatory provision, criterion or practice

47. Harassment and Victimisation • (3) Harassment • A person is unlawfully harassed if they are subjected to unwanted conduct that has the purpose or effect of violating their dignity or of creating an intimidating, hostile, degrading, humiliating or offensive environment and the treatment is on the grounds of race, national or ethnic origin • This will include abusive language, excessive monitoring or criticism of an employee’s work

48. Victimisation • A comment by a manager to an employee of Indian ethnic origin who tendered her resignation that “we will probably bump into each other in the future, unless you are married off in India” was held to amount to racial harassment – intention of perpetrator was irrelevant (Richmond Pharmacology v Dhaliwal) • (4) Victimisation • It is unlawful for employers to victimise someone because they brought a discrimination claim, gave evidence in a case or made an allegation of race discrimination

49. Exceptions • Genuine Occupational Requirement (GOR) • Employer must establish that: • A requirement for a person of a particular race or ethnic or national origin is a genuine and decisive requirement for the job • The requirement is proportionate • The person either does not meet the requirement or the employer is not satisfied that they do

50. Exceptions (2) • Genuine occupational qualification (GOQ): • Drama - the job involves participation in a play or other entertainment in a capacity for which a person of that racial group is required for reasons of authenticity; or • Models - the job involves participation as an artist’s or photographic model for which a person of that racial group is required for reasons of authenticity; or • Restaurants - the job involves working in a restaurant and a person of that racial group is required for reasons of authenticity; or • Personal welfare services - the holder of the job provides persons of that racial group with personal services promoting their welfare