Q2 2008 Legal Update

Proposed Legislation / Consultations
The Single Equality Bill
The Bill is set to be unveiled in this autumn's Queen's Speech. Proposals include:
1. "Spot checks" to ensure that companies are obeying discrimination laws (Equality and Human Rights Commission - EHRC);
2. Public bodies to award contracts only to firms with a good record of employing minority staff (Department for Business, Enterprise & Regulatory Reform Committee)
3. Larger companies and public sector bodies to produce annual "equality audits" of the number of staff they employ from disadvantaged groups; and
4. Results to be published by the EHRC in a league table.

The Bill will sweep away 116 pieces of equality legislation which have been developed piecemeal over the past five decades and replace them with a single duty on employers not to discriminate on the grounds of race, faith, gender, sexuality, age or disability.

Consultation on Positive Discrimination
Harriet Harman, the Minister for Women, has launched a consultation on proposals to repeal legislation preventing potential employers from taking race or sex into consideration when hiring. The plan is described as "positive action" rather than "positive discrimination" - it would not allow a candidate with worse job credentials to be given preferential treatment; the measures would allow race or sex to be taken into consideration when choosing between candidates with exactly the same qualifications.

A similar system currently exists in Norway. The implementation period has now finished on a law that stipulates 40% of directors must be female. The government in Norway have published a list of 12 companies accused of breaking the law by failing to appoint women to 40% of their non-executive board directorships.

Agency Workers
James v. Greenborough Council
The Court of Appeal decision in James v Greenwich Borough Council has endorsed the guidance set out by Mr Justice Elias in the Employment Appeal Tribunal and crystallised the necessity test for implying contracts of employment between agency workers and end users.
1. This means that temps must now surmount high evidential hurdles to convince tribunals they have an implied contract with an end user;
2. Employment agencies could take on employment responsibilities; and
3. Legislative reform regarding the rights of agency workers is needed.

Temporary and Agency Workers (Equal Treatment) Bill 2007-08
As a response to the collapse of the EU Directive, the Temporary and Agency Workers (Equal Treatment) Bill 2007-08 has been laid before Parliament. The Bill intended to require the principle of equal treatment to be applied to temporary and agency workers and make provisions about the enforcement of rights of temporary and agency workers. The Bill failed at its second reading.  Andrew Miller MP brought the private member's bill .

Agency Workers Independent Commission
Unions are putting pressure on Gordon Brown regarding manifesto promises and demanding an independent commission to consider the rights of a million agency and temporary workers. The commission would bring together the Trades Union Congress (TUC) and Confederation of British Industry (CBI) to see whether or how agency workers could be given pay and conditions comparable with those of permanent workers. The commission would tackle sensitive issues such as the length of employment before any new rights would be enforceable.

It is not envisaged that the commission would be a permanent body, but parallels are being drawn with the Low Pay Commission, responsible for setting the minimum wage. The TUC, and senior Labour backbenchers, insist the government must act against the casualisation of the UK workforce.

France takes over the presidency of the EU later this year and may attempt to rekindle the EU Agency Workers Directive, previously disrupted by Britain. The CBI is suggesting that there should be a one-year period for temporary workers to qualify; an approach that the TUC believes would leave 900,000 agency workers outside the law.

Equal Pay and Sex Discrimination
Business, Enterprise and Regulatory Reform Committee second report of session 2007-08. Vol. 1
In its 2005 report, the Women and Work Commission made 40 recommendations to tackle job segregation and the gender pay gap. This report finds amongst other things:
1. there are insufficient training opportunities for women in non-traditional occupations;
2. the announced extension in apprenticeships is welcome but must not just follow traditional occupational breakdowns;
3. the dearth of quality part-time jobs is a waste of the experience and skills of many older women and one of the main reasons for the persistence of the gender pay gap.

The extension to the private sector of the gender equality duty imposed on the public sector from April 2007 could encourage greater transparency and positive action, but it is too still early to judge the success of this duty. It is clearly the case that the gender pay gap remains worryingly stubborn. The Committee recommends that if the pay gap continues to decline only slowly, the Government should look at further measures such as the extension of the gender equality duty and consider making pay audits mandatory.

Equal Pay Milestone
The GMB union has settled its 25,000th claim for women workers seeking equal pay. Despite these cases amounting to £250 million in settlements, a survey by the union shows that there is still a gap in pay between men and women and that women are frequently unwilling to make a claim.

Councils Face £2.8bn Bill for Equal Pay
New research by the councils' organisation Local Government Employers (LGE), identifies a bill of £1bn for back pay and £1.4bn a year to meet the higher pay costs. Another £400m needs to be found to protect the wages of men who face pay cuts to rectify past positive discrimination in their favour.
Council bosses now estimate that
1. 40% of their staff are women who are owed money;
2. 40% are employees whose wages will stay the same; and
3. 20% are men whose jobs have been overpaid by comparison with those of women colleagues.

The government has refused to provide any direct funding for equal pay deals, but the Treasury has devised a so-called capitalisation scheme by which some councils are being allowed to borrow money against their assets to help meet the costs.

Unions are warning that the lawyers are threatening the whole basis of negotiation between employers and representatives of workers. Allegations that trade unions did not look out for members' best interests when negotiating settlements with local authorities over equal pay claims, may be discriminatory. Lawyers - who, in many cases, have secured higher settlements for claimants than trade unions - are critical of collective agreements reached between unions and employers.

The Court of Appeal is due to hear the appeal from the Employment Appeal Tribunal (EAT) decision in GMB v Allen [2007] IRLR 752 between March and July 2008.  In GMB v Allen and others UKEAT/0425/06, the EAT overturned a tribunal decision that the GMB had indirectly discriminated against some of its female members on grounds of sex when it reached a low back pay settlement in order to prioritise future pay protection and that it had victimised them by failing to support their equal pay claims against their employer.