The government makes it clear in its 'Next Steps to Make Work Pay' policy paper that "in our modern society and economy, inequality of treatment and opportunity at work is unacceptable". So how does it plan to tackle this?
The Draft Equality (Race and Disability) Bill
The Next Steps document states that measures that will be delivered through the Bill include:
- Extending equal pay gap reporting to ethnicity and disability for employers with more than 250 staff and measures on equal pay.
- Extending equal pay rights to protect workers suffering discrimination on the basis of race or disability.
- Ensuring that outsourcing of services can no longer be used by employers to avoid paying equal pay.
- Implementing a regulatory and enforcement unit for equal pay with involvement from trade unions.
The government has said it will begin consulting on this legislation in due course, with a draft Bill to be published during this parliamentary session for pre-legislative scrutiny. Further consultation will also take place prior to the making of secondary legislation implementing these reforms.
The ethnicity pay gap
The concept of ethnicity pay gap reporting is not a new one. Back in 2016 the Conservative government launched a review into the progression of black and ethnic minority (BME) workers in the labour market. The review was led by Baroness McGregor-Smith and the final report 'Race in the Workplace: The McGregor-Smith Review' (the Review), was published in February 2017. One of the key recommendations of the Review was that the government should legislate to require all businesses with more than 50 employees to publish ethnicity pay gap data.
The government published a response to the Review which said that, on the issue of mandatory ethnicity pay gap reporting, voluntary, non-legislative interventions should be tried first. Later the government launched a consultation on ethnicity pay gap reporting but decided not to go ahead with it. In the meantime, it did publish guidance for those employers who wanted to report their ethnicity pay gap on a voluntary basis.
The disability pay gap
A disability pay gap analysis was published by the Trades Union Congress (TUC) on 7 November. This shows that the disability pay gap is now 17.2%. The TUC's analysis of official statistics shows that over the year to Spring 2024 the earnings gulf between disabled and non-disabled workers widened to £2.35 an hour. For an employee working 35 hours a week, this would be equivalent to £82.25 per week, or £4,300 a year.
As with the ethnicity pay gap, employers don't have to wait for mandatory reporting to come in and can take steps to identify and address any gaps they currently have. Where a disability pay gap, or under-representation of disabled people is uncovered, employers may wish to consider using positive action to redress the balance.
The details of both ethnicity pay gap and disability pay gap reporting will be set out in regulations.
The gender pay gap and outsourcing of services
There is currently no mandatory requirement to publish action plans, but under the Employment Rights Bill employers with 250 or more employees will have to develop, publish and implement action plans to close their gender pay gaps and ensure that outsourced workers are included in gender pay gap and pay ratio reporting. Companies could be investigated by the Equality and Human Rights Commission (EHRC) should they be suspected of not providing this information. We don't have any more information on this measure at the moment; the detail will appear in regulations.
What are equality action plans and why are they needed?
The Employment Rights Bill provides that regulations may require large employers (with 250 or more employees) and certain public authorities to develop and publish equality action plans.
These plans will show the steps taken to reduce gender equality including the gender pay gap and supporting employees through the menopause. There have some recent changes to the Employment Rights Bill - menstrual problems and menstrual disorders have been added to the definition of "matters related to gender equality", so equality action plans and support will cover these conditions too.
According to the government's Next Steps document states there be a Regulatory Enforcement Unit for equal pay.
Prescribed information will need to be published and frequently refreshed. Key details, including the required content, frequency and form of publication, remain to be determined in future regulations. Published equality action plans are unlikely to be required before 2026 but employers should start to consider what steps they can take, as well as engaging with their workforce, now.
Menopause
At the moment if an employer fails to act in a supportive way to those experiencing menopausal symptoms, then it runs the risk of legal claims, Including claims for unfair dismissal and discrimination claims on the grounds of sex, age or disability.
Employers will want to ensure that they are compliant with their obligations under the Equality Act 2010 and that they avoid potential discrimination risks when it comes to the menopause. Whether or not the menopause amounts to a disability will depend on how serious the symptoms and effects are. If the individual's menopausal symptoms amount to a disability, then the duty to make reasonable adjustments will be triggered.
Although there are currently no proactive obligations for employers to take steps to support those going through the menopause, it will be good practice to put these in place, especially in view of the forthcoming requirement to publish action plans. These include putting together a menopause policy, rolling out training so that managers understand and are able to recognise menopausal symptoms and offer support, and making any workplace adjustments that are needed. This should be done irrespective of whether the legal duty to make reasonable adjustments is triggered.
Employers will also have to start thinking about the support they offer, or could offer, those experiencing menstrual problems and disorders. We don't yet have a definition of these so don't know exactly what they will cover, but it's something that employers will need to have on their radar.
New protections for pregnant workers
Currently women are protected from unfavourable treatment until the end of their maternity leave period, or until they return to work (if earlier). Under the Employment Rights Bill it will be unlawful to dismiss a woman for six months after her return to work except in specific circumstances. Again, we don't have any further detail on this proposed right.
Practical points
While we don't have the full detail on many of the equality measures proposed by the government, and they are unlikely to come in before 2026, there are a few general steps you can start taking in preparation:
- Consider the depth and quality of data already held and keep your existing employee data up-to-date.
- Review current pay and grading structures, analyse any risks and put in place plans for resolving differences.
- Currently not many employers publish action plans alongside their gender pay gap report so it's a good idea to start thinking about how you will approach putting these together.
- Make sure that you put in place measures to support those experiencing the menopause in the workplace.
- Get ready to think about how you will support those suffering from menstrual problems and menstrual disorders.
