The Government has announced further amendments to the Enterprise and Regulatory Reform Bill creating, among other things, a power to issue regulations on mandatory equal pay audits for employers who lose employment tribunal claims. Other amendments include the promised removal of employer liability for harassment by third parties under the Equality Act 2010. The Government claims the amendments will ‘cut unnecessary red tape and take steps towards creating the right conditions for businesses to grow’.
Draft amendment 10 enables a minister to make regulations, subject to the affirmative resolution procedure, requiring employment tribunals to order any employer found to have breached equal pay law or discriminated because of sex in non-contractual pay, such as discretionary bonuses, to carry out an equal pay audit. The amendment describes an equal pay audit as an audit ‘designed to identify action to be taken to avoid equal pay breaches occurring or continuing’.
Under the power to make the regulations an equal pay audit cannot be ordered where:
• a tribunal considers that an audit completed by the respondent in the past three years meets prescribed requirements
• it is clear without an audit whether any action is required to avoid equal pay breaches occurring or continuing
• the breach found by the tribunal gives no reason to think that there may be other breaches, or
• the disadvantages of an equal pay audit would outweigh its benefits.
The regulations may make further provision on the content of audits, the powers and duties of a tribunal when deciding whether its order has been complied with, any circumstances in which an audit may be required to be published or disclosed to any person, and what should happen where an order is not complied with. The first equal pay audit regulations will exempt start-up and micro-businesses from any such order, although this may be changed by further provision.
Draft amendment 6 removes the questionnaire provisions in S.138 of the Equality Act 2010 which allow a person who thinks that he or she may have been unlawfully discriminated against, harassed or victimised to obtain information from his or her employer. The Government states that, despite the lack of any provision for a statutory questionnaire, a complainant may still raise questions of the respondent and a court or tribunal could still make adverse inferences from a refusal to respond or from evasive answers. In the impact assessment the Government concluded that repealing the information obtaining provisions in the Equality Act 2010 will have no impact on an individual’s access to justice.
Draft amendment 5 removes S.40(2)-(4) of the Equality Act, which renders employers liable for harassment of employees by third parties, such as customers or clients, in circumstances where harassment has occurred before and the employer has failed to take reasonable steps to prevent it. Following consultation, the Government decided to remove liability for third party harassment as it ‘imposed an unnecessary burden on business’. Although the Government conceded in the impact assessment that ‘there are some limited views’ that women, disabled and ethnic minority employees would be more likely to encounter third party harassment than others, it felt that there are alternative provisions that may provide adequate legal protection.
Draft amendment 1 amends the Employment Tribunals Act 1996 to enable tribunals to make an order requiring a deposit of up to GBP1000 to be paid by a party before he or she can pursue any specified allegations or arguments in proceedings. Currently, a GBP1000 deposit can be required as a condition of continuing to participate in the proceedings. S.13A would also be amended to allow a tribunal to order a party to make a payment in respect of preparation time as well as a costs order that is limited to witnesses’ expenses.