UK: Sex Discrimination Act : Reforms Ahead

Last Updated: 10 May 2005
Article by Christopher Booth

Originally published May 2005

Nearly 30 years after the UK first introduced laws to outlaw sex discrimination in the workplace, the Sex Discrimination Act is to receive a major overhaul. The reforms, which are designed to implement amendments to the European Equal Treatment Directive, are contained in draft regulations which are currently subject to a consultation exercise by the DTI. Once finalised, they will come into effect on 1 October 2005.

The Main Changes

The reforms of most interest to employers include:-

  • a new definition of indirect discrimination for the employment provisions of the Act. This requires claimants to show they have been put at ‘a particular disadvantage’ as compared with the opposite sex and so moves away from numerical comparisons between groups of employees which the law currently demands. The practical effect will be to reduce the need for claimants to rely on statistical evidence to prove their cases. Expert or other witness evidence may well be sufficient. It also means that the same definition of indirect discrimination will be used for sex, race, sexual orientation and religion/belief claims;
  • an express prohibition of sexual harassment. Surprisingly, until these reforms, there has been no explicit reference to harassment in the SDA, although the courts have for some time taken the view that such conduct may constitute a form of direct sex discrimination. The new rules will cover both harassment that is sexual in nature (eg unwanted sexual advances) and also harassment on the ground of gender (which need not be sexual in nature). Guidance will be issued to aid understanding of these concepts;
  • the extension of the SDA to cover certain individuals working wholly outside the UK for British organisations;
  • the imposition of an 8 week time limit for employers to respond to statutory questionnaires in sex discrimination cases. This replaces the current rather vague requirement that employers respond within a ‘reasonable time’.

Practical Implications

Employers need to familiarise themselves with the proposed changes so that they are prepared for implementation at the start of October 2005. Policies and procedures will need updating and managers made aware of the new rules. As the Government admits, all this will have a cost for employers. Whether employers regard this as a fair price to pay for increased clarity in this area remains to be seen. For those seeking further advice please talk to your usual Pinsent Masons adviser. The consultation document and draft Regulations are available at http://www.womenandequalityunit.gov.uk/legislation/index.htm. The consultation closes on 31 May 2005.

New Disability Act Receives Royal Assent

Further changes to discrimination law will occur as a result of the Disability Discrimination Act 2005 which received Royal Assent on 7 April 2005. The Act is wide in scope and extends beyond the employment sphere. However it makes a number of important changes which employers need to be aware of including:

  • expanding the definition of disability to cover individuals with HIV, MS and cancer from the point of diagnosis. In practice this removes the need for claimants to show that these conditions have any current or past effect on normal day to day activities;
  • removing the requirement that a mental illness must be clinically well recognised to fall within the definition of disability. Supporters of this change claim that it will not lead to abuse because claimants will still need to show their mental impairment has a substantial and long term effect on their ability to carry out normal day to day activities. However, many employers will be concerned that the door is now open to disability claims based on anxiety or stress;
  • introducing a new positive duty on public bodies to work to eliminate disability discrimination and to promote equality of opportunity for disabled people.

Practical Implications

These provisions will not become law straight away. The changes to the definition of disability are expected to come into force in December 2005, whilst it will be December 2006 in all likelihood before the public sector duty takes effect. In the meantime employers need to consider the changes carefully, particularly as the reforms could make it considerably easier for some individuals to make disability claims.

Do You Need To Know?

Unfair dismissal: EAT at odds over the compensatory award

The EAT has reached two conflicting decisions on the calculation of the unfair dismissal compensatory award. In Morgans v Alpha Plus Security Ltd, it held that an employee had to give credit for all incapacity benefit received from the date of dismissal until the remedies hearing. This was in line with the strict view that the law only allows actual financial losses to be reimbursed. However in Voith Turbo Ltd v Stowe a differently constituted EAT held that an employee who was dismissed with pay in lieu of notice did not have to give credit for earnings from a new job during what would otherwise be the notice period, thereby giving employment tribunals the flexibility to reflect ‘good industrial practice’ when calculating the compensatory award.

Only the Court of Appeal can sort this one out. Until then employees are likely to rely on the Voith case in settlement negotiations to try to increase the value of their claim.

Age Discrimination: An Update

UK legislation to prevent age discrimination in employment has to come into force by December 2006 to comply with European law. As a result - whoever wins the General Election - we can expect to see draft regulations sometime this year, although if Labour retains power they are likely to be available over the summer.

In the meantime the House of Lords is to hear an appeal in the well known case of Rutherford, later this year. At issue is whether the provisions in the Employment Rights Act 1996, which place upper age limits on the rights to claim unfair dismissal and redundancy payments, are unlawful because they indirectly discriminate against men. Clearly both the timing as well as the substance of the House of Lords' decision could be a significant complication in this area, whichever party gains power on 5 May.

Statutory maternity pay: the impact of pay rises

SMP is paid at 2 rates, a higher rate payable for 6 weeks at 90% of average earnings followed by a standard rate (currently Ł106 per week) for the remaining 20 weeks. The higher rate is usually calculated by reference to an 8 week calculation period prior to the start of leave. Under new rules which came into effect on 6 April 2005 the higher rate must be recalculated not only if the employee has a pay rise which is backdated to the calculation period but also if a pay rise occurs at any time after the calculation period but before the end of her maternity leave. Detailed guidance on these complex provisions can be found at: http://www.dwp.gov.uk/lifeevent/benefits/ecj_judgement.asp

Cases referred to in this update:

Morgans v Alpha Plus Security Ltd [2005] IRLR 234; Voith Turbo Ltd v Stowe [2005] IRLR 228; Rutherford v Sec of State for Trade and Industry [2004] IRLR 892 CA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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