Equality Bill - Equality Bill signals change for brokers

The government's response to the consultation on the new Equality Bill, due to be introduced in this parliamentary session, aims to resolve inconsistencies between the current threads of discrimination legislation. Several proposals will have significance for brokers, both as employers and in marketing products.

To encourage transparency about pay, employers will not be able to require employees to keep details of their pay package confidential. While potentially significant, in practice its effect may be limited. Pay details often remain confidential, not because of contractual requirements but because employees do not wish to discuss their pay with colleagues.

Yet employers may be concerned that greater awareness of colleagues' pay could result in damaging workplace rumours and, ultimately, grievances about pay awards; this may also herald the beginning of a cultural change where it will become normal for pay details to be discussed openly.

It is unclear whether or not the Bill will prohibit confidentiality provisions in settlement agreements. If so, this is likely to be a major concern for many employers because confidentiality clauses in such arrangements help to prevent copycat claims and potential reputational damage of financial settlements becoming public.

In readiness, brokers should review their contracts and bonus award letters to ensure that they will not contravene this new requirement.

Other proposals include an investigation by the Equality and Human Rights Commission into inequality in the financial services sector, which will increase the pressure on brokers to disclose sensitive pay data.

Faced with two equally qualified candidates, one from a group that is under-represented in the workforce, employers will be able to favour that candidate for selection purposes. Despite the extensive press interest, this is likely to have limited effect in practice because employers are rarely faced with two equally qualified applicants.

In the event of a successful claim, an employment tribunal will be able to make recommendations to benefit the whole workforce rather than just the employee bringing the complaint, as is the practice currently.

Also, age discrimination legislation will be extended to cover goods and services, affecting how products are priced and marketed; however, differential provision of products and services for older people will be allowed where this is justified.

It is intended to remove the insurance exception allowing insurers to treat people differently on the grounds of sexual orientation. The government has also decided not to introduce statutory protection on grounds of genetic predisposition, parenting or caring responsibilities, caste or Welsh speaking.

The immediate effects of the proposals are not intended to be dramatic but may herald the beginning of a cultural change over pay. If so, the impact of a genuine shift in attitudes to pay transparency could be more far-reaching for employers than any new statutory obligation.

James MacNish Porter, partner, financial services group, Ceri Lawrence, associate, employment group, Beachcroft.