Legal: Introducing The Equality Act (2010)

UK legislation covering the protected characteristics of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation has been developed over more than 40 years. All the major parties agreed that harmonising the legislation was long overdue and The Equality Act (2010) was passed in Parliament's final week before being dissolved for this year's General Election.

While many principles will remain the same, the scope of discrimination law will be widened and reinterpreted, most of which will come into force in October 2010 or thereafter and affect products and services as well as employment rights.

For the insurance market, the main change is that it will be unlawful to discriminate against customers on grounds of age from 2012.

The use of age in underwriting had to be explained to government and, after a huge effort, it promised an insurance exemption.

Insurance prices can still be varied by age where this genuinely reflects risks or costs. Age bands will be permitted so long as they are based on appropriate data about risks. Age limits will be permitted where they are relevant to risks or costs and providers will have to refer declined customers to another provider or to a new signposting system. There will also be a requirement for insurers to make data on some products available at industry level.

However, we will have to wait until the autumn to see the exemption in detail.

Finally, the raising and or removal of the default retirement age, whereby employers can require employees to retire, did not make it into the Act but the law is likely to change within the next few years, with a significant effect on damages and insured benefits.

Other significant inclusions in the new act
• Job applicants cannot be asked health or disability questions other than in specified circumstances.
• Permitting a single discrimination claim on the basis of a combination of two (but no more) protected characteristics.
• Protection against direct discrimination for ‘those associated with' a disabled person or an older relative (usually carers of such people).
• Protection for employees who experience discrimination because they are wrongly thought to have a protected characteristic.
• Enabling tribunals to make wide-ranging recommendations across the workplace.
• A new right for employers to select someone from an under-represented group when they have candidates who are "as qualified" as each other.
• Employees will be free to discuss pay with colleagues. Employers with 250 employees or more will be encouraged to publish their pay statistics voluntarily.
• A late amendment gave the government power to outlaw "caste" discrimination if evidence shows this is appropriate.
• From 2011, public sector bodies will be subject to a single equality duty and, if the provision is implemented, the duty to consider action to reduce socio-economic inequalities. This could affect businesses applying for public sector contracts.

James MacNish Porter, financial services partner Rachel Dineley, employment partner and head of diversity and discrimination unit, Beachcroft

Source: PB – May 2010