Equality Bill could make employers reveal pay structures

The Government plans to create more equality in the workplace by obliging employers to disclose their salary structures so any unjustified discrepancies in pay rates for men and women will become apparent.

It also wants to create more diversity in the workplace by allowing positive discrimination in favour of women and ethnic minorities.

The measures will be part of the new Equality Bill which will be published later this year. The Bill is designed to streamline the law relating to equality and in doing so will replace nine other major pieces of legislation such as the Equal Pay Act, the 2006 Equality Act and the Disability Discrimination Act.

The Equality Minister Harriet Harman outlined some of the main points to be covered in the new Bill in a statement to the House of Commons. She said it is impossible to tackle discrimination when it is hidden so she wants to encourage more openness. "So, just as every school has to publish their exam results, I want employers to report on key equality matters, like gender pay. This will put the spotlight on pay unfairness which we all know goes on but which stays swept under the carpet."

She said 80% of people are employed in the private sector where the pay gap is double that of the public sector. The Government will now concentrate on how to oblige the private sector to close that gap. For example, it will use the fact that 30% of all companies do £160billion worth of business with the public sector.

Ministers will consider how public procurement can be used to deliver transparency and change. The implication is that unless companies can show that they have equality policies in place then they may not be able to compete for public sector contracts.

Ms Harman outlined four other measures. "The Equality Bill will outlaw clauses in employment contracts which prohibit employees disclosing their pay to each other. Where an employer has been found to have unlawfully discriminated, we will provide for the Employment Tribunal to be able to make a recommendation applying not just to the successful complainant but to everyone in that workplace.

"The Equality and Human Rights Commission will conduct inquiries under its legal powers into sectors where most progress needs to be made - starting with the financial services sector. And through a new kite-mark system, we will challenge companies to report on equality."

The Bill will also promote equality in other areas by outlawing "age discrimination in the provision of goods and services" and by providing greater legal protection for the disabled in the workplace.

Ms Harman said: "We need to make further progress on fairness. That's why we will legislate to give more scope for employers, if they want to increase the number of women or black or Asian employees - to take positive action."

It means employers will be allowed to use positive discrimination when choosing between two equally qualified candidates to ensure a more diverse workplace if particular groups such as women or ethnic minorities are under-represented. The law will also allow positive discrimination in favour of men if the circumstances call for it. For example, a school which employs mainly women teachers may be able to discriminate in favour of a man to redress the balance.

The Government will publish another paper within the next few months setting out the proposals in further detail. We shall keep clients informed of developments.