Back in February 2024, Labour revealed plans to make some significant reforms to discrimination law.  It pledged to introduce a new Race Equality Act, which would allow equal pay claims based on ethnicity and disability, and introduce dual (or intersectional) discrimination.  These commitments were repeated in Labour’s Manifesto before last year’s election.

Since then, Labour won the election and the Employment Rights Bill has been published.  This covers some aspects of discrimination law, including significant proposals to strengthen protection from workplace harassment.  This Bill will also require employers with 250+ employees to publish an “equality action plan” relating to gender equality, to include addressing the gender pay gap, and identify contract workers in gender pay gap reports.

The “Next Steps” document, published alongside the Employment Rights Bill, confirms that the government also intends to publish and consult on a draft Equality (Race and Disability) Bill.  This will cover the extension of equal pay rights.  It will also extend pay gap reporting obligations, protect equal pay rights during outsourcing, and implement a new regulatory and enforcement unit for equal pay.

Equal pay extended to ethnicity and disability

The right to make an “equal pay” claim is currently limited to differences in pay based on sex.  Special provisions on equality of terms are set out in the Equality Act and apply to differences in contractual terms (including pay) between men and women.  

This does not mean that claims about pay cannot be made based on other protected characteristics such as race and disability – they can still be brought as an ordinary direct or indirect discrimination claim.  Equal pay law is an additional type of discrimination protection that was first introduced in 1970 and recognises the long history of pay discrimination largely based on what were at that time regarded as traditionally “women’s” and “men’s” jobs.  (For more information on this complex area of law see our Inbrief on equal pay).

The government proposes to extend the right to make equal pay claims to black, Asian and minority ethnic workers and disabled workers.  This would mean that equal pay claims on the basis of ethnicity or disability would be treated in the same way as claims based on sex.  While there may be an issue with pay discrimination based on ethnicity and disability, is extending equal pay law an effective way to tackle the problem?

The short answer is surely “no”.  In the interest of balance, there are some possible advantages to being able to bring an equal pay claim as compared to an ordinary discrimination claim:

• A worker “only” (but see below for the practical challenges) needs to show that someone of the opposite sex is paid more than them for doing a job of equal value.  It is then necessary for the employer to show that this is for a genuine reason other than sex.  This puts the burden on the employer to explain the difference, rather than on the worker to show it is discrimination.
• If statistics show there is a difference in pay between two jobs of equal value, one of which is mainly done by women and one mainly by men, the employer may be called upon to objectively justify this difference.  This means the employer has to show that its explanation for the difference is a proportionate means of achieving a legitimate aim if women (or men) are being disadvantaged.
• A successful claim makes a permanent change to the worker’s contract. There is also a longer time limit for bringing claims (six months from the end of employment instead of three months from the act of discrimination), and the losing employer can be ordered to carry out a compulsory equal pay audit.

However, even accepting these “pros” for employees, these are surely outweighed by the very significant issues with extending equal pay to ethnicity and disability:

• Perhaps most importantly – equal pay law is very complicated!  Many equal pay claims get bogged down in legal argument about appropriate comparators and, in particular, whether jobs are of equal value.  There are a series of tests in an equal pay claim which can involve expert evidence, contested job descriptions running to hundreds of pages, and multiple preliminary hearings over many years.  These claims are notoriously slow, difficult for unrepresented claimants to bring, and expensive for those who are represented unless backed by a union.  Consider the long running equal pay litigation against various large supermarkets, which has been going on for more than a decade and still hasn’t reached a conclusion.
• A worker needs to find an actual comparator who is doing like work or work of equal value, while an ordinary discrimination claim can be based on a hypothetical argument that, for example, if I was white or non-disabled I would be paid more.  The current equal pay rules only allow this hypothetical argument if the claim cannot be brought as an equal pay claim instead – meaning that workers who do have a comparator have to use the more complex equal pay rules.
• The issue of a comparator for disability is particularly complex.  Will this be limited to people who meet the definition of disability being able to compare themselves with someone who doesn’t?  Or will comparisons between different disabilities be permitted, for example an argument that someone with a mental health disability is being paid less than someone with a physical disability? 
• The issue of comparators is also far from simple with ethnicity, potentially raising some sensitive issues about how to treat comparators with mixed heritage and the danger of making assumptions about people’s backgrounds. In a similar way to disability, will the comparison be limited to “white” workers, or will people from other ethnicities be able to compare themselves with each other?  As we discuss in our article on the current ethnicity pay gap reporting guidance, black employees tend to earn less, on average, than Asian employees.  A binary approach which just allows a comparison between white workers and all other ethnicities will miss these types of nuances.
• Equal pay claims have a limit of six years of back pay and there is no award for injury to feelings.  There is no such limit on compensation in ordinary discrimination claims.

It is much less obvious that there is occupational segregation based on ethnicity or disability in the same way as has historically been the case for sex.  The most high profile equal pay successes have come in class action claims backed by unions, where large groups of female workers have been able to compare themselves with groups of male workers doing similar jobs (initially in the public sector, and more recently in retail such as the recent claims brought against Next).  Although there may well be some jobs where black, Asian and other ethnic minority workers are over-represented, it is not clear that there will be other equivalent jobs with mainly white workers which could form the basis for a comparison. It also seems very unlikely this would apply for disabled workers.  

Other equal pay proposals

The government proposes requiring employers with over 250 employees to publish ethnicity and disability pay gap reports. This also has challenges, particularly relating to group definitions and whether statistics will be meaningful, something that we explore further in our article on the previous government’s ethnicity pay gap reporting guidance.  

Equal pay claims are currently brought by individuals, although often by acting in groups – there is no state enforcement of the right to equal pay.  The government’s Next Steps document says that it will create a new regulatory enforcement unit for equal pay.  It seems that this is intended to be separate from the plans in the Employment Rights Bill to create the Fair Work Agency to enforce other employment rights such as minimum wage, holiday pay and sick pay.

The Next Steps document also says there will be new measures “ensuring that outsourcing of services can no longer be used by employers to avoid paying equal pay”.  No further detail has been provided, but this is presumably aimed as situations such as where a contractor worker earns less than employees who are directly employed. This may also be linked to proposals in the Employment Rights Bill to prevent ex-public sector employees and private sector employees from being employed on different terms and conditions.

Overall, the government’s plan seems to be a unified approach towards sex, ethnicity and disability pay discrimination.  These are very important issues, but it may be more constructive to reform the current complex equal pay rules rather than adding new characteristics into a flawed regime.

Dual discrimination 

The other major proposal is the right to claim “dual discrimination”.  This is where someone claims that they have been discriminated against because of having two protected characteristics, such as because they are a Muslim woman.  It is often referred to as “intersectional” discrimination.

The Equality Act has always contained a provision about dual discrimination (called “combined” discrimination), but this has never been brought into force.  This provides that it is direct discrimination to treat a person less favourably because of a combination of two relevant protected characteristics.  The government could implement dual discrimination by simply reviving this provision.  However, it should be noted that the current provision is quite limited.  It only covers direct discrimination, not indirect discrimination or harassment.  It is also only possible to combine two characteristics, which may not be sufficient in all cases (for example, discrimination against young black men).

There are arguments that dual discrimination is necessary to protect certain groups, including women experiencing the menopause.  This discrimination is essentially caused by being an older woman.  It is arguable that this is not sex discrimination (because a younger woman would not be treated in the same way), and not age discrimination (because an older man would not be treated in the same way).  In practice, however, we have not seen Employment Tribunals analysing claims in this way. They are more likely to find that the treatment is both types of discrimination separately.  

Although this may not make a big difference in practice, allowing claims based on combined characteristics would match better with the reality of discrimination for some groups.  One possible further benefit is to the ability of employers to take positive action.  The recognition of intersectional discrimination may make it easier to take action targeted at groups who suffer disadvantage due to a combination of characteristics, for example Asian women or older men.  At the moment the employer would need to show that both groups are disadvantaged before positive action would be lawful, as confirmed in the current government guidance on positive action in the workplace.

Having said all this, it is notable that the original proposal to enact dual discrimination is not included in the Next Steps document – so it may have been shelved.

What next?

The new government may have laudable intentions in seeking to tackle persistent discrimination against certain groups, but making it vastly more complicated for employees to bring claims of discrimination on the grounds of race or disability is surely not the right way to go about it.  It is unlikely that the already overburdened Employment Tribunal system will welcome – or perhaps be able to cope with – equal pay claims being extended to further protected characteristics, with the attendant need for multi-stage proceedings that unfold over many years.  It is unclear why, if the government thinks this is a problem that needs to be tackled, it has not chosen to go in the opposite direction and allow employees to bring complaints of sex discrimination in relation to contractual pay through the normal discrimination route, perhaps even abolishing the unwieldy, archaic and costly equal pay regime.  That would surely be a change that would be welcomed by employers and employees alike.  

There will be consultation about the proposal to extend equal pay claims, along with the other plans to be included in the draft Equality (Race and Disability) Bill.  This has not yet been published.  If all of the proposals do go ahead, we currently anticipate that the law will not change until 2026 at the earliest, in line with what we expect to happen with the Employment Rights Bill.