The Equality Bill – Time to Sit Up and Take Notice

Damian Williams 08-Sep-2008

The Government’s Equality Bill, announced by Deputy Labour leader and Equalities Minister Harriet Harman in July, has been long anticipated by public sector organisations and long dreaded by many of them. While the anticipation of the Bill and the implications it has for the sector have been heavily discussed, it appears that it may have caught many unawares. Data is yet to be released on the sector’s compliance with the bill but with a spate of new employee litigation filed shortly after its reading, it sends a clear message to organisations that aren’t ready that they need to get ready soon.

The first major implication of the Bill is the impact it will have on the private sector. The government hopes to use it to bring both public organisations and their private sector suppliers into line on diversity management. From now on, companies bidding for contracts worth £160bn a year can actually lose work if their competitors have a better record on equality in the workplace. Likewise existing suppliers may find themselves playing catch-up to compete with dynamic and diverse equality-ready suppliers as a wave of diversity compliance sweeps public sector procurement.

To the unprepared, bringing an organisation in line with the bill could be a difficult task and is definitely more than a box ticking exercise. The Bill is a real legal minefield, providing many potential stumbling blocks for unsure HR departments. Complying will require a step change in the way some those dealing with HR issues operate in order to avoid being taken to the cleaners by legally-wronged or, of course, underhanded employees.

The Equality bill brings together over 100 separate pieces of legislation covering areas of race, sex, age, religion, disability and more. Basically anything about a worker (that doesn’t obviously prevent them from doing a job) that could be classed as discriminatory, features. Examples of this include: removing gags on discussion of pay to eliminate gender pay differences and promoting provision of employment and appropriate working environments for older people.

One could be fooled into thinking that the Bill was a completely negative thing for the sector but it shouldn’t be viewed like this. In many ways the Bill is an opportunity – why? Well to start with, it brings together a heap of disparate legislation meaning it is now much easier for organisations to get their heads around what they should be doing and recording regarding diversity. The Bill also paves the way for a diversity code of practice to aid compliance, so it may yet become even easier to comply with the tenets of the bill and get organisational diversity on track. It should also help well-prepared organisations avoid possible legal trouble in our increasingly litigious culture.

A central tenet of the Bill is in encouraging transparency in diversity management. The law now allows the Equality Commission to set-up investigative tribunals who can then request and assess appropriate documentation to support an organisation’s diversity claims or of course claims against them. A lack of clear documentation could lead to court orders and hefty fines. The Bill also provides ample ammunition for critics and lawyers to hit an organisation with. So to avoid being caught out the onus is really on being as prepared as humanly possible to counteract criticism.

What this means for an organisation is a need to record all pieces of important information that relate to diversity and highly detailed audit trails demonstrating compliance with the Bill. The Bill calls this the public sector’s ‘Equality Duty’ and puts pressure on organisations to attend to the key areas of gender pay, ethnic minority, disability and age representation and religion.

The trouble is that the audit trails needed to back up an organisation’s diversity credentials can quickly become highly complex and highly admin-intensive. Consider having to log all background details on recruitment ads, interviews and recruitment decisions, promotions, pay rises, bonuses, disciplinaries and grievances – understandably this can become a real bottomless pit for man-hours. Having the right systems and technology in place can help an organisation create clear and interlinked audit trails which can then mitigate against alleged breaches of the bill and of course remove some of the administrative burden.

Some important areas of diversity that organisations should think about straight away are: employment advertising, dealings with recruitment agencies, communications on appointments, disciplinary actions, documents pertaining to promotions, demotions, position applications and so on. There are likely to be many other processes and actions to log that are specific to a particular organisation. So it’s important that HR execs pick apart all internal processes for their own organisations that could influence diversity and adjust how they comply with the Bill accordingly. And it makes sense to do this sooner rather than later. Compliance requires a lot of forward thinking and planning and cannot be carried out in a piecemeal fashion. For example, simply reporting a snapshot of the current employee makeup may reveal diversity issues but these can take over a year to fix from instigation to impact. So waiting until the law comes into effect could leave organisations exposed for some time while they wait for revised policies to flow through.

Some commentators have derided the bill for the fact it will not be imposed upon the private sector. However it’s likely that disastrous and costly consequences of being shut-out of public sector procurement will have a large effect on private companies. With the FT reporting the public sector outsourcing has doubled over the last ten years to £80bn this year, there is an even larger onus on the sector to sit up and take notice. As a long term-view the government has signalled its hope that private organisations will actually start reporting on diversity in company accounts and that shareholders will start using this as important indicator of a company’s investment prospects.

For public sector organisations to be able to enforce diversity checks in their own procurement it is vital that they first get their own houses in order. While in the long term it may more efficient for a company to bring in an HR consultant to overhaul policies, there are avenues that can be looked at right away. Putting in place plans for the whole recruitment process, such as advertising, vetting, interviewing, selection should be an initial step. After this companies can start looking at their existing staff and implement systems for checking staff makeup to ensure that going forward, all groups are represented appropriately. Once these systems, whether developed in-house or bought-in, are in place the monitoring and analysis of pay deals, new employees, promotions and as a result compliance with the Bill should become much more simple. Indeed, once the appropriate policies are in place diversity management should become a way of life for an organisation.

While many organisations will have groaned at the announcement of the Equality Bill, in the end the ramifications for both the public and private sectors should be broadly positive. The shakeup will be painful for some but now is the time that savvy companies can take the initiative, dominate diversity and come out better suited to the needs of our multicultural society. Hopefully, after the shakeup, we’ll be left with a better environment for the public sector, private companies and, of course, for employees.

Damian Williams is MD of ROC UK