A Labour government: a new dawn for DEI?

Ethnicity pay gap reporting will become mandatory for businesses with 250 or more staff.

This is in stark contrast to the former government’s position, which preferred a voluntary approach to such reporting. Its consultation on mandating ethnicity pay gap reporting revealed that many employers did not collect detailed ethnicity data and those that did often had poor response rates, making it difficult to interpret and meaningfully act upon any findings (see the former government’s consultation response here).

Unlike gender pay gap reporting where the categories are generally binary and clearly defined, ethnicity encompasses a wide range of identities and classifications. Designing a reliable reporting model which captures the diversity of identities and enables meaningful analysis into unjust racial disparities will therefore be no mean feat.

Disability pay gap reporting will become mandatory for businesses with 250 or more staff. 

Whilst some businesses voluntarily report on their ethnicity pay gap, reporting on disability pay gaps is notably less common. Difficulties with the collection of data remains a common theme. Many employees may choose not to disclose a disability due to concerns about discrimination or stigma. Others may not consider themselves disabled even if, under the wide Equality Act 2010 (“EqA 2010”) definition, they would likely meet the threshold.

However, the definition of disability for the purposes of reporting may not necessarily align with that under the EqA 2010. It could, for example, relate to claiming disability benefits. It remains to be seen what approach would be taken to this.

Alongside brand new ethnicity and disability pay reporting obligations, Labour will bolster the existing gender pay gap obligations by requiring employers to develop, publish and implement action plans and include outsourced workers in their reporting. 

With the most recent statistics indicating that progress on closing the gender pay gap has stalled, it is hoped this measure will give the regime a new lease of life (see our EmploymentLinks blog). 

However, Labour has not indicated it would make any changes to the existing enforcement (or lack of) regime, so the legal incentive for employers to comply with the relevant Regulations arguably remains low. 

Currently, pay disparities because of sex fall under equal pay laws. The new government proposes to increase the ambit of the existing equal pay regime by allowing claims based on ethnicity and disability. These would ordinarily be challenged through discrimination claims. 

However, bringing equal pay claims is notoriously challenging in comparison to discrimination claims. They may not be the best course of action for all claimants, given the need to find a direct comparator and limit on compensation if successful.

Labour has also indicated that it will bring workers performing outsourced services within the regime by allowing them to compare their terms with permanent direct hires. 

We would expect the Labour party to consult on these changes before taking further action. 

Labour has indicated that it would implement the dual discrimination provisions under section 14, EqA 2010. This would allow a direct discrimination claim to be brought on the basis of the intersection between two protected characteristics (i.e. claims for menopause-related discrimination could be brought based on the combination of age and sex). 

The provisions have been dormant since the EqA 2010’s introduction. Whether that has impacted the overall protections available to claimants with multiple protected characteristics is up for debate. 

Find out more in our podcast and EmploymentLinks blog.

Labour proposes to overhaul the existing suite of family friendly rights, including:

• Making flexible working the default unless it is not reasonably feasible;
• Extending protection against dismissal for new mothers;
• Clarifying the law on bereavement leave; and
• Reviewing parental leave and making it available from day one of employment. 

Businesses with more than 250 employees will be required to produce Menopause Action Plans setting out how they will support menopausal employees. However, it remains to be seen whether (and if so, how) employers would be held to account in respect of their action plans.

This policy aligns with the transformation in attitudes towards the menopause in recent years. In particular, the negative impact it can have on a woman’s performance at work is increasingly being recognised.

Menopausal employees may also stand to benefit from the implementation of the dual discrimination provisions (see above). 

For more information on the how to promote a more supportive, inclusive culture around menopause, please see our client guide.