To avoid legal claims and lost tenders – read on

Under the Equality Bill, it’s time to even up pay and opportunity for everyone, writes Sharon Latham

In its manifesto ahead of the 2005 general election, the Labour Party committed to introducing an Equality Bill. Five years on, the Bill is making its way through the legislative process and, subject to any change of heart – or government – is due to come into force in October, except for some specific public sector equality duties, which take effect from April 2011.

The forthcoming Act will replicate and simplify existing discrimination and equal pay law covering employment, and the supply of goods and services – for instance, access to premises for people with disabilities. However, there are some significant changes that construction companies, both as employers and as bidders for public sector work, will have to get to grips with.

One of the major changes will be the duty on large private companies (those with 250 or more employees) to release information showing whether there are differences in the pay of their male and female employees. This will no doubt be followed by a flood of claims, so forward-thinking companies should prepare now.

Another change will allow (but not require) employers in recruitment or promotion situations to take into account under-representation of particular groups when choosing between two equally qualified candidates, as long as there is no automatic selection of under-represented groups and no quotas. Selection of a less well-qualified candidate is not permitted.

This has already prompted much media attention, including The Daily Express’s front-page headline: “White men face jobs ban”. There is a real risk of employers facing litigation by the disappointed (probably white and/or male) candidate claiming that they were better “qualified”, and challenging that employer to prove that they were not. Many private sector employers will therefore more than likely steer clear of positive action when making recruitment/promotion decisions.

But it’s the changes affecting public sector organisations that are likely to have a wider impact on construction. From April 2011, public bodies with more than 150 employees will have to publish annual details of their gender pay gap, ethnic minority employment rate and disability employment rate. Linked to this is the requirement that public bodies – including local authorities and government departments – when selecting suppliers, “prefer” companies that have a “positive record” on equality.

Some local authorities are already using their public sector equality duties to ask contractors for information such as what percentage of their staff are from ethnic minorities. In future, it is suggested that authorities should also consider standardised contract terms requiring suppliers to comply with the equality laws and, where appropriate, to assess this compliance as part of the tender.

The government has made it clear that public bodies can use procurement to remove inequality. One example the government gives is of a local council commissioning a significant building project. This requires work from plumbers, carpenters and plasterers, trades in which women are under-represented nationally. The contract for this work could, therefore, include a requirement that the contractor runs a positive action programme to train women in these skills.

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Sharon Latham is a partner at law firm Clarke Willmott