Equalities Bill will cost businesses 'millions'

It may have promised a ‘one in, one out’ rule on new legislation – but the Coalition seems to have conveniently forgotten about that with the introduction today of the Equality Act, a combination of nine new rules designed to reduce discrimination. The Government says it will make it easier for businesses to comply with equality rules, but business organisations are unimpressed, saying it will ‘hamper job creation’, costing something in the region of £189m.

The Act is billed as the single biggest piece of discrimination regulation created in the UK, and it governs everything from gender, disability and religion, to age and sexual orientation. One of the most prominent rules means that there are only ‘limited circumstances’ under which employers can ask interviewees about disability or health. Equalities Minister Theresa May says it will help businesses ‘make the most of all the talent available’. Businesses, on the other hand, remain concerned, pointing out that, while they’re all for equal rights, employing someone, only to see them signed off sick for months on end because you couldn’t ask them if they are unwell, isn’t the best way to operate. Particularly if you’re trying to recoup losses after the recession.

The gender gap is addressed heavily by the new regulations, too. Labour’s plans to force businesses to reveal how much they pay women, in comparison to their male counterparts have been scrapped – which has angered womens’ groups, who said it was ‘tantamount to endorsing the shocking gender pay gap’. A rule which voids clauses in employment contracts that prevent workers from discussing their pay has been kept in, though – as has a change to employment tribunal law, which now allows people to make more than one claim. So workers can now take employers to tribunal for gender discrimination, as well as racial discrimination – which lawyers have warned could lead to a ‘flood’ of new claims. We can hardly wait.

David Frost, director-general of the British Chambers of Commerce, pointed out that, with heavy job-losses in the public sector on their way due to Government spending cuts, this is not the time for the private sector to be hit with legislation which will make picking up the pieces more difficult. ‘As austerity measures start to bite, companies need the flexibility and freedom to boost employment and drive our economic recovery,’ he said.

The minimum wage has also been raised by 13p today, from £5.80 to £5.93. While it’s keeping workers’ salaries in line with high inflation, businesses are likely to struggle to comply with the new rules.

Now we don't doubt that the new bill is well meant. As regular readers will know, we're all in favour of equality at work. We're also aware that the changing demographics of the working population means that employers are going to have to get used to casting their nets more widely in the search for talent. So there is as always a balance to be struck, it's just that we remain to be convinced legislation - particularly on such a far-reaching scale - is the way to strike it. More carrot and less stick, perhaps?