Equality Bill: Tribunals to have power to set policy on pay and recruitment if firms discriminate

Tribunal panels will be given powers under the Equality Bill to order organisations found guilty of discrimination against a single employee to make sweeping changes to their hiring and pay practices.

Employers that fail to heed these warnings could face massive fines, along with other tough sanctions, in the crackdown led by equality minister Harriet Harman.

The first draft of the long-awaited Equality Bill, laid before Parliament last week, stated: "The Bill will allow employment tribunals to make wider recommendations in discrimination cases.

"This will mean that, for example, where a female employee had left her employer because of discrimination, and had subsequently won the case, the tribunal could recommend that the employer should introduce an equal opportunities policy, or review its policies on pay."

If an employer does not comply with this recommendation, warns the Bill, and reoffends, the subsequent tribunal would be able to hand out tougher penalties.

"We will also explore how we can ensure employers learn from tribunal judgments by looking to spread learning from individual cases in a systematic way," said the Bill. "These measures will help achieve a shift in corporate culture."

Julie Quinn, partner at law firm Nabarro, said the Bill's wording could allow employment tribunals to force employers to make policy changes.

"What we see now is that tribunals are becoming more involved in the business decisions of an employer," she said.

Employment law firm Peninsula claimed that more than 10% of its 21,000 clients called on Wednesday and Thursday with fears over the Bill's implications for private firms.

Equality Bill in brief

• Tribunals will be given power to recommend organisations change their equality policies
• Employers will be able to choose a job candidate from an under-represented group over one from an over-represented group if they are equally qualified
• Public sector bodies will have a new 'equality duty' to actively promote diversity on the grounds of race, disability, gender, gender reassignment, age, sexual orientation and religion or belief
• Public sector employers will have to publish statistics on gender pay differences, as well as the numbers of ethnic minority and disabled people employed