The new Equality Act simplifies and strengthens discrimination law. But what does it mean for workplace fairness, and how should employers prepare for the changes?

The Equality Act becomes law this month and directors must ensure they understand how it will affect the workplace. "This is the most important piece of discrimination legislation ever to come into force and directors do need to take it very seriously," says Sarah Gallon, an associate at law firm Stephenson Harwood. She says the aims of the act are threefold: to harmonise and simplify discrimination law, to make it more effective, and to modernise it.

Rachel Dineley, a partner at Beachcroft LLP, adds: "We have had so many different pieces of legislation, starting with the Equal Pay Act in 1970, but the world and the profile of the working population have changed vastly since that time. The Equality Act is coming to fruition because of several years of work and a lot of campaigning to streamline, rationalise and expand discrimination law so that you have only one statute to consult."

The act replaces a confusing set of laws. "Up to now our legislation has been a mixture of parliamentary acts such as the Sex Discrimination Act and the Race Relations Act as well as a range of EU directives, especially the EU Equal Treatment Directive. On top of that we have got case law from the House of Lords and Court of Appeal decisions that have impacted on the workplace, so it is very complicated," says Steve Williams, head of equality at Acas.

The Equality Act covers the same areas that were already safeguarded by existing law; these are now called protected characteristics (PCs; see box below). It extends legislation to spheres that were not included before while also introducing changes to current law. Associative discrimination, for example, where a person is treated differently because a peer or colleague is someone covered by a PC applied only to three groups previously but this has now been extended to seven.

Harassment rules have been extended and now allow a person to raise a discrimination claim even if he or she is not included under PCs. If someone is judged on the grounds of homosexuality, for example, a colleague can raise a claim if he or she feels the inequality creates an offensive environment, regardless of his or her own sexuality.

"This is what I would describe as widening the net of protection," says Audrey Williams, a partner at Eversheds law firm. "What it is saying is that as an employer you should be looking to protect the widest group of individuals and the standard of behaviour, conduct and fairness is being raised to another level. It is making clear that this kind of behaviour is unacceptable, full stop."

Gallon warns that the act will not necessarily make life easier for directors. "We will have to wait and see how things work in practice. The legislation is attempting to put the treatment of the different characteristics on more of an equal footing, but there are exceptions in almost every case," she says.

The act also makes it unlawful—with some exceptions—for employers to ask about a candidate's health before offering a job, and organisations will no longer be allowed to insert pay secrecy clauses into contracts to stop staff from discussing salary. Other elements that may yet be introduced include the much-discussed publication of gender pay gaps. The Labour government preferred to encourage companies to do this voluntarily and was not planning to consider making it compulsory until 2013. But the coalition is likely to review this issue.

Although, initially at least, the act will add to the regulatory burden for business, Steve Williams seeks to reassure. "I think directors need to be assured that within their organisations, the people they have working around equality issues will see this as a positive step that makes things less complicated," he says. "In the past different rules applied in different situations for different types of PCs, but the Equality Act has done away with all that and made sure that there is a consistent approach around discrimination across all the PCs."

Much has been made of the provisions in the act for positive action, allowing businesses to recruit candidates on the grounds of under-representation in the company, but only after each applicant has been assessed on merit. Williams at Eversheds believes this area has been misreported. "It is a new measure and, yes, it is strengthening, but it is entirely voluntary, so organisations shouldn't feel they are being pushed into taking this action; it is just giving them an additional tool," she says

But Audrey Williams admits that the powers come close to positive discrimination, which is not allowed. "You must assess all candidates on merit first and if two candidates are equally capable of doing the job, only at that point are you allowed to look at what groups are under-represented in your organisation," she says.

So should directors welcome the new legislation? "Those who have the good sense to invest the necessary time and attention to the requirements of the Equality Act will raise standards within the workplace," says Dineley. "Any improvement in the working environment when everybody is working very hard can only be a good thing in the medium to long term, but it does mean rolling up the sleeves and addressing the issues in the short term.

"It provides a single piece of legislation that will govern these issues with consistency in a way that has been lacking over time, which has in turn led to real anomalies, with a different approach being taken to different types of discrimination, which has been very confusing and has generated litigation."

Dawn Milman-Hurst, managing director of consultancy Equal Approach believes the act is long overdue. "It has simplified and consolidated what was a lot of confusing legislation and promotes equality to become a natural behaviour in business," she says. "The result is a more diverse workforce, reflecting the customers they [businesses] serve and the demographics they operate within, and ultimately it will add to their bottom line."

The changes merit serious attention, though. Dineley explains: "This should not be regarded as a side issue that can be sorted out by HR; it is not a case of a bit of tweaking of the odd policy and then carrying on as normal. Though there will be a job to do for HR—revising policies and practices, providing training and ensuring that line management appreciate the standards expected of them will minimise risk and maximise opportunities to get the best out of the workforce and avoid extensive litigation."

Widening the net of protection

Protected characteristics covered in the Equality Act are...

• Age
• Disability
• Gender reassignment
• Marriage and civil partnership
• Pregnancy and maternity
• Race
• Religion or belief
• Sex
• Sexual orientation

What employers need to do

Dawn Milman-Hurst of Equal Approach offers tips for dealing with the act

1. Don't panic. With good common sense and considered ethical practice, your business will comply with the provisions.
2. Allocate a Diversity Champion in the business to help lead the approach to valuing diverseness and implementing equality of opportunity.
3. Review existing processes honestly, and in conjunction with feedback and exit interviews, to identify where improvements can be made. Educate any known "hotspot" managers and decision-makers to remove prejudices in your business.