As part of our series of updates exploring the implications of the Employment Rights Bill (the Bill), this time we focus on the proposal to require large employers (those with more than 250 employees) to develop and publish an equality action plan.
An equality action plan’s sole focus would be to advance the equality of opportunity between male and female employees only, as opposed to encompassing other protected characteristics. The Bill does not introduce compulsory ethnicity and disability pay gap reporting. However, the government has indicated its intention to consult on, and bring forward, a separate Equality (Race and Disability) Bill that will mandate ethnicity and disability pay gap reporting in a similar framework to the existing gender pay gap reporting duty.
The proposed requirement to publish an equality action plan will be relevant to employers in the private sector with more than 250 employees, and certain public sector employers, and aims to improve gender equality within organisations. This would take the existing gender pay gap reporting obligations a step further. Whilst there is already a requirement for these organisations to publish their gender pay gap, the existing law does not oblige employers to address the reasons for such gender pay gap, or to put strategies in place to improve it.
| Current position | Position under the Bill |
| Employers with more than 250 employees are obliged to report annually on their gender pay gap. There is no current requirement to publish an action plan. | Employers with more than 250 employees will be required to produce an equality action plan covering matters that relate to gender equality. The plan should include steps that the organisation is taking to advance and improve gender equality and opportunity in the workplace. The plan must address gender pay gaps and contain details as to how the organisation is supporting employees through the menopause. |
The Bill provides for regulations to be made which will set out further detail of the requirements an equality action plan will need to meet. These may include:
- specifics about what the plan should contain;
- the form and manner in which employers must publish the plan;
- how frequently employers must publish the plan (although we know this will not be more than once per year);
- requirements for senior approval before publication; and
- sanctions if employers do not comply with the regulations.
Employers should also be aware that the Bill introduces a new requirement in the gender pay gap reporting process. If the Bill becomes law as drafted, regulations may also require employers to include information on the providers they use to carry out outsourced work (where the provider is also required to report on its gender pay gap). The reporting service will then show that the organisations are linked.
The government has indicated that most of the reforms will not take effect before 2026. Nevertheless, and despite the need for regulations setting out the finer details, it is not too early to start thinking proactively about the steps you are already taking in this area and what you can do to improve, before these proposed disclosure obligations come into force.
You can read our overview of all the key measures in the Bill here.
