Reviewing policies and procedures

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Date: 05/05/11

In the aftermath of the 2010 legislative changes, and in light of the further changes that this year will bring, employers should be more conscious than ever of ensuring that their policies and procedures are fit for purpose. Jamie Campbell, associate at business law firm DWF examines what these changes mean for employers…

Having the right policies and procedures in place is critical for an employer’s day-to-day dealings with its employees. Furthermore, they could be scrutinised as part of employment tribunal proceedings, and can have a significant influence on the outcome of a claim.

It is imperative not only to review policies and procedures and ensure they are up-to-date, but also to ensure that the managers who implement them are fully aware of what they are and what they mean in practice. For example, if a manager is appointed to hear an employee’s grievance that he is being discriminated against on the grounds of his race, a full understanding of the employer’s grievance procedure and equal opportunities policy is obviously extremely important.

What are the key legislative changes?

One of the legislative big-hitters of 2010 was, of course, the Equality Act 2010 which came into force on 1 October 2010. It was designed to harmonise the existing fragmented law on discrimination and consolidate it into a single, more manageable, ‘go to’ piece of legislation. In fact, the act goes further and introduces protection in new areas. Employers need to be aware of where these changes could have an impact upon their policies and procedures and revise them accordingly.

The Employment Equality (Repeal of Retirement Age) Regulations 2011 will have a dramatic and immediate impact upon the way in which employers end the employment of older employees in the workplace. With effect from 6 April 2011, retirement will cease to be one of the potentially fair reasons to dismiss an employee. Retirement policies therefore should be reviewed to ensure that expensive claims for unfair dismissal and age discrimination are avoided.

The Agency Workers Regulations 2010 are due to come into force on 1 October 2011 and eagerly awaited guidance on these regulations is due out on 31 March 2011. This long lead-in period is designed to give agencies and hirers enough time to adjust to what will inevitably be major changes to the way in which they engage temporary workers.

All of these key legislative changes will raise a variety of issues and challenges for employers:

Equality Act 2010

 Some of the new provisions of the Act and their implications are set out below:


a) Direct Discrimination

The Equality Act has introduced a revised definition of direct discrimination. The less favourable treatment may now be ‘because of’ rather than ‘on the grounds of’ a protected characteristic.


The definition has been changed to expand the concept of direct discrimination to include associative discrimination and perceptive discrimination.

Associative discrimination will cover those situations where an employee is subjected to less favourable treatment because of their association with another individual who has a protected characteristic.

Discrimination based on perception is where the employee is subjected to less favourable treatment as it is perceived that they have a protected characteristic, regardless of whether the employee actually has that protected characteristic or not.

It is likely that employers will have a significant gap in their policies here and they should be updated to expressly state that direct discrimination will include both associative and perceptive discrimination, with an appropriate definition of the same for clarity purposes.

Existing equal opportunities policies should already cover the protected characteristics of age, disability, race, sex, sexual orientation, gender reassignment, marriage and civil partnership, pregnancy and maternity, and religion or belief. However, employers should take this opportunity to check that all these protected characteristics are adequately covered.  

b) Pre-employment health questions

Historically, applicants for jobs have found it difficult to prove that the information they provide to prospective employers in relation to their health, has been detrimental to the success of their application. However, the Act looks to eliminate any such concerns. The circumstances in which an employer can now ask questions concerning an applicant’s health, prior to offering the applicant a job, are severely limited.

Employers should check recruitment policies and procedures/equal opportunities policies to ensure that they do not fall foul of this part of the Act. What is clear is that the standard pre-employment health questionnaires that employers used to send to applicants as a matter of course must now be consigned to the shredder.

There are only certain specified circumstances in which it is permissible for an applicant to be asked about health or disability prior to a job offer, namely:

  • Where it is necessary to establish if an applicant is fit to attend an assessment or requires any adjustments to the recruitment process
  • If it is necessary to ascertain whether an applicant will be able  to carry out a function that is an intrinsic part of the job
  • Where this forms part of the employer’s equal opportunities monitoring, provided that the information is not taken into account as part of the employer’s decision-making process
  • To enable the employer to take positive action
  • To establish whether the applicant has a particular disability, where having that disability is an occupational requirement.

c) Third party harassment

Section 40 of the Act extends the liability of employers for persistent harassment of their employees by third parties (which previously only applied to sexual and sex-related harassment under the Sex Discrimination Act), to all protected characteristics covered by the harassment provisions of the Act. This liability arises if a third party harasses an employee in the course of the employee’s employment; the employer knows that the employee has been harassed in the course of employment on at least two other occasions by a third party (regardless of whether or not it is by the same third party); and the employer has not taken practicable steps to prevent the harassment on this occasion.

Employers need to look beyond the policies in place for dealing with their own employees and consider the wider ramifications, as this provision could impact upon other parties, including clients, agency workers and suppliers.

Employers should consider reviewing their contractual arrangements with third parties to ensure that they encompass an anti-harassment policy statement, so that any complaints that arise can be dealt with in a prescribed manner. Consideration should also be given to a term in the contract that it may be terminated and/or an individual replaced where instances of harassment have been investigated and a complaint upheld.

Employers’ own anti-bullying and harassment policies should also be amended to include bullying and harassment by third parties, and importantly include a separate provision for handling complaints against a third party.


d) Pay secrecy clauses

Much as already been reported about these clauses and that a ban on pay secrecy clauses has been introduced. This is incorrect. The Act has not banned pay secrecy clauses, instead, it has made any such clauses unenforceable against employees who make or solicit a ‘relevant pay disclosure’.

What this means is that such clauses will only be prohibited where they hinder pay discussions aimed at establishing the existence of discrimination. For employers that use pay secrecy clauses, they’ll need to carefully consider how they operate in practice to ensure that they do not fall foul of the Act.

Employment Equality (Repeal of Retirement Age) Regulations 2011

The abolition of the DRA means that any dismissal on or after 6 April 2011 for retirement will be considered age discriminatory and unfair (unless objectively justified and a fair dismissal process has been followed), except where the transitional provisions apply so that any such retirement dismissal is not discriminatory/unfair.

The transitional arrangements have been put in place as the means by which the DRA will be phased out. During the transitional period, employers will be able to give a minimum of six months notice of retirement. However, employers must remember that the last date for issuing notice is 5 April 2011.

The transactional arrangments provide that a retirement can only proceed where: Notice of retirement is issued on or before 5 April 2011

  • Notice of retirement is issued on or before 5 April 2011
  • The employee being retired has reached 65 or the normal retirement age (if this is higher) on or before 30 September 2011
  • All existing requirements of the statutory retirement procedure have been met as set out in the Employment Equality (Age) Regulations 2006 (including the employee’s right to request to stay on).

Even without the DRA, employers may still lawfully retire an employee at a set age but only if the retirement age can be objectively justified. This means that it must be a proportionate means of achieving a legitimate aim. Employers will need to give very careful consideration to whether they can justify having a set retirement age for their workforce.

What is clear is that the removal of the DRA will mean that employers will need to completely review its current policies and procedures for the retirement of employees.

Furthermore, as capability is likely to be increasingly considered in terms of a potentially fair reason to dismiss older workers, the removal of the DRA should also be a catalyst for employers to review their practices and procedures for managing employees and their performance.

The Agency Worker Regulations 2010

The key principle of this legislation is to give equal treatment (in respect of basic working and employment conditions) to those temporary workers defined by the regulations as agency workers, so that it is no less favourable than comparable permanent employees or workers who have been directly recruited.

This covers pay, paid holiday, working hours, overtime, maternity and anti-discrimination provisions and, arguably, pension contributions. There will be a 12-week qualifying period for this right.

Any employer that uses temporary agencies to obtain temporary workers will need to carefully consider these regulations before they come into force in October 2011.

The temporary work agency will be responsible for any breach of rights under these regulations to the extent that it is responsible for the infringement. However, the hirer (which includes the end user client) will also be responsible for any breach to the extent that it is responsible for the infringement, having regard to any measures it has taken to enable the agency to provide information to the agency worker.

Accordingly, these regulations allow for the possibility of liability for both temporary work agencies and the ultimate end users. It is therefore essential that employers using temporary agency workers review the way in which this works and ensures compliance with the new regulations.

Employment legislation continues to be a fast moving and ever changing landscape, so it is essential that employers keep on top of all the legislative changes.

HR Director Magazine 2011

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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