Government publishes proposals to address racial and ethnic disparities

• United Kingdom

• Employment law
• ESG

18-03-2022

The Government has published its Response paper, Inclusive Britain: government response to the Commission on Race and Ethnic Disparities, setting out plans to formulate and improve rights and opportunities for ethnic minorities in the UK.

While the proposals are wide ranging in nature and focus, particularly for public sector services and employers, many have the potential to impact employers more generally, including the introduction of a voluntary ethnicity pay gap reporting regime.

Background

The pandemic brought many employment, health and educational disparities into sharp focus and none more so than across certain racial groups. In 2020, the Government set up a new Commission on Race and Ethnic Disparities, chaired by Tony Sewell, to investigate some of these issues and causes and to put forward recommendations. Last March, the Commission published its Report, concluding that race-related impediments and disparities do still exist and are varied in nature and cause but are less likely to be the result of direct racism. The Commission made 24 recommendations aimed at addressing community disparity. The “Inclusive Britain” paper from the Government details 74 actions in response to the Commission’s recommendations, with a view to “putting us on a course towards a more inclusive and integrated society”.

Next steps and implications for employers

Sector employers in the health and education sectors, in particular, are highlighted in the Response and will face further scrutiny and may see the most significant changes in due course. In the health sector, for example, new pay research will be commissioned to consider the scale and causes of the ethnicity pay gap. Separately, as part of a new framework and research across 2022/23, the CQC will assess ethnic disparities amongst the work force, for example, in job progression or disciplinary situations. Subject to the findings of these investigations, it seems highly likely that new standards and requirements will follow. In the education sector also, a schools White Paper for primary education is expected in the coming weeks and, in the context of educational provision and attainment, will be likely to impact teaching roles and budgets.

However, among what are very broad and diverse recommendations, employers more generally will also be likely to see important developments as a result of this Response paper. Proposals to highlight include:

Ethnicity data

To achieve change, understanding your starting position is essential. Ethnicity data collation has presented a stumbling block for many employers to progress workforce analysis, including pay gaps. The Government is therefore committing to consult on new standards for government departments and other public bodies as to how to record, understand and communicate ethnicity data. The consultation is expected by the end of 2022. However, the findings and the data framework which results will inevitably set benchmarks and criteria of influence beyond the public sector.

Increased support for the work of the EHRC

As the principal body tasked with supporting learning but also tackling inequality, the Employment and Human Rights Commission is to receive increased Government support for its enforcement activity to facilitate challenging race discrimination through investigations and supporting individual cases. Employers may well find themselves on the receiving end of such activity if they are not pro-active over their equality and diversity policies and procedures.

In addition, to improve good practice in equality law, the EHRC will be supported in helping a wider range of organisations to comply with equality law and develop policies and processes that support equality of opportunity for all.

Ethnicity pay gap reporting

Following earlier consultation over the possibility of mandatory ethnicity pay gap reporting and indications that the Government would introduce such a scheme, mirroring as closely as possible the gender pay gap reporting regime, the Government has accepted the Commission recommendation that such an initiative should be voluntary only. It is confirmed that the Government will publish guidance to employers on voluntary ethnicity pay reporting in summer 2022. The guidance will include case studies of those companies who are already reporting and is expected to assist employers in understanding and tackling pay gaps within their organisations and build trust with employees.