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Labour Stands By "Significant Change" In Its Race Equal Pay Plans

Shadow secretary of state for women and equalities, Anneliese Dodds. (Alamy)

6 min read

Shadow equalities secretary Anneliese Dodds has insisted that Labour's new race equality act will represent "significant change" despite criticism that Labour's proposals could risk making equal pay claims more complicated.

Labour's race equality act proposals, which the party argues will "enshrine in law the full right to equal pay for Black, Asian and ethnic minority people", follows data from the Office for National Statistics in November which showed the pay gap for Black, African, Caribbean or Black British people compared to their white counterparts has remained steady for over a decade. The figure was at 5.6 per cent in 2012, and in 2023 at 5.7 per cent.

On average in 2022, the ONS found Black, African, Caribbean or Black British employees earned £13.53 median gross hourly pay while White employees earned more at £14.35. Mixed White and Black Caribbean employees fared the worst of all groups, who had a pay gap of 18.5 per cent with their median earnings at £11.75 an hour in 2022. 

Labour's new act would also place a duty on public services to collect and report data by ethnicity on staffing and pay, and will aim to "strengthen protections against discrimination for people who face prejudice because of a combination of protected characteristics".

However the proposals have been heavily criticised by government ministers, with equalities minister and Trade Secretary, Kemi Badenoch describing the plans as "pointless".

"Labour’s proposed new race law will set people against each other and see millions wasted on pointless red tape," she wrote on X last week. "It is obviously already illegal to pay someone less because of their race. The new law would be a bonanza for dodgy, activist lawyers."

Employment lawyer Darren Newman, also told PoliticsHome Labour's plans could make equal pay claims on the basis of race more complicated, warning compensation could also be more limited than under the current system. 

"I don't know anybody in the world of employment law who has ever suggested this change, the only suggestion would go the other way," said Newman. 

"Plenty of people would say abolish equal pay claims and just ask the question: 'is there discrimination in the pay system?' And if there's discrimination in the pay system, you should be able to bring a claim."

But he believes that the current system is actually more straightforward than what is proposed by Labour. "It allows you to claim more than you can under an equal pay claim," he explained. "It allows you to bring in direct pay discrimination claims in a way that you can't in sex discrimination."

But Shadow equalities secretary Dodds has defended Labour's planned legislation, telling PoliticsHome it will address some of the limitations of current equality law on pay. She argued it is currently "not possible to seek redress for equal pay for work of equal value on the basis of ethnicity" as it is for pay discrimination based on gender. 

Current legislation does not afford the same avenues to pursue pay discrimination based on race as it does for gender, where the law is more broad on the types of claims that can be brought. For example, jobs with different titles but of equal value are included within the scope of current legislation when it comes to gender pay discrimination. 

However, current legislation for race pay discrimination requires evidence of more direct discrimination – such as where two people with the same job title, but different ethnicities, may be paid differently. This means the avenues for equal pay claims based on race are currently narrower than they are for gender. 

"People can take cases on the basis of direct discrimination, but ensuring that they were covered by equal pay measures would actually provide people with more time, it would also make cases much simpler for the person who believes that they have been subjected to pay discrimination," said Dodds.

"And we think this could have quite a big impact overall. They will still be able to use provisions around direct discrimination, but we have seen with those fully equal pay provisions for women that that has enabled women to take cases on the basis of equal pay for equal work. And, of course, that's that's at the crux of this."

A KC specialising in employment law appeared to agree with Labour's reasoning, telling PoliticsHome they believed existing laws for equal pay claims based on race were "quite restrictive" and that Labour's plans would be a "helpful" change. 

"In an actual case, when you don't have the same job title, it's actually restrictive and of course, with equal pay you can get six years back pay, it has more teeth, it has more clout, you might be more likely to get a settlement, it's better in that way," they said.

"From a practitioner perspective, that is why it can be a helpful step in the right direction to try and ameliorate the pay gap because the pay gap is substantial for women, but it's exponentially higher for ethnic minorities".

Dodds also said Labour had "conducted a number of different workshops" as well as "really extensive consultation with experts" on the issue of equal pay which had influenced the planned legislation. 

"This would give ethnic minority people the full right to equal pay, and that's not available at the moment," Dodds continued.

"And as with the other measures that are detailed in the act – whether that's ethnicity pay gap reporting, whether that's the measures around ensuring we have data on outcomes for ethnic minority people, whether that's around a target to close the gap for black maternal mortality – the Conservatives have refused to enact these measures.

"So there's a really clear political difference there. Labour's absolutely determined that we will open up opportunities for ethnic minority people, and frankly, the question is whether as a country we can afford not to do that, not whether we should do it in the first place."

Dodds also dismissed criticism that Labour's plans more broadly for a new Race Equality Act aren't necessary. 

"There's been some suggestion, for example, that provisions on dual discrimination aren't needed or ethnicity pay gap reporting isn't needed," said Dodds. 

"Well, actually discussing this – particularly with many groups representing ethnic minority people, experts in this area – many businesses who've really been pushing hard for change here.

"It's clear that we do need to shift from the status quo, if we're going to be genuinely unlocking opportunity, and that's what Labour's absolutely determined to do."

Newman, however, while supportive of greater transparency on pay structures in businesses to prevent pay discrimination, told PoliticsHome measures like dual discrimination were not needed because the current law is sufficient. 

"It is unnecessary because people who are discriminated against because of two characteristics are already fully thoroughly protected," said Newman. 

"It would add nothing, it would add absolutely nothing."

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