The cynicism behind Labour’s Race Equality Act

Labour is desperate to come across as business-friendly. Last week, the party said it will no longer reinstate a cap on bankers’ bonuses, and that it will ‘unashamedly champion’ the financial services industry. But how to square that with the party’s new Race Equality Act?

Most people understand equal pay to mean exactly what was intended when it became law in 1970: that remuneration must be the same for two identical jobs within an organisation, regardless of who is in post. But since the EU’s 2006 Equal Pay Directive it has taken on a new meaning: now, it covers ‘like work’ (where the job and skills are the same or similar), ‘work rated as equivalent’ or ‘work of equal value’. Some jobs, therefore, can be classed ‘as equal work’, even if the roles are, in fact, different.

This has created a problem for employers. Take the case of Birmingham City Council. The local authority is on the hook for an equal pay liability estimated at between £650 million and £750 million, following a court ruling that found hundreds of mostly female employees working in roles such as teaching assistants and catering staff ‘missed out’ on bonuses that were given to traditionally male-dominated roles such as refuse collectors.