The UK is already considered to have some of the strongest equality legislation in Europe, and the Labour Government has signalled its intention to make further enhancements. This is in stark contrast to the approach of the United States administration, who have sought to abolish EDI programmes across federal government and have recommended that private sector companies do likewise. As such, numerous large US corporations have made changes to their approach to EDI, with several examples below:
- Goldman Sachs: removed the “diversity and inclusion” section from its annual report and abolished the requirement for board diversity quotas for its public companies.
- Disney: Shifted away from EDI related performance metrics towards business performance metrics.
- Meta: Terminated its EDI training programme, hiring practices and disbanded its dedicated EDI team.
Some UK businesses, particularly those with international reach, may wonder whether they too can follow the trend being set by the United States in relaxing their approach to EDI.
The short answer? No. The legislative framework in the UK is different from that of the United States, with the Equality Act 2010 (“Equality Act”) being our primary anti-discrimination law. Under the Equality Act, employers have a legal duty to take steps to prevent discrimination, harassment, and victimisation in the workplace because of the nine protected characteristics listed in the act. These legal duties remain, regardless of international trends.
Any move by UK employers to dilute their EDI policies and training programmes is likely to conflict with their legal duties and will increase the risk of exposure to employment tribunals. For example, last year the Worker Protection (Amendment of Equality Act 2010) Act 2023 introduced a positive duty for employers to ‘take reasonable steps to prevent sexual harassment of workers in the course of their employment’. The Employment Rights Bill is intending to expand the scope of that positive duty to require employers to take ‘all reasonable steps’. Without EDI policies and appropriate training, an employer is highly unlikely to demonstrate compliance with that duty.
In addition to the legal risks, employers should be aware of the wider commercial risks that scaling back EDI initiatives may create. Studies have shown that employees value safe and inclusive workplaces, making it much easier to attract and retain talented employees. The reputation of an organisation may also suffer because of actions that regress EDI initiatives, potentially harming investor, customer/client, and supplier relationships.
We also expect the introduction of an Equality (Race and Disability) Bill, in the not too distant future, which the government says will address unequal pay related to race and disability, and improve pay transparency. The government is currently consulting as to how ethnicity and disability pay gap reporting may work and will formulate the Bill once it has collated the evidence from that consultation. However, in conjunction with the upcoming sexual harassment changes in the Employment Right Bill, it is quite clear that the Labour government is far from following in the footsteps of the Trump administration.
It is therefore important that UK employers keep their existing EDI initiatives and continue to keep these under regular review. Employers should also consider how best to prepare to respond to new legislation that is on the horizon. If this is something that you need advice and support with, please reach out to a member of the team.
