Reaction comes as Equalities Minister Lynne Featherstone (pictured) announced theGovernment would be proceeding with two strands on the Equality Act, the first of which was to ditch compulsion on companies to publish their data pay.
She said: "We want to move away from the arrogant notion that government knows best, to one where government empowers individuals, businesses and communities to make change happen."
Unions have reacted angrily to the announcement, with Dave Prentice, general secretary, Unison, calling it a "stripping down" of its commitment to equality.
The move has also been criticised for sending out conflicting messages, because the second of the Government’s announcements gives the greenlight for ‘employers to take positive action in recruitment and promotion’ – effectively allowing them to recruit, for example, a woman over a man, for no other reason than because she is female.
The changes are designed to increase female representation in Britain's workplaces and allow employers to appoint ethnic minority candidates over equally qualified white jobseekers. Featherstone said: "These plans are absolutely not about political correctness, or red tape, or quotas. It is about giving employers the choice to make their workforce more diverse."
But there are fears this could lead to possible unfair discrimination and potential lawsuits. Caroline Carter, head of the employment practice at law firm Ashurst, said: "The positive action recruitment provisions are quite problematic for a number of reasons, and employers should steer clear of using them unless and until further guidance is issued."
She added: "FTSE companies with few female board members may find themselves under pressure to use the provisions to increase the diversity of their workforce. If used, the provisions will require employers to walk the difficult and fine line between positive action, which is permitted, and positive discrimination, which is not. It will also involve line managers taking into account factors such as race and sex when making recruitment decisions, a practice which previously they will have been carefully trained to avoid."
Critics have been disappointed by the announcements because separately, the European Commission issued a consultation on improving companies' disclosure of non-financial information, including integrating issues such as sustainability and responsibility into their annual reports in a more transparent way. This, says Dawn Nicholson, HR services partner at PwC, could still yet force the Government for another U-turn on disclosing pay data.
"The momentum behind greater disclosure around pay is irresistible. Companies need to get their houses in order and remove any pay disparities that cannot be justified, because they are going to have to reveal their pay gap data either under the voluntary or mandatory regime, if this EU consultation comes into effect," she said.
A recent poll PwC commissioned of 1,148 workers revealed that 49% would ask for a pay rise or look for a new job if they found out for certain that colleagues at the same level were paid more.
