Legislation introduced this week exposes employers to threat of unlimited damages for discrimination
Contractors will be exposed to unlimited liability if they discriminate against workers on the grounds of their sexual orientation or religious beliefs as a result of legislation that came into effect on Monday.

Construction's macho culture is likely to make it particularly vulnerable to action by homosexual workers who have been subjected to bullying. Under the Employment Equality Regulations 2003, firms will have to have robust and effective grievance procedures in place, and demonstrate that they are acting promptly once a complaint is received.

A Construction Confederation spokesperson confirmed that contractors could face increased litigation and that a culture change was required.

He said: "The industry does not have a particularly good track record. But it is changing, and this legislation should ensure that change occurs."

The courts are likely to impose heavier damages on firms that have failed to introduce safeguards against discrimination, but there is uncertainty about exactly what measures firms should take to protect their staff.

Amanda Galashan, a director at law firm EmployEase, said employers might have to run courses on discrimination. However, she warned that companies should not go as far as trying to establish their employees' sexual orientation, and that the question should not appear on equal opportunities questionnaires.

She said: "Businesses out there are going to be demanding 'Are you gay?' but they are going to get in as much trouble for asking the question as for not. It is a potentially discriminating question."

Diana Warman, from the Chartered Institute of Personnel and Development, agreed that asking employees to declare their sexual orientation was not the best way for employers to act.

She said that instead contractors should conduct surveys to see if employees felt comfortable at work, and organise discussion groups to tackle difficulties.