Peers voted 216 to 178 in favour of Lady O’Cathain’s amendment to keep the current law unchanged.
Then in an extraordinary move the Government broke with House of Lords convention in a bid to damage Lady O’Cathain’s victory.
But in two further votes Lady O’Cathain won by 195 votes to 174 and by 177 votes to 172.
In the debate before the votes, the Government claimed its plans would simply ‘clarify’ the law.
But churches said the plans would narrow important safeguards designed to help religious employers defend their ethos.
The Government’s defeat means no change to the current law, which permits churches and other faith-based employers to protect their ethos by insisting staff live consistently with the religion’s doctrine on sexual behaviour.
At this stage it is not known whether the Government will try to overturn the defeat in the Commons.
The Christian Institute’s Mike Judge said, “We are delighted that the House of Lords has voted to protect freedom of association for churches.
“It is a shame that the Government didn’t listen to churches earlier. It’s almost as if they don’t care.”
The Archbishop of York, Dr John Sentamu, said during the Lords debate: “You may feel that many churches and other religious organisations are wrong on matters of sexual ethics.
“But, if religious freedom means anything it must mean that those are matters for the churches and other religious organisations to determine for themselves in accordance with their own convictions.”
He added: “Where are the examples of actual abuses that have caused difficulties? Where are the court rulings that have shown that the law is defective? If it ain’t broke, why fix it?”
At the weekend Church of England Bishops expressed deep concern about the Government plans.
The bishops said the Government has produced words that “create difficulties for churches and religious groups”.
They added: “This despite our raising the problem many months ago and offering various ways of resolving the issue.”
Bishops of the Roman Catholic Church have also opposed the Government proposals.
Most Revd Peter Smith, Roman Catholic Archbishop of Cardiff, voiced his regret at the Government’s refusal to “sit down earlier with religious groups and work out an amendment with the right wording”.
He continued: “As it is, legal advice indicates that a court might construe the wording too narrowly and if there was a doubt about the legal effect then the only prudent course is to support the rival amendment which deletes the definition entirely.
“That is the only sure way of guaranteeing this Bill neither widens nor narrows the scope of the current exemption.”
Ahead of tonight’s vote a Government spokesman said: “The Equality Bill will not change the existing legal position regarding churches and employment.
“It simply clarifies the current law to ensure a balance is maintained between the rights of people to manifest their religion and the right of employees not to be discriminated against.”
However, the Lords opposed the Government plans and voted to keep the present law unchanged.
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