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Don’t pay for discrimination in the workplace

Adam Bernstein explores the dark underbelly of discrimination and looks at what preventative measures companies can take to stay on the right side of the law

An allegation of discrimination in the workplace can create significant problems for employers and, while the total overall number of employment tribunal claims are falling following the July 2013 introduction of fees that claimants need to pay before their allegations can be heard, employers continue to face discrimination complaints on a regular basis. It won’t surprise many that the world of IT is not exempted from its share of cases being brought – and the matter isn’t going away.

Take the 2004 case of the Oracle Corporation UK which lost a tribunal claim brought by Karen Carlucci. She claimed that she had suffered sex discrimination after telling an employment tribunal that her boss had sent a sexist e-mail and had an offensive calendar in his office. A high performing salesperson who handled accounts worth £900m and who hit her sales target in six of her nine years with the company (the only one to do so, she said) sought £370,000 in compensation. However, the tribunal awarded a total of £98,206 compensation for sex discrimination, unfair dismissal, injury to her feelings and loss of private health cover.

In 2011, Huawei, the Chinese network and telecoms company, successfully defended allegations of race discrimination following a four-day hearing at the Southampton Employment Tribunal. A fibre optics specialist, Judeson Peter, brought a claim after his redundancy that suggested that the redundancy arose as a consequence of his being British. However, the Employment Tribunal found in favour of the employer who was able to evidence that Mr Peter's redundancy was nothing to do with his race or nationality.

Discrimination claims can seriously damage an employer's reputation. Not only that, but in the event that a discrimination claim succeeds there is no cap on the amount of compensation that can be awarded - the potential compensation that can be awarded is unlimited.

More recently, as noted by Computer Weekly, a tribunal ruled in 2015 that Tata Consultancy Services (TCS) did not indirectly discriminate against a UK man - Prashant Sengar – who was seeking employment with the company. The basis of his claim was that he suffered discrimination because he was a UK citizen and that there was indirect discrimination because TCS had a policy of recruiting lower-cost staff from India. The allegation followed Sengar’s having a copy of the TCS employee database which the High Court subsequently ordered him to return.

Getting discrimination issues wrong can create significant problems for employers reckons Mark Stevens, a solicitor at Veale Wasbrough Vizards, who also notes that defending an Employment Tribunal claim can be time consuming and expensive: “Discrimination claims can seriously damage an employer's reputation. Not only that, but in the event that a discrimination claim succeeds there is no cap on the amount of compensation that can be awarded - the potential compensation that can be awarded is unlimited.”

He outlines a number of recent cases in other business sectors that illustrate the risk and likely awards:

“In 2014 Group Captain Wendy Williams was passed over for promotion in favour of a male colleague who had served three-and-a-half years fewer than her. She took the Ministry of Defence to an employment tribunal accusing the RAF of favouring men. Williams won and was awarded £560,000 to cover loss of earnings, loss of pension contribution and injury to personal feelings. In late 2015, in Waddingham v NHS Business Services Authority, the employment tribunal held that an NHS trust committed disability discrimination against an employee having cancer treatment who was required to undergo a competitive interview process during a redeployment exercise. The employee was awarded £115,000. And more recently, Eva Carneiro, the former Chelsea FC team doctor, settled her dismissal claim against the club confidentially. Her claim included an allegation of sex discrimination after she went onto the pitch to help a player in August 2015.

“And on top of these awards come the costs of defending a case. Clearly every situation will differ and it can be difficult to gain a real understanding of costs. Discrimination cases can lead to lengthy tribunal hearings and, because of the fact specific nature of the claims often a number of witneses will be required to give evidence. The British Chambers of Commerce believe that the average cost to employers of defending an employment tribunal is around £8,500, but employers should also factor in the indirect costs incurred as a result of its employees being tied up in legal matters for a lengthy period of time.

Claims, can therefore prove very expensive in monetary terms and also the management time spent defending a claim. Discrimination issues can arise at any stage of the employment relationship - unlike in unfair dismissal claims, where an employee must have at least two years' service to bring a claim. Job applicants are protected against suffering discrimination during the application process - and employers should carefully word their job adverts to avoid discrimination complaints.

Types of discrimination

It surprises many to know that discrimination law covers a wide range of individuals including job applicants, agency workers, employees and contractors. Even former employees are protected. Further, Stevens warns that employers can be found to be vicariously liable for the discriminatory actions of their employees – “meaning that they could be found to be responsible for their employees' discriminatory conduct.”

Workers are protected against suffering discrimination in relation to a number of different protected characteristics – age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.

There are different types of discrimination that employers should be aware of says Stevens. “The first, direct discrimination, occurs when a worker is treated less favourably than others because of a protected characteristic. An example would be where a female employee is overlooked for promotion because she is a woman - the RAF case above is a perfect example of this.” He expands by explaining that unlike some other types of discrimination, direct discrimination cannot be objectively justified. This means that, generally, employers cannot argue that there was a legitimate reason behind the decision to treat a worker differently because of their particular protected characteristic.

The second type of discrimination - which is often more subtle - is that of indirect discrimination. Indirect discrimination can occur when an employer does something, or puts in place a policy, which has the effect of disadvantaging a particular group of people with one of the protected characteristics noted earlier. And this is where Stevens highlights the big problem here - it can occur without the employer intending to treat anyone less favourably: “Let’s say an employer introduces a bonus that is payable to only those employees who work full time and who have 100% attendance. This could be indirectly discriminatory towards its female employees as, statistically, women are more likely than men to have childcare responsibility and work part time hours. The requirement that someone has 100% attendance could also disproportionally impact workers with disabilities who may have a higher level of absence.”

The saving grace for employers is that unlike direct discrimination, they can seek to justify indirect discrimination by showing that their actions were a proportionate means of achieving a legitimate aim. This means a careful and written analysis of the business reasons behind the decision or policy - saving costs will - on its own - be unlikely to be accepted as a legitimate aim.

And then there’s harassment, another type of discrimination frequently considered by the Employment Tribunal. It’s defined as unwanted conduct related to a relevant protected characteristic which has the purpose or effect of either violating an individual's dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for that individual.

“What is interesting here,” says Stevens, “is that the perpetrator's intention is irrelevant and the victim's perception of the way that they have been treated is important. One-off incidents count and the victim does not need to have told the perpetrator that the conduct was unwanted.” This then, is very dangerous ground for employers.

Employers should note that unwanted conduct of a sexual nature can be caught by harassment protections.

Workers are also protected against suffering victimisation in the workplace which Stevens says can arise in circumstances “where an employee alleges that they have suffered from discrimination and then suffers a determent or less favourable treatment as a result.”

Employers can be caught out by the positive duty to make reasonable adjustments for disabled employees. Employers are required to make reasonable adjustments to help disabled job applicants, employees and former employees in certain circumstances. This might include making an adjustment to a physical feature of the workforce - like providing a larger computer screen for an employee with an eye condition, or changing a provision, criterion or practice that disproportionately impacts on a disabled employee. Examples of reasonable adjustments might include re-allocating duties, or allowing an employee to work flexibly or allowing the employee to work from a different location.

Employers should also be aware of equal pay issues. Under the Equal Pay Act 1970, employers must give men and women equal treatment in the terms and conditions of their employment contract if they are employed to do:

• 'like work' - work that is the same or broadly similar;
• work rated as equivalent under a job evaluation study; and
• work found to be of equal value in terms of effort, skill or decision making.

Top tips

  • Note where discrimination could occur in your business
  • Create an equal opportunities policy
  • Train staff in the law and the minimum standards of behaviour expected from them
  • Deal with any discriminatory behaviour firmly and immediately

As part of its Annual Survey of Hours and Earnings in 2015, the Office for National Statistics reported that the gap between men and women's average pay was 9.4% for full-time employees (the lowest since records began in 1997). The gap across all employees was 19.2%. The Government has introduced various initiatives seeking to reduce the gap. From April 2017, employers in the private or voluntary sectors with 250 or more employees will be required to publish information about pay within their own organisations. Amongst other things, large employers will now have to publish, on its website, overall gender pay gap figures calculated using both the mean and median average hourly pay on an annual basis. It’ll be interesting to see how this trickles down to the smaller business.

Preventative measures

The advice from Stevens is to put in place - and follow - an equal opportunities policy. “The policy, says Stevens, “should seek to ensure that all staff are aware of their obligation not to discriminate and what this means in practice.” Employers are not generally required by law to have an equal opportunities policy, however, the Equality and Human Rights Commission (ECHR) recommends it at paragraph 18.1 of the EHRC Code.

Next, employers should train staff on equality issues. From Stevens' point of view, this is important as it allows an employer to argue that it did everything it could do in order stop discrimination from occurring. By extension, employers need to ensure that discriminatory behaviour is not tolerated and is dealt with by appropriate disciplinary action. The last piece of advice from Stevens relates to employee communication – “employers should talk to their staff to understand their specific needs - in the workplace - particularly those arising from protected characteristics.”

This was last published in October 2016

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