Sarah Harrop looks at the equality legislation and what more needs to be done to increase BAME representation.
Despite the origins of the UK’s legislation prohibiting discrimination on grounds of race and ethnicity being nearly 45 years old, there are still huge issues to be tackled in the workplace to achieve diversity and inclusion for people of different races and ethnic origins. While legislation prohibiting discrimination is a starting point towards equality and diversity, simply making such discrimination unlawful has not to date been the solution by itself to achieving true diversity and inclusion in the workplace.
By way of example, the 2020 Parker Review dated 5 February 2020 found that out of the 256 firms it reviewed, 59% did not meet the target of having at least one director of an ethnically diverse background on their board. In particular, 37% of the FTSE 100 and 69% of the FTSE 250 did not have a BAME director. Overall, only 9.7% of directors in the FTSE 100 and 5% of directors in the FTSE 250 were people of colour (when directors of unknown ethnicity were included in the figures).
Legal backdrop
Under the Equality Act 2010 it is unlawful to discriminate against someone directly or indirectly because of race, which includes colour, nationality, ethnic or national origins. It is also unlawful to harass someone on such grounds or to victimise them for raising allegations or claims of discrimination.
Direct race discrimination is treating someone less favourably because of their race. There is no defence of objective justification to direct discrimination (except in the case of age). Indirectly discriminating against someone is applying a provision, criteria or practice which disadvantages a particular group and where that person suffers that disadvantage. In contrast to direct discrimination there is a potential defence of objective justification to indirect discrimination if the employer can show that its actions were a proportionate means of achieving a legitimate aim.
If an individual is successful in bringing a race discrimination claim, they can claim compensation for any financial loss suffered. There is no cap to the amount of compensation that can be claimed (in contrast to some other employment-related claims – most notably unfair dismissal), together with an award for injury to their feelings (up to £45,000 in the most extreme cases).
In order to assert these rights an individual needs to bring a claim in the Employment Tribunal. They do not need to pay a fee to bring a claim, but claims for discrimination can typically be complex and it is common for parties to instruct lawyers. It is unusual in the Employment Tribunal for an award of costs to be made, even where discrimination is found, and therefore an individual will be running some financial risk if they decide to bring such a claim. For employers, even if they successfully defend a claim they will usually be responsible for any legal costs they incur in defending it.
Given this regime, it is relatively uncommon for employees to assert discrimination in the Employment Tribunal unless relations with their employer have broken down, and most usually when their employment has ended. These provisions also arguably do very little to help with positively encouraging inclusion or diversity in the workplace.
Positive action
The Equality Act does contain provisions allowing for something called positive action. In its broadest sense, positive action involves taking specific, positive steps to improve equality in your workplace. However, what is not allowed is positive discrimination. That is unlawful. This is an important distinction for employers to have in mind.
Examples of potentially lawful positive action may include:
- placing job adverts in publications that target particular groups, to increase the number of applicants from that group;
- offering training or internships to help certain groups get opportunities or progress at work; and
- hosting an open day specifically for underrepresented groups to encourage them to get into a particular field.
Examples of potentially unlawful positive discrimination would include only recruiting for a role from a target demographic or interviewing all candidates for a role from a particular demographic, while being selective about candidates interviewed from other demographics.
In order to take steps that amount to lawful positive action, the employer must be able to show that there is, in broad terms, a disadvantaged group and that the action is a proportionate means of addressing that disadvantage.
One of the challenges with these kinds of steps is the extent to which they actually help with improving diversity. While, for example, targeting recruitment advertising has the potential to attract a more diverse range of candidates, that sort of step is very unlikely, in isolation, to help make any real impact on diversity.
In addition to the above, positive action in recruitment and promotion can be helpful. The Equality Act allows positive action in relation to a “tie-breaker” situation where an employer who has two candidates of equal merit can consider whether one is from a group that is disproportionately underrepresented or otherwise disadvantaged within the workforce and offer that person a role in preference to the other.
When the “tie-breaker” provisions first came into force they were not commonly used or understood. However, in our experience, a small number of larger employers have in recent years started to use the provisions regarding recruitment and promotion. Typically we have seen this focused on gender diversity, but the same provisions apply equally to other protected characteristics and so could be used by employers to promote racial diversity.
It is, however, important for employers to make sure that the provisions are applied correctly so that a purported positive action does not become positive discrimination. It is therefore often helpful to take advice about the application of these provisions before proceeding to apply them.
Pay gap reporting and transparency
Since 2017, employers have been required to report their gender pay gap on an annual basis. While having a gender pay gap is not unlawful as such, requiring employers to publish their gender pay gaps and to explain them, in particular where they have not improved, has forced many employers to focus much more on the reasons for their pay gaps and what they can do to improve them. While some might see this as additional red tape for employers to comply with, this different approach, focusing on transparency rather than simply a threat of claims, has certainly been helpful in moving the dialogue about the gender pay gap forward.
The next step will be for the government to introduce ethnicity pay gap reporting. A consultation on mandatory ethnicity pay reporting closed on 11 January 2019 but, as of yet, the conclusions have not been published.
Pay gap reporting is one aspect of a key trend towards transparency in the workplace. Businesses can no longer sweep under the carpet or ignore poor behaviour. Countless high-profile businesses have seen difficult headlines because of the poor behaviour of their leaders. There is an increased trend towards external investigation of such behaviour, and increasingly neither customers nor employees will tolerate it being ignored.
Covid-19
Clearly for all of us the implications of Covid-19 have been profound. One surprising development has been the findings that Black, Asian and minority ethnic individuals are more at risk. This has created an unusual scenario in which it is necessary to assess any additional risks to BAME individuals in the workplace. It is to be hoped that this situation does not in any way derail steps that have been taken to date to improve ethnicity diversity.
Promoting diversity
One of the potential dangers with focusing on legal risks and obligations for employers, is that promoting racial diversity is seen as something that needs to be done in order to mitigate legal risks or for compliance purposes, rather than something that will be of benefit to business more generally or something that is important for society more generally.
Therefore, while compliance and mitigating risk in this area are something that all employers should focus on, in order to achieve real diversity and inclusion it is important for employers to think more broadly about the wider importance of diversity for their business. The potential benefits should not be underestimated. They include a dynamic and challenging workforce able to respond to changes, a better understanding of foreign and global markets, and a better appreciation of the needs of a more diverse range of customers and clients nationally and internationally.
Sarah Harrop is a partner in the employment and immigration group at Addleshaw Goddard LLP
