03/08/2010

By Özlem Kulle, Associate in the Employment Department, Fox Williams LLP

From our postbag:

Dear Auntie,

I’m concerned about a recent decision taken by our company’s board of directors and would be grateful for your views. It all started with the media attention around under-representation of women and minorities in senior positions within companies and the Equality and Human Rights Commission becoming more vocal in trying to tackle this. Our company is a small financial services outfit and, although our staffing generally is split almost 30:70 between English/white employees and employees from ethnic minority backgrounds, there is only one individual in senior management who is from an ethnic minority background and no-one on the board who is from an ethnic minority background. Similarly, there are no women on the board or in the senior management team. The board has now decided that, to tackle this and encourage women and those of ethnic minority backgrounds to apply for such roles, it will accept applications for senior management positions from women and people from ethnic minority backgrounds only for the next two years. The directors say they are comfortable with this as its aim is to tackle inequality and that it will also be a great marketing opportunity for the company. There has also been some muttering about the fact that the law is about to change to allow this sort of thing anyway, so we’re just being progressive and leading the way. Surely there’s a problem here?!

Yours sincerely,
Harriet Resource

Answer:

Dear Harriet,

You are quite right to be concerned!

Although it is admirable that your company is taking such a pro-active stance to tackle what is a growing concern in modern day society, care must be taken to ensure that any measures taken do not fall foul of the law. Having said that, the law currently in force does allow what is referred to as “positive action” in certain (very limited) circumstances, in order to give an advantage to those groups in society which are often treated unfairly or are under-represented.

Positive action today

Two forms of positive action are currently permitted under the discrimination laws, namely:

1. giving members of a disadvantaged group (in the case of your company, women and those from ethnic minorities) access to facilities for training which would help train them for particular work; and

2. encouraging members of a disadvantaged group to take advantage of opportunities for doing particular work.
Employers would need to show that either the group in question is under-represented in the work in question, or is likely to have a particular disadvantage in taking up or doing that kind of work. The exact test that applies varies according to the particular strand of discrimination in question (e.g. sex, race, etc).

The permitted positive action provisions do not allow employers to discriminate in the actual selection of candidates for particular jobs, promotion or dismissal. The practice proposed by your company’s board would, therefore, amount to unlawful discrimination. What may work as an alternative, however, is perhaps offering women and those from ethnic minorities training on the skills required in senior management posts which may help them progress into such roles when vacancies arise.

Bristol City Council was recently in the newspapers because it banned white people from applying for a traineeship because it wanted to boost diversity. The Council argued that this decision was legal since the position in question was just a traineeship with no guarantee of a job at the end of it. It also commented that the training scheme was started because of the under-representation of people from ethnic minority backgrounds in its workforce.

Positive action going forward

Although the Equality Act 2010 does widen the positive action concept currently in force to recruitment and promotion, the changes would not have the effect of allowing your company’s board to carry out its proposed measures — despite the media coverage that may have lead you to believe otherwise!

The new provisions will allow employers (but not require them) to take disadvantaged groups and under-representation into account when selecting between two equally-qualified candidates, provided there is no automatic selection of the persons from the under-represented groups and no quotas. Selection of a less-qualified candidate for a particular role because he/she is from an under-represented group will also not be permitted.

One of the most obvious problems with the new rules is that it is almost impossible to pin-point when one candidate is “as qualified” as another, thereby giving the employer the freedom to choose the one from an under-represented group. The Equality and Human Rights Commission has, in its draft Employment Code of Practice, attempted to shed some light on this issue. It has stated, for example, that the term “as qualified as” should be given a broad meaning and that it requires a “full and objective assessment” of each candidate’s suitability, skills, qualifications, competence and professional performance and that there are no fixed rules on how this assessment should be done. It has also said that candidates might have different strengths and weaknesses in different areas but still be deemed equally qualified for a particular post. Ultimately, it is expected that the ambiguity surrounding this issue will probably mean most private sector employers will steer clear of positive action, rather than risk facing litigation from a disappointed candidate for a particular role.

Mark Watson, Partner at Fox Williams LLP, will be speaking at Fresh Business Thinking LIVE! and tell you how to save your business £65,300 when hiring and firing. Employment disputes are the bane of every employer's life. They cost money, directly through compensation awards and legal fees and indirectly through lost management time. Prevention is the name of the game, and taking a few careful protective measures will help stand your business in good stead if it is faced with a problem. Mark’s session will cover some key practical tips for employers from the start of the employment relationship, where contracts are often overlooked, through disciplinary procedures during the employment, and on to dismissals at the end.

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