A piece from Victoria Watson, Partner, Capsticks LLP
Improving workforce diversity is high on the agenda for most organisations. The 2018/19 gender pay gap reports have been published and most employers have reported similar gaps to last year and, in some cases, increases. Whilst employers had not had a chance to put in place any action plans before the latest set of reports, the public nature of the reports is likely to put increasing pressure on organisations which fail to narrow the gender pay gap moving forward. In addition, the government are currently considering the feedback from their recent consultation on ethnicity pay gap reporting and there seems little doubt that this obligation will be introduced in due course.
A number of employers are now focussing on the use of positive action under the Equality Act 2010 to start making real in-roads into improving the diversity of their workforces. Whilst positive action is not a new concept, it is only recently that employers have begun to really consider its use.
There are two strands to positive action under the Equality Act. Section 158 allows for positive action generally where it is reasonable for an employer to think that:
- those with a protected characteristic suffer a disadvantage connected to the characteristic;
- those with a protected characteristic have needs which are different to those who do not share it; or
- participation in an activity by persons with the characteristic is disproportionately low.
Employers do not need sophisticated statistics to justify their use of positive action; they simply need to have a reasonable belief that there is a disadvantage, that needs differ or that participation in an activity is low. Examples of action under section 158 include targeted advertising, internships, staff networks, and mentoring and sponsorship programmes
Section 159 enables employers to use positive action in a recruitment and promotion context to select a candidate with a protected characteristic over a candidate who does not have that characteristic where:
- candidates are as qualified as each other;
- the employer does not have a policy of treating people with a protected characteristic more favourably; and
- taking action is a proportionate means of achieving a legitimate aim.
The final point regarding proportionality also applies to section 158. An employer needs to consider whether the proposed action is reasonably necessary to achieve the aim, or would it be possible by other means that are less likely to result in less favourable treatment of others? Essentially, a balancing act needs to be carried out by the employer.
One solution which has been suggested to the difficulty presented by the ‘as qualified’ wording at section 159 is using a pass/fail approach so that a pass mark is set above which all candidates are deemed to be as qualified as each other.
The Employment Tribunal (ET) decision in Chief Constable of Cheshire v Furlong  is one of the first ET judgments on positive action and focuses on the pass/fail approach.
Mr Furlong, a white heterosexual male without a disability, passed all three stages of a recruitment process but was told he had been unsuccessful and “put on hold” as there were not enough vacancies. Mr Furlong believed that he was better qualified than some of the candidates who had been selected and challenged the pass/fail approach that had been adopted, arguing that it was discriminatory.
The ET found that Mr Furlong had been discriminated against. Although the Respondent acted reasonably in reaching the view that persons with certain protected characteristics were underrepresented and they had a legitimate aim in seeking to improve diversity, the Respondent had not demonstrated that the protected groups suffered disadvantage and had not complied with section 159 in key respects.
The ET found that there was data about the candidates which could be used and so it was clear that the 127 candidates who passed were not all “as qualified” as each other. Given the size of the exercise, the ET found that the approach had all the hallmarks of a policy designed to get those who had protected characteristics across the line first, ignoring qualitative assessment.
The ET also found that the steps taken by the Respondent were not proportionate. For those individuals, such as Mr Furlong, who had “passed” all stages and who were more meritorious candidates than some with protected characteristics who had been appointed, the knock on effect of the pass/fail approach could be discontentment and disillusionment which may lead to a lack of confidence in the ability of police constables and the police force in general.
Instead, the ET suggested that before applying the pass/fail test the Respondent should:
- consider the impact of the previous positive action steps taken;
- measurably assess pass/fail in a smaller exercise first;
- not impose artificially low thresholds; and
- not ignore qualitative assessment of candidates.
Employers should bear these points in mind and consider what other steps it has taken under the general provisions of section 158 before relying on section 159.
With the pressure which is now on organisations to reduce their gender pay gap, we expect to see an increased reliance on sections 158 and 159 and the use of diversity targets, which may or may not be achieved but which serve the purpose of focussing minds on the importance of improving diversity. There is a fine line which exists between positive action and positive discrimination and the use of positive action is a controversial topic which may leave an employer open to challenge. It is vital, therefore, that decision makers feel comfortable about the use of positive action, why it is necessary and the business case for its use.