Employment highlights - Sex Discrimination - update

January 2012

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Sex Discrimination - update

There has been much in the press recently on achieving diversity in the workplace, in particular on corporate boards. Following consultation on how to increase boardroom diversity, the UK Corporate Governance Code (“the Code”) has been revised to require listed companies to produce a description of the board’s policy on diversity and to set measurable objectives for implementing the policy. This edition of Employment Highlights considers boardroom diversity and also recent cases on sex discrimination in the workplace.

Introduction

The Equality Act 2010 (“the 2010 Act”) came into effect on 1 October 2010 and consolidates the provisions on sex discrimination which were contained in the Sex Discrimination Act 1975 (SDA 1975). The 2010 Act prohibits direct sex discrimination, indirect sex discrimination, harassment and victimisation in the workplace.

Sex is one of nine “protected characteristics” covered by the 2010 Act.

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Direct discrimination

Direct sex discrimination occurs where a person directly discriminates against an employee where, on a prohibited ground (i.e. sex), he treats them less favourably than he treats or would treat another. Both men and women can be protected.

Difficulty can arise in circumstances where a woman has received “special treatment” in connection with pregnancy or childbirth. The 2010 Act provides that “special treatment afforded to a woman in connection with pregnancy or childbirth” must be disregarded for the purposes of direct sex discrimination (section 13(6)(b).

However, in the case of Eversheds Legal Services Limited v De Belin [2011] IRLR 448, the EAT held that an employer, who inflated an employee’s score in a redundancy selection exercise because she was on maternity leave, discriminated against a male employee on the grounds of sex. It was held that the right to special treatment afforded to women in connection with pregnancy or childbirth must be read as protecting employers only where treatment is a proportionate means of achieving the legitimate aim of compensating a woman for the disadvantages occasioned by her pregnancy or her maternity leave. In this case the special treatment afforded to the female employee was disproportionate in that it was more favourable treatment than was reasonably necessary to compensate the comparator for the disadvantages that arose due to the woman’s pregnancy. There were less sex discriminatory alternatives which the employer could have applied such as measuring both employees' actual performance during the period before the start of the woman’s maternity leave.

The problem for employers is that in attempting to avoid discriminating against pregnant employees, they can find themselves the subject of discrimination claims by men. Employers must therefore always ensure that any steps taken are proportionate and would not cause serious disadvantages to other employees.

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Indirect sex discrimination

Indirect discrimination occurs where an employer applies a decision or policy which is not intended to treat anyone less favourably but which in practice has the effect of disadvantaging a group of people with a particular protected characteristic. Where an individual with that characteristic is put at a disadvantage and the employer cannot show that that policy is a proportionate means of achieving a legitimate aim then there will be indirect discrimination. An example of this would be if an employer requires an employee to work full time since this would disadvantage women as a group who have the greater childcare responsibilities. Unless the employer can objectively justify the need for a full time worker to do the job the requirement is indirectly discriminatory.

The recent case of Crilly v Ballymagroarty Hazelbank Community Partnership in January 2012 confirmed that employers must ensure that any criteria they apply to a position must be justifiable. In that case, an employment tribunal in Northern Ireland held that a requirement for a job candidate to have two years paid work experience over a five year period had a disproportionate impact on women. The employee in this case was not short listed on the basis that she had not had paid work experience for six years due to childcare responsibilities. However, she had extensive voluntary involvement in community development and neighbourhood regeneration which was pertinent to the requirements of the job. Although the aim of the employers to have someone who could begin work immediately with minimal training and supervision was legitimate, it was not proportionate in that someone may have had two years paid work experience but not been working for three years prior to the date and therefore would not have had up to date experience. The tribunal accepted that there should be flexibility in the employer’s requirements.

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Discrimination and marital status

“Marriage and civil partnership status” is identified as a protected characteristic under section 4 of the 2010 Act. Only those who are married or who have a civil partner are protected. The 2010 Act does not protect those who are discriminated against on the grounds of being single. In the case of Dunne v Institute of Cemetery and Crematorium Management the Employment Appeal Tribunal had to consider whether section 3 of the SDA 1975 (now set out in section 4 of the 2010 Act) covered a person who suffered discrimination on the grounds that she was married to a particular person.

In the Dunne case, the employee appealed against a decision that she had not suffered discrimination on the grounds of her marital status. At a meeting to discuss a grievance that she had raised with her employers the chief executive raised matters concerning her husband (who was also an employee of the company and with whom the company was in dispute). Subsequently the female employee was made redundant. She resigned and alleged that she had suffered marital discrimination.

The employment tribunal held that she had not been discriminated against on grounds of marriage and she appealed to the EAT arguing that the employer had acted unlawfully, not because she was married, but because she was married to a particular man. She submitted that section 3 of the SDA 1975 should be read as including “family status” in line with European law. The EAT upheld her appeal and preferred to follow the case of Chief Constable of the Bedfordshire Constabulary v Graham [2002] IRLR 239 which was authority for the proposition that a married person must be protected by section 3 by reason of her being married to her husband. The case was therefore remitted to a tribunal to determine whether the employee had been discriminated against on that basis.

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Joining an employee to a claim

An employee’s claim of sex discrimination may arise because of the actions of a fellow employee. Although the employer may be vicariously liable for any such actions, the employee may bring proceedings against both the employer and the offending colleague. However, what happens if the claimant decides not to bring a claim against the offending colleague? Where the employer still employs the offending colleague, that colleague is likely to cooperate with the employer and appear as a witness. However, If the colleague no longer works for the employer, there may be an evidential advantage for the claimant as there will be no-one to contradict their evidence. This issue arose in the case of Beresford v Sovereign House Estates and another UKEAT/0405/11.

In this case Ms Humphries brought a sex discrimination claim against her former employer partly on the ground that she had been sexually harassed over a long period by a colleague. She did not bring a claim against the colleague. Since the colleague also no longer worked for the employer, the employer felt unable to ask him for his version of events. Instead the company applied for an order joining the colleague as a respondent on the basis that he might be liable for the remedy Ms Humphries sought.

The EAT held that an employer cannot join a former employee as a second respondent to a sex discrimination claim since, unless a claim was brought against the former employee by the claimant, the only basis on which the former employee could have been joined was if the employer wanted to claim a contribution from him under the Civil Liability (Contribution) Act 1978. Even if this was possible, it was debatable whether tribunals have jurisdiction to decide a claim for contribution between joint discriminators. The EAT did note that the colleague could still be made the subject of a witness order so that, even if he was unwilling to give a statement to either party, he could be cross-examined before the tribunal.

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Compensation

Where an employee is successful in their claim for discrimination, they can be awarded reinstatement, re-engagement or compensation. Compensation is the most commonly sought remedy. A tribunal can reduce compensation where an employee has failed to take reasonable steps to mitigate his or her loss.

In the case of Debique v Ministry of Defence UKEAT/0075/11 the EAT decided not to award compensation for loss of earnings to a claimant who had failed to mitigate her loss by unreasonably refusing an offer to transfer to a new role. As a single parent the employee had difficulty combining childcare with her duties as a serving soldier. The army were initially prepared to accommodate her childcare arrangements but subsequently informed her that if she could not rearrange her childcare then it would seek termination of her service on grounds of gross misconduct. Following disciplinary proceedings the employee resigned and claimed indirect sex and race discrimination.

Although the employee was awarded damages for injury to feelings by the tribunal, no award was made for loss of earnings on the ground that she had failed to mitigate her loss. The employee had been offered a posting which would have substantially addressed the childcare issues. The tribunal held that the employee was unreasonable in refusing the offer and that she ought to have taken up the offer to see what happened and that if the security which she had been promised was not given then she could have raised a further discrimination case.

The decision highlights the dangers for claimants of rejecting an employer's offer of re-engagement. Whether the offer of re-engagement is reasonable is a question of fact for the employment tribunal and the EAT will not overturn that decision lightly.

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Boardroom diversity

On 11 October 2011, the Financial Reporting Council published a response to the consultation paper, Gender Diversity on Boards. Two changes are proposed to the UK Corporate Governance Code to strengthen the principle on boardroom diversity. These are that companies must:

  • report annually on a boardroom diversity policy, including gender, and on any measurable objectives that the board has set for implementing the policy and the progress it has made in achieving the objectives; and
  • consider diversity of the board, including gender, when evaluating board effectiveness.

In drafting a diversity policy, boards need to be aware that while positive discrimination is not permitted, the 2010 Act does permit positive action to be taken in relation to recruitment and promotion in certain circumstances.

In broad terms, section 159 of the 2010 Act will permit a board to treat a woman more favourably in connection with recruitment or promotion than a man if the board reasonably thinks that there is a disproportionately low number of women on the board, provided that:

  • the woman is as qualified as the man to be recruited or promoted;
  • the board does not have a policy of treating women more favourably in connection with recruitment or promotion than men; and
  • promoting or recruiting the woman and treating her more favourably in connection with the recruitment or promotion is a proportionate means of achieving the aim of getting women onto the board.

Particular care will need to be taken by boards in applying these provisions, particularly in determining whether a female candidate is “as qualified as” a male candidate. Boards should also be sensitive to issues that male candidates may raise in seeking to implement a diversity policy that has the objective of increasing the number of women on the board.

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Conclusion

Whilst many employers’ minds have been full of the issues of age discrimination over recent months, the problems of sex discrimination continue to be felt in the workplace. With the government’s desire to increase diversity in the boardroom, it seems that equality is still a concern that employer’s must take care to consider.

If you would like any further information on any of the matters raised, please contact us.

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