Potential legal risks for employers attempting to diversify.

A few weeks ago the McGregor-Smith Review, an independent report commissioned by the UK Government, called on employers to remove the barriers that are preventing people from black and ethnic minority backgrounds from progressing in the workplace.

Employers should promote diversity in their workforce but some do make mistakes. Here, Caroline Noblet, head of Employment at Squire Patton Boggs, looks at how to manage the legal risks of employers attempting to diversify.

A few weeks ago the McGregor-Smith Review, an independent report commissioned by the UK Government, called on employers to remove the barriers that are preventing people from black and ethnic minority backgrounds from progressing in the workplace.

It comes at a time when large employers are also being asked to look at where men and women are employed in their businesses (and what they are being paid) as they prepare for the introduction of gender pay gap reporting in April.  There are strong business and moral reasons for having a diverse workforce, but are there any legal risks for employers if they are seen to be giving preferential treatment to individuals of a particular race, gender, etc?

 There are strong business and moral reasons for having a diverse workforce, but are there any legal risks for employers if they are seen to be giving preferential treatment to individuals of a particular race, gender, etc?
Caroline Noblet, head of employment at Squire Patton Boggs

Any form of discrimination, whether “positive” or “negative”, is unlawful.  There are, however, certain circumstances in which employers can take a protected characteristic (such as race, gender, etc.) into account – the so-called “positive action” provisions.

Under the Equality Act 2010, employers are allowed to address particular disadvantages suffered by a certain group or their under-representation in the workplace.  The “general” positive action provision applies where an employer reasonably thinks that individuals with a particular protected characteristic are disadvantaged, or that their participation in the workforce is disproportionately low.

If this is the case, employers are allowed to take proportionate measures to enable or encourage individuals with the relevant protected characteristic to overcome that disadvantage or to encourage their increased participation. The Equality and Human Rights Commission’s Code of Practice gives examples of positive action provisions which might be protected, including setting targets for increasing participation of particular groups, targeted networking opportunities, effective support and mentoring, etc.

There is also a “recruitment and promotion” positive action provision which applies where an employer reasonably thinks that individuals with a particular protected characteristic are disadvantaged or that their participation in the workforce is disproportionately low. If this is the case, employers are allowed to treat such individuals more favourably than others in recruitment and promotion situations, as long as they are “as qualified as” the other candidates and the employer does not have a policy of treating such people more favourably.

The positive action provisions are entirely voluntary and this, combined with the potential consequences of getting things wrong, has meant that to date their use by employers has been very limited.  It is, however, important for employers to be aware of their existence as they may be useful as part of a wider diversity strategy.

Ultimately there are many practical steps that employers can lawfully take to promote diversity in their workforce and employers should certainly not avoid taking action to promote diversity out of a misplaced fear of discrimination claims.

The McGregor-Smith Review, for example, outlines over 20 different actions that employers can take to encourage the participation and progression of BME individuals in the labour market. These include: targets, mandatory unconscious bias training, mentoring and diverse interview panels.

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