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It feels like almost every week another report or consultation document emerges in relation to workplace discrimination and harassment.
On 30 July 2019 a report was published by the Women & Equalities Committee (“WEC”) on Enforcing the Equality Act and the role of the Equality & Human Rights Commission (“EHRC”). The report calls for fundamental change to the system of dealing with discrimination claims. It is introduced by WEC Committee Chair, Maria Miller stating: “Employers and service providers are not afraid to discriminate, knowing that they are unlikely to be held to account.”
The WEC believes that a fundamental shift in approach is needed, moving the burden of enforcement away from the individual and placing it on the wider public sector and regulatory bodies in particular. The report demands increased funding for and action by the EHRC, to enable it to “increase the volume, transparency, and publicity of its enforcement work by making much greater use of its unique enforcement powers”.
A reason given for promoting greater EHRC enforcement is the perceived cost of litigation in the Employment Tribunals being a major barrier to bringing a claim. The WEC propose to deal with this by extending and facilitating legal aid to a greater proportion of Employment Tribunal claims, believing discrimination cases are in the wider public interest - and so funding and support should be more widely available. It also proposes the introduction of QOCS – qualified one way costs shifting – for discrimination claims in the County Court, recommending that guidance be issued to judges and the legal profession as to when refusing to enter into a settlement agreement or one including a confidentiality clause will and will not lead to an award of costs against the individual. (Essentially that an individual should not be punished in costs for failing to beat an offer rejected by them because they did not want to agree to a confidentiality clause.)
The WEC has also repeated its call for exemplary damages to be introduced in cases of discrimination, in addition to the current compensation based regime, to ensure that “the financial consequences of discrimination need to be such that they act as a significant deterrent”.
Previously the WEC called for a mandatory duty on private sector employers to protect workers from harassment and victimisation in the workplace. It now requests a mandatory duty which extends to include all forms of harassment and victimisation, enforceable by the EHRC, with substantial financial penalties for breach. A statutory code of practice would set out what employers need to do in order to meet that duty.
Are the WEC’s proposals justified?
The assertion from the WEC that employers freely discriminate is unlikely to reflect the aims or experiences of HR Directors or employer legal representatives.
So why is this view being expressed by an influential Parliamentary committee that has spent a large proportion of its time over the past year examining these (and related) issues? And how are the calls for higher compensation and greater regulatory involvement in employment matters justified?
There is a sense that the assumptions underlying the WEC’s report and recommendations appear to be that it is too easy for employers to pay off discrimination claims, and that as a result individual claims do not result in cultural change within an organisation. (The “Weinstein-Green factor” perhaps.) That leads to a belief that the solution is greater intervention by the public sector and regulatory bodies, in an area already regulated by both the civil and criminal law.
Looking at the list of witnesses and contributors at the end of the report suggests that the WEC has almost exclusively heard evidence from those who represent what might broadly be referred to as the “employee” side of the debate: trade unions, support groups, the wider public sector, or individuals. The absence of contributions from employers or employer legal representatives means there is a lack of recognition of the time, effort and cost that employers - senior management and HR in particular - incur in trying to comply with the law and in trying to resolve complaints when they do arise.
The majority of employment cases involving discrimination are also not systemic issues or issues having broader application across the employer’s business. They concern individual acts or decisions. (Service provider cases may fall into a different category).
It is important to remember that many discrimination claims, particularly those involving harassment, arise not from deliberate acts of the employer, but acts of employees taking place in the course of employment. Those acts may have been not only unauthorised but expressly prohibited by the employer. A finding of discrimination in those circumstances does not mean that the employer has failed to act reasonably in trying to prevent discrimination from occurring. Even the best employers are not able to prevent discrimination entirely. It is appropriate that employers should be judged on how they respond to those issues when they arise, but that can be reflected in individual compensation without making fundamental changes to the system.
Most individuals who complain of discrimination genuinely believe that they have been discriminated against. However, not all assertions of discrimination are well founded. On many occasions the reason given by the employer for the act complained of often has nothing to do with a protected characteristic. The fact that there is another side to the story is borne out by Tribunal statistics, which suggest that only a relatively low proportion of claims succeed. (On average approximately 10% of claims are successful at a hearing; a much higher proportion are settled or withdrawn).
There are individuals who vigorously and unreasonably pursue claims that have no merit, or who use complaints of discrimination in a retaliatory or defensive way. It is often cheaper for an employer to pay off claims then have to deal with them, and/or to take any risk of reputational damage. The “preserve our reputation” factor therefore assists employees to achieve a quick and successful outcome as much as it benefits employers. Adding a further layer of regulatory enforcement proceedings and uncertainty of outcome even where a claim is settled or believed to have no merit is unlikely to change this for the better.
Commercial considerations mean that employers will often pay more than a claim is worth in order to settle it. If damages were to be substantially increased it will become that much more difficult to do so when compared to the costs of defending that claim. Despite what is said by the WEC about the need for a “critical mass” of cases, one thing that the Employment Tribunal system is not lacking is claims. The Tribunal Service has just completed a large recruitment exercise for judges to deal with the influx of cases following the abolition of tribunal fees, and the number of claims is likely to increase. Now more than ever individuals have access to many more resources explaining their legal rights, and are more willing than ever to assert them and/or complain.
Employees bringing claims are not the only ones who find the Tribunal process difficult or stressful. Individuals accused of carrying out discriminatory acts also have to suffer the stress of being the subject of those allegations until the claim is finally resolved. Damage caused to reputation cannot be undone even if ultimately the claim does not succeed. Costs of defending claims are rarely recovered. That is why a balanced approach is necessary.
The financial costs of defending a claim in the Employment Tribunal – which are generally higher than bringing a claim - are not mentioned. Costs are rarely awarded to the employer if a claim is not successful, and so it is questionable whether there is any real need to further protect individuals from the consequences of bringing unmeritorious claims through costs protection or increased use of legal aid, particularly where the success rate for claims at a full hearing is low.
It is easy to point to extreme cases and say that the system does not work. There are employers – and individuals – who when they do discriminate can pay off claims to avoid negative publicity and who do not appropriately discipline the individuals concerned. But overall the current system works. The majority of employers try to act in a fair and lawful manner, and encourage their staff to do the same. Individuals who are discriminated against are able to obtain a remedy. In those circumstances, the changes proposed by the WEC would seem more likely to increase the costs to employers - and to the taxpayer - without making anti-discrimination laws any more effective than they already are.
If you would like advice in relation to a discrimination issue or complaint, or in relation to an employment tribunal claim, please get in touch for a friendly chat today. Call 01622 759 900 or email firstname.lastname@example.org