Positive action speaks louder than words - five principles for employers
02 September 2020
This article explores the legal limits of positive action in the workplace, including the situations where it is permissible to give preferences on gender or ethnicity grounds to make up for historic lack of opportunity, and what employers can and cannot do to improve diversity in their shortlists or hiring slates.
What is positive action?
Positive action in the workplace involves taking targeted steps to address underrepresentation or disadvantage experienced by people with characteristics protected by the Equality Act 2010 (EqA) - race, sex, ethnic origins and so on. It is about ensuring equality of opportunity for people in protected groups. Positive action is not the same as positive discrimination, which is unlawful in the UK (apart from in relation to disabled people and, to some extent, women who are pregnant or who have given birth).
Initiatives involving positive action generated mainstream interest following the introduction of gender pay gap reporting, as companies looked for ways in which they could close stubborn pay gaps. Such programmes are seeing renewed interest in the wake of the Black Lives Matter movement. Leaders of FTSE 100 companies recently wrote to the Sunday Times to pledge that they would set targets for diverse candidate slates for all their vacancies in future to address racial inequality at work.
The legal framework for positive action is much more restrictive than many people realise, however, and does not necessarily allow employers go as far as they might like in addressing historic barriers and lack of opportunity.
What is the law on positive action?
The starting point is Section 158 of the EqA, which applies where an employer reasonably thinks that a protected group:
- suffers a disadvantage (including legal, social or economic barriers to accessing employment opportunities);
- has particular needs (e.g. IT training needs or needs in relation to the English language); or
- does not participate enough in an activity (including employment and training).
Section 158 allows proportionate positive action to meet the relevant needs, reduce the disadvantage or increase participation. The Employment Code of Practice published by the Equality and Human Rights Commission (EHRC) gives the example of a school that decides to offer open days to members of the Bangladeshi community to encourage them to consider applying for teaching roles, given their low rates of participation in the teaching profession.
Section 159 of the EqA, known as the “tie-breaker” provision, allows employers to go one step further in recruitment and promotion decisions when there is a stalemate between two candidates. It allows employers to give preferential treatment to a candidate from an underrepresented group, provided that:
- they are “as qualified” to be recruited or promoted;
- granting the preference is proportionate; and
- there is no policy of automatically granting a preference.
A Supplement to the EHRC’s Employment Code of Practice (which deals with positive action) gives the example of a counselling service for teenagers that has no Muslim employees, but is in an area with a high Muslim population. Where a vacancy arises, two candidates of equal merit are in a tie-break situation with the employer having to find some way to choose between them. One candidate is Muslim and the other candidate is not. The service manager could choose to offer the job to the Muslim candidate, assuming this is proportionate and the employer does not have a policy of treating that group more favourably in connection with recruitment or promotion. This would mean that the non-Muslim candidate could not claim discrimination.
While the EHRC has published various guidance on positive action, there is limited case-law. The few cases that address workplace positive action are almost entirely at European level. There is one recent Employment Tribunal (ET) decision on the tie-breaker provision (discussed below), but no binding authorities from any higher UK court. The Supreme Court is, however, currently considering a case about whether social housing can be reserved exclusively for members of a religious community which raises questions about positive action measures taken by charities and whether they are analogous to workplace measures.
Taking the legislation, existing guidance and limited case-law into account, we have distilled the following guiding principles for employers adopting positive action programmes.
Principle 1 - you need evidence of underrepresentation
Positive action which seeks to benefit people from protected groups over others can only be done if you, as the employer, reasonably believe that a protected group suffers a disadvantage, has specific needs or does not participate enough in an activity.
Establishing underrepresentation or disadvantage has not been especially difficult or contentious in the limited case-law to date, perhaps because it is all too often apparent, but it is important not to overlook or sidestep this requirement.
Demonstrating that women are underrepresented in senior management positions may be relatively straightforward and is likely to be supported by your gender pay gap data. Establishing that ethnic minorities are underrepresented may be trickier. It is likely to involve an initial drive to gather ethnicity data within the workforce along with other contextual data - for example, about your local region. It is unclear whether you can simply look at the position of all black, Asian and minority ethnic (BAME) employees compared to white employees, or if a more granular analysis would be required. (A similar issue arises in relation to the proposal to introduce ethnicity pay reporting.)
Principle 2 - you can’t offer employment automatically on basis of a protected characteristic.
Employers cannot reserve positions for underrepresented groups without this leading to discrimination against other candidates who would have been appointed except for their protected characteristics. It is unlawful to refuse to appoint a candidate because they have the “wrong” protected characteristic, apart from in the very rare scenario where having a protected characteristic is an occupational requirement for the role. This restricts the scope for applying any preference.
The furthest you can go is to apply a preference in a tie-breaker situation, where you have two equally-qualified candidates for a position. Even in those circumstances, however, you cannot have a policy of automatic preference - there must be some individual case-by-case assessment and a proportionality analysis.
The ET case Furlong v Chief Constable of Cheshire Police, decided in 2019, concerned Mr Furlong, a white, heterosexual man, who applied for the position of police constable with the Cheshire Police. He was unsuccessful because the police chose to give automatic preference to all LGBT, BME and female candidates who achieved a pass mark. The ET upheld his claim of race, sex and sexual orientation discrimination, ruling that the police’s positive action programme fell outside the scope of the section 159 tie-breaker provision. The police had applied a blanket automatic preference, but the qualitative assessment data showed that not all candidates who passed were equal - in fact, some were clearly much better qualified than others. The ET found that this was not a proportionate way of improving diversity.
In our experience, most employers are reluctant to use the tie-breaker provision. This is mainly because of the need to conclude that two candidates could do a job equally well, and the fact that an unsuccessful candidate is likely to challenge that conclusion. This is, perhaps, especially probable in circumstances where the unsuccessful candidate has come very close to being appointed but has lost out because of their gender or ethnicity etc – particularly if both candidates are existing employees applying for a promotion who know each other’s strengths and qualities. In the absence of case-law explaining how close a call it needs to be between the two candidates, most employers tend to shy away from using the tie-breaker provision altogether.
Ultimately, UK law does not allow candidates from underrepresented groups to be preferred over other better qualified candidates. Recruitment and selection outcomes need to be merit-based, except in the narrow and uncertain tie-breaker situation.
In practice, this has led to a focus on changing the diversity profile within more junior or entry-level positions, where it may be easier to influence the talent pool. As roles get more senior, positive action may be less effective because of the lack of diversity in the existing talent pool with the necessary experience - the net result often being that the pace of change feels too slow.
This can be especially frustrating for companies that have reported significant gender pay gaps and come in for heavy criticism as a result, especially when such gaps are often misunderstood to signify pay discrimination. If ethnicity pay reporting is introduced, companies can expect similar pressure to demonstrate faster change. It is important, however, that this sense of frustration does not lead to taking the sort of discriminatory measures adopted by the Cheshire Police in Mr Furlong’s case.
Principle 3 - you can take proportionate action to help people get access to employment
There is a crucial distinction between offering employment and putting someone onto an equal footing to get access to employment. Positive action is lawful when it is designed to put underrepresented or disadvantaged groups into a position of equal opportunity, there is sufficient evidence of disadvantage or underrepresentation and your steps are proportionate.
Examples of such measures include training, sponsorship, mentoring or accelerator programmes, outreach work in selected schools, and holding open days for particular cohorts. You can target your measures primarily at the underrepresented group, or potentially even exclusively at that group where that is a necessary and proportionate means of achieving your objectives.
To demonstrate that your positive action programme is proportionate, you will need to make sure that it is time-limited, targeted, and takes account of the extent of the underrepresentation or disadvantage and the impact of any other diversity measures or commitments.
Principle 4 – improving diversity of shortlists is effective, but you should set targets not quotas
Including multiple women on shortlists for recruitment and promotions was listed as the first effective action employers could take to close their gender pay gap in a 2018 report published by the Behavioural Insights Team of the Government Equalities Office (GEO). Some employers are now looking to increase the ethnic diversity of their shortlists in addition to trying to make them more gender-balanced.
There is no reported UK case-law on this type of measure. Reserving places on shortlists is intended to give people an equal opportunity of getting the job, rather than to influence the eventual employment decision, so at first sight it should fall within our principle 3 above. The limited case-law of the European Court of Justice about guaranteed interview schemes indicates that it might regard reserving places on shortlists as different from employment quotas, and potentially lawful if proportionate.
The EHRC has, however, adopted a strong stance against guaranteeing places on shortlists. Its guide to increasing diversity in the TV and broadcasting industry (updated in March 2019) states: “Under British law, places cannot be reserved on shortlists or guaranteed interviews offered to some people from certain protected groups…as this would unlawfully discriminate against others (unless the recruitment relates to a disabled person).”
Nonetheless, operating targets – as opposed to hard quotas - would be within the scope of the provisions on lawful positive action discussed above, so long as there is sufficient evidence of disadvantage and the steps are proportionate. With a target-based approach, you are compiling the shortlist based on merit rather than giving preferences to ensure that a quota is met.
Targets need to be realistic and based on an assessment of the underlying market. As the EHRC’s six-step guide to improve board diversity states, targets must not lead to candidates from underrepresented groups being preferred over other better qualified candidates, and you should make clear to your recruiters that they must not unlawfully discriminate against potential or actual candidates in trying to achieve them.
In reality, of course, targets are more easily set than met. You may need to take other steps to help develop a pipeline of potential candidates and work with a range of recruiters who can help you source a more diverse pool. It may be helpful to talk about aiming for a better gender or ethnic balance, rather than the need to identify suitable female/BAME candidates, and to explain the purpose behind adopting targets and how diverse companies perform better.
Principle 5 – some effective tactics don’t count as positive action and are always lawful
Chapter 12 of the EHRC’s Employment Code of Practice points out that action to benefit a particular protected group which does not have any impact on other groups is always lawful, and shouldn’t even be classed as positive action. The Code gives two examples of this: placing adverts in magazines read by particular groups alongside national media, and auditing selection criteria to remove any discrimination.
A more modern-day example might be working with charities who will help identify and put forward candidates from particular groups or backgrounds. This does not restrict applications from any other candidate, so long as all your other recruitment channels remain open. Another example would be reworking your recruitment processes to improve transparency about what is expected and what “good” performance looks like - i.e. what you will be looking for candidates to demonstrate and how you’re going to test that.
The GEO Behavioural Insights Team report mentioned above also cites the following actions as being shown to be effective in reducing the gender pay gap:
- using skills-based assessment tasks in recruitment
- structured interviews
- transparency over salary ranges and promotion processes
- appointing diversity managers and/or diversity taskforces.
Everyone stands to benefit from these measures, so they are lawful without having to meet the criteria set out in section 158 of the EqA.
The law in the UK on positive action remains unclear in several important respects and there is very limited case-law. While the tie-breaker provisions remain unattractive, employers can adopt effective and lawful positive action programmes ranging from diverse candidate shortlist targets through to targeted support and development initiatives. Some measures benefit everyone, so do not need to come within the legal exemption for positive action. Despite this, it remains the case that the legal framework is heavily restricted and does not necessarily allow employers to move as far or as fast as they would like.