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Don't fall foul of discrimination laws30th of June 2011
The law on workplace discrimination is a minefield for the unwary, with employers who fail to watch their step risking becoming embroiled in costly and time-consuming disputes that can be as damaging to their reputation as their bottom line. Hartley Milner reports on the pitfalls of the legislation for businesses.
A notice of claim from an employment tribunal is perhaps not the most welcome of communications a busy ceo would wish to have landing on their already groaning desk. So it is vital, and not only for the sake of their stress levels, that employers keep up with all the latest legislation on workers’ rights to reduce the risk of it happening.
Discrimination has long been a focus of EU legislators, who have produced a torrent of directives over the years on everything from working time to bullying and the harm a thoughtless remark can have on someone’s feelings.
More generally, EC directives in this area call for:
•Equal treatment in employment and training, regardless of racial or ethnic origin, religion or belief, disability, sex, age and sexual orientation
•Accommodation of the needs of disabled people, including measures to provide them with access to employment and training
•Equal access to employment, selection processes and recruitment conditions, vocational guidance and training, including practical work experience and membership of organisations
•Non-discrimination on the grounds of sex in relation to pay.
Employment tribunals have seen a sharp rise in their workload in recent years as employees become increasingly savvy about their rights under the EU’s Equal Treatment Framework Directive, so employers need to be very much on the ball themselves.
Naeema Choudry, employment partner at international law firm Eversheds, explained: “The law does recognise that an employer will not be able to prevent every act of discrimination from occurring. All they can do is take reasonable steps to stop it happening – and that is a form of defence. The problem is it places quite a heavy burden on an employer to show a tribunal they had taken these steps before the alleged discriminatory act took place, and not all have got the measures in place so that they can successfully rely on that defence.
Have policies in place
“Some of the things employers should think about therefore, are – do you have an effective diversity policy, are your people aware of their rights and obligations under the legislation, have they been trained adequately and do they appreciate the spirit of what the legislation requires?”
But on top of existing regulations, the EC has now thrown in some more confusing laws for employers to deal with.
“One of the things brought in last year was that an employer can be liable for an act of harassment against an employee by a third party, and that can lead to difficult situations,” said Choudry. “For instance if you have an important client or customer and one of your people claims they, or one of their employees, has harassed them in some way, while you may not want to upset the client of customer, it is an issue you are going to have to deal with.
“There is also discrimination by association. If, for example, someone is treated less fairly because they have caring responsibilities, perhaps for a disabled child, and you do not include them for consideration for promotion, you can again be liable.”
A recent survey of 251 employers in one EU country found that most have faced an employment tribunal claim, and many said they had aimed to settle before the dispute reached the final hearing stage.
“Obviously, this is something a large listed company will not want because of the adverse effect on their reputation and the implication that it could deter people from wanting to deal with them,” said Choudry. “A tribunal can decide that a company’s diversity policies are inadequate and they need to update them and re-train their people about diversity. And if they don’t comply, it can make a further compensation award and finally impose unlimited compensation, including an award for any injury to feelings that someone may have suffered as a result of the harassment. Equally, the harasser may also be held to be personally liable.”
There can also be implications for the member state where the company is based. A tribunal may refer a case to the European Court of Justice for a judgment on a point of national law before it gives a ruling on an employee’s claim. If the court finds a country is in breach of a EU directive, it may direct the legislation of that country is amended to comply with the directive. A failure to do so could ultimately result in the imposition of hefty financial penalties on its government.
Member countries have incorporated EC discrimination directives into their own legislation, so there may be regional variations in how the laws are implemented.
In Germany, consultants, freelancers and other independent contractors are not covered by anti-discrimination legislation, and there are several grounds on which unequal treatment on the basis of age is not unlawful, such as if a collective agreement is in place between employers and unions.
Germany found itself in the ‘dock’ recently in the case of Gisela Rosenbladt, who was employed as a cleaner at an army barracks for 39 years. Since 1994 she worked for a private firm, Oellerking. A collective agreement in the sector allowed for automatic retirement when workers reached 65 or when they became entitled to a pension.
On turning 65, Rosenbladt told her employer that she wanted to keep her 10-hour a week cleaning job, but her employment contract was terminated in accordance with the agreement. She claimed this was discrimination on grounds of age.
The court acknowledged that the agreement amounted to a difference in treatment based on age. But it said this was not the same as compulsory retirement because it was an agreement between Rosenbladt and her employer to end her employment contract when she became eligible for a pension.
The justices ruled that automatic termination when an employee reaches retirement age does not amount to discrimination.
Huge strides made
A less favourable ruling for a member state emerged in another case before the court. Under Danish law, employees who have worked for an organisation for more than 12 years must be paid up to three months' salary if they are dismissed, unless they are entitled to a pension from their former employer.
Ole Andersen had worked for a local authority for 27 years when he was let go, unfairly, as it was later determined at arbitration. He applied for severance pay, but his former employer refused, saying that because he was 63 years old he could draw a pension that would see him through any period of unemployment. Not wishing to retire, Andersen registered as a job-seeker.
The equal treatment directive allows some discrimination on the grounds of age, provided it is reasonable, proportionate and supports a wider objective, such as providing young people with the opportunity to work.
The court ruled, though, that depriving the employee of severance allowance because he was entitled to draw a pension served no purpose and constituted discrimination on grounds of age.
Inequality between men and women is another area where employers need to step with care, as illustrated by the case of a Spanish worker whose claim against her employer was referred to the European court.
María Paz Merino Gómez was employed in a factory when she took maternity leave. On returning to work, she applied for annual leave, but was refused because her absence had coincided with the fixed works holiday.
The court found that maternity leave had a different purpose to an annual holiday, as it was designed to “protect a woman's physical condition and enhance the special relationship between a woman and her child”. This must not result in less favourable treatment, such as the inability to take other leave, and was discriminatory, the court ruled.
The EC asserts it has made huge strides in achieving equality between the sexes, but concedes the employment rate for women remains lower than for men, at 60 per cent. It is now aiming for a rate of 75 per cent for men and women by 2020. Women also continue to earn on average 17.4 per cent less than men for every hour worked and are significantly under-represented in decision-making positions.
These anomalies in the way women are treated are being vigorously targeted in a new Commission strategy to 2015, which aims to:
•Promote female entrepreneurship and self-employment
•Encourage more women to enter new-age professions, such as the ‘green’ sector
•Assess workers’ rights regarding leave for family reasons
•Assess childcare provision in member states
•Improve the transparency of pay.
And to achieve these targets, it is drawing up fresh legislation that employers and governments will need to keep pace with.
You can get advice on the laws in any EU country using the Enterprise Europe Network (EEN) at www.enterprise-europe-network.ec.europa.eu