Discrimination - Employers Beware

Originally published in April 2002

The NHS plan is not only a strategy for giving the people of Britain "a health service for the 21st century". It contains a firm commitment to healthcare workers that the NHS will improve diversity within the service and tackle racial discrimination and harassment. Human resources managers working within the health service will be aware that discrimination complaints generally are on the increase.

In fact, in all areas of work, claims brought in employment tribunals for sex and race discrimination have been steadily increasing, as have the levels of awards. In the year 2000, complaints to the tribunal had risen by 20% on the previous year. The average award for sex discrimination was just under £10,000 and for race discrimination just over £13,000 - an increase of 38% over the previous year’s figures. It is even more vital for employers to keep abreast of changes in the law and to protect themselves against discrimination claims.

The Sex Discrimination Act 1975 ("SDA") and the Race Relations Act 1976 ("RRA") outlaw discrimination on grounds of sex or race in the employment field. Developments in case law and legislation in the past year have both clarified and extended the circumstances in which employers may be found liable for sex or race discrimination.

An employee is protected from direct sex or race discrimination at the hands of an employer. In order to pursue a discrimination claim successfully, the employee must demonstrate to the tribunal that, by reason of sex or race, his/her employer has treated him/her less favourably than others. Before 12 October 2001, the tribunal had adopted a two stage test when determining whether a case of direct sex discrimination had been made out:

• on the findings of fact, was less favourable treatment demonstrated?
• if so, was the reason for this the complainant’s gender or race?

On 12 October 2001 the Sex Discrimination (Indirect Discrimination and Burden of Proof) Regulations 2001¹ came into force. These reverse the burden of proof in direct sex discrimination cases. This means that, for the second stage of the test, the burden of proof now rests on the employer to demonstrate that the reason for the less favourable treatment was not related to gender. In the absence of such evidence, the tribunal is entitled to draw an inference that the less favourable treatment was discriminatory.

This change has already had a significant impact on the outcome of sex discrimination claims. The best protection for employers is to maintain accurate and full records on issues such as promotion, salary, recruitment and discretionary bonuses, so that there is evidence to counteract the presumption of discrimination. The same reversal of the burden of proof in direct race discrimination cases is scheduled to come into effect in July 2003.

The employer’s risk of a claim is not limited to direct acts of discrimination. If an employee suffers sexual or racial harassment at the hands of a fellow employee, the employer may be "vicariously" liable for the act of the harasser under s. 41 SDA or s.32 RRA - in other words the employer is responsible for his employee’s actions. The employer has a statutory defence if it can prove that it took such steps as were "reasonably practicable" to prevent the employee from harassing the complainant.

The case of Canniffe v East Riding of Yorkshire Council² in 2000 has established that, even if the employer has a policy against harassment, this may not be enough to satisfy the statutory defence. Ms Canniffe was employed by the Council and was sexually assaulted by a fellow employee. She complained to an employment tribunal of unlawful sex discrimination by the Council. The Council accepted that it was vicariously liable for the perpetrator’s conduct under the SDA. The issue was whether or not the Council could take advantage of the statutory defence.

The EAT decided that in determining whether or not the statutory defence was made out, a two step approach was required:

• identify whether or not the employer took any steps at all to prevent the employee from doing the act complained of in the course of employment.
• consider whether or not there were any further "reasonably practicable" steps which the employer could have taken.

This means that, where the employer has no knowledge of a risk of harassment or inappropriate behaviour by one employee towards another, it will probably be sufficient for it to rely on the fact it has a sexual harassment policy in place, so long as the fact and the content of the policy is brought to the attention of employees. However, if an employer knows that a particular employee is more likely to commit inappropriate acts, possibly on the basis of previous behaviour, the question will arise whether further steps should have been taken to prevent this. It might be been more supervision of the employee concerned.

In the Canniffe case, the EAT considered that even if such steps had no realistic chance of succeeding, they should nevertheless be taken if reasonably practicable.

Canniffe concerned sexual harassment, but exactly the same considerations apply in cases of racial harassment.

Recent cases have demonstrated that protection from discrimination under SDA and RRA does not continue after the contract of employment has ended. In the case of D’Souza v London Borough of Lambeth³ last year, the Court of Appeal found that an employee could not bring a claim alleging that his former employer’s failure to comply with a tribunal order to reinstate him amounted to race discrimination. This was because the alleged discrimination had occurred after his employment had ended and so was not covered by the RRA. Mr D’Souza is appealing against this decision to the House of Lords.

Similarly in the case of Rhys-Harper v Relaxion Group Plc⁴ the Court of Appeal found that the SDA could not be interpreted in such a way as to protect an ex-employee against post-employment discrimination. Christine Rhys-Harper had tried to argue that her employer’s failure to pursue her complaint of sexual harassment, raised after she had been dismissed, amounted to a detriment under the SDA.

In contrast, post-employment victimisation is actionable. This was confirmed in the case of Coote v Granada Hospitality Limited No. 2 1999⁵ ,where it was decided that an employer’s refusal to provide a reference for an employee, following her successful pursuit of a sex discrimination claim against it, amounted to victimisation.

Following a European directive, new legislation will be introduced to address discrimination on grounds of sexual orientation and religion (planned for 2003); and disability and age (planned for 2006). This will extend further the protection from discrimination enjoyed by employees in the workplace. Although draft legislation has not yet been produced, it is anticipated that it will afford protection to employees similar to that currently enjoyed under the SDA and RRA. Even more vigilance will be required from employers not to fall foul of the law.