UK: Focus On Discrimination Law — Major Changes

Last Updated: 15 December 2003

Article by Mr Richard T. Martin, Mr Martin Piers, Ms Nicola Whitely, Ms Mandy Perry
and Ms Leigh J. Warden

The grounds upon which discrimination is unlawful are to be radically extended as a result of the adoption of three European Directives which require amendments to be made to existing law. The UK already prohibits discrimination in the employment field on the grounds of race, sex and disability, but these laws are now to be extended, prohibiting discrimination on the grounds of sexual orientation, religion or belief and age.

Regulations prohibiting discrimination on the grounds of sexual orientation will come into force on 1 December 2003. Similar Regulations on discrimination on the grounds of religion or belief come into force on 2 December 2003.

Provisions on age discrimination are not scheduled until 1 October 2006 and will be covered in a future commentary.

Employment Equality (Sexual Orientation) Regulations 2003

From 1 December 2003, it will be unlawful to discriminate against or harass a person in the workplace on the grounds of his or her sexual orientation.

The Sexual Orientation Regulations define sexual orientation in terms of an orientation towards persons of the same sex, the opposite sex or both. In other words, discrimination or harassment on the grounds that a person is gay, heterosexual or bisexual will be unlawful, while discrimination according to a person's sexual preferences irrespective of gender will not. There is, therefore, no protection against discrimination on the grounds of particular sexual practices or fetishes. For example, a man who has been discriminated against because he enjoys sado-masochism would not be covered because it does not relate to his orientation viz a viz persons of the same or the opposite sex. Nor can it be argued that "orientation" towards children brings a paedophile within the scope of the Regulations.

Discrimination is prohibited if it is "on the grounds of sexual orientation" but not necessarily on the grounds of the victim's sexual orientation. This would extend therefore to cover perceived as well as actual sexual orientation and so refusal to employ on the grounds that an employer thought that the applicant was a lesbian could amount to discrimination even if she was not a lesbian. The complainant would not need to disclose her actual orientation.

Further, there is no requirement that the orientation be actively pursued; discrimination against non-practising homosexuals is unlawful in the same way as discrimination against practising homosexuals.

The Regulations do provide for limited circumstances in which direct discrimination will be allowed, where a genuine occupational requirement (GOR) exists. Where such a requirement exists, an employer may dismiss or refuse to employ, promote, transfer or train an individual if he or she does not meet the GOR or the employer is not satisfied on reasonable grounds that the individual meets the GOR.

A general GOR exists where an employer can show that having regard to the nature of the work, a particular sexual orientation is a genuine and determining occupational requirement and that it is proportionate to apply the requirement. Commentators have suggested that this provision may apply to jobs that involve counselling or other support services related to sexual matters but it is hard to think of other circumstances. Even in those limited circumstances an employer would have to show that there was no way of redistributing the workload to obviate the need for the absolute requirement and so justify that the absolute requirement was "proportionate".

A more specific GOR applies where employment is for the purpose of "an organised religion" where the employer can show that there is a requirement for sexual orientation to comply with the doctrines of the religion or to avoid conflict with the religious convictions of a significant number of the religion's followers. This will clearly be limited to employers with a clear and strong religious connection.

As per existing legislation, the Regulations prohibit both direct and indirect discrimination. Direct discrimination occurs when an employer treats a particular employee less favourably for a prohibited reason. Indirect discrimination occurs where an employer imposes a requirement that, while not necessarily discriminatory in itself, can be met by significantly more of one class (e.g. men) than another (e.g. women) and which cannot be justified on legitimate grounds.

The Regulations therefore prohibit requirements or practises which are applied to all classes of sexual orientation but which put one class at a disadvantage when compared to others and are not a proportionate means of achieving a legitimate aim. A common case that arises is a requirement that job applicants be a married couple. This excludes gay couples who would argue that there was no legitimate aim being pursued or that the requirement was not proportionate to meet that aim.

This wording on indirect discrimination is more flexible than existing discrimination legislation and may make it easier to prove claims without the need for statistical evidence.

Harassment on the grounds of sexual orientation is also specifically prohibited under the Directive. It occurs where, on the grounds of sexual orientation, A engages in unwanted conduct which has the purpose or effect of violating B's dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for B. If A did not intend the effect, A's conduct will only be regarded as having the effect of violating B's dignity or creating a hostile environment "if having regard to all the circumstances, including in particular the perception of B, it should reasonably be considered as having that effect".

There is a specific exception under the Regulations which renders not unlawful anything which prevents or restricts access to a benefit by reference to marital status. This would cover for example restricting survivor benefits in pension schemes to married partners. This pension issue is the subject of separate government consultation. The exception would also cover, however, restricting an employee's private health insurance to his or her spouse as opposed to cohabitee. The exception is the subject of some controversy.

In common with existing discrimination legislation, measures have been introduced to ensure that individuals are not discouraged from making complaints and victimisation will be unlawful.

Employment Equality (Religion or Belief) Regulations 2003

From 2 December 2003, it will be unlawful to discriminate against workers on the grounds of religion or belief. The Religion or Belief Regulations prohibit discrimination and harassment on the grounds of any religion, religious belief or similar philosophical belief.

Under the Race Relations Act it has been possible for some religious groups to claim protection from discrimination on the basis that they constitute an ethnic group but this does not extend to all religions. The Regulations introduce for the first time protection from discrimination and harassment on the grounds purely of religion and belief.

The Religion or Belief Regulations follow the Sexual Orientation Regulations in most respects in outlawing direct and indirect discrimination and harassment or victimisation.

The Religion or Belief Regulations cover only discrimination on the grounds of the religion or belief of the victim, not the perpetrator, which would appear to exclude protection for non believers, unless the victim was an atheist (as opposed to an agnostic) and could show that atheism was a religion or belief.

It has been left to tribunals and courts to determine what constitutes a "religion, religious belief or similar philosophical belief". The DTI has suggested that evidence of collective worship, a clear belief system or a profound belief affecting way of life or view of the world would be necessary. This non binding guidance might bring in satanists, pagans and various cults that the general public might not regard as religions in the ordinary sense. Political beliefs are expressly excluded unless they can be shown to be analogous to a religious belief.

As with the Sexual Orientation Regulations, there are exclusions covering genuine occupational requirements (GORs). A general GOR allows discrimination where, having regard to the context, being of a particular religion or belief is a genuine and determining occupational requirement, it is proportionate to apply that requirement in the particular case and the individual does not meet it or the employer reasonably concludes the individual does not meet it.

There is a specific religious organisation ethos GOR which has similar requirements to the general GOR where the organisation can show it is founded upon a religious or belief ethos. ACAS has commented that a faith school might be able to demonstrate that all teaching staff need to be able to promote the particular faith ethos and so be members of the particular faith, while the same may not be said, perhaps, of the school maintenance staff who do not come into contact with the pupils in the same way.

What To Do?

Employers should review all their practices to take account of both sets of Regulations and at the very least should update equal opportunity, harassment and discrimination policies.

More wide ranging impact is likely to result from the indirect discrimination aspects of the Religion and Belief Regulations for example in relation to dress codes (it may not be justifiable to exclude Hindu men wearing a pony tail), working hours (it may be necessary to take account of the need for prayer at specific times in the working day) and days off.

Round-Up of Other Developments

Taxation of Compromise Agreements -- Revenue Admits a Step Too Far

Many settlements upon the termination of employment are recorded in the form of a compromise agreement. Increasingly compromise agreements include a provision whereby if, notwithstanding the waiver of claims by the employee under the agreement, the employee does subsequently bring a claim against the employer for the claims waived, the employee becomes bound to repay the sums paid under the compromise agreement. Certain offices of the Inland Revenue had suggested that that repayment obligation rendered taxable in their entirety payments that might otherwise have qualified for the Ł30,000 tax exemption. The Revenue has conceded in a recent tax bulletin that this argument was not correct and that such a repayment obligation did not affect the tax treatment of the payments made under the compromise agreement.

Unfair Dismissal Claims -- A Year Means a Year

Under the Employment Rights Act 1996 an employee must have at least one year's continuous employment in order to bring a claim for unfair dismissal. Where an employee is dismissed without notice, the length of continuous employment is extended by the minimum statutory notice period of one week which therefore reduces the period of one year to 51 weeks for those dismissed without notice. It has been a moot point for some time whether an employee whose contractual notice period, had they been allowed to serve it, would have taken them over the one year's qualification period for unfair dismissal protection, can claim as part of a breach of contract claim the lost ability to claim for unfair dismissal.

The position has been clarified by the EAT in Virgin Net Limited v Harper. The EAT upheld the primacy of the one year qualification period laid down by statute and said that employees should not be able to get around that qualification period by way of a breach of contract claim. While this clarification is helpful, the judgment expressly did not overrule the decision in Raspin v United News Shops Limited where the employee was allowed to claim breach of contract damages in respect of the lost ability to claim unfair dismissal arising from the employer's failure to follow a contractual disciplinary procedure which, if followed, would have delayed termination of employment beyond the one year qualifying period. The two decisions do not sit comfortably together and it is likely that the Raspin decision will not be followed in subsequent cases.

Discrimination -- Liabilities of the Actions of Third Parties Clarified

In the 1997 case of Burton v De Vere Hotels Limited (known colloquially as the Bernard Manning case) two black female waitresses successfully claimed under the Race Relations Act 1976 against their employer when they became the butt of sexist and racist jokes made by Bernard Manning who was the guest speaker at an all male private dinner at which they were working. The EAT took what many at the time considered to be a pragmatic view and said that even though Mr Manning was not the employee of the Respondent employer, nevertheless it was reasonable to hold the employer liable because it had placed the employees in the position where they were being abused.

That decision has been expressly overturned by the House of Lords in Pearce v Governing Body of Mayfields School. The House of Lords said that attributing the employer with liability for the actions of a third party in this way ignored the primary requirement under discrimination legislation that the employer must treat the employee less favourably than the relevant comparator employee by reason of the employee's race, sex or disability. There was no evidence in the Burton case that the employer would have acted differently had the jokes been against white men.

The Pearce case concerned a lesbian teacher who was abused by pupils by reason of her sexual orientation. Aside from confirming that the Sex Discrimination Act does not protect against discrimination on the grounds of sexual orientation (soon to be the subject of its own regulations - see the "Focus on Discrimination Law" section above), the House of Lords decided that even were that not to be the case the employer should not be held liable in discrimination for the acts of pupils or for the employer's failure to prevent the harassment, unless that failure was motivated by the teacher's gender.

The position would of course be different were the abuse/harassment to be perpetrated by another employee of the employer in the course of their employment. In those circumstances the employer would be deemed to have liability for the actions of its employee.

Further, the ruling in Pearce only extends to liability under the discrimination legislation. It still might be a breach of the employer's duty of care or the relationship of mutual trust and confidence to fail to take steps to protect employees who the employer knows are being abused or harassed, particularly in circumstances where the employer is able to do something about it.

Mobile Phones -- Employers Beware

In a much foreshadowed change to existing legislation, the government is to make unlawful the use of hand-held mobile telephones by drivers. Hands-free equipment is not affected, nor is the use of hand-held devices while stationary. Less well known however is the extension of liability to employers who cause or permit employees to use a hand-held phone while driving. Employers with employees who drive as part of their job are advised to issue policies expressly forbidding their employees from using hand-held equipment while driving.

Further Information

This commentary is a publication of Jones Day Gouldens. The contents are intended for general informational purposes only and are to raise your awareness of certain issues (as at November 2003) under the laws of England and Wales. This commentary is not comprehensive or a substitute for proper advice, which should always be taken for particular queries. It may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at its discretion. The mailing of this publication is not intended to create, and receipt of it does not constitute, a solicitor-client relationship.

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