Employment Litigation Implications Of Recent Data/Reports Concerning “The Glass Ceiling”

Introduction

The focus of this note is to explore briefly:

• what is meant by "the glass ceiling";
• its relevance to the manner in which sex discrimination litigation may be conducted by Claimants generally; and particularly allegations asserting, either as a specific instance of discrimination and/or as background evidence in support of other allegations, that an employer has unlawfully hindered career progression; and
• the steps that can be taken and may need to be seen to be taken in order to dispel or counter an assertion that such unlawful practices prevail within an organisation.

The Terminology

The expression "the Glass Ceiling" provokes strong opinions and views, ranging from a complete denial of its existence in the UK workforce to its assertion as an indisputable fact and a practical demonstration of endemic, perpetual gender bias within significant portions of UK business and political life.

An effective, although probably broader definition (in that it extends beyond gender issues), of the term is offered by BusinessDictionary.com as:

An alternative formulation, which is perhaps more consistent with the Commission for Equality and Human Rights' (CEHR) own assessment of the glass ceiling as not merely "an impermeable barrier that blocks the vertical mobility of women . . ." but also "situations in which the disadvantages women face to men intensify as they move up organisational hierarchies". [Baxter & Wright: The Glass Ceiling Hypotheses, 2000].

The "Sex & Power 2008" report from the CEHR was published in the summer and it is worth summarising its findings as it has attracted significant coverage.

"Sex And Power 2008"

Now in its fifth year, this surveys the gender composition of 25 categories of positions and offices, including political office, heads of professional bodies, FTSE 100 company directors and top managers in the civil service: it aims to be "the annual index of women in positions of authority and influence in Britain".

The press release which accompanied the launch of the report contained the following statement from Nicola Brewer, Chief Executive of the CEHR:

The report characterises this as a "squandering of talent" and finds that in order to achieve equal representation a further 5,600 women would be needed in the 31,000 "top positions of power that it surveys", including:

• 2,921 from the 18,781 public appointments
• 436 from the 1,119 directorships in FTSE 100 companies

It further notes that there are only 46 directorships in FTSE 100 companies held by individuals with non-European ethnic backgrounds, of which 8 of whom are women.

Flexible Working Arrangements

There is a strong focus in the "Sex and Power 2008" report on the need for the utilisation of flexible working arrangements at all levels of seniority within an organisation and characterises some organisations as "offering time off for raising a family and flexibility linked to childcare grudgingly, as concessions that are a burden to business and those who are seen as not committed to the company".

It criticises a suggested greater reliance on long hours working, which "perpetuates a model of work that is almost impossible for women to see as allowing them to combine a full-time job with family life". (It is less clear on the empirical evidence to back up this contention but this is something that may well echo pressures in a 'credit crunch' environment).

The TUC response to the report was to the effect that:

A meritocracy is the CEHR's aim too; merit and talent are not the exclusive preserve of one section of the population or another.

But in the CEHR's view this has to be achieved through a more realistic, if not holistic, approach including good childcare and social care policies to level the playing field.

The TUC has not spelled out what form a suggested firmer approach should take although it has cooperated with the CBI and the CEHR in the publication of the 2008 document "Talent not Tokenism: the benefits of workforce diversity", which addresses suggested best practice approaches seen in various (commercial) organisations such as BT, Manpower UK, Serco and others to fill skills gaps, find new markets and understand customers. Its fundamental premise is that diversity within an organisation should be taken as a given in order to maximise competitiveness – the business proposition for diversity is compelling.

It suggests that providing diversity need not be expensive or time-consuming "but it does require a commitment from the top to trigger a change in culture and attitude".

The Female FTSE Report

The emphasis on leadership and setting good examples from the top down is a theme running through the Female FTSE Report (produced by Cranfield School of Management).

In 2007 it indicated that since 1999 the number of FTSE 100 boards with no women reduced from 36% to 24%.

The UKRC Publication, Transforming Boardroom Cultures: A Good Practice Guide to Inclusive Boardroom suggests that when promoting workplace culture and practice the key factors are

• Championing of diversity from the Chief Executive downwards
• Accepting that senior people also need flexibility
• Ensuring that women returning from maternity leave are not treated as if their career progression is over.

The Female FTSE Report 2007 concluded that the "key change makers are the chairs of boards who have been prepared to lead the debate on gender diversity, to insist on female candidates, to mentor aspiring female directors and to run their boards in exemplary ways".

So is compulsion at least in terms of the gender composition of the boards of companies, an inevitable or necessary step in the UK?

Compulsion For Gender Balance At Public Company Board Level?

Norway has recently gone down the road of compulsion. As of 1 January 2008 it became mandatory for all Norwegian companies listed on the Oslo Stock Exchange (OBX) to ensure that at least 40% of directors were women.

Non-compliance can result in a company being de-listed from the OBX. The Norwegian government also has powers to dissolve a company for not fulfilling this requirement.

The gender requirement applies to all publicly owned enterprises including:

1. State-owned limited liability companies;
2. Public limited companies;
3. State-owned enterprises;
4. Companies incorporated by special legislation;

As a result Norway's 500 PLCs have had to recruit about 1,000 female directors. It has been reported that many have found it difficult to find experienced candidates.

Some of the most qualified candidates sit on 25 to 35 boards, which has led to investors being concerned about "overboarding" namely too many positions, within a portfolio of non-executive appointments which, it is suggested, may compromise directors' attendance, adequate preparation for board meetings and overall performance.

In response to the increased demand for female leadership, the Confederation of Norwegian Enterprise has launched a program, called Female Future, and has trained about 600 women in preparation for board and leadership positions.

This approach is unlikely to be adopted in the UK any time soon.

Sex Discrimination – Direct And Indirect Discrimination

Direct discrimination arises where, on the grounds of sex, an employer treats an employee less favourably than he treats or would treat another employee.

Indirect discrimination arises where an employer applies to a woman a provision, criterion or practice, which he applies or would apply to a man but:

1. which puts or would put women at a particular disadvantage when compared with men,
2. puts the complainant at that disadvantage, and
3. which the employer cannot show to be a proportionate means of achieving a legitimate aim.

Therefore, the existence of the glass ceiling could be invoked as relevant to both types of claim.

For example, if a female employee is not promoted in a competitive exercise and a male colleague is promoted instead, the burden of proof operates as follows, in relation to an assertion of direct discrimination:

1. the Claimant has to establish a prima facie case of discrimination,
2. it is then for the employer to prove on the balance of probabilities that the treatment was not on the grounds of sex.

The Claimant is likely to request data concerning the number of instances where female employees, in a comparable position, have been promoted. At the same time, requests regarding the gender breakdown of the workforce should be expected. The latter being used to suggest that there is a gender bias against female promotion. Although it may not be directly relevant, a SDA Questionnaire is also likely to probe the prevalence of flexible working arrangements, particularly for working mothers, within the organisation. At each stage in the Tribunal, a Claimant is likely to point to the "evidence" of "Sex and Power 2008" as a backdrop to the statistics applicable to the given employer.

Clearly, a Tribunal is not able to conclude, solely on the basis of the "Sex and Power 2008" report that a form of "glass ceiling" applies at a given employer. However, if the statistics for a given employer are less attractive then one would ideally want, it can be seen that the Tribunal will be invited to conclude that the backdrop of an apparent "glass ceiling" across the UK workforce is the explanation for the given employer too.

Additional Factors In The Public Sector In The UK

In addition to disability and race equality duties, public authorities are subject to a gender equality duty (under S76A Sex Discrimination Act 1975 (SDA)) (a GED):

"A public authority shall in carrying out its functions have due regard to the need –

1. To eliminate unlawful discrimination and harassment, and
2. To promote equality of opportunity between men and women."

There is a related obligation to prepare a gender equality scheme (GES); in doing so it should consult its employees, service users and others (including trade unions) who appear to it to have an interest in the way it carries out its functions. Furthermore, the GES must set out the overall objectives which it has identified as being necessary to meet the GED.

It is expressly required to consider the need for objectives that address "the causes of any differences between the pay of men and women that are related to their sex."

The GES must also set out:

1. How it will gather information on the effect of its policies and practices on men and women and in particular
   
   
   • the extent to which they promote equality between its male and female staff,
   • the extent to which the services it provides and the functions it performs take account of the needs of men and women.
     
     
2. How the authority will assess the impact of its policies and practices, or the likely impact of its proposed policies and practices, on equality between men and women.

(The origin of the equality duties, to a certain degree, can be sourced back to the concern expressed in the Stephen Lawrence Inquiry in 1999 which identified, in relation to race issues, the concept of "institutional discrimination".

It is important to note that "institutional discrimination" is not a legal term of art. It has also been suggested (by Robin Allen Q.C.) that it is better "to speak of "mainstreaming" considerations of discrimination, equality of opportunity and good relations into the exercise of all the functions of relevant public authorities.")

It will readily be appreciated that Sex Discrimination Questionnaires submitted in cases alleging sex discrimination against public authorities have an almost ready made list of questions for Claimants to use in relation to the GED and GES.

Disclosure exercises in public sector discrimination litigation will, perhaps inevitably, become longer and more time-consuming and costly in order for Claimants to seek to point to alleged failures in respect of the GED and GES obligations to support a contention that the explanation for their alleged less favourable treatment is, by extrapolation, gender based . However a culture of individual settlement may not resolve matters more widely and may, indirectly, encourage more claims: truly, a rock and a hard place.

Those familiar with defending discrimination claims will be tempted to think of the old adage of "lies, damned lies and statistics". That said, the figures contained in "Sex and Power 2008" do cause pause for thought. It is tempting to suggest that the report is capturing merely the tail-end of outdated and outmoded approaches. However, on 22 September 2008 the BBC has reported a US study in the Journal of Applied Psychology which suggests that "men who grow up thinking women should stay at home....could end up well ahead in the salary stakes". The study tracked 12,700 men and women in the US over 1979-2006; and a (disappointing) finding was that the less "modern-thinking" men out-earned their more "modern-thinking" counterparts by £4,700, on average annually.

Two potential questions/theories for these observations were:

• "more traditional-minded men are interested in power"
• "employers are more likely to promote men who are the sole earner in preference to those who are not, supporting the sole breadwinner".

Neither being an edifying or attractive approach. This contrasts starkly, though, with the propositions in "Talent not Tokenism".

The Equality White Paper – "Framework For A Fairer Future"

There are a variety of potential improvements and developments planned to make the network of UK discrimination legislation more consistent and effective. However, it is clear from July's Equality White Paper that there will have to be much more detail in due course, in order to achieve the aims of "simplification" and "strengthening" the law on discrimination. Although the government has dropped the idea of mandatory equal pay audits for the private sector, there will be greater pressure on private sector entities who contract with all forms of Government to increase their emphasis on equality matters via the procurement regime.

Conclusions

There are significant advantages in terms both of preventing claims and defending claims if an employer demonstrably and publicly:

1. Champions diversity as a priority from the top down – clear, strong statements at Board level are an important starting point, but need to be followed through.
2. Monitors relevant statistics such as the gender breakdown of seniority within the organisation; successful and unsuccessful candidates for promotion – and tests/investigates the underlying reasons.
3. Articulates, through clear policies and regular training at all managerial levels, both the advantages of diversity to the business and the types of behaviours that will be and will not be tolerated.
4. Is seen to be supportive of flexible working arrangements where they can be accommodated.

This is an area where cross-fertilisation of ideas and practices in the private and public sectors may be helpful. Whilst the compulsory approach seen in Norway is unlikely to be replicated in the UK, the potential cost in financial and reputational terms of discrimination claims is likely to prove increasingly important as a catalyst to drive diversity initiatives. Credit-crunch pressures notwithstanding, diversity issues are increasingly likely to be seen as mainstream business expenditure with in-house legal and HR teams front and centre in helping to achieve successful outcomes.

Robert Davies, Partner
Dundas & Wilson LLP
robert.davies@dundas-wilson.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.