FCA’s diversity targets highlight value of ‘positive action’ initiatives

If you are looking to improve diversity within your business beware the risk of positive discrimination. That was the warning from Anne Sammon last week commenting on the FCA’s finalised rules requiring UK listed companies to set out in their annual reports whether they have met board diversity targets. Firms will have to meet minimum targets for the representation of women and people from a minority ethnic background on their boards and in their senior executive teams, or explain why they have not done so.   

In ‘Beware positive discrimination risk with FCA’s diversity targets’ she says: ‘…whether you're in a sector where it's difficult to recruit women, and you’re trying to improve the situation, how you go about measuring your progress is really important. Clients recognise that and they come to us for advice to make sure they don’t overstep the mark when it comes to things like positive discrimination.’

So, the Equality Act says employers can actively encourage people from disadvantaged groups to apply for roles, and can provide training to help equip them for the particular work. There is, however, an important caveat in section 159 – so the decision on whom to select must be made on merit alone, except in circumstances where the candidates are ‘as qualified as’ each other. 

The Equality Act puts the onus squarely on the employer. So, the employer must reasonably think that people with the protected characteristic suffer a disadvantage or are under-represented in that particular activity. Taking the positive action must be a proportionate means of enabling or encouraging people to overcome the disadvantage or to take part in the activity. Employers must not have a policy of treating people who share a characteristic more favourably. They should decide whether or not to take positive action on a case-by-case basis.

Those provisos are important ones and getting it wrong could result in unlawful discrimination and, potentially, employment tribunal claims. That might explain why, since 2010, employers have tended to steer well clear of positive action. But that is changing, as the FCA’s position demonstrates, and the same is true across all sectors. So, how can employers use positive action safely and avoid that risk of discrimination that Anne talked about? To help with that I spoke to Trish Embley who joined me by video-link from Birmingham. I started by asking Trish if positive action is becoming more common?

Trish Embley: “Yes, positive action initiatives are more common because many of us are setting aspirational targets where we recognise that certain groups have been underrepresented for far too long. Changes are happening organically, so we do have to look at certain initiatives on recruitment and in promotion to ensure that those groups that have been historically underrepresented are now both being recruited and progressing within organisations.”

Joe Glavina: “So what are employers allowed to do?”

Trish Embley: “It’s really important that a distinction is made between positive action which is completely lawful and desirable, and positive discrimination, which is unlawful direct discrimination. So positive action initiatives really encourage and try to remove the hurdles as to why people perhaps aren't going to apply for certain jobs, or once they're in an organisation they don't progress. So the sorts of things we're talking about are targeted advertising, targeted for certain groups, open days, internships, and then within employment, training, mentoring, coaching, why aren't people progressing? If we have some feedback about why somebody didn't get a promotion, what skills are needed, then we can target those skills at those groups, whether they be on the on the grounds of gender, race, or disability. By contrast, positive discrimination is where we might say, okay, we don't seem to have many, for example, people of a certain ethnicity in this organisation so the next person we will appoint will be from that group. Now, that would be a classic example of unlawful discrimination. So I think what people need to understand is that positive action initiatives are just levelling the playing field, they do not in any way compromise the concept of meritocracy within an organisation. It's not about giving somebody who isn't as skilled for a job, a job. It's saying, what are the hurdles? Why perhaps they might not perform well in an interview? Or what are the skill gaps that that are associated with this group so we can fill that gap and make sure that they're starting at the same place as everybody else.”

Joe Glavina: “So in terms of implementing positive action initiatives, Trish, what would you say are the key things for HR to be aware of?”

Trish Embley: “I think what HR needs to be aware of is education generally within their organisations. So first of all, we've seen examples of very altruistic well intended people saying, right, great, I want more women in my team so the next recruit must be a woman. Now, as I say, that will be an example of positive discrimination. We see this particularly with the tiebreaker provisions in the Equality Act, section 159, which allows employers where you've got two candidates who are both equally as good, and where they are underrepresented for the proportion action to be taken, and for the person from the underrepresented group to actually get the role. But section 159 is very clear that the employer must not have a general policy of favouring people from an underrepresented group. So it's couple of things for HR to think about, first of all, when collating your data about whether people are underrepresented care needs to be taken there in terms of data processing, GDPR, etcetera, and then there’s proportionality. Now I think it's important that those individuals who are very altruistic understand where the line is between positive action and positive discrimination, but what we're also starting to see is some fear amongst those from the represented group who might think, oh, does this mean now that I should feel threatened, there's going to be this natural favouring towards underrepresented groups to my disadvantage. That is not what positive action is about but we are starting to see cases come through tribunals where those in the represented group will say, I'm being discriminated against. So I think that's really important, over and above getting the law right, is your communication to everyone in the organisation to say this is not about giving people an unfair leg up, this is a much needed levelling of the playing field. I think it's only if people understand concepts like privilege, which is through their own lived experience, they just think, well, I've worked hard, I've spent a lot of money on my education, why should somebody else be given an advantage? It's not actually an advantage, but there's a lot of communication that needs to be done around that so that people understand and see positive action for what it is. Not for what it is not.”

If you’d like to listen to last week’s programme featuring Anne Sammon talking about the need for fairness when it comes to D&I improvements in FS firms you can. That’s ‘Beware positive discrimination risk with FCA’s diversity targets’ and it’s available now for viewing from the Outlaw website.’