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16 September 2020
What is positive action?
What is the law on positive action?
Principle 1 – you need evidence of underrepresentation
Principle 2 – you cannot offer employment automatically on the basis of a protected characteristic
Principle 3 – you can take proportionate action to help people get access to employment
Principle 4 – improving diversity of shortlists is effective, but you should set targets not quotas
Principle 5 – some effective tactics do not count as positive action and are always lawful
This article explores the legal limits of positive action in the workplace, including situations where it is permissible to give preference on gender or ethnicity grounds to make up for a historic lack of opportunity and what employers can and cannot do to improve diversity in their shortlists or hiring slates.
Positive action in the workplace involves taking targeted steps to address underrepresentation or disadvantage experienced by people with characteristics protected by the Equality Act 2010 – namely, race, sex and ethnic origin. It is about ensuring equality of opportunity for people in protected groups. Positive action is not the same as positive discrimination, which is unlawful in the United Kingdom (apart from in relation to disabled people and, to some extent, women who are pregnant or who have given birth).
Initiatives involving positive action generated mainstream interest following the introduction of gender pay gap reporting, as companies looked for ways in which they could close stubborn pay gaps. Such programmes are seeing renewed interest in the wake of the Black Lives Matter movement. Leaders of FTSE 100 companies recently wrote to the Sunday Times to pledge that they would set targets for diverse candidate slates for all of their vacancies in future to address racial inequality at work.
However, the legal framework for positive action is more restrictive than many people realise and does not necessarily allow employers to go as far as they might like in addressing historic barriers and a lack of opportunity.
The starting point is Section 158 of the Equality Act, which applies where an employer reasonably thinks that a protected group:
Section 158 allows proportionate positive action to meet the relevant needs, reduce the disadvantage or increase participation. The Employment Code of Practice published by the Equality and Human Rights Commission (EHRC) gives the example of a school that decides to offer open days to members of the Bangladeshi community to encourage them to consider applying for teaching roles, given their low rates of participation in the teaching profession.
Section 159 of the Equality Act, known as the 'tie-breaker' provision, allows employers to go one step further in recruitment and promotion decisions when there is a stalemate between two candidates. It allows employers to give preferential treatment to a candidate from an underrepresented group, provided that:
A supplement to the EHRC's Employment Code of Practice (which deals with positive action) gives the example of a counselling service for teenagers that has no Muslim employees, but is in an area with a high Muslim population. Where a vacancy arises, two candidates of equal merit are in a tie-break situation with the employer having to find some way to choose between them. One candidate is Muslim and the other candidate is not. The service manager could choose to offer the job to the Muslim candidate, assuming that this is proportionate and the employer has no policy of treating that group more favourably in connection with recruitment or promotion. This would mean that the non-Muslim candidate could not claim discrimination.
While the EHRC has published various guidance on positive action, there is limited case law. The few cases that address workplace positive action are almost entirely at the European level. There is one recent employment tribunal decision on the tie-breaker provision (discussed below), but no binding authorities from any higher UK court. However, the Supreme Court is currently considering a case about whether social housing can be reserved exclusively for members of a religious community which raises questions about positive action measures taken by charities and whether they are analogous to workplace measures.
Taking the legislation, existing guidance and limited case law into account, this article distils and outlines the following guiding principles for employers adopting positive action programmes.
Positive action which seeks to benefit people from protected groups over others can be done only if employers reasonably believe that a protected group:
Establishing underrepresentation or disadvantage has not been especially difficult or contentious in the limited case law to date, perhaps because it is all too often apparent, but it is important not to overlook or sidestep this requirement.
Demonstrating that women are underrepresented in senior management positions may be relatively straightforward and is likely to be supported by a company's gender pay gap data. Establishing that ethnic minorities are underrepresented may be trickier. It is likely to involve an initial drive to gather ethnicity data within the workforce along with other contextual data – for example, about the local region. It is unclear whether employers can simply look at the position of all black, Asian and minority ethnic (BAME) employees compared with white employees, or if a more granular analysis would be required. (A similar issue arises in relation to the proposal to introduce ethnicity pay reporting.)
Employers cannot reserve positions for underrepresented groups without this leading to discrimination against other candidates who would have been appointed except for their protected characteristics. It is unlawful to refuse to appoint a candidate because they have the 'wrong' protected characteristic, apart from in the rare scenario in which having a protected characteristic is an occupational requirement for the role. This restricts the scope for applying any preference.
The furthest that employers can go is to apply a preference in a tie-breaker situation, where they have two equally qualified candidates for a position. However, even in such circumstances, employers cannot have a policy of automatic preference – there must be some individual case-by-case assessment and a proportionality analysis.
The employment tribunal case Furlong v Chief Constable of Cheshire Police, decided in 2019, concerned Mr Furlong, a white heterosexual man, who applied for the position of police constable with the Cheshire Police. He was unsuccessful because the police chose to give automatic preference to all lesbian, gay, bisexual and transgender, black and minority ethnic and female candidates who achieved a pass mark. The employment tribunal upheld Furlong's claim of race, sex and sexual orientation discrimination, ruling that the police's positive action programme fell outside the scope of the Section 159 tie-breaker provision. The police had applied a blanket automatic preference, but the qualitative assessment data showed that not all of the candidates who passed were equal – in fact, some were clearly much better qualified than others. The employment tribunal found that this was not a proportionate way of improving diversity.
Most employers are reluctant to use the tie-breaker provision. This is mainly because of the need to conclude that two candidates could do a job equally well and the fact that an unsuccessful candidate is likely to challenge that conclusion. This is, perhaps, especially probable in circumstances where the unsuccessful candidate has come close to being appointed but has lost out because of their gender or ethnicity, among other things – particularly if both candidates are existing employees applying for a promotion who know each other's strengths and qualities. In the absence of case law explaining how close a call it must be between the two candidates, most employers tend to shy away from using the tie-breaker provision altogether.
Ultimately, UK law does not allow candidates from underrepresented groups to be preferred over other better-qualified candidates. Recruitment and selection outcomes must be merit based, except in the narrow and uncertain tie-breaker situation.
In practice, this has led to a focus on changing the diversity profile in more junior or entry-level positions, where it may be easier to influence the talent pool. As roles get more senior, positive action may be less effective because of the lack of diversity in the existing talent pool with the necessary experience – the net result often being that the pace of change feels too slow.
This can be especially frustrating for companies that have reported significant gender pay gaps and received heavy criticism as a result, especially when such gaps are often misunderstood to signify pay discrimination. If ethnicity pay reporting is introduced, companies can expect similar pressure to demonstrate faster change. However, it is important that this sense of frustration does not lead to taking the sort of discriminatory measures adopted by the Cheshire Police in Furlong.
There is a crucial distinction between offering employment and putting someone on an equal footing to get access to employment. Positive action is lawful when:
Examples of such measures include:
Employers can target their measures primarily at the underrepresented group, or potentially even exclusively at that group, where that is a necessary and proportionate means of achieving their objectives.
To demonstrate that their positive action programme is proportionate, employers must ensure that it is time limited, targeted and takes account of the extent of the underrepresentation or disadvantage and the impact of any other diversity measures or commitments.
Including multiple women on shortlists for recruitment and promotions was listed as the first effective action that employers could take to close their gender pay gap in a 2018 report published by the Behavioural Insights Team of the Government Equalities Office (GEO). Some employers are now looking to increase the ethnic diversity of their shortlists in addition to trying to make them more gender balanced.
There is no reported UK case law on this type of measure. Reserving places on shortlists is intended to give people an equal opportunity of getting the job, rather than to influence the eventual employment decision, so at first sight it should fall within Principle 3 above. The limited European Court of Justice case law concerning guaranteed interview schemes indicates that it might regard reserving places on shortlists as different from employment quotas, and potentially lawful if proportionate.
However, the EHRC has adopted a strong stance against guaranteeing places on shortlists. Its guide to increasing diversity in the TV and broadcasting industry (updated in March 2019) states as follows:
Under British law, places cannot be reserved on shortlists or guaranteed interviews offered to some people from certain protected groups… as this would unlawfully discriminate against others (unless the recruitment relates to a disabled person).
Nonetheless, operating targets – as opposed to hard quotas – would be within the scope of the provisions on lawful positive action discussed above, so long as there is sufficient evidence of disadvantage and the steps are proportionate. With a target-based approach, employers compile the shortlist based on merit rather than give preferences to ensure that a quota is met.
Targets must be realistic and based on an assessment of the underlying market. As the EHRC's six-step guide to improve board diversity states, targets must not lead to candidates from underrepresented groups being preferred over other better-qualified candidates, and employers should make clear to their recruiters that they must not unlawfully discriminate against potential or actual candidates in trying to achieve them.
In reality, of course, targets are more easily set than met. Employers may need to take other steps to help develop a pipeline of potential candidates and work with a range of recruiters who can help to source a more diverse pool. It may be helpful to talk about aiming for a better gender or ethnic balance, rather than the need to identify suitable female or BAME candidates, and to explain the purpose behind adopting targets and how diverse companies perform better.
Chapter 12 of the EHRC's Employment Code of Practice points out that action to benefit a particular protected group which has no impact on other groups is always lawful and should not even be classed as positive action. The code gives two examples of this:
A more modern-day example might be working with charities which will help to identify and put forward candidates from particular groups or backgrounds. This does not restrict applications from any other candidates, so long as all the other recruitment channels remain open. Another example would be reworking recruitment processes to improve transparency regarding what is expected and what 'good' performance looks like (ie, what the employer will be looking for candidates to demonstrate and how they are going to test that).
The abovementioned GEO Behavioural Insights Team report also cites the following actions as being shown to be effective in reducing the gender pay gap:
Everyone stands to benefit from these measures, so they are lawful without having to meet the criteria set out in Section 158 of the Equality Act.
The law in the United Kingdom on positive action remains unclear in several important respects and there is limited case law. While the tie-breaker provisions remain unattractive, employers can adopt effective and lawful positive action programmes ranging from diverse candidate shortlist targets through to targeted support and development initiatives. Some measures benefit everyone, so need not come within the legal exemption for positive action. Despite this, it remains the case that the legal framework is heavily restricted and does not necessarily allow employers to move as far or as fast as they would like.
For further information on this topic please contact Lucy Lewis or Gemma Taylor at Lewis Silkin by telephone (+44 20 7074 8000) or email (firstname.lastname@example.org or email@example.com). The Lewis Silkin website can be accessed at www.lewissilkin.com.
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