The mere mention of the word ‘discrimination’ in the workplace is enough to strike fear into the hearts of UK employers. Once the fright takes hold, usually fuelled by high profile case law judgements and seemingly mega pay-outs (discrimination payments are uncapped), the task to make sure that all your HR Policies are tightened and up to scratch lands in someone’s (generally your HR Team) lap. 

However, when it comes to an employee successfully winning a claim of indirect discrimination, then the very act of standardising your people policies where everyone is treated equally, could well back fire. 

Why? Read on……..

What is indirect discrimination?

Most employers know that it is unlawful to discriminate, and if found to do so risk facing a hefty financial (and potential reputational) penalty. This is never more so when it comes to the nine protected characteristics, as set out in the Equality Act 2010.

However, when it comes to indirect discrimination it is not always so obvious, sometimes resulting in employers inadvertently discriminating through “blanket” policies or work practices.

So, what is the difference between direct and indirect discrimination?

Indirect discrimination is usually less obvious than direct discrimination and is normally unintended.

Generally, it occurs when a rule or plan of some sort is put into place which applies to everyone, and is not in itself discriminatory but it could put those with a certain protected characteristic at a disadvantage.

The law states that indirect discrimination can occur when a ‘provision, criterion or practice’ (PCP) involves all these four things:

  1. The ‘PCP’ is applied equally to a group of people, only some of whom share the protected characteristic.
  2. It has (or will have) the effect of putting those who share the protected characteristic at a particular disadvantage when compared to others who do not have the characteristic.
  3. It puts, or would put, the person at that disadvantage.
  4. The employer is unable to objectively justify it.

Discriminatory policies can be formal or informal, and include one-off decision, long-term plans and rules that have been decided but are yet to be implemented. 

The important point to note is that if a policy applies to everyone in the same way, it is neutral, but it if applies to everyone and has a worse effect on some than others, it is indirectly discriminatory. Which if we’re honest, makes it a bit of a minefield when attempting to introduce or update our policies.

How to avoid claims of indirect discrimination

As an employer you may justify your policy or procedure by showing that it is ‘objectively justified’. There must be a real business need, for example, health and safety. However, this is often not enough. You must also be able to show that the PCP is a proportionate means of achieving this legitimate aim. In other words, you must show that you have thought about the effects of your practices or measures and considered that this was the least discriminatory way to do things.

Historically, the onus has been on the employee to prove that indirect discrimination is happening or has happened, and proving indirect discrimination has always been difficult for claimants. The employer always has the defence of justification and it was thought that if the organisation can show there is a good reason for its policy, it is not indirect discrimination. This is known as objective justification.

However, in the cases of Essop v Home Office and Naeem v Secretary of State for Justice, the Supreme Court held that an employee doesn’t have to explain why a PCP disadvantages a particular group in order to show indirect discrimination.

In many instances, it will be obvious why one group is disadvantaged, but when there is no obvious explanation why an employer’s PCP disadvantages a particular group as was demonstrated in these two joined cases, the Supreme Court clarified the precise legal test to be used and particularly whether a claimant needs to establish the reason why the treatment they received discriminated against them.

In their judgement, the Supreme Court ruled that unlike direct discrimination, indirect discrimination does not expressly require a causal link between the less favourable treatment and the protected characteristic. Instead, it requires a causal link between the PCP and the particular disadvantage suffered by the group and the individual. 

Hidden barriers

The reason for this is that, in dealing with hidden barriers which are not easy to anticipate or to spot, indirect discrimination aims to achieve a level playing field, where people sharing a particular protected characteristic are not subjected to requirements which many of them cannot meet but which cannot be shown to be justified.

It is always open to an employer to show that their PCP is justified. The issue of whether a policy or practice can be objectively justified will often be the most important consideration when implementing change or defending a later claim. 

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Wise employers

As the Supreme Court observed, “a wise employer will monitor how his policies and practices impact upon various groups and, if he finds that they have a disparate impact, will try and see what can be modified to remove that impact whilst achieving the desired result”.  

The practical effect for employers following the Supreme Court’s ruling is that employment tribunals are able to move more swiftly to the issue of justification, which should be at the forefront of employers’ minds when creating or reviewing workplace policies and rules.

Therefore, employers should take note and always ensure they have thought through why particular policies are being applied. Consideration should be given to any impact they may have on particular groups and look for any statistical discrepancies which could potentially be used to support a claim for indirect discrimination. 

However, while equality of policy in the workplace is important, perhaps consider adopting a more flexible and individualised approach to staff to ensure that no-one is adversely affected by a certain policy or rule, through measures such as discrimination impact assessments. This might just minimise the chances of indirect discrimination occurring in your workplace. 

If you have any questions about indirect discrimination, or you need help with a similar situation in your business, call MAD-HR on 01473 360160 or click here to find our contact details.