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Deregulation Bill
Committee Stage, House of Lords
Briefing in support of amendments to retain the power of employment
tribunals to make wider recommendations
17 October 2014
For more information, please contact:
Parliamentary lead: Finola Kelly, Head of Parliamentary and Public
Affairs
finola.kelly@equalityhumanrights.com
DD: 0207 832 7826
Legal lead: Rhodri McDonald, Senior Lawyer
DD: 0161 829 8434
rhodri.mcdonald@equalityhumanrights.com
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Introduction
This briefing supports amendments to Clause 2 of the Deregulation Bill
on employment tribunal powers. As the regulator of equality law, the
Commission is concerned that the law should be effective not only in
providing redress for victims of unlawful discrimination, harassment and
victimisation in the workplace, but also for preventing such unlawful acts
from occurring and helping employers to comply with their duties to treat
their employees fairly.
Clause 2 - Commission’s recommendation
Support Lord Rooker's Amendment opposing the Question that Clause 2
stand part of the Bill
Explanation
Clause 2 of the Deregulation Bill would amend section 124 of the
Equality Act 2010 to remove the power of employment tribunals to make
recommendations to employers in cases where there has been a finding
of unlawful discrimination, harassment or victimisation but the claimant
no longer works for the employer – we refer to these as “wider
recommendations”. Its effect would be that, in future, an Employment
Tribunal would only be able to make a recommendation aimed at
preventing or reducing the adverse effect of the discrimination on the
claimant.
The Survey of employment tribunal applications 20131 found that only 16
per cent of claimants in discrimination claims were still working for the
employer against whom they made their claim. This means that the
effect of Clause 2 would be that in 84% of discrimination cases the
employment tribunal would no longer have power to make
recommendations to employers to take steps to improve their practices
so as to avoid discriminating against other employees.
The current power to make wider recommendations does not apply in
respect of equal pay claims. However, from 1 October 2014 the Equality
Act 2010 (Equal Pay Audits) Regulations 2014 requires an employment
tribunal to order an employer who loses an equal pay claim to carry out
an equal pay audit (unless specified exemptions apply).
Amendment [x] would remove Clause 2 from the Bill, thus preserving
employment tribunals’ current power to make wider recommendations
following a finding of unlawful discrimination.
1
https://www.gov.uk/government/publications/survey-of-employment-tribunal-applications-2013
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Our analysis
The purpose of employment tribunals making recommendations to
employers following a finding of unlawful discrimination is to prevent or
reduce future discrimination. Thus, recommendations are an important
way of helping employers who have discriminated to improve their
practice and ensure they treat their employees fairly in future.
An employment tribunal hearing a discrimination case hears evidence
about the circumstances in which the unlawful discrimination occurred
and is therefore well-placed to identify steps the employer can take to
rectify any discriminatory practices. In our analysis, recommendations
offer an important means by which employers can learn from their
mistakes and help avoid future discrimination claims.
The current power to make wider recommendations means that these
benefits can occur even when, as in the vast majority of discrimination
cases, the employment relationship has broken down and the employee
has left the employment. In our view, they are an effective way of
tackling systemic issues and practices and so have the potential to
deliver benefits for the employer’s wider workforce.
The Joint Committee on Human Rights (JCHR) made the following
recommendation in its report of 11 June 2014:
“We recommend that the power of employment tribunals to make
wider recommendations in discrimination cases should be
retained”.
The Committee on the Draft Deregulation Bill set out the Commission’s
position on Clause 2 in its report2:
“...The EHRC saw the power as being useful, for both the
company to whom the recommendation is made and to the
Commission in following up tribunal decisions. It did not think that
sufficient evidence had been collected to decide whether or not the
power should be abolished and suggested instead that it be
reviewed...”.
Our review
Since giving evidence to the Committee, we have reviewed over 400
employment tribunal judgments received from employment tribunal
offices between December 2012 and September 2014. We have also
2
http://www.publications.parliament.uk/pa/jt201314/jtselect/jtdraftdereg/101/101.pdf
(page 61, paragraph 201)
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reviewed those cases where we have followed up employment tribunal
decisions involving recommendations.
Criticisms of wider recommendations expressed by Government and
business representatives can be summarised as follows:
1. They impose a burden on employers
2. The power is little used
3. There is no evidence that wider recommendations are effective in
changing employers’ practices
4. There is no means of enforcing wider recommendations
We address each of these points below drawing on the evidence from
our review.
1. Burden on employers
Taking steps to comply with a wider recommendation, for example by
buying in training or engaging lawyers to revise policies or employee
handbooks, may present some costs to an employer who has been
found to have discriminated. However, there is no clear evidence that
wider recommendations are disproportionately burdensome on
employers. The Commission considers that the Government’s approach
to assessing the impact on business of the Equality Act 2010 (Equal Pay
Audits) Regulations 2014 is helpful in considering the extent to which
wider recommendations place a burden on those employers subject to
them.
The Government’s Impact Assessment3 explains that the policy objective
of the equal pay audit regulations is to ensure that where a tribunal finds
an equal pay breach:
“…employers will be required to fully consider their pay policies
and structures and draw up an action plan to rectify any
discriminatory pay differences that may exist. This will result in
fewer future breaches and will consequently reduce the number of
equal pay claims brought against employers”.
In setting out the rationale for regulatory intervention, in goes on to
explain that:
“Failure by an employer to correct the factors which might have led
to a successful equal pay claim against them following an
3
http://www.legislation.gov.uk/ukdsi/2014/9780111117330/impacts
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Employment Tribunal hearing may leave them vulnerable to future
equal pay claims.”
The Commission considers that this applies equally to wider
recommendations made by employment tribunals in non-equal pay
discrimination cases. Having made a finding of discrimination after
hearing detailed evidence, an employment tribunal is well-placed to
recommend steps for an employer to take to avoid discriminatory
practices continuing or recurring. Taking those steps will reduce the risk
of future claims against the employer. Improving those practices should
also benefit the employer’s business in the longer term. For example,
providing relevant training to recruiting managers will help to ensure that
future recruitment decisions exclude discriminatory factors and focus on
securing the best person for the job, or that a manager retains the skills
and experience of a disabled employee by making appropriate
reasonable adjustments.
The Commission believes that employment tribunals use the power to
make wider recommendations proportionately. In the judgments we
have reviewed it is clear that a tribunal will not make a wider
recommendation if satisfied that the employer has or will take steps to
address the discrimination it found.
It has been suggested that the threat of wider recommendations
imposes a burden on business generally by promoting over-compliance
with the Equality Act 2010. However, in its evidence to the Committee
on the Bill, the Federation of Small Business stated that it “did not
anticipate the tangible effect of [repeal of the wider recommendation
power] to be significant as we understand that this power is rarely used”.
2. The power is little used
Our review of cases shows that in 2013:
 wider recommendations were made in 30 cases
 with very few exceptions, recommendations were made at remedy
hearings
 there were 355 remedy hearings in discrimination cases
 wider recommendations were therefore made in 8.5% of those
hearings
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 in many cases the opportunity to make wider recommendations
never arose because the parties settled the case without a remedy
hearing
 wider recommendations tend to be viewed as a remedy for the
complainant and many employment tribunals do not currently
consider making recommendations unless requested to do so by
the complainant.
This suggests that there is indeed scope for the wider recommendations
power to be put to greater use. In our analysis, given the benefits to
employers and employees which can result from wider
recommendations, concerns that the power is little used should be
addressed by encouraging employment tribunals to actively consider
whether a wider recommendation should be made in order to prevent or
reduce future discrimination – not be removing the power. In our review
we identified a number of cases in which no wider recommendations
were made despite the employment tribunal judgment suggesting areas
for improvement which could reduce the risk of further or continuing
discrimination. For example:
 a case involving "totally outmoded" attitudes to race amongst
senior managers of a large organisation which had carried out no
equality or diversity training (possible recommendation: provision
of such training);
 a case where a large financial organisation's employee handbook
"completely misunderstood" discrimination (possible
recommendation: review of the policy and training on the revised
policy);
 failures to adjust a sickness absence policy to take into account
disability related absences (possible recommendation: review of
the policy and training for those operating them).
It is difficult to know for certain why the Employment Tribunal did not
make wider recommendations in such cases, and we would urge the
Government to consider the case for amending the power to require
employment tribunals to consider making wider recommendations once
they have made a finding of unlawful discrimination. If the tribunal did so
as part of giving judgment on liability, rather than waiting for a remedy
hearing, this would increase the opportunities for making wider
recommendations and ensure the benefits of wider recommendations
could reach as widely as possible.
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3. Lack of evidence that recommendations are effective
The Commission's view remains that carefully considered wider
recommendations are valuable to employers looking to improve their
practices to ensure they avoid unlawfully discriminating in the future.
While there is limited evidence on the effectiveness of wider
recommendations due to the relatively few which have been made, in
the majority of cases we have looked at employers have taken action to
comply with wider recommendations. For example:
 in one case the employment tribunal directed the employer to
report back to it to confirm the recommendations had been
complied with, which it duly did
 in another case evidence was given by an employer of the steps
taken to address harassment following recommendations made in
an earlier case.
In our experience, some employers will take action in response to losing
a discrimination case even if recommendations are not made. However,
the judgments we have reviewed suggest that, even where an employer
is intending to take action as a result of losing a case, an employment
tribunal's wider recommendations can be useful in identifying the specific
steps which will be effective. For example:
 in one case an employer had intended to arrange generic diversity
training but the recommendation identified a need for that training
to be specifically on mental health issues
 in another case the tribunal identified the need for an employer to
focus training on those carrying out recruitment within the
company.
Recent high profile cases4 in which significant and wide ranging
recommendations were made provide good examples of tribunals
working with the parties to identify appropriate recommendations to
address discriminatory practices which have an impact on the wider
workforce.
4. No means of enforcement
An employment tribunal does not have the power to enforce wider
recommendations or to impose a penalty for non-compliance. However,
4
Such as Howard v Commissioner of Metropolitan Police (ET case no 2200184/2013 &
2202916/2013)
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the Commission routinely considers all judgments where an employment
tribunal has found an employer to be in breach of the Equality Act 2010.
We do so to assess whether we need to contact the employer to check
what steps they have taken to address any unlawful discrimination
continuing or to prevent it recurring.
We prioritise cases where wider recommendations have been for such
follow-up action. Our aim is to minimise the risk of continuing or
repeated discrimination. We do this by working with, advising and
supporting the employer wherever possible, taking account of their
business circumstances and resources. However, where a co-operative
approach is not possible, we have a range of powers under the Equality
Act 2006 we can use. These include the power to conduct an
investigation where we suspect that there is unlawful discrimination, and
the power to enter into an agreement with an employer so that the
employer undertakes to take specified action; if the employer fails to
comply with such an undertaking, we can apply to the county court for
an order requiring compliance.
Conclusion
We consider that the power to make wider recommendations is an
effective way of preventing unlawful discrimination from occurring and
helping employers to comply with their duties to treat their employees
fairly. The case for its abolition has not been made. Clause 2 of the
Deregulation Bill should therefore be removed.
About the Equality and Human Rights Commission
The Equality and Human Rights Commission is a statutory body
established under the Equality Act 2006. It is an independent body
responsible for promoting and enforcing the laws that protect fairness,
dignity and respect. It contributes to making and keeping Britain a fair
society in which everyone, regardless of background, has an equal
opportunity to fulfil their potential. The Commission enforces equality
legislation on age, disability, gender reassignment, marriage and civil
partnership, pregnancy and maternity, race, religion or belief, sex and
sexual orientation. It encourages compliance with the Human Rights Act
1998 and is accredited by the UN as an ‘A status’ National Human
Rights Institution.
Find out more about the Commission’s work at:
www.equalityhumanrights.com
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