5Enforcing the law
A culture of employers not following the law
75.Many contributions to our web forum revealed a culture in certain sectors of employers simply not following the law. This is also reflected in the TUC’s written evidence to us:
This is clearly happening, it is widespread and it happens in different industries, which would indicate that perhaps either employers aren’t aware of the health implications of wearing high heels or they are not that bothered.112
76.The evidence we have received clearly highlights a number of sectors where potentially discriminatory dress codes are commonplace. Within these sectors, there will be responsible employers who comply with the law, and irresponsible employers who—whether ignorantly or wilfully—do not. Our witnesses told us that they believed there is not enough of a disincentive for employers to avoid breaches of the discrimination legislation:
John Bowers: They take a punt that nobody is going to bring a claim. Particularly in the hospitality industry … people are working in gap years or on zero-hours contracts, so the last thing they are going to do is rock the boat. Often these sorts of claims are only brought when people have left a particular job and they are bringing other claims, and they effectively, as we call it, top it up with claims such as this. 113
Harini Iyengar: I think that the drop-off in employment litigation is now starting to affect the advice that we give to employers, because where we might have said, “In my opinion, you may well be at risk of claims”, now you have to think, “Can I properly write that?” and instead I maybe have to write something like, “It would be best practice if you did this, this and this”, rather than, “I need to advise you that you may well get sued”. From the business point of view, what you might have been able to present to your board, say, as something we need to do to protect ourselves from getting sued, you might now be presenting to the board as, “This would be best practice if we did this”. Then you look at your rival businesses and ask yourself questions such as whether they are going to be investing the same amount of money into being a best practice employer, and how does that affect our competitiveness?114
John Bowers told us:
You have to get it on the agenda for the main board of companies, and that is partly about making it expensive for people not to comply.115
77.We think lessons can be learned from other areas of law, which might help to increase employers’ compliance with the law in the main sectors identified in this report. In particular, we think injunctions and financial penalties could be used effectively to incentivise employers to follow the law.
78.An injunction is an order which requires someone to do something or prohibits them from doing something. Injunctions are most well-known for their use in court cases where they may be granted to stop the media publishing certain information. In the context of dress codes, injunctions could be awarded to stop an employer requiring workers to comply with a certain dress code.
79.It might help if employment tribunals could use injunctions to provide an interim solution for claimants. It can take many months for a case to be decided by the employment tribunal. For sex discrimination cases, the average length of time from starting the claim until the employment tribunal makes a decision is 28 weeks.116 At the moment, the employer can still require a worker who is bringing a claim to tribunal to comply with the potentially discriminatory dress code throughout this time. We think workers who are thinking about bringing legal proceedings against their employer would feel better supported if the employment tribunal could stop the employer enforcing its dress code while the case is waiting to be decided. John Bowers thought that giving employment tribunals the power to award injunctions in this way would help to ensure that the law is living in practice and not just on the statute books.117 He highlighted that once the injunction had been granted, stopping the employer imposing its dress code policy, this would apply to all the company’s employees, not just the individual claimant.118 Trade unions or the Equality and Human Rights Commission could also bring legal proceedings seeking such an injunction.119
80.Mr Bowers also told us that it would incentivise employers to follow the law if it were made more expensive for employers to breach the law. Currently the remedy which employment tribunals will usually award is a compensation payment, also known as damages. Employment tribunals can award damages for financial loss suffered by the worker, for example, lost wages if the worker was dismissed for not complying with the discriminatory dress code. Employment tribunals can also award damages for the upset and distress caused by the discriminatory dress code policy.120 The amount awarded will vary depending on how badly the worker has been affected by the policy.
81.Mr Bowers told us that these payments would usually be fairly small—in the region of “£250, maybe £1,000”.121 This is below the cost of the fees for bringing a discrimination claim before the employment tribunal which, if it cannot simply be decided on paper and requires a hearing, will cost £1,200.122 This is a strong disincentive for workers who might wish to bring a claim.123
82.Drawing lessons from other areas of employment law, we think the National Minimum Wage Act 1998 is a good example of how financial penalties can be used to incentivise workers to bring claims and also make it more expensive for employers to breach the law. The National Minimum Wage Act 1998 introduced the minimum wage in the UK. It provides for a financial penalty against any employer who is found to breach the law. Such an employer would have to pay the claimant worker the difference between what that worker was actually paid and the minimum wage which was in force at the time—this will change over time as the national minimum wage has steadily increased.124 In addition to this amount, the court or tribunal can order an employer found to have breached the law to pay an additional financial penalty. That penalty is up to double the minimum wage in force at the relevant time for all of the hours which the underpaid worker worked while he or she was not paid the minimum wage. In some cases, this can be a substantial amount of money.
83.Making this sort of financial penalty available in employment discrimination claims could act as an incentive for workers to bring a claim and as a disincentive for employers minded to breach the legislation. A penalty payment system in dress code discrimination cases could be most effective if it required an employer found to have breached the law to make a payment to every worker who was subject to the discriminatory dress code. This would mean that, the larger the company, the more expensive a breach of the law would be. Large companies—which may have in-house legal teams or greater resources to spend on legal advice—would be strongly incentivised to get their dress codes right, thereby setting an example to other, smaller, companies.
84.It is clear that there are not currently enough disincentives to prevent employers breaching the law. While negative publicity will be a disincentive for many employers, this cannot and should not be relied on to prevent unlawful discrimination.
85.The Government must substantially increase the financial penalties for employers found by employment tribunals to have breached the law. Penalties should be set at such a level as to ensure that employees are not deterred from bringing claims, and to deter employers from breaching the legislation.
86.The Government should also make it quicker and easier for the claimant to resolve a legal problem with their dress code by allowing employment tribunals to award injunctions in these types of cases.
The role of employment tribunals
87.The Government’s post-legislative memorandum on the Equality Act 2010 highlights the crucial role of case law in developing discrimination law so that it keeps pace with societal attitudes.125 The memorandum explains that the Equality Act was drafted to reflect legal concepts from pre-existing discrimination legislation, because these concepts had been tried and tested by courts and tribunals. Where the Equality Act did not simply consolidate the earlier case law, the Act sought to use wording which was consistent with the earlier cases in order to provide continuity.126
88.John Bowers and Harini Iyengar explained to us that the anti-discrimination provisions of the Equality Act were drafted with the intent that they would need to be fleshed out by case law (i.e. by employment tribunal decisions). This approach to legislation places a great deal of reliance on claimants bringing claims under the Equality Act—in the case of workplace dress codes, before an employment tribunal—to translate the general principles set out in statute into concrete instances of legality or illegality which can guide those making the law work in everyday situations. We note, however, that in recent years there has been a significant drop in the number of cases brought before employment tribunals: a recent report by the Justice Committee documented an “undisputed and precipitate drop in the number of cases brought” before employment tribunals.127 In particular, the number of sex discrimination cases brought before employment tribunals fell 68% from 2013 to 2015.128 The Justice Committee attributed this drop to the introduction of employment tribunal fees on 29 July 2013.129
89.In its written evidence, the TUC expressed concern that employment tribunal fees “present a significant barrier to justice for employees who have been discriminated against.”130 John Bowers told us that, following the introduction of fees for employment tribunals, the costs of bringing a case could equal or outweigh any damages awarded.131 This, together with the delay in hearing such cases before the tribunal, made it difficult for individuals to pursue claims unless they could gain support from a union or other group to do so.132
90.Both John Bowers and Harini Iyengar also noted the reduction in the number of cases being brought by the Equality and Human Rights Commission, compared with its predecessors (the Equal Opportunities Commission, the Commission for Racial Equality and the Disability Rights Commission). John Bowers told us:
Most of the big cases over the last 30 years have been brought by the predecessors to the EHRC. It is really doing very little at the moment because the funding has been cut back so much.133
91.The Equality Act 2010 was intentionally drafted in a way which relies on test cases being brought to build up a body of antidiscrimination case law. Far fewer of these cases are being brought, however, following the introduction of employment tribunal fees in 2013. We heard that reductions in funding for the Equalities and Human Rights Commission have also had an impact, reducing the opportunities for individuals, often in insecure employment, to obtain support when bringing such a claim. This drop in employment tribunal claims poses an obvious threat to the effectiveness of antidiscrimination law. It is extremely important that a mechanism exists whereby test cases can be brought where employment tribunals may be otherwise unaffordable or unattractive for potential claimants.
92.The Government must ensure that the Equality and Human Rights Commission is able to play an increased role in providing support and funding for antidiscrimination test cases and appeals brought before employment tribunals and courts. The Women and Equalities Committee will want to maintain a watching brief in this area as part of its ongoing scrutiny of the work of the EHRC.
112 Q77
113 Q117. See similarly, Q89
114 Q117
115 Q118
116 HM Courts and Tribunals Service, T420 form (application to the employment tribunal), page 4. Available at: https://formfinder.hmctsformfinder.justice.gov.uk/t420-eng-2016.02.24.pdf
117 Q118 and Q119
118 Q118
119 Q118
120 Where the distress is so great that it causes the worker to develop a psychiatric illness, damages can be awarded for personal injury. These will usually be significantly higher than damages for distress
121 Q118
122 The cost of an employment tribunal discrimination claim which can be decided on paper is £250, and if a hearing is required, this costs an additional £950. See: https://www.gov.uk/employment-tribunals/make-a-claim. Fees have been payable for employment tribunal claims since 29 July 2013
123 Q115 and Q116
124 Section 21 National Minimum Wage Act 1998
125 Department for Education, Memorandum to the Women and Equalities Select Committee on the Post-Legislative Assessment of the Equality Act 2010, Cm 9101, July 2015, para. 4.2
126 Department for Education, Memorandum to the Women and Equalities Select Committee on the Post-Legislative Assessment of the Equality Act 2010, Cm 9101, July 2015, para. 4.2
127 Justice Committee, Second Report of Session 2016–17, Courts and tribunals fees, HC 167, para. 61
128 Justice Committee, Second Report of Session 2016–17, Courts and tribunals fees, HC 167, para. 70
129 Justice Committee, Second Report of Session 2016–17, Courts and tribunals fees, HC 167
131 Q115
132 Q115
133 Q116
23 January 2017