It is often stated that so-called “positive action” aimed at righting historical injustices is permitted and indeed encouraged under UK law. But how true is this in reality? And is the use of such justifiable as a means of pursuing the end of diversity and inclusion targets?
According to the Advice and Guidance of the Equality and Human Rights Commission, such action constitutes what it terms direct discrimination if a person who did not share with you a protected characteristic such as gender or race would have been treated better than you in similar circumstances as a consequence of the policy. Such was in fact forbidden under the 1976 Race Relations Act, which made it unlawful to discriminate on grounds of race, colour, nationality (including citizenship), and national or ethnic origin, and the 1975 Sex Discrimination Act which did the same for biological sex. These acts covered employment, education, training, housing, and the provision of goods, facilities and services. Although these and other related acts were repealed and superseded by the Equality Act 2010, which also extended the list of protected characteristics, such discrimination remains forbidden.
However the 2010 Act at the same time introduced the “objective justification” defence which could be offered in mitigation of acts of discrimination if done for a good reason – that is “a proportionate means of achieving a legitimate aim.” While it is often suggested or implied that this renders “positive action” acceptable and even desirable, such would appear to be an oversimplification. In fact the bar is set relatively high and it is up to the party engaging in potentially illegal discriminatory behaviour to demonstrate that the justification they offer is adequate. According to the aforementioned Advice and Guidance, it is required that:
the aim must be a real, objective consideration, and not in itself discriminatory (for example, ensuring the health and safety of others would be a legitimate aim)
if the aim is simply to reduce costs because it is cheaper to discriminate, this will not be legitimate
working out whether the means is ‘proportionate’ is a balancing exercise: does the importance of the aim outweigh any discriminatory effects of the unfavourable treatment?
there must be no alternative measures available that would meet the aim without too much difficulty and would avoid such a discriminatory effect: if proportionate alternative steps could have been taken, there is unlikely to be a good reason for the policy or age-based rule
Words and terms used in the Equality Act, Equality and Human Rights Commission
It is of interest to consider how these requirements work out in practice. We shall seek to do so in relation to some of the justifications which are offered for potentially discriminatory policies devised to promote “diversity and inclusion” in large corporations currently.
Considering the first requirement, an example of a clearly discriminatory activity often engaged in is recruitment drives which are targeted at women or non-white races (or ethnicities, the two are often conflated). Such campaigns are generally justified as a means to achieve the company’s diversity aims, which usually involve commitment to hire more females and non-whites. While the Equality Act 2010 itself (and subsequent revisions) puts an onus on corporations to publish data relating to any possible “gender pay gap” and to explain deviations from parity, it does not mandate parity. So it is not clear that engaging in discriminatory practices is a justifiable alternative method to deal with the problem the company faces of not being able to explain discrepancies.
Sometimes the recruitment effort may be disguised as a work experience prior to possible recruitment in a subsequent year, to avoid the charge of selective/discriminatory recruitment. But a proverbial nod is as good as a wink. It may be argued that the purpose is not selectively to recruit non-whites and non-males. But improving their chances of recruitment is surely the reason applicants sign up, whatever grandiose-sounding goals of achieving social justice the corporation may set forth in its marketing materials, so burnishing its woke credentials. In any event, even if such claims are taken at face value this makes the discrimination less, not more, justifiable. The corporation has no requirement or mandate to pursue social justice. And if it chose anyway to do so, there are plenty of other non-discriminatory strategies it could employ to assist those experiencing disadvantage in society. But more likely the goals of the corporation are aligned with those applying for the scheme: selective recruitment. Whether this can be described as a legitimate goal for the corporation to pursue as an objective justification brings us to our next point.
Concerning the second and third requirements above, evidence is also regularly cited attempting to demonstrate that greater diversity has a performance-enhancing impact on the company. The UK Financial Conduct Authority has recently published an extensive literature survey on the subject, concluding that:
The overarching finding is that the evidence on the benefits of D&I [diversity and inclusion] in the workplace is mixed, for a number of reasons. On balance, the evidence points to more positive outcomes, for business performance to some extent, and especially for corporate governance and risk management for diverse and inclusive organisations, particularly when it comes to gender.
Review of research literature that provides evidence of the impact of diversity and inclusion in the workplace, UK Financial Conduct Authority (Feb., 2020)
The implication they seek to draw is that pursuit of diversity goals by hiring and promoting more women can serve subsidiary goals which provide the requisite justification to resist charges of discrimination. Aside from the difficulty of portraying “mixed” findings as providing a “real objective consideration,” there is the question how, if reducing costs is not an acceptable justification, the possibility of enhanced business performance can be held up as such, as it very often is? If enhanced business performance can be used to recruit non-males selectively, it can by the same token potentially be used as a justification selectively to recruit males. If this is not what is wished, the productivity enhancement argument should be disallowed. It is remarkable that it is nonetheless cited almost without challenge these days.
And are we to take seriously the suggestion that risk management is significantly enhanced by employing more women? In the first instance, very few people in financial institutions have any direct impact on its risk appetite. And even if we were to focus on these roles, would it not make sense to monitor the propensity for risk-taking of all applicants in the recruitment process, rather than using gender as a (probably rather poor) proxy for such? And can use of the blunt instrument of engaging in discriminatory practices to hire more females in the hope of improving risk management reasonably be described as a “proportionate” means? In any event an element of risk-taking is necessary for all banks and indeed for all corporations. The question is not whether employees are more or less risk-averse but whether they operate within the risk appetite parameters set by the bank. Regulators recognise that the way to ensure this is not by personality profiling but by the enforcement of robust risk management processes and have been at great pains to enforce this over the last decade or so.
A further argument made by Vivek Ramaswamy, founder of the successful biotech company Roivant Sciences, in his recently published book is that in his experience executives will often pursue diversity goals or otherwise engage in what he terms Wokenomics as a means of pursuing their own goals at the expense of the company they are supposed to serve.
CEOs can do whatever they want so long as they say that they have everyone’s best interests in mind. Wokenomics is a powerful weapon for CEOs, which they can readily deploy as a smoke screen to distract from greed, fraud, and malfeasance. It provides the perfect alibi: accountability to everyone is accountability to no one at all.
“Woke Inc.: Inside Corporate America’s Social Justice Scam”, Vivek Ramaswamy, Center Street (August 17, 2021)
He goes on to cite numerous well-known examples from recent experience where exactly this has happened. That regulators should not only allow company directors to behave in this way but to demand it of them, so opening the door to moral hazard and the risk that encompasses, seems remiss in the extreme.
An interesting further consequence of regulatory bodies taking such positions is that companies then use the regulatory pressure (or threat of such in the future) as a real objective consideration to justify discriminatory policies they might otherwise struggle to defend. In this way both both regulators and the bodies they are empowered to regulate avoid accountability to the requirement of finding real, objective considerations for discriminatory actions. One wonders if either party has actually read the legislation whose requirements they claim to be satisfying by the policies they are pursuing?
As we have indicated, further justification is sometimes sought in terms of selective recruitment and promotion of staff being a contribution to the establishment of “greater social justice.” This brings us up against the third requirement: it would be very hard to measure any “justice” achieved by such measures and this would have to be balanced against a likely sense of injustice that white males might feel on the basis that they were being personally disadvantaged in their application for roles they believed themselves qualified for.
A major problem with such “social justice” arguments is that the goal is not well-defined. What constitutes the “right” proportion of male to female employees in a given industry or role? Is it legitimate, if a certain type of work is less popular for women to apply for, that companies apply discriminatory recruitment policies in an attempt to railroad more women into their industry as a means of satisfying their diversity targets? Can social justice be said to be enhanced by such social engineering practices?
And, if racial or ethnic diversity is the goal, what is the background reference level against which comparison should be made? Many large corporations, particularly in the finance industry which we considered above, recruit from a pool reflecting national or even international demographics, which often look very different from those of the city employees are being employed to work in. And teams are often virtual with members collaborating across several continents.
Not only does this make the right target level representing the accomplishment of social justice difficult to establish, it is not even clear the direction in which a requirement for justice and equality requires us to move in. It has been reported by no less authority than BBC News that, although there may be issues in the numbers of women entering certain university courses and the numbers of black youths in some inner city areas entering higher education, the situation on the national level looks very different. The number of UK females entering higher education is around 33% higher than the number of UK males. And the lowest rate of entry by race/ethnicity is white British. Also, from the UK Government’s figures, black state school pupils are 46% more likely than white state school pupils to enter higher education. What social justice measures are needed or being deployed to address these imbalances?
This brings us to the fourth requirement: that alternative non-discriminatory measures should first be exhausted. Given the speed at which discriminatory practices such as race- and gender-based recruitment, mentorship, sponsorship and promotion policies have been proposed in response to the recent push for greater diversity and inclusion in UK corporations, it is hard to argue that all reasonable approaches based on non-discriminatory practices have been tried and have failed. Again in the words of the Equality and Human Rights Commission’s Advice and Guidance, is it not then the case that “there is unlikely to be a good reason for the policy”?
The counter-argument is typically made that “positive action” is necessary as a means to address what is termed “systemic bias” against certain minority groups (setting aside the question of whether women can rightly be described as a minority). By this is meant that it is not possible to identify particular actions by or against particular individuals which have resulted in relative disadvantage for the group. So the injustice has to be identified and therefore addressed on a statistical basis at the group level. But to view things in this way is to bake the idea that the problem is intractable other than by employing discriminatory means into its formulation. Effectively it is being conceded that non-discriminatory measures have already been exhausted and indeed are incapable of addressing the problem adequately.
This is clearly not what the authors of the Equality Act 2010 had in mind, otherwise they would presumably not have asserted the need for alternative measures to be first exhausted. Indeed Diversity and Inclusion departments nationwide inevitably run a wide range of programs to address systemic (or unconscious) biases. Many are not discriminatory. But most are of fairly recent origin. They need to be given a chance to work and to evolve based on observed results before it can be claimed the case has been made to adopt discriminatory practices as a necessary step.
Unfortunately industry regulators seem little interested in monitoring whether the bodies they regulate implement diversity policies in a non-discriminatory way, and are intent on pressurising them instead into attaining targets or quotas with few questions asked about whether the means employed are proportionate to the end, or indeed sanctioned in law.
