Exclusive Q&A on Labour and Employment Law with Karen Seward
Posted: 13th February 2017 08:13
Have there been any recent regulatory changes or interesting developments?
One of the most important developments in years is the introduction of the Gender Pay Gap Reporting Regulations, which come into force in April 2017. This regime will require employers with 250 or more employees to publish on their website the mean and median pay and bonus gaps between men and women. In addition, this data must be supplemented by the percentage of men and women who receive bonuses, and into which salary quartiles they fall.
For the first time employers will have a diversity shop window, through which candidates can see through and existing staff can see out. Come April 2018 (the long stop date by which the data must be published), there will be a flurry of activity from within the business to present the best possible narrative on the numbers. Of equal concern will be the other stakeholders: the media seeking out good copy; employees (backed by aggressive claimant lawyers) fishing for statistics and data upon which to base an equal pay claim, or to tie up an employer’s resources with burdensome subject access requests. And then there will be the competitors with a better story to tell, who will be instructing the head hunters with a shopping list for talent.
What does the gender pay gap look like in your jurisdiction and is there any attempt being made to reduce it?
The provisional results for the 2016 UK gender pay gap are (when part-time employees are included) 18.1%. The gap decreased from 19.3% in 2015, the largest year-on-year drop since 2010. This is also the lowest gender pay gap since the ONS survey began in 1997, when the gap for all employees was 27.5%. As employers have been preparing for the new gender pay gap regime outlined in question 1 above, it would appear that this has had a direct impact on the numbers.
In what ways are new data privacy and social media issues affecting your approach to employment law and how do you advise clients on these matters?
From a large employer’s perspective, which may be required to service hundreds of data protection subject access requests (DSARs) each week, the difference in approach of the Information Commissioner’s Office (ICO) on the one hand, and case law on the other, can be problematic. The ICO takes the view that requests for data are purpose-blind and must be serviced whatever the employee’s motive. Conversely, the Courts have taken a more robust approach and have placed some limits on an employer’s duty to respond, confirming that they do not need to comply with those that are solely a pre-litigation disclosure tool, and that only a “reasonable and proportionate” search for personal data is necessary.
One of the most important developments in years is the introduction of the Gender Pay Gap Reporting Regulations, which come into force in April 2017. This regime will require employers with 250 or more employees to publish on their website the mean and median pay and bonus gaps between men and women. In addition, this data must be supplemented by the percentage of men and women who receive bonuses, and into which salary quartiles they fall.
For the first time employers will have a diversity shop window, through which candidates can see through and existing staff can see out. Come April 2018 (the long stop date by which the data must be published), there will be a flurry of activity from within the business to present the best possible narrative on the numbers. Of equal concern will be the other stakeholders: the media seeking out good copy; employees (backed by aggressive claimant lawyers) fishing for statistics and data upon which to base an equal pay claim, or to tie up an employer’s resources with burdensome subject access requests. And then there will be the competitors with a better story to tell, who will be instructing the head hunters with a shopping list for talent.
What does the gender pay gap look like in your jurisdiction and is there any attempt being made to reduce it?
The provisional results for the 2016 UK gender pay gap are (when part-time employees are included) 18.1%. The gap decreased from 19.3% in 2015, the largest year-on-year drop since 2010. This is also the lowest gender pay gap since the ONS survey began in 1997, when the gap for all employees was 27.5%. As employers have been preparing for the new gender pay gap regime outlined in question 1 above, it would appear that this has had a direct impact on the numbers.
In what ways are new data privacy and social media issues affecting your approach to employment law and how do you advise clients on these matters?
From a large employer’s perspective, which may be required to service hundreds of data protection subject access requests (DSARs) each week, the difference in approach of the Information Commissioner’s Office (ICO) on the one hand, and case law on the other, can be problematic. The ICO takes the view that requests for data are purpose-blind and must be serviced whatever the employee’s motive. Conversely, the Courts have taken a more robust approach and have placed some limits on an employer’s duty to respond, confirming that they do not need to comply with those that are solely a pre-litigation disclosure tool, and that only a “reasonable and proportionate” search for personal data is necessary.
We advise our clients to think strategically about responses, and to consider a matrix of factors including:
- the long position, including litigation strategy;
- whether the data will come out in litigation in any event, and whether there is any advantage to delaying disclosure;
- imply context to assist with scoping the request;
- think about how non-cooperation will be viewed by the ICO; and
- think about whether non-cooperation may be viewed as a whistleblowing detriment or discrimination victimisation.
With regard to social media, whilst it has certainly made an impact in the workplace by making misconduct in that space very visible, the law remains unchanged. Employers have updated various policies to ensure that employees are made aware that work-related (and even some non-work-related) comments and conduct may be subject to workplace rules, particularly where they bring the company or individuals into disrepute. On the positive side, many employers are encouraging employees to promote the business through social media and are providing training to maximise the advantages and minimise the pitfalls.
What are the legal requirements for companies to accommodate under-represented groups in the work force? Are there any additional measures companies should consider implementing?
The UK’s Equality Act 2010 permits two types of positive action for under-represented groups. This applies to a wide range of protected characteristics including age, disability, gender, race, religion or belief, and sexual orientation.
The first is a general positive action, which makes provision for an employer to take action (which is lawful but not mandatory) to:
- enable or encourage people who share a protected characteristic to overcome a disadvantage connected to the characteristic;
- meet the needs of people who share a protected characteristic where those needs are different to those of people who do not have the characteristic ; or
- enable or encourage people who share a protected characteristic to participate in an activity in which their participation is disproportionately low.
Examples of this type of permitted positive action include setting targets for increasing participation of the targeted group, and providing mentoring.
The second type of positive action is permitted in recruitment and promotion, and this is far more controversial. This allows (not compels) employers to give preferential treatment to job candidates at the point of selection. Special treatment is only allowed if both candidates are equally qualified and if the person treated favourably is from an underrepresented group or suffers a disadvantage. The objective must be to overcome or minimise the disadvantage or to encourage participation by a particular group.
For example, the police service employs a disproportionately low number of people from ethnic minorities, which in some places is unreflective of the community they serve. Preferential treatment would be permitted where there was a tie break in terms of suitability and one candidate was from an ethnic minority background.
This rule does not permit a situation where, for example, women are underrepresented on the board of a company, and a woman is appointed where the man is the better qualified candidate. If a woman was selected in those circumstances, then the man would have a good claim for unlawful sex discrimination.
Which dispute resolution method do you find you most commonly recommend to employers and why?
For every situation, we would advise our clients to consider the full range of options from settlement to mediation to litigation, and these will vary depending on circumstances. It is usually in both parties’ interests to settle and we would always encourage this provided it was appropriate. There may be occasions where the employer, as a matter of principle, wants to litigate to send the right message to interested parties. This strategy might be appropriate where the employer is accused of discrimination in circumstances where none exists. Much thought will go into the strategy to reach the best outcome for our client.
What trends are you seeing with regards to whistleblowing cases?
The financial services sector is setting the trend in terms of reinvigorating whistleblowing arrangements in an effort to encourage those who are privy to malpractice to come forward to the employer or go directly to the regulator, safe in the knowledge that there will not be retaliation for making a disclosure. The new whistleblowing regime is very wide reaching and almost anything can be a “reportable concern”, and almost anybody can be a whistleblower. One of the significant changes is to require in-scope employers to appoint a director or equivalent as a Whistleblowing Champion to oversee the integrity, independence and effectiveness of arrangements, thereby elevating whistleblowing to a board issue.
Case-wise, the trend seems to be along similar lines in that the courts are keen to find that a disclosure is protected if at all possible. One of the recent changes to the Public Interest Disclosure Act 1998 (PIDA) was to require disclosures to be in the public interest to stem the tide of disclosures relating to workers’ employment contracts. This came about as a result of a case called Parkins v Sodhexo, which had the effect of bringing personal interest, as opposed to public interest, cases within the scope of PIDA. So far the cases decided under the new rules have not been limited to protection in the public interest, or have interpreted this concept very widely. For example, the Employment Appeals Tribunal (EAT) held that a small group of 100 managers is sufficient to satisfy the public interest test. Another EAT decision found that a dispute between an employer and its employees on their terms and conditions was also capable of being in the public interest.
Whether it is a strategic employment issue, a highly sensitive crisis or risk management problem, or complicated litigation, Karen Seward is the person to know. Her expertise ranges from boardroom business to social media challenges in the workplace. She is highly regarded by her peers and clients, which span financial institutions, global corporates, blue chip multinationals and law firms.
Chambers UK 2017 (Employment) notes that Karen is "an impressive individual" who "is the grand master of cutting directly to the heart of an issue." Commentators hold her in high regard, with one noting: "she is extremely effective. When you're on the other side of her arguments, you can really feel the force of them." Legal 500 2016 (Employment) describes her as ‘formidable and no-nonsense’.
Karen Seward contributes to Allen & Overy’s employment law blog: Employment Talk.
Karen can be contacted on +44 20 3088 3936 or by email at karen.seward@allenovery.com
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