26 July 2004
Law firms, like investment banks, have been facing a succession of high-profile discrimination claims. Why? And what can firms do to prevent future employment tribunal litigation? Sex discrimination and equal pay claims in particular have proliferated for many reasons.
Since 1993, compensation for sex discrimination has been unlimited and, as lawyers tend to be highly paid, tribunal awards can be substantial.
The sums at stake, therefore, justify the expense of legal action, in contrast to unfair dismissal claims, where legal fees are likely to eat up most of any award. Also, unlike many employment claims, partners as well as employees can bring discrimination claims.
In addition, lawyers often have resources, confidence and awareness of their rights – not to mention access to specialist advice. Media coverage of claims also emboldens litigants, who will readily understand the potential reputational damage to their firm.
The partnership structure of law firms can contribute to the problem too, with many of the ‘owners’ regarding themselves as empowered to make management decisions. Such individuals’ knowledge of the niceties of employment law and management training often does not match their confidence in taking action.
Attitudes have not always caught up with the times. Behaviour towards women that might have been tolerated as a ‘bit of fun’ at the time many partners started their careers can now easily lead to embarrassing and costly claims.
Habits are starting to change, however. The threat of legal claims is no doubt playing its part, as is the crucial need to retain valuable staff and to match competitors’ moves.
There is much that can be done. First, employment decisions need to be consistent, objective and transparent. In awarding pay rises or bonuses, recruiting trainees or promoting to partnership, firms should be in a position to identify the criteria taken into account and explain how different individuals fared against them.
It is not much help for an employer to have used such criteria if it cannot demonstrate this before a tribunal. Documentary evidence needs to be retained, showing when and how decisions were made and by whom. In discrimination and equal pay cases, decisions made years previously will often come under the microscope.
Second, staff at all levels need training. Equal opportunities training in law firms is presently a growth area, as it is increasingly recognised that both partners and employees need to understand workplace discrimination issues. They also frequently need to be taught basic common sense. Many cases, for example, are lost or settled as a result of incriminating emails. Where the testimony of witnesses diverges, the outcome will often turn on the documents.
Why do intelligent people still send emails creating a permanent record of comments they would never otherwise put in writing?
Third, firms need to address their approach to flexible working and seek to develop progressive policies in this area. Clarity on how to respond to requests for part-time working, for example, will avoid future disputes.
If employers have at least thought about the possibilities and set out their approach, uncertainty and misunderstanding can often be avoided.
Finally, performance needs to be managed fairly and consistently. Claims can arise where the employer’s perception of the strengths and weaknesses of a member of staff have not been communicated to that person. It is very difficult to defend a situation where someone who has had positive appraisals and received no criticism is suddenly confronted with the possibility of losing their job for performance-related reasons. Attempts to argue that the appraisal was misleadingly positive because the line manager did not want to demotivate the employee, or because they wanted to avoid conflict, will cut little ice with a tribunal.
Reported claims actually represent the tip of the iceberg. Many more are resolved privately. Law firms can take proactive steps to minimise the risk of being the next headline-grabbing case.