Recruitment – Old boys, old hat

On face value, a seemingly minor breach by an employer of the Sex Discrimination Act 1975 would have little relevancy for accountants or other professional firms.

Yet when we learn that the employer was the Lord Chancellor, one of our most senior law officers, the case becomes a little more relevant. And when we also learn that the case means that firms may have to stop relying on the old-boy network once and for all, then all employers should sit up and take notice.

The recent judgment made by a Croydon employment tribunal is in fact a landmark decision in this area.

The background to the case was the appointment by the Lord Chancellor of Gary Hart as his personal adviser.

Hart was a partner at the City law firm Herbert Smith, and a long-standing friend of both Tony Blair and Derry Irvine. The post to which Hart was appointed had not been publicly advertised and it was accepted that it was not open to applications from others.

Indirect discrimination

The two complainants, both women (one of whom was white, the other black), nevertheless felt this selection process was untoward, and alleged unlawful indirect discrimination.

Indirect sex discrimination occurs when an employer applies some requirement or condition for obtaining a job, which tends to exclude more women than men, and which is not justifiable.

‘Applicants must be six feet tall’ would be a requirement working to the disadvantage of women. The same legal principle applies to requirements that work to the disadvantage of racial or ethnic minorities.

In the Irvine case, the applicants alleged that the Lord Chancellor’s approach of selecting only from among those who he personally knew and trusted was discriminatory. Just as fewer women than men are six feet tall, so, it was said, fewer of Lord Irvine’s friends are women or from ethnic minorities, and hence such people had a reduced chance of being selected for the job.

The applicants also said that there was no objective justification for Lord Irvine to select from those known personally to him.

Friends were mainly men

The tribunal accepted the allegation of indirect sex discrimination, on the basis that the Lord Chancellor’s circle of friends included mainly men, and that the woman who made the sex discrimination allegation had a realistic prospect of being appointed.

The tribunal said that he should have been aware that ‘open recruitment enhances the prospect of obtaining the person of the highest calibre’.

However, the allegations of race discrimination were not established, since the complainant did not satisfy the tribunal that she was appropriately qualified. The tribunal will give full reasons, and a remedy, at a later date.

But Hart will stay in his position – the range of remedies available for sex discrimination does not include replacing the job holder with the victim of the unlawful discrimination.

This decision did not involve any great departure from established case law. It attracted attention largely because of the prominence of one party.

On the issue of whether using a discriminatory factor may be justified (and cases establish that often it can), this depends on the facts of a particular case. However, UK legislation must be interpreted to mean that a discriminatory job requirement is justifiable only where the employer is seeking to meet a real and legitimate need. Mere convenience or personal preference will not be enough.

The importance of this case lies in the fact that it demonstrated very publicly the breadth of sex (and race) discrimination law, and showed how recruitment practices may unwittingly be discriminatory. Word of mouth recruitment, or selection by way of choosing personal friends, is out. Wider advertising, and seeking applications from a broader range of possible candidates is in.

The case will not rule out recruiting someone who is a personal friend, but that will be permitted only after an open and fair process, involving an objective assessment of candidates. This is an especially important ruling for small and medium-sized companies which may more commonly appoint in this informal manner – either because it is how they have always operated, or because they see it as being cheaper and quicker. Employers may also have to be more ready to advertise posts externally, rather than simply recruit or promote internally.

The fact that the person making the complaint is unknown to the employer, such that the employer has not ‘deliberately discriminated against’ that person, is no defence; indeed the fact that the complainants are unknown is the very consequence of the failure by the employer to advertise.

More cases are likely

This case will certainly encourage others to raise similar complaints when they see jobs filled in circumstances where there has been no advertisement and they would have had a realistic chance of getting the job. This is especially likely in respect of positions that have some sort of public profile.

Given that the tribunals can award compensation for sex or race discrimination of unlimited amounts, employers should take particular care. The moral of the story must be this: ‘A friend in need of a job is a friend to be wary of.’

Geoffrey Mead is a solicitor in the employment department at London law firm Manches & Co.

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