Discrimination at work: what you need to know

Thursday 12 April 2007

Most employers are aware of the prohibition against discrimination.  However it is important to understand the law relating to discrimination and how to deal appropriately with allegations of discrimination.  In this update we outline some of the key issues for employers to consider to avoid placing themselves at risk of being liable for discrimination.

Defining discrimination

Discrimination occurs when a person is treated unfairly or less favourably than another person in the same or similar circumstances.  It can occur at the time of hiring, during the course of employment or when employment terminates.

Discrimination may be unlawful if it is based on one or more of the prohibited grounds of discrimination listed in the Human Rights Act 1993 (HRA) and the Employment Relations Act 2000 (ERA).  These include sex, marital status, religious belief, ethical belief, colour, race, ethnic or national origins, disability, age, political opinion, employment status, family status and sexual orientation.  Unlawful discrimination can be both direct and indirect, and related to a person’s past, present or future circumstances. 

Direct discrimination occurs when one person is treated less favourably than others because of some characteristic they have.  In employment, examples of this may include a job advertising for "strong men" (which is direct discrimination against women on the basis of sex), or a company policy that all employees "must retire at 65" (which is direct discrimination on the basis of age).

Indirect discrimination occurs less commonly and can be more difficult to identify.  Indirect discrimination occurs when an action or policy that appears to treat everyone in the same way actually has a discriminatory effect on a person or group of people on one of the prohibited grounds.  For example, an employer who requires employees to attend work-related training courses after work hours may indirectly discriminate against people with dependants on the grounds of family status.

The legal framework

The two key pieces of legislation dealing with discrimination in employment are the HRA and the ERA.  The HRA makes it unlawful for an employer, or any representative of the employer, to:

• refuse or omit to employ an applicant;
  
  
• to offer or afford less favourable terms of employment, conditions of work, benefits, training, promotion and transfer than are made available to applicants or employees of the same capabilities or similar circumstances;
  
  
• to dismiss or subject an employee to any other detriment; or
  
  
• retire an employee on any of the prohibited grounds of discrimination. 

The HRA provides some limited exceptions where employers may lawfully discriminate in certain circumstances. One exception is where a particular age or sex is a genuine qualification for a job.  For example, bar staff must be over 18 years of age to serve liquor in licensed premises. Another exception is on the grounds of disability, where this is justified for health and safety reasons.

An employee who claims to have been discriminated against may make a complaint to the Human Rights Commission.  When the discrimination is by a fellow employee, the employer may also be vicariously liable, whether or not the action was done with the employer's knowledge or approval.  The employer has a defence if they can show that they took reasonably practicable steps to prevent the discrimination occurring. 

The HRA casts a wide net in terms of who is protected from discrimination.  It covers employees, voluntary workers, people seeking work and independent contractors.  This is in contrast to the ERA which only applies to employees.

The ERA provides an alternative but parallel framework for discrimination complaints.  An employee who claims to have been discriminated against may raise a personal grievance with their employer on the grounds of discrimination.

The ERA provides that an employee will have a personal grievance if their employer (or a representative) discriminates because of:

• one of the prohibited grounds of discrimination (which are the same as those in the HRA);
  
  
• the employee's refusal to do work on health and safety grounds; or
  
  
• involvement in the activities of a union.

An employee who has a complaint involving discrimination may raise a personal grievance under the ERA, or make a complaint to the Human Rights Commission under the HRA - but not both.  A range of remedies may be awarded under the ERA and HRA including an award for damages, compensation for humiliation loss of dignity or injury to feelings, an order not to continue or repeat the breach, or an order for an apology.

When can discrimination arise?

Discrimination may arise in many areas of employment including training opportunities, promotion decisions, the provision of fringe benefits, termination of employment and retirement.  Employers should be aware of the potential for discrimination when making any business decision about their employees.  A simple question to ask is: Am I treating someone differently because of an attribute they have or that I think they have?  Considering this question will help to prevent policies or decisions being put in place that inadvertently discriminate against an employee or group of employees.

An area of employment which the HRA places a particular focus on is in advertisements, applications forms and interviews.  Under the HRA, it is unlawful for an advertisement to indicate an intention to discriminate.  It is also unlawful for any person to circulate any application form, or to make any inquiry (say at an interview), about any applicant which indicates an intention to discriminate.  In Imperial Enterprises Ltd v Attwood (2002) the employer's pre-employment application form asked, "do you have any medical problems of any kind?  If yes, please detail what and when".  The Employment Court found that this question indicated an intention to discriminate on the prohibited ground of disability. 

Dangers of discrimination

Because unlawful discrimination can arise in many different situations, employers can be in danger of discriminating against an employee or prospective employee without intending to.  However, whether or not it is deliberate, discrimination can be costly and disruptive for those involved.  For employers, discrimination against employees or job applicants can render companies liable to financial penalties and/or personal grievance claims.  In addition to the litigation risk, discrimination has a detrimental effect on employees and business, which can lead to stress, low morale, decreased productivity, and high staff turnover. 

For employees, discrimination against co-workers is not only unlawful, but may result in disciplinary action being taken against them for misconduct and/or breach of company policy. 

Dealing with discrimination responsibly

Employers need to take active steps to implement clear non-discriminatory policies, which are backed up by training for all employees, especially supervisors and managers.  In our view, employers have a responsibility to ensure that their employees are provided with adequate training on discrimination.  If problems do arise, clear policies could mean that legal action may be avoided.  At the very least employers should take all complaints seriously; act promptly when a complaint is made; and consult fully with all parties involved.  Disciplinary action against a particular employee may be appropriate in some circumstances.

Bell Gully is able to provide specific training for workplaces on discrimination, harassment and bullying.  The training course can be customised to reflect particular business policies and procedures and relevant industry issues. In addition, the Mediation Service, which is provided free of charge by the Department of Labour, may be a useful mechanism for resolving discrimination issues which may arise in the workplace. For further information, please contact your usual Bell Gully advisor or:

AUCKLAND

Rob Towner
Partner

WELLINGTON

Andrew Scott-Howman
Partner

Maria Berryman
Senior Associate

Matt McGoldrick
Solicitor