1.5 Contracts of employment and discrimination

The issue of contracts of employment and discrimination is addressed in the  Equality Act 2010, which states that employers are not allowed to discriminate against employees for anything known as a “protected characteristic”. These include age, gender, gender reassignment, sexual orientation, pregnancy and maternity, race, marital or civil partnership status, religion or belief and political orientation or belief. If something is not a protected characteristic then dismissing someone for it – for example, for having big ears or an annoying habit of sniffing loudly – may be morally unfair but it is unlikely to be legally discriminatory.

One of the most common causes of discrimination within contracts of employment is disability. Whether the applicant is registered as disabled is not the same as whether the applicant has a legal disability. A legal disability is usually a condition which lasts or is expected to last for at least 12 months and which has a substantial and negative impact on everyday life. Conditions such as depression, blindness, HIV, diabetes and cancer would or could all fall into this category. Certain conditions are specifically stated not to be a disability, for example alcohol addiction, addiction to illegal drugs, hay fever and vision problems which can be corrected by glasses or contact lenses. Intermittent or fluctuating conditions are covered all the time, regardless of whether the symptoms are occurring at any particular time.

The cause of the disability is irrelevant; for example if an employee develops liver cancer through alcoholism, the cancer is a disability even though the alcohol addiction is not. Similarly, if an employee eats so much that he develops diabetes, the diabetes is covered even if the employee could reduce the symptoms by altering his diet. The employees are still protected even though in some sense they have caused their own disability. If the condition can be controlled by medication or medical devices, the test is how the condition would affect the employee if he or she did not take the medication or use the support.

If an employer is not sure whether a condition would be classed as a disability, they may need to seek a medical opinion.

An example of directly discriminating against an employee would be giving all employees the right to company sick pay in their contract, except the one with a disability – because they are likely to need more time off sick and so the cost to the company would be greater. This is automatically unfair.

Direct disability discrimination may be lawful in certain, limited situations. It may be a requirement of certain work that the person employed is disabled; for example, someone working as a counsellor for disabled people may need personal experience of a particular disability. Sometimes it can be justified because there is a genuine occupational requirement for a certain type of person. For example, if an actress is cast to play a young person, then after ten years in the job, she may appear too old to fulfil the job role well and be fairly dismissed.

The Equality Act places a duty on employers to make reasonable adjustments to accommodate disabilities. For example, permitting an employee whose condition causes him or her to tire easily to work part time, providing auxiliary aids such as voice-activated software and allowing time off for medical appointments. When writing contracts, employers should be mindful that disabled employees may need to have a slightly different contract to their other employees.

In addition, employers should not draft contracts which disadvantage certain groups of people. For example:

• adding a contractual clause that employees who regularly work overtime until 6pm each evening will be entitled to a bonus may indirectly discriminate against women, who are more likely than men to have to leave work earlier to deal with childcare.
• employers should take care when offering a bonus related to attendance levels. It is generally fine to give employees a financial incentive not to take sick days for minor ailments such as headaches, coughs and colds but absences connected to disabilities or to pregnancy should be discounted for such purposes.
• If employers state in their contracts that all employees must be available to work on Sundays they should ensure that this is strictly necessary in order to avoid discriminating against Christians.
• Making a benefit dependent on length of service is potentially age discrimination as it is more likely to disadvantage younger employees. All benefits that accrue in the first five years of service are completely exempt but care should be taken that benefits which accrue over a longer period can be justified. For example, if a company gives extra holidays for each year of service, they should have data available to show that doing so increases employee loyalty.

It is worth considering that discrimination can be indirect, which can sometimes be harder to spot. To take a (slightly ridiculous) example, suppose that a contract has a term written into it which states that all personal trainers at a gym will achieve a bonus if they can achieve a body muscle percentage of over 40%. On the face of it, this is not discriminatory because body composition is not a protected characteristic under the Equality Act. However, on reflection, it is clear that this is indirectly discriminatory against women (who find it harder than men to gain muscle mass) and perhaps employees with certain medical conditions.

There is no limit on the amount of compensation that can be awarded by tribunals in discrimination claims so it is important to take due care to avoid it when drafting contracts of employment.

Does this seem like a minefield? It doesn’t have to be! For help on avoiding discrimination in contracts, contact info@p4b-law.co.uk