From time to time we are contacted by journalists seeking background information or a legal angle on a news story, such as this one about positive discrimination. We have written about this topic before. We are always happy to help them because it minimises the misinformation about employment law in the media. Even though they generally call us with little notice to meet their publication deadlines!
One such story recently was that the Metropolitan Police is introducing extra help to minorities with the cost of training in order to promote diversity. It will give new recruits £1000 towards the cost of a certification if they are female or from an ethnic minority, but White entrants and males get only £500. One person’s positive discrimination is another person’s negative discrimination.
There are several different types of unlawful discrimination, including direct, indirect, harassment and victimisation and a couple of others. This is direct discrimination.
There are very limited exceptions when direct sex or direct race discrimination is lawful. The Met is relying on the exception for positive discrimination. This legitimises what would otherwise be unlawful direct sex or race discrimination if all of the following are true.
- The employer believes that minority entrants are not proportionately represented.
- That belief doesn’t have to be right, only one that a reasonable employer would have.
- The employer takes steps to enable or encourage minorities to participate.
- The steps it takes must be ‘proportionate’. This means carefully applying a balancing exercise, taking into account factors such as the size of the diversity gap, the amount of help being given to the minorities, the seriousness of the socio-economic difference and the existence of other, less discriminatory ways of fixing the issue.
It’s natural to want to diversify your workforce, and positive discrimination is probably the only way to do it if you are not getting diverse applications, but those who are being discriminated against might have questions about whether this decision is proportionate; questions such as this:
- How has the employer arrived at a one-size funding amount? Was it carefully-calculated or just pulled out of the air?
- How come the funding is the same for both women and ethnic minority candidates? This looks like a broad-brush approach. If women are better- or worse-represented in the Police than candidates with an ethnic minority background, did the Police consider giving them different funding amount?
- Similarly, is it appropriate to treat all those with a minority background with a broad brush? For example, the Black community might be well-represented whilst Asian staff are less well-represented. But both minorities get the same funding.
- If other forces follow suit, will the funding be the same as the Met’s, or will it be tailored because other parts of the country have a difference diversity profile?
- What will a candidate need to do to show that they qualify for the extra funding – is it enough to tick a form, or to honestly identify as such, or to reasonably identify as such? Our understanding (eg from here) is that the Met will rely on self-declared ethnicity data. If so, could this measure and similar measures provide an incentive for more people to self-declare as having minority status in future? Positive discrimination could lead to a ‘tickbox culture’, where the diversity figures start looking better even though the diversity of the workforce doesn’t really change.
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Commission schemes are frameworks used by employers to incentivise employees (typically sales staff). There are many different types of commission scheme; by reference to volume of sales, value of sales, leads generated, renewals and retentions. There may be a minimum threshold and different commission multipliers may apply above and below certain figures.
Sometimes, especially when commissioned employees depart from a company, there can be a dispute as to whether or not they are entitled to commission payments. In this article, we shall look at the state of the law in this area.
The key legal question is whether a commission scheme is contractual or discretionary. If the commission scheme is contractual, then it is binding on the employer. If it is discretionary then it isn’t binding and therefore the employee isn’t entitled to commission payments.
Before we get into the legal ins and outs, it is important to say that a contract can be written, oral or implied by conduct (eg by a history of commission payments).
Is there a written scheme
The easiest way of identifying whether or not a commission scheme is contractual is by looking at the contract of employment. Generally commission clauses will come in two types:
- Commission clause giving the employer partial discretion – A clause giving the contractual right to participate in a commission scheme, but the terms of the scheme are at the employer’s discretion; or
- Commission clause giving no discretion – A clause giving the contractual right to participate in a scheme, but also making the terms of the scheme contractual.
Both the above commission scheme clauses are binding, but the difference is that the first doesn’t allow an employee to query the terms of the scheme (the applicable terms will be the terms of the scheme as of the employee’s termination/notice of termination); the second does.
Implied by conduct
In the rare event that a commission scheme is ‘purely’ discretionary; or if the employment contract is unclear as to whether a commission scheme is contractual, the tribunal would look into all the relevant facts. This includes looking at the conduct of the employer, in particular the custom and practice (e.g. whether or not commission payments have been paid regularly or not). If a tribunal was to find such a scheme was contractual, they would look into all the relevant facts to calculate how much the employee is entitled to in commission.
Employers usually create written schemes to look as though they give definite benefits but use discretionary language to give themselves wiggle room not to pay if they choose. The Courts have said that this wiggle-room mustn’t be abused in an egregious way; any decisions to exercise a discretion don’t have to be reasonable but they must be exercised rationally. That means a decision to pay nothing would be unlikely to fly, as would a decision made without any thought-process or a decision based on personal grudge or favouritism. But a decision to pay something, even a trivial amount, is not easy to challenge.
To avoid disputes, we advise employers to make clear in the contract of employment whether a commission scheme is contractual or not. If it isn’t contractual, then employers should be careful not to operate the scheme in a way where it can be ‘implied by conduct’ that the scheme is contractual (e.g. by making regular commission payments).
By Zahid Reza
Image used under CC courtesy of ILO in Asia and the PacificRead More