Section 23 Agreements and The Equality and Human Rights Commission
For many employers, equality and diversity are cornerstones of a thriving and successful workplace and they strive to achieve legal and regulatory compliance in these key areas.
However, for some employers, this isn’t always successful. What happens when they fall short in their efforts to achieve an equal and diverse workplace?
The Equality and Human Rights Commission (EHRC) is the body that is responsible for enforcing the Equality Act 2010. To help them do this job, they have a number of functions, which include providing advice and guidance, issuing Codes of Practice, publishing information and undertaking research. When these methods are ineffective, they also have a range of enforcement powers. These powers are set out in the Equality Act 2006, a piece of legislation often overshadowed by the 2010 Act of the same name. They include investigations, unlawful act notices, action plans, agreements and applications to court.
One of those powers is what’s known as a Section 23 Agreement. An organisation that enters into such an agreement with the Commission is committing itself to not breaching equality law; this usually applies to a specific area where they have been found wanting in the past.
A Section 23 Agreement is voluntary; however, when the Commission approaches an organisation to discuss an agreement and they get no engagement, they will consider using their other legal powers.
The Action Plan
Each agreement will take a different form depending on the organisation and the issues they are facing, but generally speaking, it will begin with an action plan to deal with the causes of the unlawful action. There will then be a commitment from the organisation to follow and complete the plan. The action plan will often include steps such as equality training for staff and drawing up new policies and procedures to try and change the culture that may have given rise to discriminatory behaviour.
Under Section 22 of the Act, the Commission can issue a notice requiring an organisation to prepare an action plan, which they must then submit to the Commission for approval. The Commission can either approve it or deem it inadequate and request a revised version or make recommendations as to what it should contain.
Under the Act, and providing it has been approved, an action plan comes into force six weeks after the first draft or revised draft is given to the Commission. In the event of a lack of co-operation from the organisation, the Commission can apply for a court order requiring a first draft (or a revision) of an action plan by a specific date.
If the court order is not complied with and there is no reasonable excuse, then this is an offence and is punishable by a fine not exceeding Level 5 on the standard scale.
If it’s decided that an action plan needs to be varied, for example if circumstances at the organisation have changed, then this can be done by agreement between the Commission and the person who prepared it.
How do Section 23 agreements happen?
When the Commission has evidence that an organisation has breached the Equality Act, it can make an approach to that organisation to enter into an Agreement. In some cases, agreements are signed after a court judgment, but this is not always the case.
The Commission takes the view that a Section 23 agreement can be significantly more cost-effective than a long investigation or legal action from an employer’s standpoint, since they would have to obtain legal representation and tie up both money and time responding to the investigation, legal action or attending tribunals.
The benefits of an agreement
For the most part, employers don’t set out to act in a discriminatory manner; breaches often arise due to problems with workplace culture, lack of education and awareness. Working with the Commission to improve the way the workplace operates and ensure that problems don’t happen again usually results in a positive outcome for the organisation.
An agreement is regularly monitored and assessed to ensure that it is delivering on its intended purpose. This means that any potential problems can be spotted early and rectified.
Once the aims of the Action Plan are achieved, the Agreement comes to an end, but only with the agreement of both the Commission and the organisation, so effectively the decision lies with the Commission; an organisation cannot unilaterally end the Agreement.
What if an agreement doesn’t work?
There are some organisations who don’t have the commitment to follow through on the steps necessary to make a Section 23 agreement work and in the case of such recidivism, the Commission can take legal action to enforce the agreement.
How does the Commission gather intelligence on breaches?
The Commission gathers information from a wide range of sources including court judgments, formal complaints and protected disclosures from employees and other concerned individuals. They are a prescribed whistleblowing organisation which means that an employee who doesn’t feel confident about making such a disclosure to their employer can contact the Commission about it.
The Commission also works with lawyers and other advice providers who are dealing with potential breaches that could benefit from an approach to establish a Section 23 agreement.
What does the law say?
(1) The Commission may enter into an agreement with a person under which—
(a) the person undertakes—
(i) not to commit an unlawful act of a specified kind, and
(ii) to take, or refrain from taking, other specified action (which may include the preparation of a plan for the purpose of avoiding an unlawful act), and
(b) the Commission undertakes not to proceed against the person under Section 20 or 21 in respect of any unlawful act of the kind specified under paragraph (a)(i).
(2) The Commission may enter into an agreement with a person under this section only if it thinks that the person has committed an unlawful act.
(3) But a person shall not be taken to admit to the commission of an unlawful act by reason only of entering into an agreement under this section.
(4) An agreement under this section—
(a)may be entered into whether or not the person is or has been the subject of an investigation under section 20,
(b) may include incidental or supplemental provision (which may include provision for termination in specified circumstances), and
(c) may be varied or terminated by agreement of the parties.
It’s worth noting that under paragraph 3, an organisation that voluntarily enters into a Section 23 Agreement is not admitting to an unlawful act. Therefore, employers who realise that there is a problem with discrimination in their organisation may wish to contact the Commission to discuss an agreement before more serious action is considered.
Things to bear in mind
Although a Section 23 Agreement is preferable to legal action by the Commission, it is not entirely free from consequences; the Commission will mention on social media that it has set up an agreement and will also advise on the same channels that the agreement has come to an end. An organisation which has agreed to a Section 23 Agreement will therefore be admitting that there are problems with discrimination in its culture and practices. Of course, they are at liberty to interpret and describe the Agreement and its implications in whatever manner they choose, but they should be aware of how some people may choose to see it.
The surest way to avoid people finding out about discrimination in an organisation is not to discriminate in the first place; this will require root and branch examination of working practices, organisational culture and the way in which employees are trained as well as the means by which non-discriminatory behaviour is encouraged and rewarded. Proactive expert legal and regulatory advice and guidance from a trusted external provider will go a long way to ensuring that an organisation’s commitment to equality and diversity is met.