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Comments from the Association of Chartered Certified Accountants

27 March 2002

ACCA is pleased to have the opportunity to comment on the above consultative document. We wish to pass comment only on the following issues raised by the document so trust that a response in this format will be acceptable.

Reversal of proof (para 2.16)

The Directives' reversal of the burden of proof in discrimination cases is, in our view, likely to impose unfair pressure on employers in defending allegations made against them and will do nothing to arrest the steep rise in cases brought before tribunals in the UK. We would urge the Government to avoid exacerbating the potentially unjust consequences of this development by abstaining from adopting the power offered to it by recital 15 of both the Race Directive and the Employment Directive, both of which allow member states to recognise statistical evidence for the purpose of establishing indirect discrimination. In our view, this would have enormous additional potential for the bringing of frivolous claims and put many employers in the position of justifying themselves by reference to statistics and not necessarily by reference to their actions or conduct. We believe that, when bringing any claim for direct or indirect discrimination, the claimant should be required to base the claim on the facts surrounding his or her experience with the employer concerned.

Direct discrimination (para 4.6)

If the definition currently used in the Race Relations Act 1976 is to be extended to the other proposed legislation, then this must be on condition that the provisions of recital 17 of the Employment Directive are acknowledged.

Indirect discrimination (para 5.10)

We consider that a single definition of indirect discrimination based on that contained in the Directives would be logical and help ensure consistency of treatment.

Occupational requirements (paras 9.5 and 9.6)

The consultative document proposes that UK legislation should provide that the basic prohibition against direct or discrimination on any of the relevant grounds should be capable of being overridden where an employer can show that a particular sexual orientation, age, religion or race is an 'essentially defining feature' of the job. We would agree that there are conceivably many circumstances in which a person of a particular type would be more suitable than another, bearing in mind the circumstances of the business, but we would not argue that 'suitability' is the same thing as an 'essentially defining feature'. We suspect that there are extremely few jobs where a person's race or sexual orientation, in particular, can realistically be presented as being an 'essentially defining feature' for the purposes of their employment. If this is indeed the Government's intention in making its proposals in this regard, it would be helpful if it could issue guidance on the specific circumstances in which derogation would be possible. Unless the proposed new definition can be made workable, we would suggest adopting only the criterion of 'genuine occupational requirement'.

Positive action (para 10.5)

We would agree in principle that the current right for employers to take positive action in the area of race should be extended to the areas covered by the Employment Directive. Offering targeted training opportunities on the basis of age would certainly be of real practical benefit in the context of combating age discrimination. Against this, the idea of offering re-training opportunities to persons on the basis of their sexual orientation or religion might well be seen as unnecessary and even insulting by those concerned.

Charities (para 11.7)

Where charities have particular links with specific racial communities, members of their staff will often liaise routinely with members of those communities. We would pose the question, however, of whether the genuine occupational requirement element in such circumstances is to be a member of the same race as the charity's clients or whether it is to speak the same language as those same clients. If it is the latter, then the extension of the Directive to charity employment might have a wider impact than the consultative document suggests.

Small partnerships (para 11.9)

We agree that the Race Directive will have to apply to such firms.

Sexual orientation (para 12.4)

As far as we are aware, the term 'sexual orientation' does not require further interpretation.

'Belief' (para 13.6)

The term 'belief' has the potential to cause great difficulties for employers, as well as tribunals. In our view, the term should be interpreted restrictively, given that, in the Employment Directive, it is used in conjunction with the term 'religion', implying that a belief is intended to be construed as being of a similar profound, moral character to a religion. We agree that it should be made clear that political beliefs are outside the definition. Difficult though it may be to specify what is NOT a 'belief', employers need to be given practical guidance in this area.

Age discrimination (chapter 15)

Article 6 of the Employment Directive provides that member states may provide that pensions schemes may allow the use of discrimination on the grounds of age as long as such practice does not amount to discrimination on the grounds of sex. It is a fact that women in our society have a longer life expectancy than do men. This biological reality is reflected by insurance companies in the differential amounts paid to men and women in retirement annuities. Since an annuity constitutes a guaranteed income for life for the annuitant, an insurance company has to take into account, when calculating the amount payable to the individual purchaser, all factors which it considers to be relevant to the longevity of the purchaser. These factors will invariably include the purchaser's state of health and lifestyle habits, but it will also, inevitably, take into account the purchaser's sex. While it is superficially discriminatory that a woman's monthly income from her annuity will usually be less then a man's of the same age, it is defensible in the context of the nature of the annuity, which, to reiterate, is to provide a guaranteed income for life. A requirement for insurance companies to equalise annuity payments could result in annuities becoming even less attractive than they are now.

Age - Specific issues (para 15.6)

The consultative document suggests that measures such as additional holiday entitlement in recognition of long service, and more generous redundancy packages for longer-serving staff, might be considered to amount to indirect discrimination. We consider that such measures are dependent on service rather than age, and as such do not constitute either direct or indirect discrimination. In any case, we suggest that these sorts of measures could be legitimised under Recital 25 of the Employment Directive.

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