Employers paying the price for workplace diversity

As the downturn hits home, abiding by equality laws may prove costly for employers, writes Gerard McMahon

REGARDLESS OF economic fortunes, the indications are that Ireland's foreign-national labour force is here to stay. It is estimated that about one in 10 of the population was born abroad. This migration development is one of the most significant challenges facing the State's employers.

Crunch decisions are being taken as to whether companies are going to take part in the "race to the bottom" - by undercutting employment standards via an "Irish Ferries on land" scenario - or whether they can afford to seek advantage at the top of the employment standards ladder.

All the while, State agencies such as the National Employment Rights Authority and Equality Authority are endeavouring to prevent what they adjudge to be the more extreme or illegal measures taken along the former path. However, some of these decisions are causing consternation in employment circles and adding to employers' woes in the most challenging economic environment experienced since the 1980s.

The recent decision by the Equality Tribunal to award €327,000 to a group of non-Irish employees at Goode Concrete on the grounds of race discrimination has left many employers reeling. According to the tribunal, the company was in breach of the Employment Equality Act by virtue of its failure to produce its employment terms and conditions in a language that was understandable to the claimants.

The human resources policy council of Chambers Ireland has labelled this a "matter of grave concern". It may well have a point.

In the current climate, with already spiralling costs and widespread uncertainty, this ruling sets a precedent whereby employers are required to translate all contracts and workplace statements into up to 7,000 languages - the number in use worldwide. Even then, as the council points out, the ramifications of taking on workers with low literacy skills are uncertain.

Where such skills are impaired by disabilities such as dyslexia or dyspraxia, it is established that even the otherwise "model" employer is open to the charge of discrimination under the same equality law.

The knock-on implications of the Goode judgment are potentially calamitous for many employers.

For example, during a recent commission to overhaul the recruitment and selection practices at a Dublin hospital, I was asked by the human resources department and a host of line managers to assess the merit of introducing a "written communications" test.

This request was driven by their experience of recruiting people who subsequently revealed that they could not read the organisation's safety statement, never mind patients' files or doctors' handwriting.

However, the Equality Authority advised: "It would be best practice not to ask all job applicants to sit a written [English] test as this could prove to be discriminatory on grounds of equality [set down in law] and you may leave yourself open to action being taken against you."

Who wants to be the test case before the courts?

Despite the many positive developments arising from immigration, there are signs that employers are not getting the message in respect of the standards to which they must adhere. Successive reports from the Equality Tribunal reveal sharp rises in the number of claims being processed under the heading of "race".

One such case to make the headlines recently involved a black African woman who was awarded €50,000 by the tribunal, having been demoted and then dismissed from her job as a saleswoman.

Sending a warning shot across the business community's bows, the judgment warned that its "award of compensation for the effects of discrimination must be proportionate, effective and dissuasive".

Prior to this, the Labour Court laid down a marker when it ruled in favour of a female Nigerian complainant in a case taken against Campbell Catering, after she was dismissed for taking bananas from the workplace.

Awarding €15,000 - €11,000 of which was in compensation for the "distress and humiliation suffered" - the court warned that "employers have a positive duty to ensure that employees fully understand what is being alleged against them, the gravity of the alleged misconduct and their right to mount a full defence, including the right to be represented".

According to the court, "special measures in the case of non-nationals may be necessary to ensure that the obligation is fulfilled".

The legal entitlement to such "special measures" has now been endorsed by the Goode case.

Equality Authority chief executive Niall Crowley attaches considerable significance to the fact that race is starting to outstrip the other grounds of discrimination set down in the 1998 Equality Act.

According to Crowley, there are both positives and negatives in this development. "There is a strong negative in terms of the scale of the problem and the speed at which it has emerged." However, he says, it is also a sign of growing awareness among the public of their rights.

Crowley draws attention to a recent report carried out for the Equality Authority by the Economic and Social Research Institute, which found that there was a correlation between the adoption of an equality policy and a low level of workplace stress, high levels of job satisfaction and loyalty to the organisation.

Furthermore, he contends that diversity needs to be managed effectively if cohesive teamwork and increased productivity are employers' objectives.

The practical difficulties associated with ethnic diversity were addressed at a recent Irish Management Institute conference, where it was agreed that the management of such challenges is seen as vital to productivity, innovation and employee retention.

Conference contributors acknowledged that the retention of immigrant workers posed serious challenges. For example, many find themselves in jobs for which they are overqualified. When they fail to experience challenging, stimulating work to match their capabilities and skills, they are more likely to move on when the opportunity arises. This is allied to the evidence that there is an earnings gap, whereby immigrant workers earn considerably less than their Irish counterparts.

According to Prof Susan Jackson, a diversity expert at Rutgers University in the US, over the past decade many American managers have been persuaded that a diverse workforce can improve their firms' financial performance.

However, research also indicates that most organisations do not manage diversity effectively. In fact, despite US employers' greater experience in this area, they continue to pay out costly settlements for racism at work.

Jackson concludes: "It is clear that we have a long way to go before realising the promise of diversity."

The implications of this warning do not augur well for Ireland. While open arms and a preparedness to spend money to facilitate integration at work may be feasible in a Celtic Tiger economy, some employers will choke at the prospect of such practices should they feel they're on board the Celtic Titanic.

Some will take solace from the Cabinet's recent decision to approve the Immigration, Residence and Protection Bill which, akin to our British neighbours, envisages a test to ensure that people wishing to remain in the State long term can speak English.

In the interim, however, it looks like employers will have to change all of their documentation into however many languages are necessary to facilitate foreign nationals in their workforce. And that's assuming people can read.

Alternately, they might be well advised to shell out on English language classes.

• Dr Gerard McMahon is a lecturer at DIT faculty of business.