For those of you who are waiting for the consultation paper from the FCA, PRA and Bank of England on diversity and inclusion in the financial sector, an update has just appeared on the regulators’ websites announcing a delay as follows: We had planned to publish the consultation paper in Q3 2022. We are carefully considering feedback and plan to provide a further update on timing in the next Regulatory Initiatives Grid, which is expected to be published in November.
We are pleased to send you the second D&I View, keeping you updated with the most relevant diversity and inclusion developments from the past quarter.
1. Government's Equality Hub consults on standard for ethnicity data
The government's Equality Hub is consulting on standards for ethnicity data which describe best practice when collecting, analysing and reporting ethnicity data. Although the standards will only apply to government departments and public bodies, they will provide valuable guidance to all UK organisations collecting ethnicity data on employees. If you're considering asking employees about their ethnicity, this is certainly worth a read.
2. Menopause and the workplace - a report from the Women and Equalities Committee
On 28 July, the Women and Equalities Committee published a report on Menopause and the workplace, which criticised the current law for failing to serve or protect menopausal women. Noting that 51% of the population will experience menopause, the Report explores menopause as a health issue, a workplace issue and, fundamentally, an equality issue. The Women and Equalities Committee's recommendations include calling on the government to:
- Appoint a Menopause Ambassador to champion good practice, produce model menopause policies, and trial specific menopause leave.
- Commence section 14 of the Equality Act 2010 to allow dual discrimination claims based on more than one protected characteristic.
- Urgently consult on making menopause a protected characteristic under the Equality Act 2010.
3. Trio of cases on gender related beliefs
In the past three months the Employment Tribunal and Employment Appeal Tribunal have handed down three separate judgments in discrimination claims related to an individual's beliefs about gender issues:
- In Maya Forstater v CGD Europe & ors the Employment Tribunal held that the Claimant suffered direct discrimination as a result of her gender critical beliefs. In a preliminary decision in July 2021 the Employment Appeal Tribunal had ruled that the Claimant's gender critical belief (namely that biological sex, is real, important, immutable and not to be conflated with gender identity) was capable of being a protected philosophical belief under the Equality Act 2010.
- In Bailey v Stonewall and others the Employment Tribunal found that a barristers' chambers discriminated against a gender-critical barrister.
- In Dr David Mackereth v The Department of Work and Pensions & ors the Employment Appeal Tribunal found that the DWP did not discriminate against a doctor who refused to refer to transgender clients by their preferred pronouns.
These three cases highlight the complexities and sensitivities of navigating issues and beliefs relating to gender in the workplace.
4. ICO's strategic plan
In July the Information Commissioner's Office published its strategic plan, ICO25 - Empowering you through information. The plan includes, for example, a commitment to investigating concerns over the use of algorithms to sift recruitment applications, which could negatively impact employment opportunities for those from diverse backgrounds.
5. Women's Health Strategy for England
The Department of Health and Social Care published its first Women's Health Strategy for England. The 10-year strategy builds on Our Vision for Women's Health and sets out to address issues within the health and care system to improve the health and wellbeing of women, and reset how the health and care system listens to women.
The strategy, which notes just over 1 in 3 respondents felt comfortable talking about health issues with their workplace (35%), includes specific ambitions and actions regarding health in the workplace.
6. World Economic Forum - Global Gender Gap Report 2022
The World Economic Forum has published its Global Gender Gap Report 2022, which reports it will take 132 years to reach full gender parity. The report benchmarks gender parity across four key dimensions: economic participation and opportunity, educational attainment, health and survival, and political empowerment. Although this is an improvement against last year's results, trends leading up to 2020 had indicated that the gender gap was set to close within 100 years.
7. FCA focuses on D&I
Ahead of the release of the FCA, PRA and Bank of England joint consultation paper on D&I in the financial sector (expected any day), there has been a flurry of activity from the FCA over the summer months.
D&I and culture has been a common theme in Dear CEO letters and speeches of late. In particular, Nikhil Rathi (CEO of the FCA) delivered a speech on how the UK will regulate for the future. The speech reiterated that D&I is a regulatory issue as less diverse and inclusive leadership teams risks bias, which can result in poorer risk management and made clear that the FCA is continuing to consider further regulatory interventions on diversity and inclusion. Similar comments were included in this speech made by Sarah Pritchard at the end of June.
At the beginning of August, the FCA also wrote to the chair of the Remuneration Committee of proportionality level one Banks, Building Societies and PRA designated investment firms. The FCA emphasised that remuneration and incentives have a part to play in supporting diversity in firms.
8. FSCB - Inclusion of employees with disabilities in financial services
The FSCB has reported that employees with a disability:
- are less likely to feel they have access to fair progression or the ability to raise concerns, especially those not in leadership;
- are more likely than those without disabilities to suggest that leaders should demonstrate more inclusive attitudes; and
- think their organisation would benefit from training on inclusive practices.
To help improve inclusion, the FSCB recommends that firms:
- understand and measure inclusion rather than just diversity;
- develop and demonstrate a culture of listening and learning;
- maintain and demonstrate fair and transparent processes and systems; and
- demonstrate strong leadership on inclusion.
9. Sexual misconduct guidance from the SRA
On 1 September the SRA published guidance setting out its approach to allegations of sexual misconduct (which it defined as conduct related to sexual behaviour which raises a regulatory issue). The purpose of the guidance is to facilitate understanding of:
- The SRA's approach to allegations of sexual misconduct, unacceptable behaviours and when they might become a regulatory matter.
- The boundary between an individual's behaviour in their private and professional life.
- The SRA's expectation that firms will promote and ensure a workplace culture that does not tolerate sexual misconduct.
- A firm's obligations both when investigating these matters internally and reporting them.
10. TUC reports of racism in the workplace
In August, the TUC published a report on racism experienced by ethnic minority workers, calling on the government to introduce a new duty on employers to take action. The report, which covered workplace 'banter', bullying, harassment and 'hidden' institutional racism, reveals that 41% of ethnic minority workers have faced racism at work in the last five years. The responses from ethnic minority workers on the long-term impacts of racism at work included having a negative impact on their mental health, less confidence at work and leaving their job. The TUC has called on the government to work with trade unions and employers to:
- Ensure employers have a duty to prevent workplace racism;
- Improve workers' rights, as ethnic minority workers are disproportionately affected by insecure and unfair working practices (such as low wages and zero-hour contracts);
- Ensure swift and effective penalties are enforced when workers experience racism; and
- Introduce mandatory ethnicity pay gap reporting.
11. Market view
Some recent trends / areas of focus we are seeing in the market include:
- Internship season: this past summer we saw a marked increase in internships focussed on social mobility and diversity across all sectors.
- Global approach: more than ever, our clients are asking us how to navigate D&I issues consistently and cohesively across the globe.
- AI in recruitment: eradicating human biases or entrenching them further?
We loved hearing your feedback on our first newsletter, so please do continue to let us know any additional areas you would like us to cover. To discuss any of the articles in this D&I View or for more information about how we can help you, please contact any of us listed below.
