Legal Risks Arising From Recruitment And Selection Process | ABC Ltd Case Study

Demonstrate the relationship between organisational changes at work, employee relations and the wider social and economic background.
Identify the causes of disputes arising from employment issues and the methods used to mitigate and remove these.
Evaluate the role of legislation, including European Law in employment relations.

Recruitment is the process of locating and engaging competent candidates for employment; it begins when new recruits are sought and ends when they submit their applications resulting in a collection of applications to select new employees from (Laxman, 2008, p. 19).  Selection, on the other hand, is the processes of choosing a suitable candidate from the applicants to fill the position (Business Case Studies, 2017). Recruitment encourages possible candidates to apply so as to create a talent pool while selection screens the pool for the best-suited candidate. Good practice entails that the adopted system is reliable, valid, interpretable, practical, diverse and legitimate in that it encompasses any provisions of the law such as equality, fairness and confidentiality in the recruitment process (Cooper, et al., 2005).  The recruitment and selection process in the UK is guided by various legislation and codes of practice with regard to discrimination and protection of employee information. However, the main sources of law in this regard are the Equality Act 2010, which embodies the four major EU Equal Treatment Directives and other anti-discrimination laws, the Employment Relations Act 1999, the Employment Rights Act 1996 among other statutes and codes of practice.

An internal recruitment gives an opportunity for promotion to current employees so as to motivate them by availing opportunities to develop their careers (Philips & Gully, 2009, p. 18). The recruitment process is subject to certain legal requirements starting from the advertisement stage which under UK and EU legislation should be non-discriminatory (Aylott, 2014, p. 66). It is absolutely necessary to ensure total fairness and openness in this process first in adherence to the law and also to ensure each candidate’s experience is fair as this affects the recruitment and selection of high-quality candidates in the long-run (CIPD, 2013, p. 1). The following are the legal risks arising from ABC Ltd’s recruitment and selection process.

Informal recruitment method: The law does not make any specific provisions requiring employers to advertise every job. Recruiting acquaintances and family members, however, can lead to claims of indirect discrimination if there is no external advertisement. Indirect discrimination is prohibited under s.19 of the Equality Act 2010; applicants who are unaware of the opening until the recruitment process has passed due to an informal recruitment strategy can claim indirect discrimination against the company.

Joan Keenan: The rejection of her application prima facie raises the risk of discrimination on grounds of age as well as sex especially since she has been noted to qualify on skills on the basis of being branded a ‘good recruit’.  Indirect discrimination occurs where a condition or requirement applied by the employer puts a certain protected group at a disadvantage. Recently in Aurelie Fhima v Travel Jigsaw Ltd ET/2401978/2014, the rejection of an application by a Jewish woman brought about an indirect discrimination charge when the company in question failed to show that her inability to work on Saturdays, as she observed Sabbath, was sufficient reason to reject her application. The company was found liable for indirect discrimination which is prohibited under the Equality Act 2010. The assumption by the selection team that the male-dominated team, as well as the clients, would not take kindly to a female Sales Director raises a legal risk of discrimination for ABC Ltd.

Legal Requirements for Recruitment and Selection

Aldo Viscida: The legal risk arising in Aldo’s case is indirect discrimination on racial grounds. The Equality Act 2010 prohibits indirect discrimination on racial grounds under s 19 (2). In Perera v Civil Service Commission (1982) the claimant, a Sri Lanka-born immigrant, had relocated as an adult to the UK. Working as an executive officer in the civil service, he on various occasions applied for a promotion but was denied despite having the necessary qualifications. He brought a claim of indirect racial discrimination brought about by and age requirement the Employment Appeals Tribunal held that indirect racial discrimination was evident. The requirement served as discrimination against the makjority of black people who had moved to Britain as adults. Similarly, Mr Aldo can bring a claim of indirect discrimination against the company as his first language is not English, additionally, he can argue that the task be delegated as was the case in the aforementioned Fhima case.

David Constant: The legal risk arising from rejecting Mr Constant’s application would be firstly direct discrimination on grounds of age and secondly misuse of his personal information. On the issue of direct discrimination, the Equality Act 2010 prohibits discrimination against job seekers, trainees and employees on the grounds of age.. Additionally, the removal of the default retirement age in 2011 means that an employer can no longer specify an upper age limit for a job unless they can objectively justify it (ACAS, n.d.). In Mr J Peters v Rock Chemicals Limited t/a Rock Oil Company Mr Peter’s claimed that the company, anticipating he would retire at 65 years has already recruited a replacement despite the fact that he had made no notification to the company of his intention to retire and prior to his dismissal had no plans to retire either. The Employment Tribunal at Manchester held that this was an inference to age discrimination and found the company liable for direct age discrimination (Mr J Peters v Rock Chemicals Limited t/a Rock Oil Company, 2016). With this in mind, it is clear that David Constant can bring a claim for direct discrimination against the company.

Mike Replica: The panel decided to settle on Mike Replica as the replacement for Steve Brown. The appointment of Mike to the Sales Director position is will raise a legal risk of discrimination through bias. Mike is said to be married to the Finance Director’s niece and regularly plays golf with the CEO. As such he has formed a personal relationship with two of the three-panel members assessing the applications.

Internal Recruitment

The Equality Act s.19(2)(b) prohibits the indirect discrimination of employees under sex or racial grounds except where they can prove the requirement, condition/provision, practice or criterion used is justified and the said reason for justification is unrelated to either race or sex. What constitutes justifiability is a question of fact to be determined by the Tribunal and not merely based on an employer’s belief that they acted justifiably; the onus is on the employer to produce evidence in support of a justifiable reason defence. The requirement of the condition will be considered against the effect of the discrimination caused and the employer’s needs business-wise. This was a discussion in Hampson v Department of Education and Science (1989) where, the House of Lords held that proof of justification, depended on an employer showing the existence of a real need whether economic or administrative.

In Home Office v Holmes (1984), the department refused to employ women on a part-time basis citing that it would incur increased costs if it hired part-time employees and believed it was justified to adopt such a policy. However, the tribunal considered a report which showed increased efficiency in departments that employed part-time workers. In Panesar v Nestlé Co Ltd (1979) the factory-imposed regulation that prohibited workers from growing beards or excessively long hair. The rule against having beards was essential in a factory making chocolate to prevent contamination from bacteria thus making it justifiable and not discriminatory against Sikhs.

In ABC Ltd’s case study, the issue of discrimination is the main legal risk arising from the recruitment and selection process adopted by the organisation. Indirect discrimination would arise on the grounds of sex for Joanna, race for Aldo and age for David. Additionally, all three applicants can bring an action against the organisation challenging the fairness of the recruitment and selection process citing Mike’s relationship with two of the three members of the panel. The case of Hampson v Department of Education and Science (1989) provides a defence for the organisation if it can prove that the criteria used in singling out the ultimate successor for the Sale Director position were objectively justified in that it served a real business need and the actions of the company were proportionate to achieving a legitimate aim.

Additionally, ABC Ltd can discriminate against certain protected groups if the appointments made would qualify as a genuine occupational qualification. With regard to sex, Sch. 9 paras 1 & 2 of the Equality Act 2010 outlines conditions under which being of a particular sex would be a genuine occupational occupation. In Wylie v Dee (1978) a tailoring shop denied a woman employment on the ground that she would have to take inside leg measurements for men. The tribunal held that this did not qualify as a genuine occupational qualification and in any case, any of the male colleagues could easily step in to take inside leg measurements where required the same applied in Etam plc v Rowan (1989) the tribunal held it discriminatory to deny a man employment in a women’s shop.

Legal Risks Arising from ABC Ltd's Recruitment and Selection Process

In Tottenham Green, Under Fives Centre v Marshall (1989) the Centre had in place a policy to maintain an ethnic balance between its staff and children. As such when and Afro-Caribbean worker decided to resign, an advertisement was sent out for their replacement. The advertisement made specific requirements that applicants be of Afro-Caribbean decent. The respondent’s application was rejected as he was not Afro-Caribbean. He filed a complaint citing racial discrimination. The tribunal held that there was no discrimination as a genuine occupational qualification existed.

In the same way, ABC Ltd can rely on the Genuine Occupational Qualifications available in the Equality Act 2010 to defend any claims brought by Joanna or Aldo on grounds of sex or race respectively. The same applies to age discrimination in David’s case where an employer can only make a decision based on an employee’s age if they can prove objective and proportionate justifiability  (Age UK, 2017).

Employment relations are the activities relating to the development, maintenance and improvement of relationships between employers and employees through communication, consultation, dispute resolution, involvement and negotiations with employee representatives (Martin, 2010, p. 112); they succeeded the term industrial relations previously used in the description of employee and employer relationships (CIPD, 2016). Employment relations issues can arise from wages, working hours, discriminatory practices or policies among others. Ensuring proper channels are put in place to manage these issues is in the best interest of the company as it ascertains increased productivity and through improved communication systems.

In order to ensure success in managing employee relations, it is paramount for senior management to set up proper communication channels for employees to report their grievances. Additionally, management should endeavour any grievances raised are handled promptly and effectively ensuring fairness is observed. Furthermore, improved employment relations mean a motivated workforce; this can be done by ensuring the employees are on board and feel part and parcel of the organisation as a whole, including employees in the decision making process and taking their ideas into consideration is another way to successfully manage employee relations. Additionally, successfully managing employee relations entails ensuring employee satisfaction, management should undertake to identify sources of employee satisfaction and ensure measures are taken to incorporate them.

Best practice in the recruitment and selection process is key to ensure any organisation meets its objective; increased productivity and competitive advantage. It is applicable in every stage of the recruitment and selection process so as to ensure maximum benefits are achieved. When setting out a job description, good practice guided by law dictates that the wording should not be discriminatory as such only highlight specifications or qualifications that are necessary for the job at hand. In the advertising stage that follows, management should ensure it promotes and encourages diversity in any strategy it adopts. Where an informal system is adopted, management should liaise with HR to ensure the process is not discriminatory to potential applicants. Additionally, in conducting any interviews, a standard procedure should be adopted to ensure there is no room bias. It is important to note that any information collected during this process is subject to the provisions of the Data Protection Act 1998 and should be handled securely.

Informal Recruitment Method

Conclusion

The case study discussed above highlights the issues arising from undertaking an informal internal recruitment and selection process. Additionally, it highlights the challenges an organisation is likely to face where the Human Resource department and line managers are not involved in the process. It is the human resource management to ensure the recruitment and selection strategy adopted by any organisation is relevant, fair and most importantly adheres to legal provisions so as to avoid litigation risks arising from aggrieved applicants on grounds of discrimination. As aforementioned, discrimination on various grounds is the major legal risk ABC Ltd is likely to face based on its recruitment and selection process and CEO plan of action.

As highlighted, Joanna Keenan, the only female applicant and also the youngest is likely to bring discrimination claims on grounds of sex and possibly age as well. Additionally, Aldo Viscida can also raise discrimination claims on racial grounds citing that the English report writing requirement is detrimental to him as an applicant and employee. David Constant, the most likely candidate based on experience and skill can also bring an age discrimination claim against ABC Ltd as well as sue for breach of duty with regard to confidentiality for having information on his wife’s illness used in determining his application. Furthermore, the appointment of Mike Replica will raise questions of favouritism and challenge the integrity of the company’s recruitment process based on his relationship with the panel members. However, as discussed, the company has a defence on all these claims if it can objectively justify its actions as well as prove genuine occupational qualifications were required.

In analysis ABC‘s process, it is clear that the organisation does not have a Human Resource Department in place. The aforementioned benefits of Human Resource managers outline the need for the organisation to set up a department that in future would liaise with line managers so as to identify the most qualified candidates having followed a stable fair and legitimate process. Additionally, HR would be able to advise company leadership on the best employment relations policies to adopt so as to ensure an effective workforce in order to ensure their ultimate business objective is achieved and surpassed.

In future, the company should also consider a recruitment process that is more reliable, valid, interpretable and fair so as to ensure best practice is reflected. A more formal recruitment process, though likely to be more expensive, is fairer in that it gives every possibly interested member an opportunity to apply avoiding discrimination claims and also ensures the company has a larger pool of talent to recruit from.

Additionally, the company should review Mike Replica’s proposed policies so as to ensure their application is not bias or discriminatory to any of the other employees. His ideas are likely to raise litigation risks for the company if proper procedures and legal requirements are not considered prior to adoption; this is more reason why an HR department is necessary as it will ensure these policies are in the employees as well as the company’s best interests.

References

ACAS, n.d. Age Discrimination. [Online] Available at: https://www.acas.org.uk/index.aspx?articleid=1841[Accessed 11 March 2017].

Age UK, 2017. Ageism at work. [Online] Available at: https://www.ageuk.org.uk/work-and-learning/discrimination-and-rights/ageism-at-work/ageism-in-workplace/[Accessed 11 March 2017].

Aurelia Fhima v Jigsaw Ltd (2014) Employment Appeals Tribunal.

Aylott, E., 2014. Employment Law: HR Fundamentals. London: Kogan.

Business Case Studies, 2017. Recruitment and Selection. [Online] Available at: https://businesscasestudies.co.uk/business-theory/people/recruitment-and-selection.html[Accessed 11 March 2017].

CIPD, 2013. Recruitment factsheet. [Online] Available at: https://www.cipd.co.uk/hr-resources/factsheets/recruitment-overview.aspx
[Accessed 3 March 2017].

CIPD, 2016. Employee relations: an introduction. [Online] Available at: https://www.cipd.co.uk/knowledge/fundamentals/relations/employees/factsheet[Accessed 11 March 2017].

Cooper, D., Robertson, I. T. & Tinline, G., 2005. Recruitment and Selection: A Framework for Success. London: Thomson.Data Protection Act, 1998

Etam plc v Rowan (1989) Employment Appeals Tribunal.Equality Act, 2010

Hampson v Department of Education and Science (1989) Employment Appeals Tribunal.Home Office v Holmes (1984) Employment Appeals Tribunal.

Laxman, G., 2008. Human Resource Managment: Managing People at Work. s.l.: Nirali Prakashan.

Martin, J., 2010. Key Concepts in Human Resource Management. London: SAGE.

Mr J Peters v Rock Chemicals Limited t/a Rock Oil Company (2016) Employment Tribunal Manchester Case Number 2404460/2015.

Panesar v Nestle Co Ltd (1979) Employment Appeals Tribunal.

Perera v Civil Service Commission (1982) Employment Appeals Tribunal.

Philips, S. & Gully, C., 2009. Strategic Staffing. New Jersey: Pearson Education.

Tottenham Green Under Fives Centre v Marsharll (1989) Employment Appeals Tribunal.

Wylie v Dee (1978) Employment Appeals Tribunal.