The Workplace HR ‘Tools’ That Can Be Dangerous!

The Workplace HR ‘tools’ that can be dangerous!

We all use a variety of tools in the workplace to manage or reward staff, but some of these need to be used very carefully to make sure that you aren’t leaving yourself open to a discrimination claim. In this HR Blast we explore some of these risky tools in more detail and consider what you can do to minimise the risk of potential claims of discrimination.

Bradford Factor

The Bradford Factor is undoubtedly a fantastic tool to help measure and manage short term absence. It works by multiplying the numbers of days an individual has been absent by the number of periods of absence an individual has. Most organisations then create a policy whereby certain trigger points will result in the individual progressing up the short-term absence policy.

Whilst the Bradford Factor is, in general, a great tool, it’s absolutely critical to make sure it’s used properly to ensure that you aren’t at risk of a discrimination claim. Only short term unrelated absences should be included in the Bradford Factor calculations. Any absences in relation to long term ongoing conditions, or otherwise disabilities, pregnancy and emergency leave for child care should not be included.

Managers frequently become unstuck when they include some of these types of absences in their numbers used to calculate the Bradford factor results, and in doing so they put the organisation at significant risk. For example, if they include pregnancy related absence, then they are treating a woman unfavourably and as such would find a sex discrimination claim very hard to defend. If they include absence related to an ongoing long-term condition or disability, then they are not making reasonable adjustments for those with a disability and would find a disability claim very hard to defend.

Our recommendation: Never allow ‘tools’ to drive your business. You should use tools to support the way you manage within your business, but the tool itself should not be considered the deciding factor. Also check the absences you are including in your figures very carefully before using the results for managing short term absence, if you use software to collate absence figures, ensure that you understand the parameters the software uses and don’t blindly use the figures without checking them first – to do so could be very costly!

Psychometric testing (including; emotional intelligence testing, general intelligence testing) 

Many employers conduct a variety of tests typically on job applicants and new recruits, but also existing employees. These include psychometric tests, intelligence tests, emotional intelligence tests and so on. Whilst these tests can provide valuable insights such as into an employee’s personality, tendencies, behaviours, likely communication or management style and intelligence and so on, they are fraught with risks and need to be used very carefully indeed.

In particular these tests do not take into account those with any disabilities and may also not be ideal for people of all ages, ethnicities, gender and so on. For example, someone with dyslexia or who is visually impaired would likely struggle with some of the aspects of some of these tests, and if they choose not to tell you about their disability or are never provided with an opportunity to tell you about their disability, then the organisation may well make adverse inferences from their test results. If a candidate has a disability the organisation is obliged to make reasonable adjustments, which may well include changing the test, doing a different style of test, allowing different test scores, or even ignoring the tests altogether.

During the recruitment process it’s therefore important to ask whether the candidates need any adjustments to be made if they have any disabilities, and to encourage adjustments which will allow them to go through the interview process without being disadvantaged by their disabilities. If the candidate chooses not to tell you about their disability (they may not even be aware that they have a disability), it’s important to carefully consider any unusual results you see before making your final decisions.

Our recommendation: If you use any psychometric testing or other similar tools, use with caution and be aware of the potential biases and limitations of the tool you are using. Ensure you actively work to make adjustments for those who may need you to do so.  We also suggest you do not rely too heavily on these tests, they should be a small part of the interview process and shouldn’t be a key factor in the recruitment decision.

Performance Bonuses

Many of our clients have performance bonuses, some of which are related to Company performance and some of which are related to individual performance.  But a lot of organisations become unstuck when employees are absent, e.g. for reasons of sickness or maternity/paternity/shared parental leave – and they are unsure how to manage the bonuses.  As a result, we often find that organisations have paid bonuses unnecessarily, or worse still have decided not to make a payment when they should have done, risking potential grievances and discrimination claims!

This is a complex area of law, and whether you should in fact be paying out or not will depend on factors such as custom and practice, the wording of your bonus policies and the nature of the bonuses, so please phone us so we can advise on your specific situation. For those of you who like to take short cuts on the advice after gleaning the basics, here are some general principles:

  • If the individual is entitled to a bonus related to overall Company performance, which goes to all employees, irrespective of personal work performance, they are usually entitled to receive the bonus even if they are absent due to illness/family leave.
  • If the individual would normally (had they been in work) be been entitled to a performance based solely on their own individual performance, then during a period of long term absence, you can use your discretion to choose not to make this payment (reduced pro rata for the period that they haven’t been in work) although you will need to include and make and payment for the two weeks that they were on compulsory maternity leave (if this is why there were off) and also for any period of medical suspension (if that applies).

Our recommendation: Tread carefully, take advice, think before you act!

Enhanced Redundancy Payments

Statutory redundancy payments are calculated in a very structured way, and depend on the age of the employee and length of service, i.e.

  • 5 week’s pay for each full year worked when you’re under 22
  • 1 week’s pay for each full year worked when you’re between 22 and 41
  • 5 week’s pay for each full year worked when you’re 41 or older

The week’s pay is currently (2018) capped at £489 per week and the length of service is capped at 20 years.

Many employers though are keen to offer enhanced redundancy payments to reward loyalty and service and to soften the blow of the redundancies. However, if you want to offer an enhanced redundancy payment, you must follow the structure of the statutory redundancy payment scheme if you want to avoid any discrimination claims, so for instance if you choose to enhance payments by removing the weekly cap, that would be absolutely fine. However, if you change the structure entirely and decide for example to offer the same redundancy payment to everyone, or if you applied different age bands – that would potentially be viewed as discriminatory leaving you open to discrimination claims.

Our recommendation: Think very carefully about how you structure enhanced redundancy payments to ensure that they mirror the statutory scheme as only the statutory scheme is covered by an exemption providing protection from discrimination claims.  Phone us if you would like to talk anything through to ensure that your scheme will be included in the exemption.

Service Related Benefits

We often come across organisations that want to offer their employees benefits which come into force once they acquire a particular length of service e.g. holiday. Whilst offering benefits to reward long service is great, you do need to be careful about how you structure the scheme.

The Equality Act deliberately excludes service related benefits that reward service of up to 5 years. This means that if you have for example a holiday scheme where you get an extra day of service for each completed year of service, up to a maximum of 5 days after 5 years, then that’s absolutely fine and will definitely not be viewed as discriminatory. However, if your scheme offers benefits beyond this 5 year mark, for example an extra day of holiday after 5, 10 and 15 years’ service, it may be seen as indirectly age discriminatory on the basis that it adversely affects younger employees.

Aside from benefits accrued on the basis of length of service, there are also organisations that offer certain categories of staff certain benefits e.g. health, holidays, bonuses, first dibs on internal promotions etc. If there is any danger that you are inadvertently or deliberately providing enhanced benefits or opportunities to your full time staff resulting in your part time staff experiencing less favourable treatment, then beware! It’s probably sex discrimination.

Danger zones come for example from self employed staff switching to part time contracts and not being viewed by their manager as an equal permanent member of staff, historic practices within the organisation not having been reviewed to check for inbuilt or indirect discrimination.

Our recommendation: Review your benefits and ensure that if they are service related that they only include service up to 5 years.  If they include service of more than 5 years, change the structure to ensure that you reduce the risk going forward. At the same time, review your benefits to ensure there is no element of discrimination in the way in which they are allocated.

AI and automated recruitment selection tools

Organisations are increasingly using automation and artificial intelligence within the recruitment process. For example, some organisations are using AI to help sort CVs/Application Forms, complete the initial screening process, and some, less commonly, at the later stages of testing and interview.

Of course, there are significant time benefits from using this type of automation, and also potentially diversity benefits, as some Artificial Intelligence tools can be used to predict certain characteristics, such as gender and ethnic backgrounds which could help organisations reach their diversity targets as part of a positive discrimination campaign.

However, in reality, in many cases the way in which these tools are used could potentially be discriminatory, the algorithms and filters used have the potential to filter out certain candidates and be directly or indirectly discriminatory. For example, a tool which automatically picks out only the candidates with a certain number of years’ experience may well miss candidates who have gained the experience in other ways, or if selecting only for a particular qualification, then the filters may not include a candidate who has received a qualification in another country which isn’t recognised by the system. Without a real human with logic looking at the applications, there is significant potential for discriminatory decisions unless the automation is used very carefully, the algorithms and filters used have been studied in detail and it’s overseen by a human able to intervene in the automated decisions.

Our Recommendation: If you do use AI or any automation in recruitment, ensure that you use it very carefully and feel confident that you understand the algorithms and filters that it uses, and that there are not any inherent biases within this. Remember that AI and automation should be an aid, and will not undertake the whole process for you, a human being should oversee the process and always have the final decision.

For any questions raised from reading this Blast or if you would value support from our experienced HR team, please call 01425 479888 or contact us.

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The information contained within this article is for general guidance only and represents our understanding of employment and associated law and employee relations issues as at the date of publication. Jaluch Limited, or any of its directors or employees, cannot be held responsible for any action or inaction taken in reliance upon the contents. Specific advice should be sought on all individual matters.

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