Dr. Atul Shah discusses the consequences of employers overlooking their equality and diversity duties. He argues that the costs involved in cases dealing with discrimination are too big to be ignored and should be pre-empted by proper consideration of equality and diversity in everyday practice.

Organisations in general seem reluctant to be pro-active about equality for various reasons. The reasons given depend on the leadership and management behaviour and mindset, resources available, and the whole culture of the organisation. Unless the benefits are understood and articulated, for many managers equality and diversity work appears to be a headache to be bypassed or at best done minimally. For example, to employ disabled people may require the employer to make reasonable adjustments, and managers may want to avoid these. They may not see the benefits of having all kinds of people working as a team in the organisation.

However, when inequality or discrimination strikes, and an employee makes a complaint or grievance, then everything changes. Due to the strict employment laws in the UK, such matters have to be dealt with carefully otherwise they can escalate. A lot of management time and effort is involved in dealing with such grievances, with consequent financial loss, not to mention the stress of it all.

Organisations often get tempted to victimise the complainant or bully them, but they really need to be very careful about this behaviour, because it again is illegal. In a recent case in Yorkshire involving the NHS, an award of £4.5 million was made to a victimised former doctor, and the whole case had been handled very badly by the employer.

For the complainant, the whole experience is often very stressful and traumatic as they are usually alone and fighting against a whole team of senior management who simply do not want to admit their weaknesses. When Miriam O’Reilly won her celebrated case on age discrimination against the BBC, she found the whole experience very lonely, isolating and stressful. After the BBC lost, they had to revisit their whole policy and attitude to older women and implement major changes.

When it comes to pro-active diversity work, budgets also tend to be very limited, but in the case of a grievance, budgets appear to be unlimited. The legal bill for the employer starts from the moment a grievance is expressed, and it can easily run into tens of thousands of pounds. Employment lawyers are very very expensive, and it is also quite a complex area of the law. It is estimated that the average legal costs of an employment tribunal are £90,000 per case. Not only are there the direct costs, but there are also indirect costs like loss of reputation, which often happens where cases attract publicity. Someone suggested to me that this money comes out of a different pot, related to legal costs, or it comes out of an insurance claim made by the employer. Whatever the source, the costs are very significant and should not be treated lightly.

When a court examines such a case, it looks for mitigating evidence – has the employer been fair to other similar minority employees, is there evidence of management training about the law on equality, what are the company policies and practices etc. This makes a case for more pro-active work around equality and diversity, rather than brushing it under the carpet until problems emerge.

A much more sustainable way of approaching equality is to understand its potential and benefits, and then follow its spirit, rather than do a cosmetic exercise. Here the entire corporate philosophy would change to embed equality as a core asset of the organisation, and see its strengths and benefits to creativity, efficiency and productivity. In my experience, very few organisations operate at this level, to their considerable loss and disadvantage. And there are huge bottom line benefits of this in terms of increasing revenues and reducing costs.

Dr. Atul K. Shah is a consultant and founder of www.diverseethics.com. Diverse Ethics has developed many innovative training and advisory concepts around equality in the workplace.