The UK arm of fast food giant McDonald’s has signed a ‘section 23 agreement’ with the Equality and Human Rights Commission in response to concerns about the handling of harassment complaints made by hundreds of UK staff. It has been widely reported in press including the BBC, Sky News, the FT and a number of national newspapers, as well as being fully detailed on the Commission’s website, a deliberate ploy on their part to maximise the publicity around this and send a wider message to organisations about the importance of equality law compliance. So, what is a section 23 agreement and how do you avoid getting one? We’ll consider that.
The background is the Bakers, Food and Allied Workers Union which represents the employees alleged there was a ‘toxic culture’ at UK sites and that sexual harassment was rife. In 2019 they claimed they’d received at least 1,000 reports of women being harassed by managers and supervisors mirroring similar complaints in the US where some workers went on strike over the issue and filed a class-action lawsuit. In the UK this came to the attention of the Equality and Human Rights Commission and subsequently McDonald’s agreed to the legally binding agreement with the Commission committing the firm to a number of measures to better protect UK workers including communicating a zero tolerance approach to sexual harassment, providing sexual harassment training for its employees and improving policies for responding to complaints.
The legal basis of the agreement is section 23 of the Equality Act 2006 which gives powers to the Commission to force employers to take steps to remedy their equality failings. Whilst it doesn’t give the employees any legal rights, nonetheless it has teeth in so far as the Commission invariably ‘names and shames’ the firms that have agreements with and so the potential for reputational damage is huge.
So, let’s hear more about this. Kate Dodd is a diversity and inclusion specialist and she joined my by video-link from Manchester to discuss it:
Kate Dodd: “Yes, so it's a fairly draconian measure that the EHRC will take with an employer if they feel that there is something serious going on in that business that is not being addressed sufficiently by that business. So what the EHRC do is they get involved, they go in there, they look at what's happened, they make recommendations, they then draw them up into a legally binding agreement which they then sign with the employer, and they come in to check that those things are being done, basically. So it is important and it can be a worrying thing for a business to be facing.”
Joe Glavina: “You say it can be a worrying time for a business if the Commission is brought it. Why is that? Why is it best avoided?”
Kate Dodd: “Well the reason why it is best avoided is because it is prescriptive, because it will be up to the EHRC as to whether those things are being done to their liking and then also it's really bad press. Once you enter into an agreement, once there is a section 23 agreement in place, it goes on the EHRC website which means anyone can go on and view it, which is obviously really bad from an employer brand perspective, not great for your investors, etcetera, so definitely one to be avoided if you can do. The way to avoid it is actually, what will happen, when we've been advising our clients on these, the EHRC will get in touch and say we've had a report made, or we've seen something that's come up in the press, and we're worried about it and we want to know what you're doing. They will give the employer an opportunity to reassure them, basically. They're not out there to punish anybody, they’re there to make sure that the lives of people who work for that business are improved, and they will seek to get that agreement from the employer without having to put something in place, without having to put a section 23 agreement in place.”
Joe Glavina: “So presumably they key thing for HR to understand here is the need to make sure any letter from the EHRC gets attention and isn’t overlooked?”
Kate Dodd: “Yes, absolutely. So, it’s like that feeling when a tribunal case lands and you've taught your business to say, look, if we get tribunal paperwork then you need to give it to us that day. This, I would say, needs to be given to you that hour, basically. Someone needs to flag it. Often, what we find is that these things just haven't been picked up, somebody's seen it, they've passed it to somebody else, they’ve not really been sure what to do with it, then they've gone on holiday, and often the EHRC then get involved because they feel that they're not being taken seriously. So someone needs to come running, screaming as it were, with it in their hand, pass it on to the HRD, someone of HRD level if the HRD is not available, and they need to then take advice on this from their lawyers and make sure that their lawyers have got experience of dealing with the EHRC so that they know what they're doing, so they can help you to avoid having one of these types of agreements put in place because, as I said, it usually is considered to be a bit of a last resort for the EHRC if they feel that they're not getting through with other methods.”
Joe Glavina: “So to avoid a section 23 notice employers need to make sure they are compliant. So they need to already be doing the things that the Commission would want to see if they were called in. Is that right?”
Kate Dodd: “Yes, absolutely. So, what the EHRC really want is they usually come with a list of questions, and they want each of those questions to be answered and they want evidence of that. So often it's a case of really going through a bit of an audit process, looking at the questions that they're asking, considering what they could be, where they could be coming from, why they're asking those questions, and working together with our clients to say, right, you've given us this but, actually, I don't think that's going to cut the mustard and what we need is something a bit more. So the way that we work with clients is we challenge our clients to say, right, we need a bit more here, or we need something else that we can demonstrate quite how seriously you're taking this because often what will happen is it's just a lack of information being given in a timely manner that will cause these types of situations to escalate and then, of course, it's on the EHRC website, it’s poor press, it's in the news and then, of course, it has that real knock on effect on your brand and your employee engagement.”
If you would like to know more about section 23 agreements then the place to go is the EHRC’s website. They have some helpful guidance on how firms can improve their approach to equality, as well as explaining when the Commission will use its section 23 powers and what you can expect. We have put a link to that in the transcript of this programme.
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