Choy Lau
- Legal Director
- Employment
Employment update – What’s next for dei in the workplace and new statutory rates for April
Like the proverbial bull smashing his way through the china shop, President Trump’s presidency began with a flurry of predictably controversial executive orders. Prominent among them was an order ending all diversity, equity and inclusion (DEI) programmes within the federal government. While this obviously has no force in the UK, the order could signal an international backlash against DEI programmes established in recent years, as a number of companies have rolled back or ended their DEI policies. In January, for instance, McDonald’s announced it was revising its global DEI policy, which it claimed had achieved its goals. The announcement came shortly before the BBC revealed a fresh investigation into sexual harassment allegations at McDonald’s in the UK. The Equality and Human Rights Commission has already intervened in similar allegations in 2023, and a claim by over 700 junior employees is still pending in the employment tribunal – an odd time then for the multinational to say ‘Mission Accomplished’ for DEI.
So what is all the controversy about? And how should employers in the UK be responding to a seemingly new era in DEI?
What is DEI?
DEI is a broad term, but it generally refers to any efforts to increase access and remove barriers to the workplace (and other settings) for those from traditionally marginalised socioeconomic groups. In the UK, the Equality Act 2010 names nine ‘protected characteristics’ (age, disability, gender assignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation) which are afforded legal protection. DEI policies might start here to consider how an employer can improve access for those with protected characteristics. But DEI policies can also go beyond legal obligations to consider, for instance, economic class or how multiple protected characteristics might intersect.
There are a number of laudable goals that DEI initiatives may seek to achieve, including:
- Increasing productivity by fostering an environment in which all employees feel comfortable sharing their views and contributing.
- Attracting and retaining top talent.
- Enhancing a company’s reputation in the market, which can improve relationships with clients and suppliers, as well as employees.
Why the backlash?
DEI policies are not new as employers have had to comply with discrimination legislation in the UK. However, the term DEI gained traction with the Black Lives Matter movement in 2020, which emphasised corporate social accountability. Many businesses sought to improve the representation of women and minority groups in particular in their workforces, often appointing Chief Diversity Officers to oversee their DEI efforts.
But for every action there is a reaction. The growing popularity of DEI initiatives have given rise to allegations of “tokenism”, or the idea that businesses recruit a small number of minority employees for appearances’ sake, potentially to the detriment of “non-diverse” candidates with stronger skills or better experience. DEI initiatives can sometimes be unfairly associated with “wokeness”, or disingenuously exploiting underrepresented groups to signal a left-leaning ideology. Moreover, poorly applied DEI policies risk taking a simplistic approach or pitting disadvantaged groups against one another.
Often there aren’t easy answers when it comes to diversity questions, which may explain a broader shift away from DEI policies. In its annual survey published in September 2024, the Recruitment and Employment Confederation reported a marked year-on-year decline in the number of employers specifically indicating an interest in diverse candidates, or using wording specifically designed to be inclusive, in job adverts; using blind CV submissions; or using diverse interview panels.
Avoiding DEI pitfalls
Nonetheless, DEI programmes continue to have an important place in today’s businesses. But tick-box exercises are not likely to be sufficient. If an employer wants to make substantive change – and make the most of DEI initiatives to the benefit of its business – the starting point is to take a look at their own workplace and genuinely consider where the issues are. Regardless of the way the winds might be shifting across the pond, there are a number of ways in which DEI concerns are embedded within the legal framework in the UK, including:
1. Positive action vs positive discrimination
Knowing what particular issues there are is important not only to make DEI issues more effective; it may also go to the legality of any potential “positive action”.
Positive action is demonstrated by the proactive steps employers can take to support employees with protected characteristics who are socially or economically disadvantaged or excluded. This should be distinguished from positive discrimination, or treating individuals with protected characteristics more favourably than those without (which is unlawful).
Broadly, positive action can be lawful under the Equality Act 2010 where an employer reasonably thinks that it is necessary to fix a real need or disadvantage suffered by individuals who share a protected characteristic, even where individuals who don’t share the protected characteristic can’t share in the benefit. Moreover, the positive action itself needs to be particularly targeted at that need or disadvantage, and proportionate to achieving that aim.
Employers can also take positive action in recruitment and promotion. In certain situations, an employer can essentially treat someone with a protected characteristic (“A”) more favourably than someone who does not share that protected characteristic (“B”), but, importantly, A must be at least as qualified as B. This means employers cannot favour a less qualified candidate simply because they are from an underrepresented minority. Positive action can only act as a “tie-breaker” in these circumstances.
By contrast, positive discrimination involves discriminating against individuals who do not share a protected characteristic in favour of those who do and is not permitted under UK law. Employers should be careful that any action taken addresses an actual need, and falls within the statutory requirements.
2. Indirect discrimination
There are also instances where proactive intervention is not only permitted but required. For instance, employers must make reasonable adjustments for disabled employees. Employers should also be wary of any workplace practices that inadvertently put certain groups of employees at a disadvantage. In one famous example, the Supreme Court in Essop v Home Office determined that an aptitude test for promotion was indirectly discriminatory because the pass rate was significantly lower for black and minority ethnic candidates. It did not matter that the employer had no intention to target such candidates, or that no one understood the reason for the difference. The Home office were unable to objectively justify the requirement of the test and ultimately settled the claims for over £1,000,000.
So prudent employers should carefully consider their employment practices through the lens of different individual employees’ needs. This is where having a DEI committee in place to carry out regular reviews, conduct staff surveys, etc. can be useful so companies know where their issues are.
3. DEI training
DEI training has a real role to play in setting the tone in a company’s culture. In addition, ensuring adequate DEI training is in place can help limit the risks of claims. In particular, last year, the requirement for employers to take reasonable steps to prevent sexual harassment came into force. What are “reasonable steps” will depend on the individual business and risks identified, but for many the starting point is providing sexual harassment training to its employees – though it should be noted that training alone will not be sufficient to comply with the new duty. For more information on the new duty to prevent sexual harassment, please see our earlier article here – Prevention is better than cure (2): Employer’s duty to prevent sexual harassment in the workplace – Wedlake Bell
Conclusion
Regardless of the politics of the moment, DEI initiatives are not new and continue to have a real role to play, not least because of discrimination legislation. Rather than tick-box exercises, it is important to understand and address the unique needs of employees to implement effective, legally compliant DEI strategies. This approach not only enhances productivity and minimises legal risks for employers; it also builds an inclusive and sustainable workforce.
2025/2026 rates update
The Government has announced increases to the National Minimum Wage which will come into force from April 2025.
From 1 April 2025 the rates will increase:
from £11.44 to £12.21 per hour for those aged 21 and over
from £8.60 to £10.00 per hour for those aged 18-20; and
from £6.40 to £7.55 per hour for those aged 16-17 and apprentices.
The significant increase in the rate for 18-20 year olds is intended to narrow the gap with the adult rate, in anticipation of the adult rate being extended to 18-year-olds in future.
Weekly pay for the purposes of statutory maternity, paternity, shared parental and neonatal care has also increased to £187.18. Statutory sick pay has increased to £118.75 week.
Rate changes for statutory redundancy pay, Vento bands and the cap on unfair dismissal awards have also been announced:
The limit of compensation for unfair dismissal will be increased from £115,115 to £118,223.
The limit on a week’s pay for the purposes of calculating statutory redundancy pay will be increased from £700 to £719.
Vento bands have been updated as follows:
- a lower band of £1,200 to £12,100 for less serious cases;
- a middle band of £12,100 to £36,400 for cases that do not merit an award in the upper band; and,
- an upper band of £36,400 to £60,700 for the most serious cases, and the most exceptional cases are capable of exceeding £60,700.
Changes will take effect from 6 April 2025.
Meet the team:
Kendal Youngblood
- Solicitor
- Employment
