The first time a global client asked me for a template employment diversity form, I didn’t know what they were after.

They wanted to track their workforce’s diversity attributes (asking every person about race, gender identity, sexual orientation, disabilities, etc.) so that they could track performance on their broader diversity targets. This is typical practice in the US, where both discrimination and data privacy considerations are different.

When I flagged there were restrictions in Australia, they patiently explained to me “this is for diversity” and were incredulous when I had to give them the bad news that it still might be unlawful here.

In Australia, it is generally not sufficient for an employer to simply seek to achieve workforce diversity. Discrimination is prohibited at Commonwealth and state level. Under many of these laws, positive discrimination is only lawful if an employer can demonstrate that there is currently substantive inequality which will be remedied by the proposed measure.

Further, some laws (such as the NSW Anti-Discrimination Act 1977) require a formal exemption from a Tribunal, with limited or no capacity for unilateral positive discrimination. There are around 750,000 Australian business with NSW as their main state, but fewer than 150 organisations have current exemptions permitting positive discrimination. If information will be used for discrimination, it can be a separate breach of some state laws to collect it, raising the prospect that even asking for diversity details can result in risk for an employer.

This is a concern given that many diversity goals seem like aspirational rather than reachable targets. For example, 2017 research showed that there were fewer Australian companies run by women than by men named Peter or John. By 2020, there had been some improvement for gender diversity, but only around 5% of board directors in the ASX300 came from non-Anglo-Celtic backgrounds.

Australia is not alone in these issues. In Europe, positive action is only allowed within narrow limits. In the UK, the Equality Act 2010 allows positive action where there is demonstrated under-representation or disadvantage for a protected group and, specifically, the individual concerned. The employer also has to show that the positive action is proportionate – another hurdle to get over. For hiring and promotion, the exemption is even narrower – essentially allowing under-representation to be a “tiebreaker” only where candidates are equally qualified.

Ultimately, positive action which goes beyond target-setting and into practical steps is a risk for employers. For example, a UK police force recently lost a case for selecting a minority candidate over a white candidate to improve its diversity, on the basis the candidates were “not equally qualified”.

There are complex reasons for lack of diverse representation in many companies, and we do not suggest the discrimination laws are a cause. However, they result in complexity, risk and difficulty instead of making it simple or easy for businesses to implement diversity initiatives.

Many global companies are increasingly looking at diversity as a commercial issue, and seeking to partner with business that meet various diversity targets. Some employers are willing to take these risks, for example by insisting on all women shortlists for board roles, in order to speed up the pace of change. In countries where discrimination laws create complex hurdles to navigate, we might miss the opportunity to get on board.

Is it time to diversify our discrimination laws so that we can all do better?


Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.