Discrimination issues are not just local concerns. Jessica Davey of Allen & Overy explains how they can arise on international assignments and practical measures an employer can take to minimise the risk of claims.

Employers with experience of cross-border transfers are well aware of the relevant immigration requirements regarding visas and work permits but may not be so familiar with the implications of anti-discrimination legislation, both at home and abroad, for both the seconded employee and employees in the host country.

This articles focuses on the more common forms of discrimination likely to arise: those based on race, nationality and ethnic origin.

However, employers should be aware of other forms of discrimination when considering staff re-location. An employee who has signed a contract containing a provision allowing their employer to second them abroad may not be willing to move due to family responsibilities. An employer could be liable for a claim of indirect sex discrimination if it sought to enforce such a relocation clause against a woman who is not the primary breadwinner in her family and who has childcare commitments.

Race discrimination cases 

Two UK cases illustrate how race discrimination can arise on international assignments.

In the first case, Mooyart v Sakura Finance International Limited (1997) , Mr Mooyart was employed in the UK by Sakura Finance International Limited ("Sakura"), a subsidiary of the Japanese Sakura Bank.

After a number of years (and two promotions) Mr Mooyart, who was of Anglo-Dutch origin, was passed over for promotion to Head of Department in favour of a more junior Japanese employee, Mr Ishikawa. Sakura sought to justify the appointment of Mr Ishikawa on grounds that he was able to speak and write in Japanese whereas Mr Mooyart was not.

However, the Tribunal held that, whilst language skills may justify differential treatment in a given case, there was no such justification in this case because it was general practice amongst other Heads of Department to use more junior employees to conduct communications for them in Japanese. In other words, it was not a genuine requirement for the post that the successful candidate was able to communicate in spoken and written Japanese.

The Tribunal commented that it "should be obvious that where there is a company operating in one country but predominantly managed and directed by personnel from a different country, there is an increased possibility of race discrimination against the locally hired nationals. It is therefore reprehensible that no attention whatsoever has been given by the respondent to the provisions of the code of practice on race equality".

This seems logical and appears to suggest that there is a more onerous obligation on a foreign employer to consider where discrimination may arise, even inadvertently, in the treatment of local employees in international offices (and vice versa).

The Tribunal went on to castigate Sakura for the fact that it had no equal opportunities policy in place and that neither the personnel officer nor any of the managers had received any equal opportunities training.

The lesson here — applicable to any organisation anywhere in the world — is that the best strategy to prevent, or at least reduce, the risk of discrimination claims is to educate every individual to recognise and address discrimination issues.

In Wakeman & Others v Quick Corporation (1999) , the UK Court of Appeal accepted that it may be legitimate, in some circumstances, to pay local employees a different rate from those seconded from abroad.

Mr Wakeman and his colleagues were English managers employed at the London office of Quick Corporation, a Japanese company. They were paid much less than Japanese employees at the same level who were seconded to London from Japan on Japanese terms and conditions. They claimed that they were being treated less favourably because they were not Japanese.

The Court found that the real reason for the difference in pay was that the market rates of salaries in Japan was higher than in London and that the Japanese secondees received enhancements to their pay to account for the cost and inconvenience of temporarily living and working abroad. For the same reasons, the Court said that the circumstances of the London employees and Japanese secondees were materially different and could not, therefore, be compared for the purposes of establishing a discrimination claim.

It is worth noting that the decision in Wakeman was in large part influenced by the company's ability to demonstrate that Japanese employees recruited in London were paid the same as other UK employees, not the Japanese secondees.

Applicable law

In both Mooyart and Wakeman, the employees' claims were brought under the UK Race Relations Act 1976, not by the international secondees.

It is easy to see how similar circumstances may arise in reverse, ie, where it is the secondee who suffers discrimination and wishes to bring a claim. In such a situation, it will be necessary to establish the relevant anti-discrimination legislation that applies to an employee from one country working in another.

This is a highly complex area of law (and is beyond the scope of this article) but the best advice to an employer with an international workforce is to assume that the best of the protections afforded by both the legislation of the country of origin and of the host country will apply (irrespective of any contractual provision regarding the applicable law) and to adopt a "highest common denominator" approach to compliance.

The European Union Posted Workers Directive (PWD) guarantees a certain minimum level of employment rights, including equality of treatment, to employees working in any EU member state. It had been thought that the PWD only applied to EU nationals working in another EU country but a UK Employment Tribunal recently held, in the case of Collins & Others v United Airlines (2001) , that the PWD could apply to workers posted from outside the EU, including the US, and could apply to private sector employers provided that the host country had properly implemented the PWD through domestic legislation.

In addition to the PWD, the national anti-discrimination legislation in the host country may well apply to international employees working in those countries, even if they are there on a temporary basis.

Practical steps

What does an employer need to do when seconding an employee abroad to minimise the risk of race discrimination claims arising?

1. As a first step, the employer must familiarise itself with the relevant anti-discrimination legislation, both at home and in the host country. It may be necessary to obtain professional legal advice and it may also be useful to seek guidance from any relevant advisory bodies, such as, in the UK, the Commission for Racial Equality.

2. In addition to primary legislation, an employer should take into account any guidance documents or codes of practice on the relevant legislative provisions. Although such codes of practice are not legally binding, courts and tribunals are obliged to consider them and employers are ill advised to ignore them. In the Mooyart case mentioned above, Sakura was severely criticised by the Employment Tribunal for its failure to take account of the Code of Practice for the elimination of racial discrimination and the promotion of equality of opportunity in employment. This provides employers with guidance and good practice on a range of issues affecting the employment relationship including advertising, recruitment and selection procedures, training, policy development and monitoring.

3. Every organisation should have an equal opportunities policy that is issued to all employees at every level. This is all the more important for a global organisation with a multi-national, multi-racial workforce.

4. All employees should receive training on the equal opportunities policy and, in addition, those managers and human resources personnel responsible for implementing the policy should receive training on how to deal with complaints made under it. Refresher training should also be undertaken at appropriate intervals.

5. Employment policies and practices should be reviewed and audited at intervals to check for any patterns or statistics that may indicate underlying or inadvertent discrimination.

August 2002

Jessica Davey is a senior associate in the Employment, Pensions and Incentives Department of Allen & Overy in London.