The dramatic move by the watchdog follows dossiers of complaints handed to it by the Campaign Against Anti-Semitism (CAA) and by the Jewish Labour Movement (JLM) last year.
The EHRC has written to the party to warn it could begin the process of using its enforcement powers to assess whether the party is institutionally anti-Semitic and whether any equalities laws have been broken.
Depending on the answers it receives from Labour, a full-blown probe could begin within weeks.
The pre-enforcement proceedings are a huge blow to Jeremy Corbyn and to his general secretary Jennie Formby, who have vowed to tackle anti-Jewish abuse but have been accused by MPs of failing to do so.
A EHRC spokesman said: “Having received a number of complaints regarding antisemitism in the Labour Party, we believe Labour may have unlawfully discriminated against people because of their ethnicity and religious beliefs.
“Our concerns are sufficient for us to consider using our statutory enforcement powers. As set out in our enforcement policy, we are now engaging with the Labour Party to give them an opportunity to respond.”
The EHRC can only formally start an investigation where it suspects that an organisation has “committed an unlawful act”, using powers introduced when the last Labour government passed the Equality Act in 2006.
Gideon Falter, Chairman of Campaign Against Antisemitism, said: “The Labour Party has repeatedly failed to address its own antisemitism problem, resulting in MPs and members abandoning the Party.
“It is a sad indictment that the once great anti-racist Labour Party is now being investigated by the equality and human rights regulator it established just a decade ago.
“The Jewish community has gone to every conceivable length to persuade Jeremy Corbyn, Jennie Formby and Labour’s National Executive Committee to act, but we have been persistently rebuffed. We had no option but to seek an external, impartial investigation, and that is why we asked the Equality and Human Rights Commission to investigate illegal antisemitic discrimination and victimisation in the institutionally racist Labour Party.
“Since the Holocaust, Britain has led the world in promoting human rights, and it could scarcely be more important to British society that the Jew-hatred festering in the Labour Party is firmly brought to an end.”
The Jewish Labour Movement, which decided on Wednesday to maintain its 99-year affiliation to the party, said that its request for an investigation last November was not taken lightly.
“After years of anti-Jewish racism experienced by our members, and a long pattern of denial, obfuscation and inaction by those with the power and ability to do something about it, we felt there was little choice but to secure a fully independent inquiry, not encumbered by corrupted internal practices.
“Everything that has happened in the months since our referral supports our view that the Labour Party is now institutionally antisemitic. We, in our history, have loved and respected the Labour Party too much to let this continue.”
A Labour party spokesperson said: “We completely reject any suggestion the party has acted unlawfully and will be cooperating fully with the EHRC. Labour is fully committed to the support, defence and celebration of the Jewish community and its organisations.
“Antisemitism complaints received since April 2018 relate to about 0.1% of our membership, but one antisemite in our party is one too many. We are determined to tackle antisemitism and root it out of our Party.”
A party source told HuffPost UK that it would be co-operating fully with the EHRC request but had not yet seen the information passed to it or had an opportunity to respond.
The EHRC has only once before conducted such an inquiry before. It launched an investigation into unlawful discrimination, harassment and victimisation of employees by the Metropolitan police.
Last month, Labour MPs demanding fresh action on the issue after new figures revealed just under 2% of members accused of abuse had been expelled from the party since the row exploded last year.
Of the 18 cases sent for disciplinary action since April 2018, 12 members have been booted out of the party, six received ‘sanctions’ and the rest are awaiting completion, Formby revealed.
But the figures also laid bare that hundreds of members escaped full disciplinary hearings, with 146 receiving a only a ‘reminder of conduct’ and 220 cases deemed to lack sufficient evidence to have breached party rules.
Labour’s Mayor of London Sadiq Khan told LBC that he welcomed the action taken, saying that the party had been “too slow” to act on complaints.
Labour peer and shadow health minister Glenys Thornton said: “This is so shaming but also the right thing to happen. I have been suggesting it for over a year.”
Former Labour MP Chuka Umunna, now part of the The Independent Group of MPs, said: “Labour can’t lecture anyone on Islamophobia so long as antisemitism is not dealt with — and the Tories can’t lecture Labour on antisemitism so long as Islamophobia is not dealt with.”
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