On 15 April, an employment tribunal will hear a claim that Virgin Atlantic discriminated on the grounds of race when it rejected Liberian-born Max Kpakio's job application allegedly because of his African name. A British citizen, with a degree in international relations, Kpakio was shocked that he was denied an interview for a job in a Swansea call centre. Suspicious that it could be due to his foreign-sounding name, he reapplied with a typically British name, Craig Owen, and was invited several times to attend an interview. "There was an enormous difference in the way I was treated when I used a British name," he said.

There is reason to believe Kpakio's experience is not unprecedented. In December, the all-party parliamentary group on race and community published a study showing that women who "whitened" or "anglicised" their names on job applications had to send half as many job applications before being asked for interview. With competition for jobs higher than ever during the extended recession, stories from applicants and recruiters suggest that prejudice and discrimination are still commonplace.

A friend who works in the City recently told me that his boss asked him to go through an enormous pile of CVs on his desk and eliminate any who "sounded black". Another colleague, who was a successful journalist in India and has since moved to the UK, recounted the difficulties she has faced applying for jobs, being told that "no one would take her because she is an export from India". She explained: "When you are qualified, experienced, willing to work – sometimes even willing to take a position below your qualifications – and still denied an opportunity, then you are inclined to think that it's racism and it's never a 'grey' area. It's black and white, and it's wrong".

The problem seems to start at the beginning of the recruitment process. A senior manager at a leading recruitment practice who did not want to be named said he sees bias in favour of British sounding names on a daily basis. "It's awful," he said. "Our job as recruiters is to send what we deem to be the right CVs to our clients. If I put forward a candidate with an unusual or foreign name, 90% of the time I will hear nothing. They don't say no, they just infer they're not interested by pretending they never saw that CV. It's even more extreme if the vacancy is customer-facing."

As recruiters earn their living through placing an applicant in the advertised position as efficiently as possible, "when there are 300 CVs to go through a day, any foreign name is likely to be deleted without even being opened. We feel dreadful about it, but essentially it's a matter of time-saving".

The behaviour is not just unethical, it is also a breach of equality legislation. However, it is clearly difficult for applicants to discover and prove they have been discriminated against. A more practical answer could be the introduction of anonymous CVs. The Runnymede Trust, which acts as a secretariat for the all-party parliamentary group, is calling on the government to publish an action plan to encourage blank-name application forms, and to lead by example by piloting their use in at least one of its departments.

Steps to introduce anonymous CVs have received mixed successes abroad. A plan for them to be made compulsory at all large French companies was abandoned after the Pôle Emploi – the French government agency that helps the unemployed find jobs – deemed them to be counter-productive. Research found that people of foreign origin and those who lived in underprivileged areas were less likely to be invited to an interview if their CV was anonymous, possibly because allowances could not be made for poor qualifications or faults due to disadvantaged backgrounds. Positive discrimination was impossible to implement. However, the City of Helsinki has recently begun a pilot scheme using anonymous CVs when recruiting staff. Officials from other Finnish cities have said they may follow Helsinki's example. A German study last year found that anonymous applications helped level the playing field for job applicants.

The British government has taken some steps to tackle name-bias. In April 2012, deputy prime minister, Nick Clegg, introduced the social mobility business compact, an initiative designed to make the process of getting a job fairer. Under the compact, some of the UK's biggest companies including Tesco, BP and Barclays have agreed to "recruit openly and fairly ensuring non-discrimination, including increased use of name-blank and school-blank applications".

A cabinet office press officer said: "The business compact asks businesses and other organisations to open their doors to people from all walks of life, regardless of their background.

"Its aim is to encourage behavioural change in business to open their opportunities to everyone regardless of, for example, where they are born, the school they go to and the jobs their parents do. This is because skills and talents shouldn't be wasted just because someone's personal circumstances mean they can't get a foot on the ladder."

However Runnymede Trust director Rob Berkeley said that as of December 2012, only 143 companies had signed up to the scheme "which is not a ringing endorsement or success for the government". He added: "There is still a long way to go in achieving diversity across a number of large organisations in Britain."

Virgin Group is named as a signatory on the business compact. When asked for comment on Kpakio's case, its press office said: "Virgin Atlantic is an equal opportunities employer and prides itself on providing opportunities to talented people regardless of their race, sex, age or other characteristic. We take allegations of discrimination extremely seriously and whilst we do not comment on individual cases, we strongly deny any of our recruitment decisions or practices are discriminatory in any way."