Supreme Court considers indirect discrimination


25 May 2017

The Supreme Court has given a significant ruling that analyses in detail the concept of indirect discrimination. The judgment given in two cases, each based on different facts, makes it clear that although someone claiming indirect discrimination must show that a practice causes a particular disadvantage to him and the group that shares his protected characteristic, he need not show why it affects that group and claimant.

Lady Hale, who gave the Court’s judgment, started by setting out what she described as certain ‘salient features’ of the concept of indirect discrimination, which were as follows:

  1. For direct discrimination to exist, the less favourable treatment must be caused by the protected characteristic. That is not the case for indirect discrimination. Instead, the particular disadvantage suffered by the individual and the group which shares his or her protected characteristic must be caused by a ‘provision, criterion or practice’ (PCP for short).
  2. The legislation contains no express requirement for the reasons why a particular PCP puts one group at a disadvantage when compared with others to be explained.
  3. The reason for the disadvantage need not be unlawful in itself or be under the control of the employer or service provider but both the PCP and the reason for the disadvantage must cause the disadvantage, in the sense that removing one or the other would solve the problem.
  4. There is no requirement that the PCP in question puts every member of the group sharing the particular protected characteristic at a disadvantage.
  5. It is commonplace for the disparate impact, or particular disadvantage, to be established on the basis of statistical evidence.
  6. It is always open to the respondent to show that his PCP is justified.

With those principles in mind, Lady Hale then dealt with the two cases.

 

Naeem v Secretary of State for Justice

Mr Naeem was an imam who worked as a prison chaplain. Before 2002, Muslim chaplains were not employed on a salaried basis whereas, for reasons to do with demand, some Christian chaplains were. In line with that policy Mr Naeem was at first engaged on a sessional basis but after the policy changed he became a salaried employee. At this date the pay scheme for chaplains incorporated pay progression over time. The average length of service of Christian chaplains was longer, which led to a higher average basic pay. Mr Naeem argued that the incremental pay scheme was indirectly discriminatory against Muslim or Asian chaplains.

Mr Naeem’s claim was rejected by the Employment Tribunal, which found that the pay scheme was indirectly discriminatory but justified. The Employment Appeal Tribunal rejected an appeal, holding that the scheme was not indirectly discriminatory at all because chaplains employed before 2002 should be excluded from the comparison between the two groups. Rejecting a further appeal, the Court of Appeal held, controversially, that it was not enough to show that the length of service criterion had a disparate impact upon Muslim chaplains: it was also necessary to show that the reason for that disparate impact was something peculiar to the protected characteristic of race or religion.

Lady Hale held that both the Court of Appeal and the EAT had got it wrong: the incremental pay structure affected all the chaplains employed by the Prison Service (not just those employed since 2002); this did put the Muslim chaplains at a particular disadvantage compared with Christians and it was irrelevant that the protected characteristic itself was not the cause of the treatment. So there was, on the face of it, indirect discrimination. The claimant’s appeal still failed, however, as the Tribunal had found the PCP to be justified and that was a decision with which the Supreme Court was not prepared to interfere.

 

Essop and others v Home Office (UK Border Agency)

Mr Essop was employed by the Home Office. To gain promotion to certain grades he had to pass a Core Skills Assessment (CSA). A report in 2010 established that Black and Minority Ethnic (BME) candidates, and older candidates, had lower pass rates than white and younger candidates. No-one has been able to identify why this is. Mr Essop (and others) issued claims alleging that the requirement to pass the CSA constituted indirect discrimination on the grounds of race or age. The Home Office argued that the Equality Act 2010 required the appellants to prove the reason for the lower pass rate. The Court of Appeal agreed, upholding the decision of the Employment Judge. The claimant appealed.

In opposing the appeal the employer relied on two main arguments to support its contention that a person alleging indirect discrimination must prove the reason why the PCP in question puts or would put the affected group at a particular disadvantage. The first argument was that the definition of indirect discrimination requires an individual claimant to show that he has been put at the same disadvantage that the group to which he belongs is, or would be, put. And one cannot know what that disadvantage is unless one knows the reason for it. The second argument was that (in a case like Essop) ‘undeserving’ claimants, who have failed for reasons that have nothing to do with the disparate impact, may ‘coat tail’ upon the claims of the deserving ones.

The Supreme Court allowed the appeal. Lady Hale acknowledged that, in order to establish indirect discrimination, the disadvantage suffered by the individual must correspond with the disadvantage suffered by the group. The disadvantage in Essop was that members of the group failed the CSA disproportionately and Lady Hale considered that the claimants also suffered this disadvantage. She held that the claimants need not go further than that and identify the reason why the PCP caused the disadvantage.

Dealing with the argument about ‘coat-tailers’ Lady Hale suggested that a candidate who fails the CSA because he did not prepare or did not turn up for or finish the CSA will not have suffered harm as a result of the PCP in question and in such a case it would be open to the respondent to show that the causal link between the PCP and the individual disadvantage is absent. In any event, as the Supreme Court was keen to point out, it is always open to an employer to put forward a justification for a seemingly indirectly discriminatory rule or practice and so a conclusion that a PCP has caused group and individual disadvantage does not inevitably mean that there has been unlawful discrimination.

Essop and others v Home Office (UK Border Agency); Naeem v Secretary of State for Justice [2017] UKSC 27, 5 April 2017

 

Simon Rice-Birchall, Partner
e: simonrice-birchall@eversheds-sutherland.com
t: +44 113 200 4978