Hilary
Term
[2017] UKSC 27
On appeals from: [2015] EWCA Civ 609 and [2015] EWCA Civ 1264
JUDGMENT
Essop and others (Appellants) v Home Office (UK
Border Agency) (Respondent)
Naeem (Appellant) v Secretary of State for Justice (Respondent)
before
Lady Hale, Deputy
President
Lord Clarke
Lord Wilson
Lord Carnwath
Lord Hodge
JUDGMENT GIVEN ON
5 April 2017
Heard on 14 and 15
November 2016
|
Appellant (Essop
and ors)
Karon Monaghan QC
Nicola Braganza
(Instructed by
Thompsons Solicitors LLP)
|
|
Respondent (Home
Office)
Naomi Ellenbogen QC
John-Paul Waite
(Instructed by The
Government Legal Department)
|
|
|
|
|
|
Appellant
(Naeem)
Sean Jones QC
Amy Rogers
(Instructed by
Slater and Gordon (UK) LLP)
|
|
Respondent (SSJ)
Thomas Linden QC
Mathew Purchase
(Instructed by The
Government Legal Department)
|
LADY HALE: (with whom Lord
Clarke, Lord Wilson, Lord Carnwath and Lord Hodge agree)
1.
Ideally, discrimination ought to be an easy concept, although proving it
may be harder. But we do not live in an ideal world and the concepts are not
easy, as these two cases illustrate all too well. The law prohibits two main
kinds of discrimination - direct and indirect. Direct discrimination is
comparatively simple: it is treating one person less favourably than you would
treat another person, because of a particular protected characteristic that the
former has. Indirect discrimination, however, is not so simple. It is meant to
avoid rules and practices which are not directed at or against people with a
particular protected characteristic but have the effect of putting them at a
disadvantage. It is one form of trying to “level the playing field”.
2.
The two cases before us are about indirect discrimination on grounds of
race and/or age and/or religion. Indirect discrimination is defined in section
19 of the Equality Act 2010 in this way:
“(1) A person (A)
discriminates against another (B) if A applies to B a provision, criterion or
practice which is discriminatory in relation to a relevant protected
characteristic of B’s.
(2) For the purposes of
subsection (1), a provision, criterion or practice is discriminatory in
relation to a relevant protected characteristic of B’s if -
(a) A applies, or would
apply, it to persons with whom B does not share the characteristic,
(b) it puts, or would put,
persons with whom B shares the characteristic at a particular disadvantage when
compared with persons with whom B does not share it,
(c) it puts, or would put,
B at that disadvantage, and
(d) A cannot show it to be
a proportionate means of achieving a legitimate aim.”
Subsection (3) lists the relevant protected
characteristics, which include age, race and religion or belief.
3.
Mr Essop’s case relies upon both age and race; Mr Naeem’s case relies on
both race and religion but primarily religion. Section 9 explains what is meant
by race:
“(1) Race includes - (a)
colour; (b) nationality; (c) ethnic or national origins.
(2) In relation to the protected
characteristic of race -
(a) a reference to a person
who has a particular protected characteristic is a reference to a person of a
particular racial group;
(b) a reference to persons
who share a protected characteristic is a reference to persons of the same
racial group.
(3) A racial group is a
group of persons defined by reference to race; and a reference to a person’s
racial group is a reference to a racial group into which the person falls.
(4) The fact that a racial
group comprises two or more distinct racial groups does not prevent it from
constituting a particular racial group.”
Section 5(1) and (2) makes provision equivalent to
section 9(2) for people who belong to or share a particular age group, which
may be defined either by reference to a particular age or an age range. Section
10(3) makes equivalent provision for people of, or who share, a particular
religion or belief.
4.
The concept of discrimination obviously involves comparisons between
groups or individuals. Section 23(1) provides that:
“On a comparison of cases for the
purpose of section 13, 14 or 19 there must be no material difference between
the circumstances relating to each case.”
5.
Having defined what is meant by discrimination, the Act goes on to
define the circumstances in which it is unlawful. Relevant to these appeals is
section 39(2):
“An employer (A) must not
discriminate against an employee of A’s (B) - (a) as to B’s terms of
employment; (b) in the way A affords B access, or by not affording B access, to
opportunities for promotion, transfer or training or for receiving any other
benefit, facility or service.”
6.
Finally, the Act deals with the burden of proof in civil proceedings
before a court or a list of tribunals which includes an employment tribunal.
Relevant to these appeals are section 136(2) and (3):
“(2) If there are facts from
which the court could decide, in the absence of any other explanation, that a
person (A) contravened the provisions concerned, the court must hold that the contravention
occurred.
(3) But subsection (2) does
not apply if A shows that A did not contravene the provision.”
The Essop case
7.
Mr Essop is the lead appellant in a group of 49 people, six of whom have
been chosen as test cases. They are, or were, all employed by the Home Office.
Mr Essop is an immigration officer who has been employed by the Home Office
since 1995. It is common ground that the relevant “provision, criterion or
practice” (PCP) in this case is the requirement to pass a Core Skills
Assessment (CSA) as a pre-requisite to promotion to certain civil service
grades.
8.
At the relevant times, the Home Office required all employees to take
and pass a CSA in order to become eligible for promotion to the grades of
Higher Executive Officer (HEO) original, HEO interim or Grade 7. The CSA was a
generic test required for each of these grades, irrespective of the particular
role. Its stated purpose was to test the core skills required to operate as a
civil servant at those grades, rather than the knowledge and skills required
for the particular post sought. Candidates who passed the CSA would then be
required to sit and pass a Specific Skills Assessment relevant to the
particular post. All the appellants have, at some time, failed the CSA and were
thus not, at that time, eligible for promotion.
9.
In 2010, a report commissioned by the Home Office from a firm of
occupational psychologists, Pearn Kandola, revealed that Black and Minority
Ethnic (BME) candidates and older candidates had lower pass rates than white
and younger candidates. All non-white candidates were pooled into a single BME
grouping, although a more detailed breakdown of ethnicity was available, in
order to maximise the size of the group and thus the reliability of the
analysis. (Whether this is an appropriate approach is not in issue before this
Court but was left open by the Employment Tribunal.) The BME pass rate was
40.3% of that of the white candidates. The pass rate of candidates aged 35 or
older was 37.4% of that of those below that age. In each case, there was a 0.1%
likelihood that this could happen by chance. Of course, they did not all fail.
No-one knows why the proportion of BME or older candidates failing is
significantly higher than the proportion of white or younger candidates
failing.
10.
Proceedings were launched in the London South Employment Tribunal. It
was agreed between the parties that a pre-hearing review was required to
determine whether the claimants were required for the purposes of section
19(2)(b) and/or (c) to prove what the reason for the lower pass rate was. The
Home Office argued that they did need to do so. The claimants argued that they
did not. The Employment Judge held that they did have to prove the reason. The
claimants appealed to the then President of the Employment Appeal Tribunal,
Langstaff J, who sat alone on this occasion. He held that they did not have to
prove the reason. It was enough to show that the group had suffered, or would
suffer, the particular disadvantage of a greater risk of failure and that each
individual had in fact suffered the disadvantage of failure: [2014]
UKEAT/0480/13; [2014] ICR 871. The Home Office appealed to the Court of Appeal,
which held that the claimants had to show why the requirement to pass the CSA put
the group at a disadvantage and that he or she had failed the test for that
same reason and gave general guidance for the Employment Tribunal handling the
claims: [2015] EWCA Civ 609; [2015] ICR 1063.
11.
The principal issue of law on appeal to this Court, therefore, is
whether section 19(2)(b) and (c) of the 2010 Act requires that the reason for
the disadvantage suffered by the group be established and that the reason why
the individual has suffered from that disadvantage be the same. Also in issue
are how the disadvantage is to be defined in this case and how and by whom the
burden of proving the reason for it is to be discharged.
The Naeem case
12.
Mr Naeem is an imam who works as a chaplain in the Prison Service. Some
prison chaplains are employed on a salaried basis under contracts of
employment. Some are engaged on a sessional basis as and when required and paid
at an hourly rate. Both groups are required to undergo training. Before 2002,
Muslim chaplains were engaged on a sessional basis only, because the Prison
Service believed that there were not enough Muslim prisoners to justify
employing them on a salaried basis. Mr Naeem began working as a prison chaplain
at HMP Bullingdon in June 2001, at first on a sessional basis, but in October
2004 he became a salaried employee. It is common ground that the PCP in
question is the Prison Service pay scheme for chaplains, which incorporates pay
progression over time and thus pay is related to length of service.
13.
Like many public sector employers, the Prison Service operates an
incremental pay scale, with (usually) annual increments in pay in addition to
any cost of living increases until the top of the scale is reached. When Mr
Naeem became an employee it would take 17 years to progress from the bottom of
the pay scale (where employees normally began) to the top. The Prison Service
has since reduced the time taken to climb from the bottom to the top, with the
eventual aim of reducing the ladder to six years. This was done gradually, so
that a new joiner in 2009 would take only nine years to do so. Existing
chaplains were granted accelerated progress up the scale so that they could
keep pace. But the whole process was interrupted by government constraints and
a pay freeze from 2010/11 onwards.
14.
These proceedings were launched in April 2011. On 1 April 2011, the
average basic pay for Muslim chaplains was £31,847, whereas the average basic
pay for Christian chaplains was £33,811. This was because Muslims had only been
employed on a salaried basis since 2002, whereas a substantial number of
Christian chaplains had started their employment before that date. Hence their
average length of service was longer and they had had more time to climb the
ladder. Of course, a Christian chaplain who started in salaried employment on
the same date as a Muslim chaplain, and who had the same appraisal record,
would be paid the same.
15.
Mr Naeem brought proceedings in the Reading Employment Tribunal
complaining that the incremental pay scheme was indirectly discriminatory
against Muslim or Asian chaplains. It resulted in his being paid less than
Christian chaplains in a post where length of service served no useful purpose
as a reflection of ability or experience. The Tribunal held that the pay scheme
was indirectly discriminatory in relation to both race and religion, but that
it was objectively justified as a proportionate means of achieving a legitimate
aim. Each side appealed to the Employment Appeal Tribunal, which held that the
pay scheme was not indirectly discriminatory at all, because chaplains employed
before 2002 should be excluded from the comparison between the two groups.
However, if the EAT were wrong about that, the pay scheme had not been shown to
be a proportionate means of achieving a legitimate aim. There were various
possible ways of modifying the scheme so as to avoid the disadvantage suffered
by people such as the claimant, which the tribunal ought to have considered:
UKEAT/0215/13/RN; [2014] ICR 472. Mr Naeem’s appeal to the Court of Appeal was
dismissed. 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 in question: [2015] EWCA Civ 1264; [2016] ICR 289.
16.
Thus, although the reason for the differential impact of the length of
service criterion is known, one issue in Mr Naeem’s case is whether the reason
for the disadvantage which he suffers has also to be related to the protected
characteristic of his religion or race. It is also in issue whether the pool
for comparison should be all prison chaplains or only those employed since 2002
and whether the EAT was entitled to interfere with the decision of the
Employment Tribunal.
Direct and indirect discrimination
17.
Under the Sex Discrimination Act 1975 and the Race Relations Act 1976,
direct discrimination was defined as treating a person less favourably than
another “on the ground of her sex” or “on racial grounds”. Under section 13(1)
of the Equality Act 2010, this has become treating someone less favourably
“because of” a protected characteristic. The characteristic has to be the
reason for the treatment. Sometimes this will be obvious, as when the
characteristic is the criterion employed for the less favourable treatment: an
example is Preddy v Bull [2013] UKSC 73; [2013] I WLR 3741, where
reserving double-bedded rooms to “hetero-sexual married couples only” was
directly discriminatory on grounds of sexual orientation. At other times, it
will not be obvious, and the reasons for the less favourable treatment will
have to be explored: an example is Nagarajan v London Regional Transport [2000] 1 AC 501, where the tribunal’s factual finding of conscious or subconscious
bias was upheld in the House of Lords, confirming the principle, established in
R v Birmingham City Council, Ex p Equal Opportunities Commission [1989] AC 1155 and James v Eastleigh Borough Council [1990] 2 AC 751, that no
hostile or malicious motive is required. James v Eastleigh Borough Council also
shows that, even if the protected characteristic is not the overt criterion,
there will still be direct discrimination if the criterion used (in that case
retirement age) exactly corresponds with a protected characteristic (in that
case sex) and is thus a proxy for it.
18.
The concept of indirect discrimination has proved more difficult to
define in statutory terms. The original version in section 1(1)(b) of the Sex
Discrimination Act 1975 provided that a person discriminates against a woman if
“he applies to her a requirement
or condition which he applies or would apply equally to a man but - (i) which
is such that the proportion of women who can comply with it is considerably
smaller than the proportion of men who can comply with it, and (ii) which he
cannot show to be justifiable irrespective of the sex of the person to whom it
is applied, and (iii) which is to her detriment because she cannot comply with
it.”
Essentially the same definition was contained in section
1(1)(b) of the Race Relations Act 1976, as originally enacted.
19.
Much, but by no means all, of the Equality Act 2010 is derived from our
obligations under European Union law. Those parts which are so derived must be
interpreted consistently with EU law (as it is now called) and it is
inconceivable that Parliament intended the same concepts to be interpreted
differently in different contexts. Although EU law has always recognised both
direct and indirect discrimination, the first legislative definition of
indirect discrimination was contained in Council Directive 97/80/EC on the
burden of proof in cases of discrimination based on sex, article 2(2) of
which provided that, for the purposes of the principle of equal treatment,
“indirect discrimination shall
exist where an apparently neutral provision, criterion or practice
disadvantages a substantially higher proportion of the members of one sex
unless that provision, criterion or practice is appropriate and necessary and
can be justified by objective factors unrelated to sex.”
This introduced the term “an apparently neutral
provision, criterion or practice” (or PCP as it is generally known) and the
concept of disproportionate group disadvantage. There was no reference to
individual disadvantage, but article 4 required that, where persons who
considered themselves wronged by the non-application to them of the principle
of equal treatment established facts from which it might be presumed that there
had been direct or indirect discrimination, it was for the respondent to prove
that there had been no breach of the principle of equal treatment.
20.
In 2001, a new section 63A was added to the Sex Discrimination Act to
cater for this in relation to particular fields of activity covered by European
Union law. A new section 54A was added to make equivalent provision in the Race
Relations Act, although not yet required by European law (although it soon
would be, by article 8 of Council Directive 2000/43/EC, referred to below). Section
136 of the Equality Act 2010 (above, para 6) has extended the shifting burden
of proof to all activities covered by the Act (although not to criminal
proceedings).
21.
The next European definition of indirect discrimination came in Council
Directive 2000/43/EC implementing the principle of equal treatment between
persons irrespective of racial or ethnic origins (“the Race Directive”).
Article 2(2)(b) provided that:
“indirect discrimination shall be
taken to occur where an apparently neutral provision, criterion or practice
would put persons of a racial or ethnic origin at a particular disadvantage compared
with other persons, unless that provision, criterion or practice is objectively
justified by a legitimate aim and the means of achieving that aim are
appropriate and necessary.”
Thus it was sufficient that the PCP “would put” such
persons at a particular disadvantage when compared to others. Article 8 made
the same provision for shifting the burden of proof as had the earlier
Directive in relation to sex. The same definition of indirect discrimination
was adopted in article 2(2)(b) of Council Directive 2000/78/EC establishing
a general framework for equal treatment in employment and occupation on
grounds other than sex or race, in article 2(b) of Council Directive
2004/113/EC implementing the principle of equal treatment between men and
women in the access to and supply of goods and services and article 2(1)(b)
of Council Directive 2006/54/EC on the implementation of the principle of
equal opportunities and equal treatment of men and women in matters of
employment and occupation (recast).
22.
In 2003, both the Sex Discrimination Act and the Race Relations Act were
amended to apply this new concept of indirect discrimination to specified
fields of activity covered by European Union law. Thus a new section 1(2)(b) in
the 1975 Act provided that, for those purposes, a person discriminated against
a woman if
“he applies to her a provision,
criterion or practice which he applies or would apply equally to a man, but (i)
which puts or would put women at a particular disadvantage when compared with
men, (ii) which puts her at that disadvantage, and (iii) which he cannot show
to be a proportionate means of achieving a legitimate aim.”
Equivalent provision was made in a new section 1(1A) of
the 1976 Act. That is the same concept of indirect discrimination as has now
been applied to all the areas of activity covered by the Equality Act 2010.
23.
It is instructive to go through the various iterations of the indirect
discrimination concept because it is inconceivable that the later versions were
seeking to cut it down or to restrict it in ways which the earlier ones did
not. The whole trend of equality legislation since it began in the 1970s has
been to reinforce the protection given to the principle of equal treatment. All
the iterations share certain salient features relevant to the issues before us.
24.
The first salient feature is that, in none of the various definitions of
indirect discrimination, is there any express requirement for an explanation of
the reasons why a particular PCP puts one group at a disadvantage when
compared with others. Thus there was no requirement in the 1975 Act that the
claimant had to show why the proportion of women who could comply with the
requirement was smaller than the proportion of men. It was enough that it was.
There is no requirement in the Equality Act 2010 that the claimant show why the
PCP puts one group sharing a particular protected characteristic at a
particular disadvantage when compared with others. It is enough that it does.
Sometimes, perhaps usually, the reason will be obvious: women are on average
shorter than men, so a tall minimum height requirement will disadvantage women
whereas a short maximum will disadvantage men. But sometimes it will not be
obvious: there is no generally accepted explanation for why women have on
average achieved lower grades as chess players than men, but a requirement to
hold a high chess grade will put them at a disadvantage.
25.
A second salient feature is the contrast between the definitions of
direct and indirect discrimination. Direct discrimination expressly requires a
causal link between the less favourable treatment and the protected
characteristic. Indirect discrimination does not. Instead it requires a causal
link between the PCP and the particular disadvantage suffered by the group and
the individual. The reason for this is that the prohibition of direct
discrimination aims to achieve equality of treatment. Indirect discrimination
assumes equality of treatment - the PCP is applied indiscriminately to all -
but aims to achieve a level playing field, where people sharing a particular
protected characteristic are not subjected to requirements which many of them
cannot meet but which cannot be shown to be justified. The prohibition of
indirect discrimination thus aims to achieve equality of results in the absence
of such justification. It is dealing with hidden barriers which are not easy to
anticipate or to spot.
26.
A third salient feature is that the reasons why one group may find it
harder to comply with the PCP than others are many and various (Mr Sean Jones
QC for Mr Naeem called them “context factors”). They could be genetic, such as
strength or height. They could be social, such as the expectation that women
will bear the greater responsibility for caring for the home and family than
will men. They could be traditional employment practices, such as the division
between “women’s jobs” and “men’s jobs” or the practice of starting at the
bottom of an incremental pay scale. They could be another PCP, working in
combination with the one at issue, as in Homer v Chief Constable of West
Yorkshire [2012] UKSC 15; [2012] ICR 704, where the requirement of a law
degree operated in combination with normal retirement age to produce the
disadvantage suffered by Mr Homer and others in his age group. These various examples
show that the reason for the disadvantage need not be unlawful in itself or be
under the control of the employer or provider (although sometimes it will be).
They also show that both the PCP and the reason for the disadvantage are “but
for” causes of the disadvantage: removing one or the other would solve the
problem.
27.
A fourth salient feature is that there is no requirement that the PCP in
question put every member of the group sharing the particular protected
characteristic at a disadvantage. The later definitions cannot have restricted
the original definitions, which referred to the proportion who could, or could
not, meet the requirement. Obviously, some women are taller or stronger than
some men and can meet a height or strength requirement that many women could
not. Some women can work full time without difficulty whereas others cannot.
Yet these are paradigm examples of a PCP which may be indirectly
discriminatory. The fact that some BME or older candidates could pass the test
is neither here nor there. The group was at a disadvantage because the
proportion of those who could pass it was smaller than the proportion of white
or younger candidates. If they had all failed, it would be closer to a case of
direct discrimination (because the test requirement would be a proxy for race
or age).
28.
A fifth salient feature is that it is commonplace for the disparate
impact, or particular disadvantage, to be established on the basis of
statistical evidence. That was obvious from the way in which the concept was
expressed in the 1975 and 1976 Acts: indeed it might be difficult to establish
that the proportion of women who could comply with the requirement was smaller
than the proportion of men unless there was statistical evidence to that
effect. Recital (15) to the Race Directive recognised that indirect
discrimination might be proved on the basis of statistical evidence, while at
the same time introducing the new definition. It cannot have been contemplated
that the “particular disadvantage” might not be capable of being proved by
statistical evidence. Statistical evidence is designed to show correlations
between particular variables and particular outcomes and to assess the
significance of those correlations. But a correlation is not the same as a
causal link.
29.
A final salient feature is that it is always open to the respondent to show
that his PCP is justified - in other words, that there is a good reason for the
particular height requirement, or the particular chess grade, or the particular
CSA test. Some reluctance to reach this point can be detected in the cases, yet
there should not be. There is no finding of unlawful discrimination until all
four elements of the definition are met. The requirement to justify a PCP
should not be seen as placing an unreasonable burden upon respondents. Nor
should it be seen as casting some sort of shadow or stigma upon them. There is
no shame in it. There may well be very good reasons for the PCP in question -
fitness levels in fire-fighters or policemen spring to mind. But, as Langstaff
J pointed out in the EAT in Essop, a wise employer will monitor how his
policies and practices impact upon various groups and, if he finds that they do
have a disparate impact, will try and see what can be modified to remove that
impact while achieving the desired result.
The arguments in Essop
30.
All the above salient features of the definition of indirect discrimination
support the appellants’ case that there is no need to prove the reason why the
PCP in question puts or would put the affected group at a particular
disadvantage.
31.
The respondent relies upon two main arguments to counter this. The first
is that the individual claimant has to show that he has been put at “that
disadvantage”, that is, the same disadvantage that the group to which he belongs
is, or would be, put. How, it is said, can one know what that disadvantage is
unless one knows the reason for it? But what is required by the language is
correspondence between the disadvantage suffered by the group and the
disadvantage suffered by the individual. This will largely depend upon how one
defines the particular disadvantage in question. If the disadvantage is that
more BME or older candidates fail the test than do white or younger candidates,
then failure is the disadvantage and a claimant who fails has suffered that
disadvantage. If the disadvantage is that BME and older candidates are more
likely to fail than white or younger candidates, then the likelihood of failure
is the disadvantage and any BME or older candidate suffers that disadvantage.
32.
That leads to the second argument - that “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. This is easier to answer if
the disadvantage is defined in terms of actual failure than if it is defined in
terms of likelihood of failure (because only some suffer the first whereas all
suffer the second). But in any event, it must be open to the respondent to show
that the particular claimant was not put at a disadvantage by the requirement.
There was no causal link between the PCP and the disadvantage suffered by the
individual: he failed because he did not prepare, or did not show up at the
right time or in the right place to take the test, or did not finish the task.
A second answer is that a candidate who fails for reasons such as that is not
in the same position as a candidate who diligently prepares for the test, turns
up in the right place at the right time, and finishes the tasks he was set. In such
a situation there would be a “material difference between the circumstances
relating to each case”, contrary to section 23(1) (para 4 above). A third
answer is that the test may in any event be justified despite its disparate
impact. Although justification is aimed at the impact of the PCP on the group
as a whole rather than at the impact upon the individual, as Langstaff J
pointed out, the less the disadvantage suffered by the group as a whole, the
easier it is likely to be to justify the PCP. If, however, the disadvantage is
defined in terms of likelihood of rather than actual failure, then it could be
said that all do suffer it, whether or not they fail and whatever the reason
for their failure. But there still has to be a causal link between the PCP and the
individual disadvantage and it is fanciful to suppose that people who do not
fail or who fail because of their own conduct have suffered any harm as a
result of the PCP. It must be permissible for an employer to show that an
employee has not suffered harm as a result of the PCP in question.
33.
The appeal has come before us as a matter of principle. In principle,
the arguments put forward by the respondent do not justify importing words into
the statute (and the Directives which lay behind it) which are simply not there
and which, as the Court of Appeal recognised, could lead to the continuation of
unlawful discrimination, which would be contrary to the public interest (para
34). In order to succeed in an indirect discrimination claim, it is not necessary
to establish the reason for the particular disadvantage to which the group is
put. The essential element is a causal connection between the PCP and the
disadvantage suffered, not only by the group, but also by the individual. This
may be easier to prove if the reason for the group disadvantage is known but
that is a matter of fact, not law.
34.
Secondly, the parties are not agreed on how the disadvantage should be
defined. The case came before the Employment Tribunal on the basis that the
disadvantage was the greater likelihood of failure. In the Employment Appeal
Tribunal, Langstaff J treated the “mere fact of failure of the test” as the
disadvantage (para 25). The Court of Appeal favoured the approach in the
Employment Tribunal. Before this Court the appellants identify the disadvantage
in essentially the same terms as did Langstaff J: the disadvantage was that
members of the group failed the test disproportionately and the appellants
suffered that same disadvantage.
35.
In my view, the appellants (and the EAT) are in principle correct. As
already noted, it is a typical feature of indirect discrimination that some
members of the disadvantaged group will not in fact suffer the disadvantage. At
the level of the group the disadvantage may be no more than likely but that
does not make it a different disadvantage from the actual disadvantage suffered
by those who are affected. The difference is between potential and actual
disadvantage but the disadvantage is the same. Thus, in the typical example of
a height requirement, women are statistically more likely to fail to meet it,
but only some will fail and others will pass. The disadvantage in each case is
the same - the failure to meet the height requirement. Any other approach would
deprive indirect discrimination of much of its content.
36.
I would therefore allow the appeal in the Essop case and remit
the claims to be determined by the Employment Tribunal in accordance with this
judgment.
The arguments in Naeem
Disadvantage
37.
In Mr Naeem’s case, the reason why the pay scale puts Muslim chaplains
at a disadvantage is known: essentially it depends upon length of service and
they have, on average, shorter lengths of service than Christian chaplains. But
the respondent raises two main arguments.
38.
The first argument is that the reason why the PCP puts the group at a
disadvantage - the “context factor” - has itself to be related to the protected
characteristic. This was the view taken by Underhill LJ in the Court of Appeal
in this case (and in the EAT in the earlier case of Haq v Audit Commission [2011]
UKEAT/0123/10/LA but not upheld by the Court of Appeal at [2012] EWCA Civ 1621;
[2013] Eq LR 130). Thus, at para 22, he held that it cannot
“properly be said that it is the
use of the length of service criterion which puts Muslim chaplains at a
disadvantage, within the meaning of section 19(2)(b). The concept of ‘putting’ persons
at a disadvantage is causal, and, as in any legal analysis of causation, it is
necessary to distinguish the legally relevant cause or causes from other
factors in the situation. In my view the only material cause of the disparity
in remuneration … is the (on average) more recent start-dates of the Muslim
chaplains. But that does not reflect any characteristic peculiar to them as
Muslims: rather, it reflects the fact that there was no need for their services
(as employees) at any earlier date.”
39.
But this cannot be right. The same could be said of almost any reason
why a PCP puts one group at a disadvantage. There is nothing peculiar to
womanhood in taking the larger share of caring responsibilities in a family.
Some do and some do not. But (in the context of equal pay) it has been
acknowledged that a length of service criterion can have a disparate impact on
women because they tend to have shorter service periods as a result of career
breaks or later career starts flowing from their child care responsibilities:
see Wilson v Health and Safety Executive [2009] EWCA Civ 1074; [2010] ICR 302, following Cadman v Health and Safety Executive (Case C-17/05)
[2006] ICR 1623. Indeed, it could be said that the lack of need for the Muslim
chaplains is more “peculiar to them as Muslims” than are many of the reasons
why women may suffer a particular disadvantage. All that this means is that the
employer may have to justify the PCP. In principle, a length of service
criterion may be justified as a reward for greater experience and skill, but
this gets harder to do the longer the time taken to achieve parity with others.
40.
The second argument relates to the group or “pool” with which the
comparison is made. Should it be all chaplains, as the Employment Tribunal
held, or only those who were employed since 2002? In the equal pay case of Grundy
v British Airways plc [2007] EWCA Civ 1020; [2008] IRLR 74, at para 27,
Sedley LJ said that the pool chosen should be that which suitably tests the
particular discrimination complained of. In relation to the indirect
discrimination claim in Allonby v Accrington and Rossendale College [2001] EWCA Civ 529; [2001] ICR 1189, at para 18, he observed that identifying the
pool was not a matter of discretion or of fact-finding but of logic. Giving
permission to appeal to the Court of Appeal in this case, he observed that
“There is no formula for identifying indirect discrimination pools, but there are
some guiding principles. Amongst these is the principle that the pool should
not be so drawn as to incorporate the disputed condition”.
41.
Consistently with these observations, the Statutory Code of
Practice (2011), prepared by the Equality and Human Rights Commission under
section 14 of the Equality Act 2006, at para 4.18, advises that:
“In general, the pool should
consist of the group which the provision, criterion or practice affects (or
would affect) either positively and negatively, while excluding workers who are
not affected by it, either positively or negatively.”
In other words, all the workers affected by the PCP in
question should be considered. Then the comparison can be made between the
impact of the PCP on the group with the relevant protected characteristic and
its impact upon the group without it. This makes sense. It also matches the
language of section 19(2)(b) which requires that “it” - ie the PCP in question
- puts or would put persons with whom B shares the characteristic at a
particular disadvantage compared with persons with whom B does not share it.
There is no warrant for including only some of the persons affected by the PCP
for comparison purposes. In general, therefore, identifying the PCP will also
identify the pool for comparison.
42.
In this case, the PCP identified was the incremental pay structure which
affected all the chaplains employed by the Prison Service. This did put the
Muslim chaplains at a particular disadvantage compared with the Christians. The
appellant suffered this disadvantage and so section 19(2)(b) and (c) were
satisfied. The question, therefore, is whether the respondent can justify it as
“a proportionate means of achieving a legitimate aim”.
Justification
43.
The Employment Tribunal held that it could. The original pay scale had
been intended to reward loyalty and experience. The Prison Service had been
trying to move away, as quickly as possible, from the long incremental pay
scale to a much shorter one, where increments would depend to a limited extent
on experience and a greater extent on assessed performance. The Employment
Tribunal identified the objective as “the single one of rewarding length of
service and increasing experience, while at the same time managing an orderly
and structured transition, over a period of time, to the shorter, single pay
scale … That is clearly a serious objective, which represents a real
organisational need …” (para 27). The EAT agreed that the Employment Tribunal
had properly identified a legitimate aim. Mr Naeem does not now challenge that
conclusion.
44.
The EAT however disagreed that the means adopted to meet that
organisational need had been shown to be proportionate. The Employment Tribunal
had found as a fact that six years’ service was the most required for newly
appointed chaplains to have attained the professional standards which should
entitle them to be rewarded at the top of the scale, as fully trained and
experienced in their role (para 10.7). The Prison Service was trying to achieve
that in an orderly manner, by agreement with the Trade Union, but the process
had been halted by government pay restraint. The Tribunal simply concluded that
“We accept that the need for orderly management of the process renders the
element of particular disadvantage in this case necessary, but having regard to
the totality of the circumstances, we find that such disadvantage to the claimant
is no more than is necessary to achieve the objective” (para 27). They had not
considered alternative ways in which the Prison Service could have eliminated
the discrimination against Mr Naeem and the other Muslim chaplains affected
within the constraints to which they were subject.
45.
Not surprisingly, Mr Naeem agrees with the EAT and asks this Court,
should we accept his arguments on the earlier issues, as I would do, to remit
the claim to the Employment Tribunal for reconsideration of the justification
issue.
46.
The EAT records that the Employment Tribunal had been offered the
example of a larger group of Prison Service employees, psychotherapists, for
whom a suitable adjustment had been made to eliminate discriminatory treatment
(para 41). The EAT did not place much, if any, weight on this, as it had been
done in the context of an equal pay rather than a discrimination claim. But the
EAT made other suggestions for alternative ways of continuing to apply the PCP
in question without disadvantage to the claimant - backdating his length of
service, adding an additional increment at the start of his service, or
refusing further pay increases for those higher up the scale while improving
the position of those lower down the scale. The Tribunal should have thought of
these, especially as they had been given an example of a successful search for
solutions.
47.
Neither the EAT nor any higher court is entitled to disturb the factual
findings of an Employment Tribunal. It must detect an error of law. The
Tribunal had adopted the “no more than necessary” test of proportionality from
the Homer case and can scarcely be criticised by this Court for doing
so. But we are here concerned with a system which is in transition. The
question was not whether the original pay scheme could be justified but whether
the steps being taken to move towards the new system were proportionate. Where
part of the aim is to move towards a system which will reduce or even eliminate
the disadvantage suffered by a group sharing a protected characteristic, it is
necessary to consider whether there were other ways of proceeding which would
eliminate or reduce the disadvantage more quickly. Otherwise it cannot be said
that the means used are “no more than necessary” to meet the employer’s need
for an orderly transition. This is a particular and perhaps unusual category of
case. The burden of proof is on the respondent, although it is clearly
incumbent upon the claimant to challenge the assertion that there was nothing
else the employer could do. Where alternative means are suggested or are
obvious, it is incumbent upon the Tribunal to consider them. But this is a
question of fact, not of law, and if it was not fully explored before the
Employment Tribunal it is not for the EAT or this Court to do so.
48.
I would therefore dismiss the appeal in Mr Naeem’s case.
