Lady Hale on indirect discrimination: Essop and Naeem

Introduction

In Essop & Ors v Home Office (UK Border Agency) [2017] UKSC 27, there were two conjoined cases: Essop and Naeem v Secretary of State for Justice. The Supreme Court gave a unanimous judgment on both.

The issue before the Court was the interpretation of indirect discrimination as defined in s 19 of the Equality Act 2010:

“(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 (“PCP”) 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.”

Mr Essop relied on both age and race; Mr Naeem relied on both race and religion – “but primarily religion” [3].

Background: Essop

Mr Essop, an immigration officer, was the lead appellant in a group of 49 current or former employees of the Home Office. It was common ground that the relevant “provision, criterion or practice” (PCP) was the requirement to pass a generic Core Skills Assessment (CSA) to become eligible for promotion to the grades of Higher Executive Officer (HEO)  or above. 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. Successful candidates would then be required to pass a Specific Skills Assessment relevant to the particular post. All the appellants had at some time failed the CSA [8]: the proportion of Black and Minority Ethnic (BME) candidates and candidates older than 35 who failed was significantly higher than the proportion of White or younger candidates failing [9].

The principal issue of law on appeal was whether section 19(2)(b) and (c) of the 2010 Act required that the reason for the disadvantage suffered by the group had to be established and that the reason why the individual had suffered from that disadvantage had to be the same. Also in issue were how the disadvantage was to be defined and how and by whom the burden of proving the reason for it was to be discharged [11].

Background: Naeem

Mr Naeem, an imam, worked as a chaplain in the Prison Service. 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 permanent salaried chaplains. Mr Naeem began work as a chaplain at HMP Bullingdon in June 2001 but in October 2004 became a salaried employee. It was common ground that the PCP in question was the Prison Service pay scheme for chaplains, which incorporates pay progression over time and thus relates pay to length of service [12]:  the Prison Service operates an incremental pay scale and, though progression had become shorter,  when Mr Naeem became an employee it would  have taken him 17 years to progress from the bottom of the pay scale (where employees normally began) to the top [13].

Mr Naeem began proceedings 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 because Muslims had only been salaried employees since 2002, whereas a substantial number of Christian chaplains had a much longer average length of service. A Christian chaplain who had started in salaried employment on the same date as a Muslim chaplain and who had the same appraisal record would be paid the same [14].

In the Employment Tribunal, Mr Naeem complained that the incremental pay scheme was indirectly discriminatory against Muslim or Asian chaplains: 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. His further 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: see [2015] EWCA Civ 1264 [15].

Therefore, though the reason for the differential impact of the length of service criterion was known, one issue in Mr Naeem’s case was whether the reason for the disadvantage had also to be related to the protected characteristic of his religion or race. It was 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 [16].

Indirect vs direct discrimination

Lady Hale helpfully set out the “salient features” of indirect discrimination as follows:

1. “[I]n 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 … It is enough that it does [24].

2. “[T]he 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 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 [25: emphasis added].

3. “[T]he reasons why one group may find it harder to comply with the PCP than others are many and various … 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 … 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 [26].

4. “[T]here is no requirement that the PCP in question put every member of the group sharing the particular protected characteristic at a disadvantage … 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” [27].

5. “[I]t 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 … 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” [28].

6. “[I]t 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 … 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 firefighters or policemen spring to mind. But … 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” [29].

Judgment: Essop

In Essop, the Home Office argued that the individual claimant had to show that he had been put at “that disadvantage”, that is, the same disadvantage that would affect the group to which he belonged and he had failed to do so [31]. There had to be a causal link between the PCP and the individual disadvantage and it was “fanciful” to suppose that people who did not fail or who failed because of their own conduct had 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” [32].

The UKSC concluded that the appellants (and the EAT) were 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” [35].

The appeal was allowed and the claims remitted to be determined by the Employment Tribunal “in accordance with this judgment” [36].

Judgment: Naeem

In Naeem, the PCP identified was the incremental pay structure which affected all the chaplains employed by the Prison Service. The Court rejected that argument that “the reason why the PCP puts the group at a disadvantage – the ‘context factor’ – has itself to be related to the protected characteristic” [38] because “The same could be said of almost any reason why a PCP puts one group at a disadvantage” [39]. The pay structure had put the Muslim chaplains at a particular disadvantage compared with the Christians,  Mr Naeem had suffered the disadvantage and section 19(2)(b) and (c) were therefore satisfied [42].

The Employment Tribunal had held that the Prison Service, by trying to move away 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, was pursuing “a proportionate means of achieving a legitimate aim” [42] and Mr Naeem did not challenge that conclusion [43]. The EAT had disagreed, however, that the means of meeting that organisational need had been shown to be proportionate. The Employment Tribunal had not considered alternative ways in which – within the constraints to which it was subject – the Prison Service might have eliminated the discrimination against Mr Naeem and the other Muslim chaplains affected [45].

The EAT had 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 and suggested that the lower tribunal should have thought of these, especially as it had been given an example of a successful search for solutions [46].

As to the appeal, however,

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 … 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. [47: emphasis added]

Appeal dismissed [48].

Comment

Lady Hale’s clarification of the constituent features of indirect discrimination is extremely important for future employment claims in which religion is a factor; and on the Cloisters blog, Robin Allen QC and Anna Beale describe the judgment as “a welcome reaffirmation of indirect discrimination as a concept concerned with ‘equality of results’ rather than ‘equality of treatment'”, while Jason Braier, of Field Court Chambers, welcomes the judgment as restoring “clarity and sanity” to the statutory test of indirect discrimination and ensuring that the objectives behind the protection are best served by the applicable legal test.

However, Allen and Beale regret that the Court did not declare that two equal pay cases in the Court of Appeal had been wrongly decided –  Armstrong v Newcastle upon Tyne NHS Hospital Trust [2006] IRLR 124 and Gibson v Sheffield City Council [2010] ICR 708, in which it was held that even where disparate impact of a pay practice on women had been demonstrated, the employer had an opportunity to prove that the disparate impact had nothing to do with sex before the court proceeded to the issue of justification. (Gibson was appealed to the Supreme Court but settled before it could be heard.) In their view, following Essop and Naeem, in a pay claim based on indirect racial discrimination it is not necessary to show that a PCP was disadvantageous in some way because of the protected characteristic; therefore, “there can be no possible reason in logic why a woman in an equal pay case should have to do so”.

For my part, I still cannot make up my mind whether or not, on the facts, Mr Naeem might simply have been rather unlucky. But be that as it may, the factual findings of an Employment Tribunal cannot – as we have seen – be disturbed on appeal.

Cite this article as: Frank Cranmer, "Lady Hale on indirect discrimination: Essop and Naeem" in Law & Religion UK, 7 April 2017, http://www.lawandreligionuk.com/2017/04/07/lady-hale-on-indirect-discrimination-essop-and-naeem/

 

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