“Ours is not to reason why…” – Essop and Naeem examined

April 5, 2017

Jason Braier looks at the Supreme Court’s restoration of sanity on indirect discrimination law in its judgments in Essop and Others v. Home Office (UK Border Agency) and Naeem v. Secretary of State for Justice [2017] UKSC 27.

The Supreme Court this morning handed down its judgments in the joined cases of Essop and Naeem, allowing the appeal in the first, dismissing it in the second, but in both cases restoring the law on indirect discrimination to that which most practitioners had understood to be the case.

The Facts and Judgments Below

Mr Essop and his colleagues were civil servants required to pass a core skills assessment to be promoted further up the civil service ladder.  For unidentifiable reasons, BME candidates and candidates over the age of 35 had far lower pass rates than white and younger candidates.  A test case was brought claiming indirect discrimination.

The ET dismissed the claim given the inability to answer the question of why an individual suffered the disadvantage of increased likelihood to fail the test.  The ET held it necessary under s.19 to show the reason why disadvantage was suffered.  The EAT disagreed both that there was any requirement to answer a ‘reason why’ question, and that increased likelihood (as opposed to the fact of failure) was the correct identification of the disadvantage, and allowed the Home Office’s appeal.  The Court of Appeal, however, restored the ET’s decision, considering it conceptually impossible to prove group disadvantage without also showing why the claimed disadvantage was said to arise.

Mr Naeem is a Muslim prison chaplain.  Due to the low level of the Muslim prison population at the time, there were no Muslim prison chaplains before 2002.  The MoJ pay scale for prison chaplains took account of length of service.  As a result, due to there being no Muslim prison chaplains pre-2002, Christian prison chaplains earned, on average, a higher salary than their Muslim counterparts.  The MoJ had recognised this issue and were moving, piecemeal, from a pay scale that recognised length of service to one related to assessment of performance.  Mr Naeem brought a claim for, inter alia, indirect discrimination.

The ET constructed a pool comprising all prison chaplains, and held disadvantage proven.  However, the ET dismissed the claim on grounds that justification had been made out.  The EAT allowed the appeal, holding the pool had been wrongly constructed and should just include all prison chaplains employed since 2002, as to include non-Muslim chaplains whose employment commenced before any Muslim chaplains were employed was to incorporate into the comparative pool a material difference.  Once that correct pool was constructed, there was no disadvantage – the pay scale operated equally for Muslim and non-Muslim chaplains employed post-2002.  Although strictly obiter, Judge Luba in the EAT went on to consider objective justification.  He disagreed that it had been made out, holding the ET should have considered manifest alternative ways of applying the PCP whilst removing the disadvantage.  The Court of Appeal upheld the EAT decision but through a different route.  Not a fan of pools, Underhill LJ looked at the reason behind the disadvantage, holding the concept of ‘putting’ at disadvantage was causal and that it could not be made out where the cause of disadvantage did not reflect a characteristic peculiar to the group as (in this case) Muslims.  Relying on Essop, Underhill LJ considered it permissible to consider the reason for the disparity complained of.  The Court of Appeal did not engage with the objective justification issue.

Decision of the Supreme Court and Analysis

The Supreme Court allowed the appeal in Essop and dismissed the appeal in Naeem.  The dismissal of the latter, though, was solely because the ET’s decision on objective justification should not have been interfered with in the absence of identification of an error of law.  But for that, the appeal in Naeem would have been allowed.

Building her analysis on the history of iterations of the protection against indirect discrimination, Baroness Hale (giving the only judgment) wholly rejected the suggestion that the test for indirect discrimination included a ‘reason why’ question. This conclusion was based on six salient features of protection against indirect discrimination:

  • None of the various iterations of the protection include an express requirement to explain the reason why a PCP puts a group at a disadvantage when compared to other groups;
  • Indirect discrimination requires a causal link between the PCP and the disadvantage suffered, but not between the disadvantage suffered and the protected characteristic. Baroness Hale explains this by noting that the prohibition of indirect discrimination aims to achieve a level playing field and deals with hidden barriers not easy to spot – a similar analysis to that which she famously used in paragraph 56 of R (E) v. Governing Body of JFS and Others [2010] IRLR 136.
  • The context factors (i.e. the reasons why one group finds it harder to comply with the PCP than another) are many and various – they need not be in the control of the employer (height of women, for example, in respect of PCPs with a height requirement that disadvantage women for being genetically less likely to be tall) and the reason for the disadvantage needs not itself be unlawful.
  • There is no requirement that the PCP in question puts every member of the group at a disadvantage – thus in Essop, the fact that some BME or older candidates could pass the test was neither here nor there.
  • It is commonplace for the particular disadvantage to be established by statistical evidence showing correlations between variables and outcomes that could then be assessed.
  • It is always open to a respondent to show the PCP is justified, with a wise employer monitoring the impact of PCPs and trying to see what can be modified to remove any disparate impact.

Dealing with the Court of Appeal’s argument that to prove an individual suffered ‘that’ disadvantage, one needs to know the reason why, Baroness Hale considered that all that was required was correspondence between the disadvantage suffered by the group and that suffered by the individual.  This largely depended, she explained, on how the particular disadvantage is defined.  Thus in Essop, she preferred the disadvantage to be defined as one where more BME and older candidates fail the test, rather than one where BME and older candidates are more likely to fail the test.  The former has the advantage of being grounded in actual rather than potential disadvantage, and enables a respondent to deal with the coat-tailer by pointing to, for example, his lateness for the exam or lack of preparation, in order to show a lack of causal link between the PCP and the disadvantage suffered, or (by an alternative route) to show material difference between his circumstances and those of a comparative group which includes candidates who did fully prepare and turn up on time.  Baroness Hale rightly considered it fanciful to argue that a candidate who failed because of his own conduct suffered any harm as a result of the PCP.  To hold otherwise would be to undermine and devalue the prohibition against indirect discrimination.

Although not considered by the Supreme Court, it is important to place some boundaries on this distinction between actual and potential disadvantage.  What the Supreme Court should not (in my view) be construed as saying is that claims for indirect discrimination cannot be brought unless and until actual disadvantageous impact has been suffered.  Such a wide construction would overturn cases such as Sharma v Manchester City Council [2008] IRLR 337, where the EAT (Elias J (P), as he then was, presiding) made clear a claim under the Part-Time Worker (Prevention of Less Favourable Treatment) Regulations 2000 could be brought in respect of terms of their employment contracts which had not yet had any practical impact on the claimant.  Turning to the facts of Essop, the Supreme Court judgment should not be read as denying the legitimacy of a BME candidate bringing a claim for a declaration that the core skills assessment breached the prohibition against indirect discrimination notwithstanding that the candidate has not yet taken, let alone failed, the exam.  There are perfectly valid and legitimate interests in a person looking to his future career progression and trying to remove discriminatory barriers before he has to try to cross them.

Although the CJEU judgment in CHEZ  Razpredelenie Bulgaria AD v. Komisia za Zashtita ot Diskriminatsia [2015] IRLR 746 is not mentioned, practitioners may also wish to rely on this part of Baroness Hale’s judgment if arguing that the implications of CHEZ must not extend to the coat-tailer who shares the disadvantage shared by the group but for entirely distinct reasons.  For example, it has been regularly postulated that the effect of CHEZ is that the man who wants to work part-time to play golf on a Friday could piggyback on to the particular disadvantage suffered by women with childcare responsibilities from a PCP that requires full-time working.  Baroness Hale would say that there is no correspondence there between the disadvantage suffered by the individual as against that suffered by the group, and to allow the man to claim indirect discrimination in those circumstances would deprive indirect discrimination of much of its content.

In dealing with the Naeem appeal, Baroness Hale was dismissive of Underhill LJ’s notion that the context factor had to be related to the protected characteristic.  She gave the example of women taking the greater share of familial caring responsibilities, noting there was nothing peculiar to womanhood in this fact and therefore in respect of disadvantages suffered because of it.  Rightly, in my view, she considered it could be said that the lack of need pre-2002 for Muslim chaplains was more peculiar to them as Muslims (and thus bore closer relation between the disadvantage and the protected characteristic) than the reasons why women may suffer a particular disadvantage.

Unlike the Court of Appeal, Baroness Hale sought to focus (as the ET and EAT had done) on the construction of the pool as the identifier of disadvantage.  She disagreed with the restrictions placed by the EAT on pool’s construction.  In language somewhat reminiscent of the reasonable adjustment case law, stemming from Archibald v. Fife Council [2004] IRLR 651 (one of Baroness Hale’s first cases as a Law Lord – or Law Lady), Baroness Hale held the pool should include all the workers affected by the PCP in question, so that the comparison could then be made on the impact of the PCP on the group with the protected characteristic as against the impact on the group without it.  This simple approach to construction of the appropriate pool ought to allay Underhill LJ’s concerns in the Court of Appeal about ‘elaborate jurisprudence’ about pools.  As the PCP here was the incremental pay structure, the pool was all prison chaplains employed by the prison service, given that all were subject to that pay structure.

The primary focus in Naeem should therefore have been not on whether the initial requirements of indirect discrimination were established (i.e. those under section 19(2)(a) to (c)), but whether the pay structure was objectively justified.  That is a question of fact for the employment tribunal.  It is not, held Baroness Hale, something with which the EAT should have interfered in the absence of a finding of an error of law.  Thus whilst the reasoning of the Court of Appeal was held in error on whether all other elements of indirect discrimination was made out, the Supreme Court dismissed Mr Naeem’s appeal on grounds that the ET’s finding that the PCP was objectively justified should not be interfered with.

In reaching that finding, Baroness Hale nevertheless gave some points of useful guidance to practitioners.  First, whilst the burden of proving objective justification falls on the respondent, it is incumbent on the claimant to challenge an assertion there was nothing less discriminatory the employer could have done to achieve its legitimate aim.  Secondly, it is incumbent on the ET to consider alternative means which are either suggested or are obvious.  Thirdly, where a respondent is moving away from a discriminatory system towards one which will minimise or eliminate the particular disadvantage, what the ET should consider is whether there are other ways of proceeding which would eliminate or reduce the disadvantage more quickly.

To conclude, the Supreme Court’s judgment is wholly welcome.  It restores clarity and sanity to the statutory test of indirect discrimination and ensures the objectives behind the protection are best served by the applicable legal test.

The judgment of the Supreme Court can be found here.