A promotion test and a prison chaplains’ pay scale raised the same question about indirect discrimination. Did employees need to explain why a neutral rule disadvantaged their group? The Supreme Court held that the rule had to cause the disadvantage, but the employees did not have to establish why it did so. The two appeals had different outcomes.
Lady Hale, with whom Lord Clarke, Lord Wilson, Lord Carnwath and Lord Hodge agreed, contrasted two forms of discrimination under the Equality Act 2010. Direct discrimination is less favourable treatment because of a protected characteristic. Indirect discrimination concerns an apparently neutral rule — a “provision, criterion or practice”, or PCP — applied generally, but which puts people sharing a protected characteristic at a particular disadvantage. Under section 19, that is unlawful unless the employer shows that the PCP is a proportionate means of achieving a legitimate aim. These appeals concerned age, race and religion or belief, in the context of promotion and pay.
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The Home Office test
Mr Essop, an immigration officer employed since 1995, led 49 Home Office employees, six of them test cases. Eligibility for promotion to certain grades required everyone to pass a Core Skills Assessment, a generic test of civil-service skills rather than the skills of a particular post. Candidates who passed then sat a further assessment. All the appellants had failed the Core Skills Assessment and were not then eligible for promotion.
A 2010 report commissioned by the Home Office found that Black and minority ethnic candidates, pooled as one group, had a pass rate of 40.3% of the white candidates’ rate. Candidates aged 35 or over had a pass rate of 37.4% of the rate for younger candidates. In each case there was a 0.1% likelihood that the difference had arisen by chance. Not everyone in those groups failed, and no one knew why the rates differed. Whether pooling all non-white candidates was appropriate was not before the Supreme Court; the employment tribunal had left it open.
The issue was whether section 19(2)(b) and (c) required the claimants to prove the reason for the group disadvantage and to show that each individual failed for that same reason. The employment tribunal held that they did. The Employment Appeal Tribunal, Langstaff J, held that a greater risk of failure for the group, and actual failure by the individual, was enough. The Court of Appeal required proof of the reason and of a common explanation for the individual’s failure.
No need to prove the reason
Lady Hale held that none of the statutory definitions of indirect discrimination, from the 1975 and 1976 Acts to the Equality Act 2010, requires an explanation of why a PCP disadvantages a group. The later wording, reflecting EU equality law, was not meant to narrow that protection. Direct discrimination needs a causal link between the treatment and the protected characteristic. Indirect discrimination needs a link between the PCP and the disadvantage suffered by the group and the individual. The rule is applied to everyone. The law is aimed at hidden barriers and, unless the rule is justified, at equality of results.
The reasons why one group finds a rule harder to meet may be genetic, social, the product of traditional working practices, or the effect of another PCP. They need not be unlawful or within the employer’s control. A minimum height may disadvantage women because women are, on average, shorter. Sometimes, as with the Home Office test, there is no known explanation at all. Statistics can show a correlation between a characteristic and an outcome, but a correlation is not itself a proven explanation, and the statute does not demand one. Nor must every member of the group be disadvantaged. The fact that some Black and minority ethnic or older candidates passed was irrelevant: the group disadvantage was the smaller proportion who passed.
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.
Knowing the reason may make proof easier, but that is fact, not law. The Court refused to read missing words into section 19. It noted that the Court of Appeal’s approach could allow unlawful discrimination to continue.
The disadvantage was failure
The claim had been put before the employment tribunal as a greater likelihood of failure. Langstaff J, and the appellants before the Supreme Court, treated the disadvantage as disproportionate failure of the test, suffered by the appellants when they failed. Lady Hale agreed. A group disadvantage may be only likely, but those who actually fail suffer that same disadvantage, not a different one. Treating it merely as a risk of failure would deprive indirect discrimination of much of its content.
This did not let every unsuccessful candidate rely on the group figures. The employer may show that the PCP did not cause that person’s disadvantage: the candidate did not prepare, did not attend at the right time or place, or did not finish. Section 23 also prevents a comparison where there is a material difference in circumstances. Justification remains open and is aimed at the impact on the group. There is no unlawful discrimination until all four elements of section 19 are met, and Lady Hale said there is no shame in an employer having to justify a rule.
The chaplain’s pay scale
Mr Naeem, an imam, began as a sessional chaplain at HMP Bullingdon in June 2001 and became salaried in October 2004. Before 2002, Muslim chaplains were engaged only sessionally, because the Prison Service believed there were too few Muslim prisoners to justify salaried posts. The PCP was the chaplains’ pay scheme, under which pay increased with length of service. When Mr Naeem became an employee, the scale took 17 years to climb. The Service was shortening it, with an eventual aim of six years, but a pay freeze from 2010/11 interrupted the change.
On 1 April 2011, average basic pay was £31,847 for Muslim chaplains and £33,811 for Christian chaplains, because Muslim chaplains had on average shorter salaried service. A Christian chaplain who started on the same date, with the same appraisal record, would have been paid the same. The employment tribunal found indirect discrimination on race and religion, but held it justified. The Employment Appeal Tribunal held that there was no indirect discrimination if chaplains employed before 2002 were excluded from the comparison; if that was wrong, it considered the scheme disproportionate. The Court of Appeal dismissed Mr Naeem’s appeal. Underhill LJ held that the legally relevant cause was the Muslim chaplains’ later start dates, which reflected a lack of earlier need for their services as employees rather than anything peculiar to them as Muslims.
Lady Hale rejected that limitation. Almost any explanation of a disadvantage could be said not to be peculiar to the protected characteristic. Length of service can disadvantage women because childcare often leads to later starts or career breaks, although not every woman has those responsibilities. The absence of an earlier need for Muslim chaplains was, if anything, more particular to them as Muslims. The consequence is that the employer may have to justify the criterion, not that the claim fails immediately. Justification of length of service, as a reward for experience, becomes harder the longer parity takes.
The comparison pool should include the workers affected by the PCP, positively or negatively, and should not be drawn so as to build in the disputed condition. Here the pay structure affected all Prison Service chaplains. It put Muslim chaplains at a particular disadvantage compared with Christian chaplains, and Mr Naeem suffered it. Section 19(2)(b) and (c) were satisfied.
Justification remained for the tribunal
The employment tribunal identified a legitimate aim: rewarding service and experience while managing an orderly move to a shorter scale. Mr Naeem no longer challenged that aim. The tribunal found that six years was the most service needed for a newly appointed chaplain to merit the top of the scale, and accepted that the disadvantage was no more than necessary. The Appeal Tribunal thought alternatives should have been considered, including backdating service, an extra starting increment, or restraining increases higher up the scale.
Lady Hale accepted that, where part of the aim is to reduce a disadvantage during a transition, proportionality requires consideration of whether other steps would reduce it more quickly. The burden of justification is on the employer, although the claimant must challenge the claim that nothing else could be done, and obvious or suggested alternatives must be considered. But that is a question of fact. An appeal court may interfere only for an error of law. If the alternatives were not fully explored before the employment tribunal, neither the Appeal Tribunal nor the Supreme Court could conduct that inquiry. Mr Naeem had asked for the justification issue to be remitted. Lady Hale would not do so.
Verdict: The Court unanimously allowed the Home Office employees’ appeal and sent their claims back to the employment tribunal. It dismissed Mr Naeem’s appeal. The chaplains’ pay scale disadvantaged Muslim chaplains, but the tribunal’s finding that the pay arrangements were justified stood.
