Essop & Ors v Home Office (UK Border Agency) [2017] UKSC 27

The Supreme Court considered two conjoined appeals concerning indirect discrimination under section 19 of the Equality Act 2010. It held that claimants need not prove why a provision, criterion or practice disadvantages a protected group, only that it does. Essop's appeal was allowed; Naeem's was dismissed.

Facts

Two conjoined appeals concerning indirect discrimination under section 19 of the Equality Act 2010 were heard together.

Essop

Mr Essop and 48 others were Home Office employees required to pass a generic Core Skills Assessment (CSA) as a prerequisite for promotion to certain civil service grades. A 2010 Pearn Kandola report revealed that Black and Minority Ethnic (BME) and older candidates had significantly lower pass rates than white and younger candidates: the BME pass rate was 40.3% of the white pass rate, and the over-35 pass rate was 37.4% of the under-35 rate, each with only a 0.1% likelihood of arising by chance. The reason for the disparity was unknown.

Naeem

Mr Naeem, a Muslim imam employed as a salaried prison chaplain since October 2004, complained that the Prison Service’s incremental pay scheme indirectly discriminated against Muslim (and Asian) chaplains. Because Muslim chaplains had only been employed on a salaried basis since 2002, their average length of service, and therefore average basic pay, was lower than that of Christian chaplains.

Issues

• Whether section 19(2)(b) and (c) of the Equality Act 2010 requires a claimant to prove the reason why a provision, criterion or practice (PCP) puts the protected group at a particular disadvantage, and whether the individual must have suffered the disadvantage for that same reason (Essop).
• How the relevant disadvantage should be defined and how the burden of proof operates (Essop).
• Whether the reason for the disadvantage must itself be related to the protected characteristic (Naeem).
• The correct pool for comparison (Naeem).
• Whether the EAT was entitled to interfere with the Employment Tribunal’s finding on justification (Naeem).

Arguments

Essop

The Home Office argued claimants must prove (i) the reason the PCP disadvantaged the group, and (ii) that the individual failed for the same reason, otherwise ‘undeserving’ claimants could ‘coat tail’ on deserving claims. The claimants argued it was sufficient to show group disadvantage and individual disadvantage flowing from the PCP.

Naeem

The Secretary of State argued the ‘context factor’ producing the group disadvantage had itself to be related to the protected characteristic, and that the comparison pool should be confined to chaplains employed since 2002. Mr Naeem argued the pool was all chaplains affected by the pay scheme and that the scheme was not a proportionate means of achieving a legitimate aim.

Judgment

Lady Hale, with whom Lord Clarke, Lord Wilson, Lord Carnwath and Lord Hodge agreed, traced the legislative history of indirect discrimination from the Sex Discrimination Act 1975 and Race Relations Act 1976 through successive EU Directives to section 19 of the Equality Act 2010, and identified six salient features of the modern definition.

First, none of the definitions has ever required a claimant to explain why a PCP disadvantages the group; it is sufficient that it does. Second, unlike direct discrimination, indirect discrimination does not require a causal link between the protected characteristic and treatment; rather, a causal link between the PCP and the group and individual disadvantage. Third, the reasons for group disadvantage (‘context factors’) may be genetic, social, traditional or another PCP, and need not themselves be unlawful or within the employer’s control. Fourth, the PCP need not disadvantage every member of the protected group. Fifth, disparate impact is commonly established statistically, and correlation is not the same as causation. Sixth, the respondent may always seek to justify the PCP as a proportionate means of achieving a legitimate aim.

Essop

The Court held that there is no requirement for a claimant to establish the reason the PCP creates the group disadvantage. The essential element is the causal connection between the PCP and the disadvantage suffered by both group and individual. Respondents may show that an individual claimant was not in fact disadvantaged by the PCP (e.g. because he failed for unrelated reasons such as not preparing or not turning up), or rely on the ‘no material difference’ provision in section 23(1), or justify the PCP. The disadvantage was properly defined, as Langstaff J had said in the EAT, as failure of the test (the same disadvantage being potential at group level and actual at individual level). The appeal was allowed and the claims remitted to the Employment Tribunal.

Naeem

The Court rejected Underhill LJ’s view that the ‘context factor’ must itself be peculiar to the protected characteristic; that approach would unduly restrict indirect discrimination, as illustrated by length-of-service cases such as Cadman and Wilson. On the pool question, citing Sedley LJ in Grundy and Allonby, and the Statutory Code of Practice, the correct pool is generally all those affected by the PCP — here, all prison chaplains. The pay scheme did put Muslim chaplains at a particular disadvantage.

However, the Employment Tribunal had been entitled to find the legitimate aim, namely rewarding length of service and experience while managing an orderly transition to a shorter pay scale, was made out, and its conclusion that the disadvantage was no more than necessary was a finding of fact. The EAT had erred in substituting its own view, as alternative means had not been fully explored before the Tribunal. The appeal was dismissed.

Implications

The decision clarifies the structure of indirect discrimination under section 19 of the Equality Act 2010. A claimant need not prove the reason why a PCP creates group disadvantage; statistical evidence of disparate impact, plus a causal link between the PCP and the individual’s disadvantage, suffices. The burden then shifts to the respondent to justify the PCP, or to show the individual was not in fact disadvantaged by it.

The judgment confirms that ‘context factors’ giving rise to disparate impact need not themselves be tied to or peculiar to the protected characteristic, and that the comparison pool will usually consist of all persons affected by the PCP. The decision is significant for employers, who are encouraged to monitor the impact of policies on protected groups and adjust them where they create disparate impact, and for claimants, who need not prove the underlying cause of statistical disparities.

The Court also reaffirmed the limited role of appellate tribunals in reviewing factual findings on proportionality, while emphasising that, in transitional pay or policy regimes, tribunals should consider whether obvious or suggested alternative means could reduce or eliminate the disadvantage more quickly. The decision does not resolve every factual or evidential question — including how broadly protected groups may be aggregated for statistical analysis — which remain matters for individual tribunals.

Verdict: The appeal in Essop was allowed and the claims remitted to the Employment Tribunal. The appeal in Naeem was dismissed.

Source: Essop & Ors v Home Office (UK Border Agency) [2017] UKSC 27