In this post, Mathew Purchase QC of Matrix Chambers shares his views on the Supreme Court’s decision in R (on the application of Z) v Hackney LBC [2020] UKSC 40. The Supreme Court unanimously dismissed an appeal about the application of anti-discrimination law to charities, where they are established to provide benefits (in this case, social housing) for particular groups which are the subject of their charitable objectives. The relevant anti-discrimination laws are contained in the Equality Act 2010 and Council Directive 2000/43/EC of 29 June 2000 (the “Race Directive”).



The narrow result of this appeal is that, on the facts, it was proportionate and lawful for a charity to restrict the allocation of its housing stock to Orthodox Jewish families. However, in reaching that conclusion, Lord Sales, giving the leading judgment, made a number of points of wider importance.



The Agusas Israel Housing Association (‘AIHA’) is a charity whose objectives include providing housing ‘primarily for the benefit of the Orthodox Jewish Community’. In practice, the demand from the Orthodox Jewish community is so high that, under current market conditions, AIHA will only consider applications from that community. As a result, Hackney London Borough Council will refer families on its waiting list to AIHA only if they are Orthodox Jewish.

The claimant is a mother with four children, two of whom were very young and two of whom had autism spectrum disorders. She needed re-housing into a larger property. AIHA properties became available but they were allocated to members of the Orthodox Jewish community, which she was not. She accordingly had to wait longer than she otherwise would have for a suitable home.

That approach constitutes direct discrimination on the ground of religious belief, contrary to section 29 of the Equality Act 2010 (‘the 2010 Act’) read with section 13. However, section 158 of the 2010 Act permits such discrimination if it is ‘a proportionate means of achieving the aim of… enabling or encouraging persons who share [a] protected characteristic to overcome… a disadvantage [or] meeting… needs that are from the needs of persons who do not share [the protected characteristic]’. Further, section 193 of the 2010 Act permits a charity to provide benefits which would otherwise be discriminatory if they are ‘a proportionate means of achieving a legitimate aim’ (section 193(2)(a)) or are ‘for the purpose of preventing or compensating for a disadvantage linked to the protected characteristic’ (section 193(2)(b)).

The Divisional Court held that it was proportionate to restrict access to the Orthodox Jewish community in order to overcome disadvantages they faced in securing appropriate housing and to meet their particular needs. They had a particular need for large houses because of their large family sizes, living as a community was central to their way of life, they experienced high levels of poverty, and as a group they faced prejudice and discrimination when seeking accommodation in the private sector. Accordingly, AIHA (and by extension) Hackney’s approach was lawful under sections 158 and 193 of the 2010 Act.

The main issues in the appeal were (i) whether the Divisional Court was wrong to hold that those defences were satisfied on the facts and (ii) whether they had to be read down or disapplied in order to comply with EU law or under section 3 of the Human Right Act 1998 (‘the 1998 Act’).



The Supreme Court upheld the findings of the Divisional Court. Those findings are instructive but have little wider legal importance. However, the claimant developed a number of arguments which did raise issues of wider public importance. In particular, it was argued that:

  1. The section 158 and 193 defences should be interpreted generally in light of EU law. It is impermissible under EU law to engage in ‘positive action’ which would otherwise constitute discrimination unless: it is aimed at achieving equality of opportunity rather than outcome, it is limited to the different treatment of persons who are in an equivalent position apart from their protected characteristic, and it allows for exceptions on individual facts.
  2. The claimant’s treatment was on the ground of race as well as on the ground of religious belief, such that the Race Directive 2000/43/EC applied. Accordingly, EU law applied directly so as to restrict the scope of those defences. (There is a directive preventing discrimination on the ground of religious belief in employment and occupation, but not in the provision of goods and services.)
  3. The claimant’s treatment also fell within Articles 8 and 14 of the European Convention on Human Rights (‘the Convention’) so that it was impermissible to allow positive action without consideration of its proportionality on the facts of the particular case (meaning that section 193(2)(b) of the 2010 Act was too wide and had to be interpreted so as to incorporate such a requirement).
  4. Whatever the claimant’s position, in other cases the Race Directive would be engaged and so the legislation had to be interpreted or disapplied so as to be compatible with it.

In rejecting those arguments, the Supreme Court made some important statements of principle. These included the following.

  1. First, the approach to ‘proportionality’ under section 158 and 193 is the conventional one. It is legitimate to pursue equality of outcome as well as equality of opportunity and it may be proportionate to apply a ‘bright line rule’ which focusses on the position of identifiable groups rather than on the particular circumstances of individuals. The claimant’s reliance on the narrower approach mandated by case law under the Equal Treatment Directive 76/207/EEC was misplaced. That Directive applied to discrimination on grounds of sex in employment and occupation – which is covered by section 159 of the 2010 act – whereas other EU legislation allowed for much wider exceptions for positive action. (Note also that the Equal Treatment Directive has itself been replaced by Directive 2006/54/EC, which contains a wider exception for positive action than its predecessor.) [58-72, 79-82, 85-86]
  2. Secondly, provided the first instance court has applied the correct legal approach, an appellate court should interfere only if its decision was ‘wrong’ in the sense of containing a significant error of principle or an identifiable flaw in reasoning, such as an error of logic or a failure to take account of a material factor. This test is derived from the Civil Procedure Rules, but should also be applied by the Supreme Court. [56, 74]
  3. Thirdly, on the available evidence, the discrimination in the present case was on the ground of religious belief and not on the ground of race. Sometimes, a person’s status as a Jew may be a racial status based on ethnic origin: see, for example, R (E) v Governing Body of JFS [2010] 2 AC 728 (children who were recognised as Jewish as a result of matrilineal descent) and Mandla v Dowell Lee [1983] 2 AC 548 (distinct groups with, as a minimum, a long shared history and cultural tradition of their own). However, the criterion applied by AIHA was based solely on religious observance as an Orthodox Jew. The Supreme Court left open the possibility that, in a different case, evidence could establish that this group was a racial group in the Mandla However, no such evidence had been adduced in the present case, the point not even having been raised at first instance. [89-94]
  4. Fourthly, Parliament’s decision to provide in section 193(2)(b) of the 2010 Act that it was permissible for a charity to take ostensibly discriminatory action ‘for the purpose of preventing or compensating for a disadvantage linked to [a] protected characteristic’ without any additional requirement of proportionality did not breach the Convention. Parliament’s decision to apply a general rule of this nature was itself proportionate in pursuit of the aim of allowing more charitable resources to be directed towards those who need them. [92-110]
  5. Fifthly, the ‘margin of discretion’ to be accorded to Parliament in this context was wide because (a) ‘Parliament… had its attention drawn to the competing interests and for the need for the regime it enacts to strike a balance which is fair and proportionate and has plainly legislated with a view to satisfying that requirement’ and (b) the test of whether the approach is ‘manifestly without reasonable foundation’, which applies to ‘general measures of economic or social strategy’, also applies to decisions concerning the ability of charities to allocate funds to meet a range of needs. [108-109]
  6. Sixthly, section 193(2)(b) of the 2010 Act could not be interpreted under section 3 of the 1998 Act or under the Marleasing principle to include a proportionality test in any event. Parliament had purposely decided not to include a proportionality test in that subsection, in contrast to the general test set out in subsection (a). If a proportionality test were included, it would render subsection (b) otiose as all such cases would fall within section (a) as well. (The Court did not address the disapplication of domestic legislation to comply with EU law but, as the following point explains, this did not arise.) [111-112]
  7. Finally, on the facts, there was no breach of EU law in the claimant’s case. And, although it is possible that, in other cases, the application of section 193(2)(b) might raise issues under the Race Directive: ‘The proper approach to construction is that legislation should be read and given effect in a particular case according to its ordinary meaning, unless the person who is affected by it can show that this would be incompatible with their Convention rights under the HRA or some provision of EU law as applied to their case. Only then do the special interpretive obligations under section 3(1) of the HRA or under the Marleasing principle come into play to authorise the court to search for a conforming interpretation at variance with the ordinary meaning of the legislation. This means that the same legislative provision might be given a different interpretation in different cases, depending on whether Convention rights or EU law are applicable in the case or not’. [113-114]