‘The law on discrimination ought to be easy’, declared Lady Hale giving judgment onDarwin_C_145259web behalf of the Supreme Court in Essop v Home Office and Naeem v Secretary of State for Justice [2017] UKSC 27. Yet for the last five years, while the cases of Essop and Naeem wound their way through the courts, the law on indirect discrimination has been anything but.

Now though, with the help of Lady Hale’s concise judgment in Essop, establishing prima facie indirect discrimination (i.e establishing the matters at the Equality Act 2010, s 19(2)(a), (b) and (c)) will be plain sailing again.

Further, the focus of litigating indirect discrimination claims will be back where it belongs – on objective justification (Equality Act 2010, s 19(2)(d)).  This will not, according to Lady Hale, place an unreasonable burden upon respondents, because as Lady Hale highlighted, it is good practice for employers (and others) to actively monitor the disparate impact of their policies and practices on particular groups (on this see the Statutory Code of Practice, ch 18), and anticipate the need to objectively justify them.  Nor should the need for respondents to objectively justify their policies and practices be seen as “casting some sort of shadow or stigma upon them,” since the objective justifications relied upon by a respondent may well be “very good reasons”.

The Cases

Essop and Naeem concerned two issues that bedevil indirect discrimination claims: first, establishing group and individual disadvantage; and second, the choice of pool. Although both cases were employment cases, the same definition of indirect discrimination applies across all parts of the Equality Act 2010, although the group for comparison in indirect disability discrimination cases is modified by s 6(3) of the Act.

Establishing Disadvantage

In Essop the Home Office argued that in order for the claimants to establish prima facie indirect discrimination, the claimants had to prove the reason why a particular PCP (the requirement to pass a Core Skills Assessment as a pre-requisite to promotion to certain civil service grades) put one group at a disadvantage when compared with others, and that he or she was put at that same disadvantage.  This argument succeeded both at first instance, and in the Court of Appeal.

As most employment lawyers and commentators had anticipated, Lady Hale held that this argument was wrong, and that there was no justification for interpreting the Equality Act (and the EU Directives which lay behind it) in this manner. She held that: “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. This may be easier to prove if the reason for the group disadvantage is known but that is a matter of fact, not law.”

Introducing a new phrase into the lexicon of discrimination lawyers, she adopted the term “context factor” as shorthand for the reason or reasons why a PCP puts a group at a disadvantage.  She explained that context factors are many and various, and could be genetic (e.g. strength or height); social (e.g. childcare patterns); or traditional employment practices (such as the expectation that men and women undertake “girls’ jobs” and “boys’ jobs”). For more on context factors see here.

Naeem concerned the Prison Service pay scheme for chaplains which incorporates pay progression over time. Mr Naeem was a Muslim chaplain who argued that this placed him at a disadvantage, as the Prison Service had not employed Muslim chaplains on a salaried basis until 2002. In Naeem in the Court of Appeal, Underhill LJ held that the reason why the PCP (the pay scale) puts Muslim chaplains at a disadvantage had itself to be related to the protected characteristic. Since, as was common ground, the Muslim chaplains were at a disadvantage because of their shorter lengths of service, he held that this was not sufficient. However Lady Hale held that his analysis could not be right, noting that the same could be said of almost any reason why a PCP puts one group at a disadvantage.

The Supreme Court did not consider the provisions within the Equality Act 2010 on equal pay, and nor did it refer to the controversial case of Armstrong and ors v Newcastle Upon Tyne Hospital Trust [2006] IRLR 124. However, the judgment has set a hare running (see for example here) about whether it remains open to an employer in an equal pay case to avoid the justification stage by proving that the explanation for a difference in pay was not itself discriminatory on grounds of sex.

Choice of Pool

In Naeem the employer argued that the correct pool for comparison should be just those chaplains employed after 2002, rather than all chaplains. Lady Hale dismissed this argument, and held that all the workers affected by the PCP in question should be considered, so that the comparison can be made between the impact of the PCP on the group with the relevant protected characteristic and its impact upon the group without it. She held that “[t]here is no warrant for including only some of the persons affected by the PCP for comparison purposes.”

The case of Essop has been remitted to the Employment Tribunal to consider the issue of objective justification.