Case law: Employers more at risk of indirect discrimination claims following Supreme Court ruling
Employers should review their policies, criteria and procedures (PCPs) to ensure they do not indirectly discriminate against particular groups of employees on the basis of a protected characteristic, following a recent case. The ruling makes it easier for employees to bring indirect discrimination claims in those circumstances.
This update was published in Legal Alert - May 2017
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There is unlawful indirect discrimination if:
- an employer operates a PCP which puts a group of employees (including the employee who is complaining about it)
- who share a 'protected characteristic' (such as their race, age or religion)
- at a substantial disadvantage compared with people of a different race or age, and
- the disadvantage suffered by the individual making the complaint and the other members of the group are the same
Effectively, it catches situations where an employer's practice, policy or rule applies to everyone, but has a worse effect on a particular group of employees whose members share a protected characteristic, than the rest of the workforce.
The courts' approach has been that employees claiming a PCP puts them (and others in the same group) at a disadvantage have had to explain why it does. However, in a ruling on two related cases, the Supreme Court (SC) has now overturned this. The SC said that employees do not have to explain the reasons why a PCP causes them to suffer a disadvantage – it is enough that it does. While it is vital that there is a causal connection between the PCP and the disadvantage suffered, it is not necessary to show there is a causal link between the protected characteristic and the disadvantage.
In the first case, Home Office immigration officers had to pass a Core Skills Assessment (CSA) before they could be promoted. An official report showed that black and minority employees and older employees had a lower pass rate than white and young employees, but it was not clear why. The employee claimed indirect discrimination.
The employer said the fact that non-white and older employees taking the CSA (the PCP in this case) were more likely to fail (which was the disadvantage) was not in itself evidence that the CSA was indirectly discriminatory. Rather, the employee had to show that the reason why he had failed was his race/age. Given that some non-white, older candidates passed, and some white, younger candidate failed, this would have been difficult.
In the other case, a Muslim worked as a prison service chaplain. His employer introduced an incremental pay scheme based on length of service in 2004. Muslim chaplains had not been allowed to work full-time until 2002, and this particular Imam did not become full-time until 2004. Inevitably, Christian chaplains' average length of service was longer than that for Muslim chaplains, meaning their basic pay was, on average, higher than that of Muslim chaplains. However, a Christian chaplain who had started in salaried employment on the same date as a Muslim chaplain would be paid the same.
The Muslim chaplain claimed the relationship between length of service and pay in the incremental pay scheme (the PCP in this case) resulting in average lower pay for Muslim chaplains (the disadvantage) was indirectly discriminatory.
The employer claimed that the chaplain had to show the reason why it was, ie. he had to show a causal connection between being Muslim and being paid less. Given that some Muslim chaplains would be paid the same as some Christian chaplains (because they had both started on a date after the scheme was introduced), this would be difficult.
If that argument failed, the employer also argued that the discrimination was justified as it was a proportionate means of achieving the legitimate aim of introducing a new pay scheme.
The Supreme Court ruled that there is no requirement for an employee claiming indirect discrimination to explain the reason why the relevant PCP causes them (and other members of the same group) to suffer a disadvantage. Provided they all suffer the same disadvantage, it is enough that it does.
The SC said: "Sometimes … the reason will be obvious: women are on average shorter than men, so a tall minimum height requirement will disadvantage women whereas a short maximum will disadvantage men. But sometimes it will not be obvious: there is no generally accepted explanation for why women have on average achieved lower grades as chess players than men, but a requirement to hold a high chess grade will put them at a disadvantage."
Applying this principle, the SC decided in the prison officer's case that there was indirect discrimination because he and other employees who were non-white and/or older had a disproportionate likelihood of failing the CSA compared to white, younger employees. That was sufficient to establish indirect discrimination.
The SC also found indirect discrimination in the Muslim chaplain's case because the pool of people he should be compared to includes everyone affected by the PCP (whether positively or negatively), including Christian chaplains employed before Muslim chaplains were first employed. Since Muslim chaplains generally suffered a disadvantage compared to others in the pool under the new scheme, there was indirect discrimination.
However, the SC found that the disadvantage was justified as a proportionate means of achieving a legitimate aim. The disadvantage was nothing more than the necessary consequence of a transition to a new pay scale, and each of the steps taken to switch to the new system was proportionate. Therefore, the discrimination was not unlawful.
The SC set out a useful list of features common to all instances of indirect discrimination:
- There is no need for an explanation why a specific act disadvantages one group. It is enough that it does
- There is no requirement to show a causal link between the relevant protected characteristic and the particular disadvantage suffered by the employee and other members of the same group. For example, it was not necessary to show the chaplain in the second case was paid less because he was Muslim. (This is different from cases of direct discrimination which expressly requires a causal connection between the less favourable treatment of a person and their protected characteristic.) However, a link does have to be shown between the PCP and the disadvantage
- The PCP does not have to put every member of the group sharing the particular protected characteristic at a disadvantage. However, the disadvantage suffered by the individual bringing the claim must be the same as that suffered by other members of the group
- The employer can always show the PCP complained of is a proportionate means of achieving a legitimate aim to justify what would otherwise be discriminatory treatment
The SC stressed the last point: it was always open to employers to justify a PCP that would otherwise be indirect discrimination, on grounds it was a proportionate means of achieving a legitimate aim. The SC therefore remitted the prison officer's case back to the Employment Tribunal to consider whether the CSA could be justified.
- Employers should review their policies, criteria and procedures (PCPs) to ensure they do not indirectly discriminate against particular groups of employees on the basis of a protected characteristic (such as their race or age), or risk indirect discrimination claims against them. Employees no longer have to give the reasons why a PCP discriminates against them - the fact it does is enough
Case ref: Essop and others v Home Office (UK Border Agency) and Naeem v Secretary of State for Justice  UKSC 27
Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.