The recent Supreme Court decision in the conjoined cases of Essop and Naeem has helped to clarify the scope of indirect discrimination by confirming that Claimants do not need to prove the reason behind a disadvantage suffered as a result of a provision, criterion or practice (PCP).

Essop – facts and decision

Employees of the Home Office were required to pass a core skills assessment (CSA) as a pre-requisite to promotion. A report commissioned by the Home Office showed that Black and Minority Ethnic (BME) candidates and older candidates had lower pass rates than white and younger candidates. No one knows why the proportion of BME or older candidates failing was significantly higher than the proportion of white or younger candidates failing but the statistics were clear. The 49 claimants in this case failed the CSA and consequently were not eligible for promotion. They brought indirect discrimination claims on the basis of race and/or age.

The Court of Appeal held that the claimants had to show why the requirement to pass the CSA put the group at a disadvantage and that he or she failed the test for that same reason. The Supreme Court reversed that decision and unanimously concluded that the claimants did not need to show the reason why they were prejudiced; the fact of the disadvantage was sufficient.

Naeem – facts and decision

Mr Naeem is an imam who works as a chaplain in the Prison Service. Prior to 2002 Muslim chaplains were engaged on a sessional basis only, as the Prison Service believed there were not enough Muslim prisoners to justify employing them on a salaried basis. The Prison Service operates an incremental pay scheme which relates pay progression to length of service.

Mr Naeem brought an indirect discrimination claim on the grounds that the incremental pay scheme was indirectly discriminatory against Muslim or Asian chaplains; the average length of service of Christian chaplains was longer than Muslim chaplains and therefore their average pay was higher.

The Court of Appeal found that it was not enough to show that the length of service criterion had a disparate impact upon Muslim chaplains. It held that it was also necessary to show that the reason for that disparate impact was something peculiar to the protected characteristic in question. However, in keeping with the Essop case, the Supreme Court reiterated that the reason for the disadvantage suffered does not have to be related to the protected characteristic. It was plain that the pay scheme put Muslim chaplains at a disadvantage when compared to Christian chaplains and that Mr Naeem also suffered this disadvantage. This was enough to establish the first limb of indirect discrimination.

However, on the facts of this case it was found that the pay scheme was objectively justified. The employer had successfully persuaded the Employment Tribunal that the PCP was a proportionate means of achieving a legitimate aim, and the Supreme Court declined to interfere with the Tribunal’s assessment on the question of justification. Therefore Mr Naeem’s claim ultimately failed.

What does this mean?

The Supreme Court has confirmed that there is no express requirement for an explanation as to why a particular PCP puts one group at a disadvantage when compared to others. The fact of the disadvantage is enough. Further, there is no requirement that the PCP in question put every member of the group sharing the particular protected characteristic at a disadvantage.

Therefore, an apparently neutral provision, criterion or practice, which has the effect of disproportionate group disadvantage (often established on the basis of statistical evidence) will normally be indirectly discriminatory (subject to the objective justification defence).

Employers are strongly advised to review their policies and practices and consider how they impact upon employees with protected characteristics. If you find that a PCP does have the effect of disadvantaging a certain group, then:

  • consider whether the PCP can be objectively justified (for example through a genuine business objective);
  • query whether there are less discriminatory means by which the aim can be achieved; or
  • modify the PCP so that it no longer has the effect of disproportionate group disadvantage.