In two conjoined cases, (Essop and Naeem) the Supreme Court considered whether a claimant in an indirect discrimination claim has to prove the reason why a PCP puts (or would put) an affected group at a particular disadvantage, and whether the reason has to relate to the protected characteristic.

The Facts

The Essop case

Mr Essop is an immigration officer employed by the Home Office. The Home Office requires all employees to pass a test in order to be promoted. In 2010, a report revealed that black and ethnic minority (BME) candidates and candidates over the age of 35 had significantly lower pass rates for this test than white and younger candidates. No one knows why the proportion of BME or older candidates failing is significantly higher than the proportion of white or younger candidates failing.

Mr Essop and other claimants brought indirect race and age discrimination proceedings against the Home Office, arguing that:

  • The requirement to pass the test was a provision, criterion or practice (PCP).

  • Although not all older BME candidates failed, there was a statistically significant difference between the success of older BME candidates and younger non-BME candidates sitting the test.

  • The claimants had failed the test and there was no particular personal factor specific to any individual claimant that might explain this.

The key issue in the Employment Tribunal, the EAT, the Court of Appeal, and ultimately the Supreme Court was around the reason for the differential in the rates of success. There was no evidence to explain the differential, and no evidence of a link between the assessment and age or race. Did this mean that the requirement to pass the test could not be discriminatory?

The principal issue of law to be decided by the Supreme Court was therefore whether discrimination legislation requires that the reason for the disadvantage suffered by the group be established and that the reason why the individual has suffered from that disadvantage be the same.

The Naeem case

Mr Naeem is an imam who works as a chaplain in the Prison Service. He was originally engaged on a sessional basis on an hourly rate. In October 2004, he became a salaried employee. Before 2002, Muslim chaplains were engaged on a sessional basis only, because the Prison Service believed that there were not enough Muslim prisoners to justify employing them on a salaried basis. The Prison Service operates an incremental pay scale, with annual increases in pay until the employee reaches the top of the pay scale. At the time when Mr Naeem became a salaried employee, it would have taken him 17 years to progress from the bottom of the pay scale to the top.

Given that the incremental pay system is based on length of service, Christian chaplains were more likely than Muslim chaplains to be paid towards the top of the pay scale. Mr Naeem brought an indirect religious discrimination claim, arguing that he had been disadvantaged as a Muslim chaplain by the application of the length of service criterion, which meant that the average basic rate of pay for Muslim chaplains was lower than that of Christian chaplains. He also claimed race discrimination, and it was agreed that the race discrimination claim would rise or fall with the religious discrimination claim.

Mr Naeem's case also ended up in the Supreme Court. In his case, unlike in Essop, the reason for the differential impact of the length of service criterion was known. The key issue in dispute was whether the reason for the differential impact had to be related to the protected characteristic of his religion.

The Supreme Court held that there is no requirement for a claimant to establish the reason why a PCP puts the affected group of employees with a protected characteristic at a particular disadvantage: it is sufficient to show that it does. The fact that no one knows why older BME employees had a lower pass rate does not therefore prevent the PCP of passing the test to be indirectly discriminatory, subject to the employer's justification. It is enough that the BME employees suffered a disadvantage because of the PCP. A causal connection between the PCP and the disadvantage suffered by the individual and by the group is essential. This may be easier to prove if the reason for the group disadvantage is known, but that is a question of fact and not of law.

The Supreme Court also decided that the reason why the PCP puts the group at a disadvantage ("the context factor") does not have to relate to the protected characteristic. In Mr Naeem's case, the reason for the disadvantage was that the Prison Service had not required full time Muslim clerics before 2002 because there were not enough Muslim prisoners. The incremental pay structure was a PCP which affected all chaplains regardless of their religion. It did put the Muslim chaplains at a disadvantage compared with Christian chaplains so it was indirectly discriminatory. However, the original employment tribunal had found because the Home Office was trying to transition to a shorter pay scale the PCP was justified so Mr Naeem's claim ultimately failed as the Supreme Court could not interfere with this part of the decision.

What does this mean for employers?

This case makes little difference to how employers treat their employees in practice. It clarifies a complex area of law, and will make it slightly easier, in some cases, for claimants to establish indirect discrimination, but this will still be subject to an employer's justification defence. The judge used this case to make positive comments about justification, reminding employers that the requirement to justify a PCP should not be seen as placing an unreasonable burden on employers or "casting some sort of stigma upon them."

Following this case, employers should regularly review how their policies and practices impact on different protected groups and, if they find evidence of disparate impact, look at what can be modified to remove the impact while still achieving the desired result of the PCP.

Essop and others v Home Office (UK Border Agency)

Naeem v Secretary of State for Justice [2017] UKSC 27