Supreme Court Clarifies Law on Indirect Discrimination

The Supreme Court has now handed down its judgment in an important case, Essop and Others v Home Office (UK Border Agency), brought by a group of workers who claimed to have suffered indirect race and/or age discrimination. The Court has ruled 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 provision, criterion or practice (PCP) complained of and the disadvantage suffered, not only by the group but also by the individual. Whilst this may be easier to prove if the reason for the group disadvantage is known, this is a matter of fact, not law.

The members of the group had all failed a Home Office Core Skills Assessment (CSA) and could not, therefore, qualify for promotion. They were all aged 35 or over, or were from black and minority ethnic (BME) backgrounds. A statistical report commissioned by the Home Office in 2009, to assess the equality impact of the CSA, had shown that candidates in those categories were less likely to pass the test than those who were younger and white. A further report in 2011 had confirmed that the differential impact was statistically significant. However, no reason was identified to explain it. Also, many BME and older candidates had passed the exam and there was no particular personal factor specific to any individual that might explain the statistical difference.

On the basis that the requirement for all employees to pass the CSA in order to demonstrate eligibility for promotion was a PCP that put them at a disadvantage compared with those who did not share the same protected characteristics, the group launched proceedings under the Equality Act 2010 alleging indirect race and age discrimination.

It was agreed between the parties that a pre-hearing review was necessary to determine whether the claimants were required, for the purposes of Section 19(2)(b) and/or (c) of the Act, to prove what the reason for the lower pass rate was. The Employment Tribunal (ET) held that they did have to prove the reason. The claimants appealed against the ET's decision and the Employment Appeal Tribunal held that they did not. It was enough to show that the group had suffered, or would suffer, the particular disadvantage of a greater risk of failing the CSA and that each individual had in fact suffered the disadvantage of failure. In allowing the Home Office's appeal against that decision, however, the Court of Appeal ruled that in order to prove a group disadvantage, it was necessary to show not only that the CSA had produced apparently unequal results but also the reason why that was the case. Each member of the group was under an evidential burden to show that he or she had been discriminated against on the basis of a protected characteristic.

In unanimously allowing the workers' appeal against that decision, the Supreme Court provided clarification of the law and gave examples to illustrate its application. There is no express requirement in the Act for a person claiming indirect discrimination to show why a particular PCP puts one group at a disadvantage when compared with others. It is not necessary to establish that the reason for the disadvantage is itself unlawful, or that it is within the control of the employer (although sometimes it will be). Instead, it requires a causal link between the PCP and the particular disadvantage suffered by the group and the individual.

Reliance on statistical evidence is commonplace in indirect discrimination cases and there is no requirement to show that all members of a protected group have been put at a disadvantage. It was irrelevant that some BME or older candidates could pass the CSA. What mattered was that members of those groups failed it disproportionately.

A further salient feature in indirect discrimination cases is that it remains open to an employer to demonstrate that a PCP is justified, despite having an apparently discriminatory effect. The Court noted that a degree of reluctance to reach this point can sometimes be detected, but ETs should not shy away from this aspect of the decision-making process. There is no finding of unlawful discrimination until all four elements of the definition in Section 19(2) are met. There may well be very good reasons for the PCP in question and there is no shame attached to an employer for seeking to justify it. However, a wise employer will seek to modify such PCPs in order to avoid the necessity of explaining disparate effects.

The Court noted that a candidate who had failed to turn up for or finish the CSA would be unable to establish that he or she had suffered any harm. The case was therefore returned to the ET for consideration of each individual claim in the light of the Court's ruling.