Strathclyde Regional Council v. Zafar

The House of Lords dismissed the appellant's appeal against the Court of Session. The court held that an Industrial Tribunal erred in inferring unlawful racial discrimination from (a) the fact that an employer had acted unreasonably (assessed against the standard of a reasonable employer) and (b) the absence of a non-racial explanation for its conduct as a matter of legal necessity. The court clarified that under section 1(1) of the Race Relations Act 1976 the correct comparison for "less favourable treatment" is how the same employer did or would have treated others in the same circumstances, not how a hypothetical reasonable employer would have behaved, and that the complainant bears the burden of proving discrimination on the balance of probabilities. The court approved the approach in King (Neill L.J.) that tribunals may look to the employer for an explanation and may draw an inference of racial motivation where no satisfactory non‑racial explanation is given, but made clear that such an inference is not mandatory as a matter of law.

The appellant, a long‑serving social worker and United Kingdom citizen of Asian origin, was dismissed by Strathclyde Regional Council on grounds of sexual harassment. He brought several sets of proceedings before an Industrial Tribunal alleging, among other matters, racial discrimination under section 1(1) of the Race Relations Act 1976 and unfair dismissal under section 57(3) of the Employment Protection (Consolidation) Act 1978. The Industrial Tribunal dismissed most allegations but found that the dismissal was unfair in manner and that the council had discriminated against the appellant on racial grounds.

The Industrial Tribunal's finding of racial discrimination rested on two inferences: first, that the council's treatment of the appellant "fell far below the standards of a reasonable employer" and therefore there was a presumption of less favourable treatment compared with others; and second, that in the absence of a satisfactory non‑racial explanation the tribunal had no choice but to infer racial motivation. The Employment Appeal Tribunal dismissed the council's appeal; the council then succeeded in the Court of Session (Second Division) which set aside the Industrial Tribunal's finding of racial discrimination (1997 S.L.T. 281). The appellant appealed to the House of Lords.

The issues framed were (i) whether the Industrial Tribunal was correct to infer that the appellant had been treated "less favourably" within the meaning of section 1(1) by reference to the standards of a reasonable employer rather than by reference to the actual or hypothetical conduct of the same employer towards others, and (ii) whether a tribunal is bound in law to draw an inference of racial motivation where no satisfactory non‑racial explanation is offered. The House of Lords held that the Industrial Tribunal's reasoning was wrong on both points: the correct comparator for "less favourable treatment" is the same employer's conduct towards others in like circumstances, and an inference of racial motivation is permissible where a tribunal, after considering all primary facts and inferences, finds the employer's explanation unsatisfactory, but such an inference is not compelled as a matter of law. The House of Lords endorsed the guidance of Neill L.J. in King on the proper approach to drawing inferences in discrimination cases and confirmed the claimant's burden to prove discrimination on the balance of probabilities, albeit recognising the evidential difficulties in such cases.

Procedural posture: appeal to the House of Lords from the Court of Session (Second Division) which had set aside the Industrial Tribunal's finding of racial discrimination.

Appeal dismissed. The House of Lords agreed with the Second Division that the Industrial Tribunal had erred by using the conduct of a hypothetical reasonable employer as the comparator for "less favourable treatment" under section 1(1) of the Race Relations Act 1976 and by treating the absence of a non‑racial explanation as mandating an inference of racial motivation. The correct approach is to compare the treatment to that which the same employer had given or would give to others in the same circumstances and to apply the ordinary evidential and inferential processes (as summarised by Neill L.J. in King) with the claimant bearing the burden to prove discrimination on the balance of probabilities.

Industrial Tribunal: found unfair dismissal and racial discrimination (no neutral citation given). Employment Appeal Tribunal: dismissed the council's appeal (no neutral citation given). Court of Session (Second Division): allowed the council's appeal and set aside the finding of racial discrimination (1997 S.L.T. 281). House of Lords: dismissed the appellant's further appeal [1997] UKHL 54.