Secretary of State For Employment, Ex Parte Seymour Smith and Another, R v.

The House of Lords considered whether the Unfair Dismissal (Variation of Qualifying Period) Order 1985 (extending the qualifying period for unfair dismissal claims to two years) indirectly discriminated against women in breach of Article 119 of the EC Treaty (now Article 141). The European Court of Justice had answered questions on the correct legal test for indirect discrimination, endorsing a primary test of whether statistics indicate that a considerably smaller percentage of women than men can satisfy the requirement and permitting, in some circumstances, a lesser but persistent and relatively constant disparity over a long period to suffice.

The House applied the ECJ guidance to the agreed labour force statistics for 1985–1991 and concluded that, on the figures and the ECJ test, there was not established at the relevant time such a disparity as to constitute indirect discrimination, or, alternatively, that the Secretary of State had discharged the burden of objective justification for the rule. The appeal by the Secretary of State was allowed and the Court of Appeal's decision disallowing the Order was reversed.

The claimants, dismissed in 1991 with between one and two years' service, sought to challenge the Unfair Dismissal (Variation of Qualifying Period) Order 1985 which extended the qualifying period for unfair dismissal compensation to two years. They argued the Order indirectly discriminated against women because a smaller proportion of women than men satisfied the two-year requirement, contrary to Article 119 of the EC Treaty. The Industrial Tribunal refused jurisdiction because the claimants lacked the statutory qualifying period. Judicial review in the Divisional Court was dismissed; the Court of Appeal allowed the claimants and held the Order had an unlawfully discriminatory effect. The House of Lords referred questions to the European Court of Justice on the meaning and scope of Article 119; the ECJ replied with guidance on the statistical test for indirect discrimination and on timing for assessment.

Nature of the claim: judicial review seeking a declaration that the 1985 Order indirectly discriminated against women and thus rendered claimants unable to obtain unfair dismissal compensation.

Issues framed: (i) the legal test for establishing indirect (disparate) effect under Article 119; (ii) the point in time at which legality is to be assessed; and (iii) whether, if there was disparate effect, the Secretary of State had objective justification for the measure.

Court’s reasoning: the ECJ directed that national courts should compare proportions of men and women who do and do not satisfy the condition and that a finding of indirect discrimination requires statistics showing a considerably smaller percentage of women than men can comply, although a lesser but persistent disparity over a long period can in some cases suffice. Applying that guidance to the agreed labour force statistics for 1985–1991, the House concluded that the 1985 figures did not on their face show a considerably smaller percentage of women and that the pattern through to 1991 did not demonstrate an established discriminatory effect for which objective justification was not available. Even where some Law Lords treated the disparity as capable of amounting to indirect discrimination, they accepted that the Secretary of State had a broad margin of discretion in social policy, had evidence reasonably supporting the Order when made, and had been entitled to allow time to assess its effects; accordingly objective justification was established. The appeal was allowed.

Appeal allowed. Applying the ECJ guidance on indirect discrimination under Article 119, the House concluded that the agreed labour force statistics did not establish, at the relevant time of dismissal, a disparity of effect on women amounting to indirect discrimination that was not objectively justified; alternatively, where a disparity could be seen, the Secretary of State had discharged the burden of objective justification and had behaved within a permissible margin of discretion.

Industrial Tribunal: claim not registered for lack of qualifying period. Divisional Court: judicial review dismissed ([1995] I.C.R. 889). Court of Appeal: claimants' appeal allowed ([1995] I.C.R. 919). House of Lords earlier dealt with remedies and referred questions to the ECJ; European Court of Justice answered reference in Case C-167/97 ([1999] 2 AC 554). Final determination by House of Lords: appeal allowed ([2000] UKHL 12).