Jaffrey v Department Of Environment Transport And Regions

Distinct claims may arise from an employer’s appraisal system and pay system, but whether they do is fact-sensitive. Where an appraisal system is accepted as fair if operated without racial bias, and is the sole route to performance-related pay, resulting pay disparity is attributable to discriminatory operation of the appraisal system rather than an inherently discriminatory pay system. A tribunal may determine the issue preliminarily without hearing witnesses where the essential facts are undisputed and the applicant’s evidence is accepted for that purpose. In those circumstances, an indirect-discrimination claim based only on the resulting pay difference may properly be struck out where it has no realistic prospect of success.

The applicant, an administrative officer, alleged direct and indirect racial discrimination arising from annual appraisals and performance-related pay. The respondent admitted direct discrimination in the conduct of the appraisals and accepted that this had reduced the applicant’s pay.

The Employment Tribunal considered the indirect-discrimination issue as a preliminary matter on assumed agreed facts. It struck out that claim as frivolous and concluded alternatively that it was not established. The Employment Appeal Tribunal upheld that approach. On a renewed application, the Court of Appeal considered whether the pay system gave rise to a distinct indirect-discrimination claim and whether the Employment Tribunal had been entitled to determine the issue without hearing witnesses.

Lord Justice Keene gave the judgment and Lord Justice Mummery agreed. The renewed application for permission to appeal was refused.

1. Separate systems. An employer’s appraisal system and pay system can, in principle, give rise to distinct discrimination claims. Whether they do so depends on the facts and the formulation of the complaint.
2. Application to the complaint. The applicant’s originating application and witness statement complained about the assessment of his performance and the resulting loss of performance-related pay. The Employment Tribunal had expressly found that the appraisal system was the sole route to performance-related pay. The applicant accepted that the system itself was fair if operated without racial bias.
3. No separate indirect claim on the accepted facts. The pay disadvantage arose only because the line manager operated a fair appraisal system in a directly discriminatory manner. It therefore did not establish that the pay system was inherently discriminatory, or that operating a performance-related pay system was indirectly discriminatory. The pay complaint was, in substance, the same complaint as the appraisal complaint. The Employment Tribunal and Employment Appeal Tribunal were entitled to reach that conclusion.
4. Preliminary determination. Employment tribunals should be slow to determine racial-discrimination issues without hearing witnesses. Here, however, the Tribunal accepted the applicant’s evidence for the purpose of its ruling, and the essential facts were not disputed. It was therefore entitled to treat the indirect-discrimination claim as frivolous under rule 13(2)(d) of the Employment Tribunal Rules of Procedure 1993 and strike it out. There was no realistic prospect of a successful appeal.

• Court of Appeal (Civil Division): Refused the renewed application for permission to appeal.
• Employment Appeal Tribunal: Accepted that distinct direct and indirect discrimination claims could theoretically arise, but held that on the facts the applicant’s pay complaint was not separate from the appraisal complaint and that the Employment Tribunal was entitled to strike it out.
• Employment Tribunal: Treated the indirect-discrimination claim as a preliminary issue, struck it out as frivolous, and held alternatively that it was not established on the assumed facts.