Spicer v Government of Spain

The Court of Appeal allowed the appellant's appeal on the issue of indirect race discrimination in pay under the Race Relations Act 1976. The court emphasised that an applicant must identify a requirement or condition under section 1(1)(b) and a pool of persons for the disparate impact calculation, and that section 3(4) requires relevant circumstances to be the same or not materially different when making comparisons. Critically, the respondent had been precluded by interlocutory order from relying on an objective justification defence; the Tribunal’s finding of no detriment effectively re-introduced justification by the back door and was therefore unsustainable. The court held that the correct logical pool was all teachers at the school, that the Tribunal’s conclusion on detriment was perverse, and remitted the pay issue to the Tribunal for assessment of compensation.

Background and procedural posture: The appellant, a British teacher at a Spanish State school in London, brought claims under the Race Relations Act 1976 including indirect discrimination in relation to pay. The Employment Tribunal dismissed the indirect discrimination claim but found unfair dismissal (the latter stayed in part). The appellant appealed to the Employment Appeal Tribunal which allowed the appeal in part but dismissed the part dealing with indirect discrimination in pay. The appellant then obtained permission to appeal to the Court of Appeal.

Nature of the claim and relief sought: The claim before the court concerned indirect racial discrimination under RRA 1976 section 1(1)(b) in relation to pay (specifically the payment of relocation allowances to Spanish civil servants seconded from Spain). The appellant sought a finding of indirect discrimination and assessment of compensation.

Key facts: The school employed Spanish civil servants seconded from Spain, locally recruited Spanish teachers, and British teachers. Spanish secondees received relocation allowances that resulted in substantially higher total pay than the British teachers, although British teachers had higher basic salaries. The respondent had been ordered to plead a full objective justification defence but failed to do so and the Tribunal struck that defence out.

Issues before the Court: (i) whether the appellant suffered a detriment for the purposes of RRA 1976 section 1(1)(b); (ii) the proper identification of the pool and the role of section 3(4) in defining like-for-like comparisons; and (iii) the legal consequence of the respondent being precluded from advancing an objective justification defence.

Court’s reasoning: The Court held that the Tribunal’s finding of no detriment was legally unsupportable in the absence of an available objective justification defence, because the Tribunal effectively treated the relocation allowance and secondee status as a non-comparative feature and thereby re-introduced justification. The court adopted the logical approach to identification of the impugned requirement/condition and the pool (citing Allonby and related authority), concluding that the correct pool was all teachers at the school and that section 3(4) was satisfied because the relevant circumstances of the comparators were the same for the purpose of the statutory test. The court rejected the respondent’s submission that the secondees could be excluded from the pool so as to defeat the claim. Because the respondent had been precluded from advancing objective justification, the Tribunal should have found detriment and proceeded to assess compensation. The court therefore allowed the appeal and remitted the pay issue to the Tribunal for assessment of compensation.

Other matters: The Court noted that promotion and pension issues had been remitted by the EAT to the Tribunal for further consideration and did not disturb those remittals. The court observed that compliance with Tribunal directions to plead objective justification is important.

Appeal allowed. The Court of Appeal held that the Employment Tribunal was wrong to find no detriment on the pay issue where the respondent had been precluded from advancing objective justification; the correct pool for assessing disparate impact comprised all the teachers at the school and section 3(4) did not prevent the comparison. The pay issue was remitted to the Tribunal for assessment of compensation.

Employment Tribunal (London Central) reserved decision 8 May 2003: dismissed indirect discrimination claims and upheld unfair dismissal (part stayed). Employment Appeal Tribunal judgment 25 November 2003 (EAT/0516/03/RN): allowed appeal in part but dismissed the appeal on the pay/indirect discrimination point. Appeal to the Court of Appeal ([2004] EWCA Civ 1046): appeal allowed and pay issue remitted to the Tribunal for compensation assessment.