Hardys & Hansons Plc v Lax

For indirect sex discrimination, an employer must objectively justify a requirement that has a disparate adverse effect. The employment tribunal must itself balance the discriminatory impact against the reasonable needs of the business, applying proportionality. The requirement need be reasonably necessary; it need not be the only possible course. There is no margin of appreciation or range-of-reasonable-responses test for the employer.

The tribunal must critically evaluate the asserted business reasons and practical alternatives. An appellate court must scrutinise that evaluation, but should not overturn a sound decision merely because its written reasons are imperfect. In this case, the employer had not shown that refusing a job-share arrangement was justified under the Sex Discrimination Act 1975.

Hardys & Hansons Plc employed Mrs Lax as a retail recruitment manager. After becoming responsible for two children, she sought to return from maternity leave on a part-time or job-share basis. The employer refused. It subsequently created a full-time tenant support manager role, which incorporated elements of her former work, and dismissed her for redundancy.

The Nottingham Employment Tribunal upheld complaints of indirect sex discrimination and unfair dismissal. The Employment Appeal Tribunal dismissed the employer’s appeal. The employer then appealed to the Court of Appeal, contending that the tribunal should have afforded it a margin of discretion and that its reasoning on justification was legally inadequate.

The central issue was whether the refusal to allow job sharing was objectively justifiable under section 1(2)(b) of the Sex Discrimination Act 1975.

1. Appeal dismissed unanimously. The Court upheld the Employment Tribunal and Employment Appeal Tribunal. The employer had not established objective justification for requiring the tenant support manager role to be performed full-time by one person.

2. Under section 1(2)(b)(ii) of the Sex Discrimination Act 1975, justification is an objective and proportionate inquiry. Applying Bilka-Kaufaus G.m.b.H. v Weber von Hartz [1987] ICR 110, Barry v Midland Bank plc [1999] ICR 859, and Allonby v Accrington and Rossendale College and Others [2002] ICR 1189, the tribunal must balance the discriminatory effect of the requirement against the employer’s reasonable business needs. The requirement need be reasonably necessary, not indispensable. The employer need not prove that no alternative is possible, but it cannot rely on a margin of appreciation or a range of reasonable responses.

3. The tribunal must conduct, and demonstrate, a critical evaluation of the business reasons, working practices and economic considerations said to justify the discriminatory requirement. The appellate court must carefully scrutinise whether that task was performed, while avoiding an over-fastidious reading of tribunal reasons or substitution of its own view.

4. Although Pill LJ identified shortcomings in the tribunal’s detailed reasoning, the essential conclusion was sustainable. The tribunal had recorded the employer’s objections, was entitled to find that its witnesses had overstated the practical difficulties and had insufficiently explored flexible job sharing, and was entitled to conclude that the employer had failed to prove justification. Thomas LJ considered the reasons only just sufficient in the particular circumstances; Gage LJ agreed that no error of law had been shown.

5. The finding of unlawful indirect discrimination meant that it was unreasonable to dismiss Mrs Lax without offering the job-share alternative. The consequential finding of unfair dismissal therefore stood.

• Court of Appeal (Civil Division) — dismissed the employer’s appeal: [2005] EWCA Civ 846.
• Employment Appeal Tribunal — dismissed the employer’s appeal from the Employment Tribunal; decision sent to the parties on 8 September 2004.
• Employment Tribunal, Nottingham — upheld the indirect sex-discrimination and unfair-dismissal complaints; decision sent to the parties on 29 March 2004.