Hardy & Hansons plc

The Court of Appeal dismissed an appeal by the employer against Employment Tribunal findings that the employer's refusal to permit job‑sharing or part‑time working amounted to unlawful indirect sex discrimination under section 1(2)(b) of the Sex Discrimination Act 1975 and that the respondent had been unfairly dismissed. The tribunal found that the retail recruitment manager role had effectively become redundant before the employee returned from maternity leave and that the new tenant support manager role incorporated RRM functions but could, contrary to the employer's case, be performed on a job‑share or part‑time basis. The central legal principle is that a provision, criterion or practice which has a disparate impact must be shown to be objectively justifiable irrespective of sex; that justification requires an objective, proportionate and reasonably necessary analysis (drawing on Bilka, Barry, Allonby and Cadman). The Court affirmed that tribunals must carry out a critical evaluation of the employer’s justification (including economic or practical business reasons) but concluded that, despite some shortcomings in the written reasoning, the Employment Tribunal had reached a sustainable conclusion on the facts and applied the correct test.

Background and parties: The respondent, Mrs Lisa Lax, was employed as retail recruitment manager by Hardys & Hansons plc. She became pregnant and, prior to maternity leave, asked to return on a part‑time or job‑share basis. The employer refused that request in May 2002. During her maternity leave the RRM functions were restructured and incorporated into a newly created tenant support manager (TSM) role. On her return the employer informed her there was no part‑time role and gave notice of redundancy; a full‑time TSM was appointed before her notice expired.

Nature of the claim and procedural posture: The respondent brought Employment Tribunal complaints of indirect sex discrimination under section 1(2)(b) of the Sex Discrimination Act 1975, unfair dismissal, victimisation (s.4 SDA) and a complaint under the Maternity and Parental Leave Regulations 1999. The tribunal upheld the indirect discrimination and unfair dismissal complaints but dismissed victimisation and the maternity leave regulation claim. The employer appealed to the Employment Appeal Tribunal which dismissed the appeal. The employer then appealed to the Court of Appeal.

Issues: (i) Whether the refusal to permit job‑share/part‑time working amounted to indirect sex discrimination under section 1(2)(b) SDA; (ii) whether the employer could objectively justify its requirement for a full‑time appointment (the evidential and legal standard of justification, including whether a margin of discretion applies to the employer); (iii) consequences of findings for unfair dismissal.

Court’s reasoning and findings: The Employment Tribunal found RRM was largely redundant by December 2002 and that the TSM role incorporated RRM functions but could, contrary to the employer’s evidence, be done by two job sharers or by two part‑time workers. The tribunal treated the employer’s operational objections as overstated and concluded the employer had not shown objective justification under s.1(2)(b)(ii). The Court of Appeal reviewed relevant authorities (including Bilka, Barry, Allonby and Cadman), confirmed the correct test is one of objective justification assessed by proportionality and a showing of reasonable necessity rather than a deferential margin of appreciation for employers, and emphasised that tribunals must carry out a critical and reasonably detailed evaluation of the employer’s asserted business needs. Although the appellate court noted some gaps and overstatements in the tribunal's reasoning, it concluded the tribunal had addressed the employer’s objections and that the outcome was sustainable on the evidence. The Court therefore dismissed the appeal. The tribunal’s unfair dismissal finding flowed from the discrimination finding. The respondent had been awarded damages at remedies hearing (about £60,000) and an EAT appeal against remedies was pending at the time of the judgment.

This is an appeal from the Employment Appeal Tribunal. The Court of Appeal dismissed the employer’s appeal. The court held that (i) indirect discrimination under section 1(2)(b) SDA requires objective justification assessed by proportionality and reasonable necessity; (ii) tribunals must carry out a critical and reasonably detailed evaluation of the employer’s business justification (Bilka/Barry/Allonby/Cadman principles) and need not afford a margin of appreciation to the employer; and (iii) on the facts the Employment Tribunal’s findings that job‑sharing could have been accommodated and that the employer had not shown objective justification were sustainable, and unfair dismissal followed from the discrimination finding.

This appeal was from an Employment Appeal Tribunal decision (His Honour Judge Prophet) dated 8 September 2004 which had dismissed the employer’s appeal from an Employment Tribunal decision sent to the parties on 29 March 2004. The Employment Tribunal had found indirect sex discrimination and unfair dismissal; remedies proceeded separately and an appeal from the remedies hearing to the EAT was pending at the time of this judgment.