Carter v Ahsan

The Court of Appeal examined whether employment tribunals had constitutionally conferred jurisdiction to determine complaints under section 12 of the Race Relations Act 1976 against a political party and, if not, whether the tribunal's subsequent merits findings could stand. The court analysed the distinction between constitutive jurisdiction (the power to hear a class of dispute) and adjudicative errors of law made within that jurisdiction. The majority held that, in light of this court's decision in Ali v McDonagh, the employment tribunal lacked jurisdiction to try complaints under s.12 against the Labour Party and therefore its merits decision could not stand; they allowed the Labour Party's appeals. The judgment also addressed the substantive discrimination findings and comparator issues, with the majority concluding that the tribunal should not have determined the merits and that the discrimination finding was not sustainable. The minority (Sedley LJ) took the opposite view on jurisdiction, treating the question as an error of law within jurisdiction and upholding the tribunal's discrimination finding.

The appellant (Matt Carter) and respondent (Raghib Ahsan) were parties to contested employment tribunal proceedings concerning repeated non-selection by the Labour Party. The litigation involved three separate selection decisions (1997, 1998 and 2000) and preliminary hearings about whether the Labour Party was a "qualifying body" within section 12(1) of the Race Relations Act 1976.

Procedural history:

• Employment tribunal made a preliminary ruling in favour of Ahsan that the Labour Party fell within s.12 and ordered the first claim to be relisted.
• The Labour Party appealed to the Employment Appeal Tribunal (EAT); the EAT dismissed the appeal and directed the ET to hear the first claim on its merits (Sawyer v Ahsan [2000] ICR 1). Leave to appeal to this court was granted in the EAT but (in that earlier interlocutory step) not pursued in the Ahsan proceedings.
• This court later decided Ali v McDonagh ([2002] ICR 1026), holding that the Labour Party was not a qualifying body under s.12, and that such complaints fell outside the employment tribunal's jurisdiction.
• The ET had heard the three claims on their merits (but reserved promulgation), and after Ali promulgated a decision largely in Ahsan's favour. The Labour Party appealed to the EAT on jurisdictional and discrimination grounds. Those EAT decisions were then brought to this court.

Nature of the applications: The appeals challenged (i) whether the ET retained constitutive jurisdiction after Ali to hear the claims under s.12, and (ii) whether, on the merits, the ET correctly found unlawful race discrimination and used a proper comparator.

Issues framed:

1. Does Ali v McDonagh deprive the employment tribunal of constitutive jurisdiction to hear complaints under s.12 against a political party, or was the ET merely in error of law within jurisdiction when it decided otherwise?
2. If the ET was entitled to proceed, were its findings of direct race discrimination sustainable (including choice of comparator and treatment of the evidence about alleged malpractice and political suitability)?

Court’s reasoning and outcome: The majority (Rimer J and Buxton LJ) concluded that Ali established that complaints of the kind made against the Labour Party did not fall within the statutory jurisdiction conferred on employment tribunals by s.54 read with Part II of the Race Relations Act 1976; the ET therefore lacked constitutive jurisdiction to hear the claims and its merits decision could not stand. The majority set aside the tribunal's merits findings and allowed the Labour Party's appeals. They held that question of whether a tribunal has power to hear a class of claim is a question of constitutive jurisdiction which may not be preserved by consent or estoppel. The minority (Sedley LJ) dissented: he drew a firm distinction between constitutive jurisdiction and errors of law made within jurisdiction and would have treated the ET's error (if any) as an adjudicative error correctable on appeal, not as nullifying the tribunal's orders; he would therefore have dismissed the Labour Party's appeals and upheld the discrimination findings.

The judgment also considered comparative methodology under the Race Relations Act, the proper test for direct discrimination (the 'but for' analysis), the difficulties of handling ethnically-based operational problems, and the limits of estoppel and finality where jurisdictional questions are involved.

Appeal allowed. The majority held that this court's decision in Ali v McDonagh established that a political party in selecting candidates was not a "qualifying body" for the purposes of s.12 of the Race Relations Act 1976, and therefore the employment tribunal lacked constitutive jurisdiction to determine the complaints. Because the tribunal acted without the necessary statutory jurisdiction, its merits determinations could not stand. The minority disagreed, treating the issue as an error of law within jurisdiction and would have dismissed the appeal and upheld the discrimination finding.

This case reached the Court of Appeal on appeal from the Employment Appeal Tribunal. Earlier steps: Employment Tribunal preliminary ruling (25 August 1998) in favour of Ahsan; EAT dismissed the Labour Party's appeal and ordered relisting (14 July 1999) (reported Sawyer v Ahsan [2000] ICR 1); this court subsequently decided Ali v McDonagh [2002] ICR 1026 in separate proceedings; the ET heard the three claims on their merits and promulgated a decision (23 September 2003); the EAT issued decisions on jurisdiction (24 February 2004) and on discrimination (21 June 2004) which were then appealed to this court (Carter v Ahsan [2005] EWCA Civ 990).