Serco Ltd v Redfearn

The Court of Appeal considered whether the dismissal of an employee who was a member and elected representative of the British National Party (BNP) amounted to direct or indirect race discrimination under the Race Relations Act 1976. The court reviewed the meaning of "on racial grounds" in section 1(1)(a) and the amended indirect discrimination provisions in section 1(1A) et seq., and examined the correct application of authority such as Showboat Entertainment Centre v Owens. It held that although racial considerations (for example the ethnic origin of customers and employees) were relevant to the employer's decision, the dismissal was not itself "on racial grounds" for the purposes of direct discrimination because the employer was not pursuing a racially discriminatory policy but seeking to avoid perceived harms arising from the employee's political affiliation. The court also held that no proper case of indirect discrimination had been pleaded or established because no appropriate provision, criterion or practice and relevant disadvantaged pool had been identified. The Employment Appeal Tribunal's decision to set aside the employment tribunal was reversed and the original dismissal of the race discrimination claim was restored.

This employment law appeal arose after Serco dismissed Mr Redfearn when it became publicly known that he was a BNP candidate and later elected as a BNP councillor. Serco operated passenger transport services in an area where a high proportion of customers and a significant number of employees were of Asian origin, and it received union and employee representations expressing concern about his continued employment.

The respondent (Mr Redfearn) brought a complaint of race discrimination under the Race Relations Act 1976. He advanced direct discrimination and, during the employment tribunal hearing, argued indirectly that because BNP membership is limited to whites, dismissal for BNP membership was indirectly discriminatory. The employment tribunal dismissed the direct discrimination claim on the basis that dismissal was for health and safety and related concerns rather than "on racial grounds"; it found that any indirect discrimination was justified as a proportionate means of achieving the legitimate aim of maintaining health and safety and protecting passengers, employees and contract relationships.

The Employment Appeal Tribunal allowed an appeal and remitted the matter for rehearing, criticising the employment tribunal's treatment of "on racial grounds" and its assessment of justification under indirect discrimination.

Before the Court of Appeal the issues framed were:

• Whether the employment tribunal erred in law in concluding the dismissal was not "on racial grounds" (direct discrimination under section 1(1)(a));
• Whether a properly pleaded or made-out case of indirect discrimination under section 1(1A) existed and, if so, whether the dismissal was a proportionate means of achieving a legitimate aim;
• Whether Convention rights (Articles 9, 10, 11 and the prohibition in Article 14 and the limitation in Article 17) affected the analysis.

The Court of Appeal analysed previous authority, in particular Showboat and related cases, and concluded that Showboat's ratio protects employees who are subjected to less favourable treatment for refusing to implement a racially discriminatory policy. The court rejected a wider proposition that any action influenced by racial considerations is thereby "on racial grounds"; that construction would catch employers acting to eliminate or avoid racial discrimination and would be contrary to the statutory purpose. The court also held that the respondent had not properly pleaded a provision, criterion or practice and relevant comparators for an indirect discrimination claim under the post-2003 formulation, and thus there was no case requiring a detailed assessment of justification. On human rights arguments the court observed that Serco was not a public authority for the Human Rights Act 1998 and declined to decide Convention points raised for the first time on appeal. For those reasons the Court of Appeal allowed Serco's appeal and restored the employment tribunal's dismissal of the race discrimination claim.

The appeal was allowed. The Court of Appeal held that (1) the employment tribunal was correct in law to conclude that the dismissal was not "on racial grounds" within section 1(1)(a) of the Race Relations Act 1976 because Serco was not pursuing a racially discriminatory policy but responding to perceived risks arising from the employee’s public political affiliation; and (2) no proper case of indirect discrimination under section 1(1A) had been advanced because no meaningful "provision, criterion or practice" or relevant disadvantaged pool had been identified. The Employment Appeal Tribunal had erred in setting aside the employment tribunal's decision.

Employment tribunal: complaint of race discrimination dismissed (extended reasons dated 2 February 2005). Employment Appeal Tribunal (Burton J) allowed the respondent's appeal and remitted the case to another employment tribunal for rehearing (UKEAT/0153/05/LA). Permission to appeal to the Court of Appeal was granted (Brooke LJ, 9 September 2005). Court of Appeal allowed the employer's appeal and restored the employment tribunal's dismissal of the claim ([2006] EWCA Civ 659).