Khan & Anor v The Home Office

The Court of Appeal granted permission to appeal against an Employment Appeal Tribunal decision which had allowed in part the appellants' appeal from the Employment Tribunal. The appellants, long‑serving specialist interpreters, had advanced multiple employment claims including race and sex discrimination, unfair and automatically unfair dismissal, breach of contract and detriment for being placed on special leave. Key statutory provisions engaged included the burden of proof provisions in section 54A of the Race Relations Act 1976 and section 63A of the Sex Discrimination Act 1975 and the two‑stage approach explained in Igen Ltd v Wong.

The Court considered four principal areas of alleged error at the Tribunal and EAT levels: pay (comparison and market uplifts), the lawfulness of the dismissals (procedure in a redundancy context), placement on special leave as a detriment, and entitlement under the Civil Service Compensation Scheme. The court concluded those points were properly arguable and that the applicants had shown a sufficient prospect of success to justify permission to appeal.

Background and parties:

• The applicants, Mrs Marti Khan and Mrs Iris Odette King, were two of only three specialist interpreters employed by the Home Office. Their employment dated from 1979 and 1985 respectively. Over recent years the Home Office had increasingly used freelance interpreters.
• The litigation began in December 2002; an earlier hearing in September 2004 was aborted after eight days and gave rise to a costs order against the Home Office which was later overturned by the EAT. The Tribunal delivered a reserved decision on 15 November 2005, and the EAT issued a decision dated 17 November 2006 allowing the applicants' appeal in part. A remedies hearing was held in February 2007 with a reserved decision in March 2007 ordering, among other things, re‑engagement and awards; that remedies decision was the subject of a pending respondent appeal to the EAT.

Nature of the application:

• The applicants applied for permission to appeal to the Court of Appeal against the EAT decision. Their grounds focused on four substantive areas: pay, the dismissals, placement on special leave, and Civil Service Compensation Scheme (CSCS) payments. They also challenged the way the Tribunal and the EAT applied the burden of proof provisions in section 54A Race Relations Act 1976 and section 63A Sex Discrimination Act 1975 together with the two‑stage approach described in Igen Ltd v Wong.

Issues framed by the court:

• Whether the Tribunal and the EAT misapplied the statutory burden of proof in discrimination claims (RRA 1976 s54A and SDA 1975 s63A) and the two‑stage test;
• Whether the Tribunal improperly substituted its own explanation for the respondent's or failed to identify or evaluate the respondent's explanation on matters of pay and comparators;
• Whether procedural defects in the redundancy and dismissal process could give rise to discrimination findings;
• Whether placement on special leave and the decision about CSCS payments amounted to less favourable treatment or were infected by discrimination.

Court's reasoning and disposition:

• The Court noted the lengthy and complex procedural history and emphasised the need for the parties to consider mediation, though recognising resource asymmetry. The Court accepted that the grounds advanced were arguable and that the applicants had established matters sufficient to pass the first stage of the burden of proof in the matters identified, such that the absence of a satisfactory non‑discriminatory explanation from the respondent would be material.
• The Court therefore granted permission to appeal so that the substantive issues could be fully determined in a three‑judge Court of Appeal hearing, directed that the appellants prepare an amended appellants' notice and skeleton, and estimated 1.5 days for a hearing.

Permission to appeal to the Court of Appeal was granted. The court held that the appellants raised properly arguable points concerning the application of the burden of proof in race and sex discrimination (section 54A RRA 1976 and section 63A SDA 1975) and the two‑stage approach from Igen Ltd v Wong, in relation to four areas (pay, dismissal procedure, placement on special leave and CSCS payments). The court directed preparation for a full three‑judge hearing and encouraged parties to pursue settlement or mediation given the length and complexity of the litigation.

The claims began in December 2002. An earlier Employment Tribunal hearing in September 2004 was aborted after eight days and gave rise to a costs order which the EAT later overturned. The Employment Tribunal issued a reserved decision on 15 November 2005. The Employment Appeal Tribunal issued a decision on 17 November 2006 allowing the applicants' appeal in part. A remedies hearing before the Employment Tribunal took place in February 2007 with a reserved decision promulgated in March 2007; that remedies decision was the subject of a pending respondent appeal to the EAT. This Court (Court of Appeal) heard the applicants' application for permission to appeal on 24 October 2007 and granted permission on 5 November 2007 ([2007] EWCA Civ 1092).