Watt (formerly Carter) v Ahsan

The House of Lords considered whether the Labour Party was a "qualifying body" within the meaning of section 12 of the Race Relations Act 1976 and whether an earlier Employment Appeal Tribunal decision (Sawyer v Ahsan) that had held the Party to be a qualifying body was binding between the parties. The Law Lords held that the Labour Party is not the type of body contemplated by section 12, but that prior determinations by a tribunal as to its own jurisdiction can give rise to issue estoppel between the parties. Because the Employment Appeal Tribunal's decision in Sawyer had not been appealed, the Party was estopped from denying that ruling and the Employment Tribunal's findings of direct racial discrimination and victimisation were restored. The judgment applies principles about statutory comparators and relevant evidence (as set out in Shamoon) and confirms that direct discrimination under the 1976 Act cannot be justified by political or electoral expediency.

The appellant, Mr Ahsan, a former Labour councillor of Pakistani origin, complained to an employment tribunal that the Labour Party had discriminated against him on racial grounds and had victimised him by removing his name from an approved candidates list. The complaints relied principally on section 12 of the Race Relations Act 1976 (concerning "qualifying bodies") and on victimisation under section 2(1). Procedurally the case involved multiple hearings: an Employment Tribunal decision, an Employment Appeal Tribunal decision (Sawyer v Ahsan [2000] ICR 1) in favour of the claimant on jurisdiction, and a separate Court of Appeal decision in a different case (Ali v McDonagh [2002] ICR 1026) holding that the Labour Party was not a qualifying body under section 12. After a full hearing on the merits the Employment Tribunal found discrimination and victimisation. The Court of Appeal later allowed an appeal brought by the Labour Party and discharged those findings primarily on jurisdictional grounds.

The House of Lords addressed three main issues:

• Whether the Labour Party is a qualifying body under section 12 of the Race Relations Act 1976. The Law Lords agreed with the reasoning in Ali v McDonagh that the notion of an "authorisation or qualification" in section 12 presupposes an objective, vocational qualification process which is unlike political candidate selection. Consequently the Labour Party is not a qualifying body for section 12 purposes; selection disputes of this type are more properly captured by section 25 (associations) or by proceedings in the County Court.
• Whether the earlier EAT decision in Sawyer v Ahsan was binding between the parties (issue estoppel). The House held that a tribunal decision on a question of jurisdiction or statutory description can be a decision of a court of competent jurisdiction and, if not successfully appealed, can give rise to issue estoppel per rem judicatum between the same parties. Because the Labour Party had not appealed the EAT decision in Sawyer, it was estopped from disputing that ruling in relation to Mr Ahsan's complaints, and therefore the Employment Tribunal retained jurisdiction in his cases.
• On the merits, whether the Employment Tribunal's findings of direct racial discrimination and victimisation were sustainable. Applying the comparator principles endorsed in Shamoon, the House accepted the Employment Tribunal's factual findings that the Party treated Mr Ahsan less favourably for reasons connected to his ethnic origins, that a white candidate was favoured notwithstanding non-compliance with selection rules, and that the Party's asserted justification based on electoral perception was insufficient to excuse direct discrimination.

The House therefore allowed Mr Ahsan's appeal, restored the Employment Tribunal's findings of discrimination and victimisation, and affirmed the legal principles on issue estoppel, the proper scope of section 12, and the application of direct discrimination rules to political party selections.

Appeal allowed. Although the Labour Party is not the type of "qualifying body" within the meaning of section 12 of the Race Relations Act 1976 (and selection issues of this kind fall within section 25 and County Court procedures), the earlier Employment Appeal Tribunal decision in Sawyer v Ahsan which held that the Party was a qualifying body had not been appealed and therefore operated as an issue estoppel between the parties. The Employment Tribunal's factual findings of direct racial discrimination and victimisation were therefore restored and upheld. The House applied the comparator and evidential principles in Shamoon and held that direct discrimination cannot be justified by political expediency.

Employment Tribunal (preliminary and merits hearings; tribunal found discrimination and victimisation) -> Employment Appeal Tribunal (Sawyer v Ahsan) [2000] ICR 1 (EAT decision on jurisdiction in claimant's favour; not appealed by Labour Party) -> separate Court of Appeal decision in Ali v McDonagh [2002] ICR 1026 (held Labour Party not a qualifying body under section 12 in a different case) -> further EAT and Court of Appeal proceedings in the present litigation, culminating in Court of Appeal decision [2005] ICR 1817 allowing Labour Party appeal -> House of Lords allowed the claimant's appeal [2007] UKHL 51 and restored the Employment Tribunal decision.