Naeem v Secretary of State for Justice

For indirect discrimination, the comparison pool must suitably test the particular disadvantage alleged and must compare like with like. Where a pay system has operated under materially different entry conditions, employees subject to those different conditions may properly be excluded from the pool.

In assessing justification under section 19 of the Equality Act 2010, an employer must establish both a legitimate aim and that the provision, criterion or practice is proportionate. Tribunals should address obvious, less discriminatory alternatives, even where the claimant has not fully developed them. Financial restraint may form part of the context, but lack of resources alone cannot justify discrimination.

The claimant, a Muslim prison chaplain appointed in 2004, challenged a pay system under which progression depended substantially on length of service. Christian chaplains had been employed before 2002, whereas Muslim chaplains had only been recruited since then. The Employment Tribunal found a prima facie disadvantage but dismissed the claims after accepting justification.

The respondent cross-appealed, arguing that pre-2002 chaplains should not have been included in the comparison pool because their circumstances were materially different. The claimant appealed on justification. The central issues were the proper pool under sections 19 and 23 of the Equality Act 2010, and whether the pay system was a proportionate means of achieving a legitimate aim.

1. Cross-appeal allowed. The Employment Tribunal had erred in principle by including all chaplains, including Christian chaplains employed before 2002, in the comparison pool. Section 23 required comparison of cases without material differences in circumstances.
2. The appropriate pool comprised chaplains who had joined the service since 2002. From that date Muslim and Christian chaplains had been on a level playing field and had been subject to the same pay progression practice. On that comparison, the claimant had not suffered the alleged disadvantage.
3. The approach was consistent with Grundy, where the pool had to test the particular discrimination complained of, although there was not necessarily one suitable pool in every case. The reasoning in Homer was materially distinguishable: age was inseparably linked to the time available to obtain the required qualification, whereas race and religion were not linked to length of service in this case.
4. The appeal on justification succeeded on grounds 3 and 4. Although the employer had identified a legitimate aim, the Tribunal had failed to consider obvious alternatives, including backdating service, awarding an additional initial increment, or restraining further increments for employees higher on the scale while improving the position of newer employees.
5. The challenge based on pay controls failed. O’Brien established that an employer could not rely exclusively on its own allocation of financial resources, but public expenditure restraint was only one factor among the historical complexity and reform difficulties affecting the pay system.
6. The cross-appeal was determinative. The discrimination claims remained dismissed, and the appeal was dismissed because the claimant obtained no material advantage from succeeding on the justification grounds.

1. Employment Tribunal, Reading: dismissed the claims after finding prima facie indirect discrimination but accepting the employer’s justification defence.
2. Employment Appeal Tribunal: allowed the respondent’s cross-appeal on the comparison pool, dismissed the claimant’s appeal, and left the claims dismissed.