Court of Appeal decision in Naeem

The Court of Appeal dismissed the appellant's claim of indirect discrimination in basic pay under the Equality Act 2010. The court identified the relevant provision, criterion or practice (PCP) as the link between basic pay and length of service and held that the respondent was entitled to show the true cause of the observed pay disparity. Because the shorter average service of Muslim chaplains was shown to result from a non-discriminatory, objective decision not to employ Muslim chaplains before 2002 (reflecting prisoner demographics), the PCP did not, in law, "put" Muslim chaplains at a particular disadvantage within the meaning of section 19(2)(b). The appeal was therefore dismissed without the need to reach the question of justification under section 19(2)(d).

Background and parties. The appellant, an employed Muslim chaplain (an imam) at HMP Bullingdon, alleged that the Prison Service's pay system discriminated indirectly on grounds of religion and, alternatively, race because Muslim chaplains had a lower average basic pay than Christian chaplains. The respondent was the Secretary of State for Justice, responsible for the Prison Service.

Nature of the claim and procedural history. The appellant brought claims of indirect discrimination in terms of basic pay under the Equality Act 2010 (religion or belief, alternatively race). The Employment Tribunal (ET) found prima facie indirect discrimination but accepted the respondent's justification. The Employment Appeal Tribunal (EAT) dismissed the appeal but on the different basis that there was no prima facie indirect discrimination. The appellant appealed to the Court of Appeal.

Issues framed by the court.

• What is the PCP complained of for the purposes of section 19(2) of the Equality Act 2010?
• Does that PCP put Muslim chaplains at a particular disadvantage under section 19(2)(b)?
• What is the proper role of section 23 (comparisons and "pools") and of section 136 in analysing prima facie indirect discrimination?

Court's reasoning. The court (Underhill LJ, with Lewison LJ and Dyson LJ agreeing) identified the PCP as the relationship between basic pay and length of service. It rejected the submission that the PCP should be defined to include the whole pay system beyond the length-of-service element, because those other features were not said to disadvantage Muslims. The court held that, once a disparate outcome is shown, the respondent is entitled to go behind that disparity and show the cause. In this case the ET had found (and the appellant did not challenge) that Muslim chaplains were not employed before 2002 because objectively there was no need for employed Muslim chaplains; that non-recruitment was not discriminatory. That non-discriminatory cause of shorter average service meant that the length-of-service PCP did not "put" Muslim chaplains at a particular disadvantage within section 19(2)(b). The Court of Appeal therefore dismissed the appeal without needing to determine justification under section 19(2)(d). The court discussed and applied authority on whether an employer may show non-discriminatory causes for an apparent disparate impact (Armstrong and related decisions), considered the approach in Essop and the role of section 136, and explained why section 23 (selection of the comparison pool) is not the preferable route to the conclusion in this case.

Subsidiary findings and context. The ET had found that prior non-employment of Muslim chaplains was explained by prisoner demographics and was objectively non-discriminatory; the appellant did not seek to challenge that factual conclusion before the Court of Appeal. The judgment emphasised that correction of arguably unfair pay systems is not the court's role unless there is a discriminatory element.

The appeal was dismissed. The Court of Appeal held that the relevant PCP was the link between basic pay and length of service and that the respondent could show the true cause of the observed pay disparity. Because the shorter average service of Muslim chaplains was attributable to an objectively non-discriminatory non-recruitment before 2002 (linked to prisoner demographics), the PCP did not put Muslim chaplains at a particular disadvantage under section 19(2)(b) of the Equality Act 2010. It was therefore unnecessary to address justification under section 19(2)(d).

Employment Tribunal (reserved judgment promulgated 12 July 2012): found prima facie indirect discrimination but accepted justification. Employment Appeal Tribunal (judgment 15 January 2014): dismissed appellant's appeal, holding there was no prima facie indirect discrimination. Court of Appeal: appeal dismissed [2015] EWCA Civ 1264.