Naeem v The Secretary of State for Justice

Indirect discrimination requires more than a statistical disparity between groups. Under section 19 of the Equality Act 2010, the claimant must show that the provision, criterion or practice caused the group disadvantage, assessed in the actual population to which it applied. The court may examine why the disparity arose. A length-of-service pay criterion did not put Muslim chaplains at a particular disadvantage where their shorter average service resulted from the objectively assessed absence of need for employed Muslim chaplains before 2002, rather than from a factor related to religion. The prima facie case therefore failed and justification did not arise.

The appellant, an imam employed as a prison chaplain, challenged the lower average basic pay of Muslim chaplains compared with Christian chaplains. The disparity reflected shorter average service because Muslim chaplains were not employed before 2002. The Employment Tribunal found that this resulted from an objective assessment of prisoner need and was not discriminatory.

The Employment Tribunal found prima facie indirect religious discrimination but held the pay system justified. The Employment Appeal Tribunal dismissed the appeal on different reasoning, finding no prima facie discrimination and considering justification in the alternative. The central issue before the Court of Appeal was whether the length-of-service element of the pay system put Muslim chaplains at a particular disadvantage under section 19(2)(b) of the Equality Act 2010.

1. Appeal dismissed unanimously. Underhill LJ gave the principal reasons. Lewison LJ and Dyson MR agreed.
2. The relevant provision, criterion or practice was the relationship between basic pay and length of service. The wider pay system, including performance assessments and changes to the pay range, was not the alleged source of disadvantage. The criterion applied equally to Muslim and Christian chaplains, satisfying section 19(2)(a) of the Equality Act 2010.
3. For section 19(2)(b), the court had to consider the impact of the criterion on the actual population to which it was applied. A disparity did not, however, end the inquiry. The concept of putting a group at a disadvantage was causal. The court could examine the factors causing the disparity and distinguish the legally relevant cause from other circumstances.
4. The shorter average service of Muslim chaplains resulted from the absence of an objectively assessed need for employed Muslim chaplains before 2002. That circumstance was not itself discriminatory and did not reflect a characteristic peculiar to Muslims as Muslims. The length-of-service criterion therefore did not put Muslim chaplains at a particular disadvantage. The possibility that pre-2002 non-recruitment might itself have been discriminatory was left open for a case in which it arose.
5. The reasoning was consistent with the approach in Strathclyde Regional Council v Wallace [1998] ICR 205, Glasgow City Council v Marshall [2000] ICR 196 and the Armstrong line of authority: an employer need not justify a disparity shown to arise from genuine, causally relevant factors unrelated to the protected characteristic. The Court followed the Court of Appeal’s reasoning in Essop v Home Office [2015] EWCA Civ 609 that group disadvantage cannot be proved in the abstract and requires a reason-why inquiry.
6. Lewison LJ additionally explained that, under section 136 of the Equality Act 2010, statistical disparity may establish a prima facie case and shift the burden to the employer to explain why the PCP did not cause the disadvantage. Justification arises only after indirect discrimination has been established. Since the claim failed at the group-disadvantage stage, the court did not need to decide justification. The accepted alternative race claim consequently also failed.

• Court of Appeal (Civil Division): [2015] EWCA Civ 1264; appeal dismissed.
• Employment Appeal Tribunal: judgment handed down on 15 January 2014; appeal from the Employment Tribunal dismissed. It held that there was no prima facie indirect discrimination and considered justification in the alternative.
• Employment Tribunal: reserved judgment promulgated on 12 July 2012; found prima facie indirect religious discrimination but dismissed the claim because the pay system was justified.