Hottak & Anor, R (On the Application Of) v The Secretary of State for Foreign And Commonwealth Affairs & Anor

Part 5 of the Equality Act 2010 applies to overseas employment only where the employment relationship has a sufficiently strong connection with Great Britain and British employment law to overcome the general rule that the place of employment is decisive. The test is one of fact and degree. It does not become less demanding merely because the claim alleges discrimination rather than unfair dismissal.

Part 3 cannot provide an alternative route for a work-related discrimination claim that falls outside Part 5's territorial reach. A breach of the public sector equality duty will ordinarily justify quashing, but relief remains discretionary. A declaration may suffice where a later, open-minded equality assessment has addressed the relevant matters, resulted in changes, and a further assessment would serve no practical purpose.

Afghan nationals who had worked as locally employed interpreters for British Forces challenged the Afghan Scheme of assistance for former locally employed staff. They contended that it was less favourable than the earlier Iraq Scheme and therefore discriminatory on grounds of nationality. They relied on the employment and public-functions provisions of the Equality Act 2010, the common law, and the public sector equality duty.

The Divisional Court held that the statutory discrimination provisions did not extend to their Afghan employment. It declared that the respondents had failed to have due regard to section 149(1)(b) and (c) when formulating the Afghan Scheme, but refused to quash it: [2015] EWHC 1953 (Admin). The claimants appealed the dismissal of their substantive claims and the refusal of a quashing order.

1. Appeal dismissed unanimously. The claimants' locally engaged Afghan employment lacked the exceptionally strong connection with Great Britain and British employment law required for Part 5 of the Equality Act 2010 to apply. They were Afghan nationals, recruited, resident and employed exclusively in Afghanistan under contracts governed by Afghan law. A British Government employer, work at British compounds, British management, security arrangements and initial exemption from local tax did not alter that conclusion.

2. The territorial inquiry is one of fact and degree. The general rule is that the place of employment is decisive. Part 5 may exceptionally extend to overseas employment where the connection with Great Britain and British employment law is sufficiently strong, but the claimants were materially analogous to locally engaged staff at a British embassy abroad rather than employees working in a British or international enclave.

3. The anti-discrimination purpose of Part 5 did not justify a more generous territorial test than that applying to unfair-dismissal claims under the Employment Rights Act 1996. Parliament had provided no basis for such a distinction.

4. The claimants could not recast their employment complaint as a public-functions claim under section 29(6). Section 28 of the Equality Act 2010 confines work-related discrimination claims to Part 5. In any event, section 29(6) did not extend to claims concerning the extraterritorial effects of public functions.

5. Although unnecessary to the result, the court agreed that the differing Iraq and Afghan schemes were not direct discrimination because of nationality. The material local conditions, risks and capacity to assess threats differed. Those facts explained the different schemes and meant that Iraqi locally employed staff were not relevant comparators. The proposed indirect-discrimination claim identified no valid provision, criterion or practice. The common-law irrationality claim also failed because the circumstances were materially different.

6. The Divisional Court had correctly treated the failure to consider section 149(1)(b) and (c) as unlawful. Quashing is ordinarily appropriate for a breach of the public sector equality duty, but is not automatic. The later equality assessment had been undertaken with an open mind, had led to changes in the scheme, and went beyond the duty ultimately engaged. The Divisional Court was entitled to conclude that a declaration was sufficient and that a fresh assessment would serve no practical purpose.

• Court of Appeal (Civil Division): Dismissed the claimants' appeal and upheld the Divisional Court's refusal to quash the Afghan Scheme.
• Divisional Court, Administrative Court: Held that the substantive discrimination claims failed, granted a declaration of breach of section 149(1)(b) and (c) of the Equality Act 2010, and refused substantive relief: [2015] EWHC 1953 (Admin).