Essop and others v Home Office

Indirect discrimination does not require a claimant to explain why a provision, criterion or practice disadvantages a protected group, or to show that the reason is peculiar to the protected characteristic. The claimant must establish a causal connection between the practice and the particular disadvantage suffered by both the group and the individual.

Group disadvantage may be proved statistically and need not affect every group member. The comparison pool should generally include everyone affected by the practice. The respondent may justify the practice as a proportionate means of achieving a legitimate aim. For a transitional scheme intended to reduce disadvantage, proportionality requires consideration of available ways to reduce it more quickly.

The court heard two appeals concerning indirect discrimination under section 19 of the Equality Act 2010.

In Essop and others v Home Office, 49 employees challenged a requirement to pass a Core Skills Assessment before becoming eligible for promotion. Statistical evidence showed substantially lower pass rates among Black and Minority Ethnic and older candidates, but the reason was unknown. The Employment Appeal Tribunal held that proof of the reason was unnecessary: [2014] UKEAT/0480/13; [2014] ICR 871. The Court of Appeal disagreed: [2015] EWCA Civ 609; [2015] ICR 1063.

In Naeem v Secretary of State for Justice, a Muslim prison chaplain challenged an incremental pay scheme based on length of service. Muslim chaplains had shorter average service because salaried employment had become available to them only in 2002. The Employment Tribunal found indirect discrimination but held it justified. The Employment Appeal Tribunal held that the pre-2002 chaplains should be excluded from the comparison pool and, alternatively, that justification had not been established: UKEAT/0215/13/RN; [2014] ICR 472. The Court of Appeal dismissed Mr Naeem's appeal: [2015] EWCA Civ 1264; [2016] ICR 289.

The central questions concerned proof of the reason for group disadvantage, the necessary causal connection, identification of the comparison pool and review of proportionality.

1. Disposition. Lady Hale delivered the judgment, with which Lord Clarke, Lord Wilson, Lord Carnwath and Lord Hodge agreed. The appeal in Essop and others v Home Office was allowed and the claims were remitted to the Employment Tribunal. The appeal in Naeem v Secretary of State for Justice was dismissed.

2. Section 19 of the Equality Act 2010 does not require an explanation of why a provision, criterion or practice puts a protected group at a particular disadvantage. Nor must the reason for the disadvantage be peculiar to, or itself caused by, the protected characteristic. Adding such requirements would introduce words absent from the legislation and the underlying Directives.

   Indirect discrimination differs from direct discrimination. It assumes equal application of an apparently neutral practice. The necessary causal connection is between the practice and the disadvantage suffered by the group and by the individual. The respondent may show that an individual did not suffer the disadvantage because of the practice, including where failure resulted from the individual's own conduct.

3. Group disadvantage need not affect every member of the protected group. It may ordinarily be established through statistical evidence, although statistical correlation does not itself explain causation. Potential disadvantage at group level and actual disadvantage suffered by affected individuals can be the same disadvantage. In the assessment cases, disproportionate group failure and each claimant's own failure were capable of satisfying that requirement without proof of why the disparity arose.

4. The causative context producing disparate impact need not itself relate to the protected characteristic. The incremental pay structure affected all employed prison chaplains and therefore supplied the proper comparison pool. In general, the pool should include everyone whom the practice affects, positively or negatively. The scheme disadvantaged Muslim chaplains because they had shorter average service, and Mr Naeem suffered that disadvantage.

5. The pay scheme nevertheless remained justified. The Employment Tribunal had accepted the legitimate aim of rewarding service and experience while managing an orderly transition to a shorter scale. In a transitional scheme intended to reduce group disadvantage, the proportionality inquiry must consider whether other methods could remove or reduce that disadvantage more quickly. Suggested or obvious alternatives must be considered. That assessment is factual, however, and the Employment Appeal Tribunal and higher courts may not disturb the Tribunal's findings without identifying an error of law. The Tribunal had applied the correct “no more than necessary” test, so its justification decision stood.

• United Kingdom Supreme Court: In [2017] UKSC 27, the court unanimously allowed the appeal in Essop and others v Home Office and remitted the claims to the Employment Tribunal. It unanimously dismissed the appeal in Naeem v Secretary of State for Justice.
• Court of Appeal: In the Essop proceedings, it held that the claimants had to establish why the assessment caused group disadvantage and that each claimant failed for that reason: [2015] EWCA Civ 609; [2015] ICR 1063. In the Naeem proceedings, it dismissed the claimant's appeal because the reason for the disparate impact was not peculiar to the protected characteristic: [2015] EWCA Civ 1264; [2016] ICR 289.
• Employment Appeal Tribunal: In Essop, it held that proof of the reason for the statistical disparity was unnecessary: [2014] UKEAT/0480/13; [2014] ICR 871. In Naeem, it excluded pre-2002 chaplains from the comparison pool but held alternatively that proportionality had not been demonstrated: UKEAT/0215/13/RN; [2014] ICR 472.
• Employment Tribunals: The London South Employment Tribunal held that the Essop claimants had to prove the reason for the lower pass rate. The Reading Employment Tribunal held that the incremental pay scheme indirectly discriminated on grounds of race and religion but was objectively justified.