Serco Leisure Operating Ltd v Lau

The burden under Equality Act 2010 s136 only shifts when the claimant adduces facts from which a tribunal could, in the absence of any explanation, conclude discrimination.

Where the burden shifts the employer must show on the balance of probabilities that the protected characteristic was not a reason for the conduct.

A tribunal must state clearly the material facts that justify an inference that the protected characteristic was a material influence.

The respondent employer reorganised a small management team shortly after the claimant informed her manager of a pregnancy. The Employment Tribunal accepted the restructure was genuine but found the claimant had suffered unfavourable treatment because pregnancy materially influenced the decision to adopt a particular selection method, and upheld a claim under Equality Act 2010 s18. The employer appealed to the Employment Appeal Tribunal on two grounds: that the ET had erred in finding the burden of proof shifted under s136, and that the ET had failed to accept the employer's non-discriminatory explanation.

The EAT allowed the appeal, holding the ET had inadequately explained why the burden had shifted and had not sufficiently linked its criticisms of the employer's explanation to pregnancy as the motivating cause. The matter was remitted to the Employment Tribunal for reconsideration.

1. Disposition: Appeal allowed and the matter remitted to the Employment Tribunal for rehearing on the section 18 claim (see paras [39]‑[41]).
2. Burden of proof (section 136): The tribunal must identify the "something more" in primary facts that could support an inference of discrimination. A bare chronology or general criticisms are insufficient unless linked to specific facts justifying the inference (see paras [27]‑[31]).
3. Explanation by employer: If the claimant satisfies the first stage, the employer must, on the balance of probabilities, show the protected characteristic was not a ground for the treatment. The ET may test the employer's stated reason for adequacy, including by assessing whether the explanation was genuinely unconnected to the protected characteristic (see paras [19], [33]).
4. Reason v Context: A tribunal must distinguish contextual factors from reasons motivating the employer. Contextual links (for example, delay caused by pregnancy) do not alone demonstrate that pregnancy motivated the decision unless the tribunal explains that link (see paras [34]‑[37]).
5. Application of authority: The EAT applied and followed guidance from earlier authorities on the two-stage burden and assessment of employer explanations (see paras [20]‑[21]).
6. Remittal: The EAT remitted the claim to the same Employment Tribunal to decide afresh under s18, applying the factors in [2004] IRLR 763 (Sinclair Roche & Temperley) and explaining why remittal to the same tribunal was appropriate (see paras [40]‑[41]).

• Employment Appeal Tribunal: Allowed the employer's appeal against the ET's finding under Equality Act 2010 s18 and remitted the claim to the Employment Tribunal for rehearing (see paras [39]‑[41]).
• Employment Tribunal: Reserved judgment (North Shields ET) originally upheld the section 18 claim; that decision is remitted for reconsideration.