Heskett v Secretary of State for Justice

The Court of Appeal dismissed the appellant's challenge to the Employment Appeal Tribunal and the Employment Tribunal on an indirect age discrimination claim under the Equality Act 2010 (notably section 19). The tribunal had identified the relevant provision, criterion or practice (PCP) as the 2011 reduction in pay-progression (from three spinal points to one) and found that, although that change had a disparate impact on younger employees, the respondent had a legitimate aim in seeking to operate within constrained pay budgets and the measure was a proportionate short-term response. The court confirmed that saving cost alone will not constitute a legitimate aim, but that an employer's need to "live within its means" (an absence of available resources) can constitute a legitimate aim to be weighed in the proportionality assessment. The temporary, transitional nature of the measure and the employer's active steps to mitigate discriminatory effects were relevant to justification.

Background and procedural history:

• The claimant, a probation officer, brought proceedings in the Employment Tribunal in 2016 alleging indirect age discrimination arising from changes to NOMS pay-progression introduced after 2010.
• The Employment Tribunal dismissed the claim (Judgment dated 12 October 2017). The claimant appealed to the Employment Appeal Tribunal which dismissed the appeal (decision of HH Judge Barklem, handed down 25 June 2019). The claimant then appealed to the Court of Appeal, which delivered this judgment on 11 November 2020.

Nature of the claim / relief sought: The claim was an allegation of indirect discrimination on grounds of age. Relief sought: Not stated in the judgment.

Issues framed by the courts:

• What was the PCP to be justified (the tribunal identified the 2011 pay-progression changes)?
• Whether the PCP put younger employees at a particular disadvantage (accepted by the tribunals)?
• Whether the respondent could show the PCP was a proportionate means of achieving a legitimate aim (justification): in particular whether reliance on cost or an absence of means could be a legitimate aim and what weight should be given to the temporary nature of the measure.

Court's reasoning in brief:

• The court agreed with the Employment Tribunal's characterisation of the PCP as the reduction in annual progression to one spinal point in 2011 and accepted the finding that that produced a disproportionate disadvantage to younger employees.
• The court reviewed the authority on whether cost alone can be a legitimate aim and concluded (following domestic and EU authorities cited in the judgment) that saving costs alone cannot justify discriminatory treatment, but that an employer's genuine need to operate within constrained resources may legitimately form part of the employer's aim and be taken into account in the proportionality assessment. The correct approach is to characterise fairly the employer's aim and then assess whether the means adopted were proportionate.
• The tribunal's reliance on the temporary or "stopgap" character of the 2011 measures, and on the employer's active steps to mitigate and shorten the discriminatory effect, was properly relevant to the proportionality enquiry. The Employment Appeal Tribunal was correct to uphold the Tribunal's conclusions and the Court of Appeal found no error of law or lack of evidential basis requiring intervention.

Appeal dismissed. The Court of Appeal upheld the tribunals' findings that the PCP was the reduction in pay-progression from 2011, that it had a disparate impact on younger employees, and that the respondent could legitimately rely on the need to operate within constrained pay budgets (an "absence of means") as part of its legitimate aim; the reduction in progression was a proportionate short-term response in the circumstances and the tribunal properly took into account the employer's transitional plans to remedy the effects.

Employment Tribunal (London South) dismissed the claim (Judgment and Reasons dated 12 October 2017). Appeal to the Employment Appeal Tribunal (HH Judge Barklem) dismissed (decision handed down 25 June 2019). Appeal to the Court of Appeal (this judgment) dismissed on 11 November 2020 ([2020] EWCA Civ 1487).