J Logo v Payone GmbH & Ors

An employer seeking to justify indirect discrimination must establish, through a critical and thorough assessment, that the provision, criterion or practice is a proportionate means of achieving a legitimate aim. The tribunal must make its own objective judgment. It must balance the discriminatory effect against the employer’s reasonable business needs and must not grant the employer a margin of appreciation.

Although some matters may require little evidence, the assessment ordinarily requires sufficiently cogent evidence of both the business need and the discriminatory impact. A summary strike-out process will usually be unsuitable where that fact-sensitive balancing exercise cannot properly be undertaken. Particular caution is required when striking out discrimination claims.

The claimant, a UK-based employee of a predominantly German-speaking payment-services business, brought indirect race discrimination claims. He challenged three alleged PCPs: the respondent’s website being available only in German, a senior role being advertised in German and requiring German-language ability, and meetings and written materials being conducted principally in German.

The Employment Tribunal struck out those claims on the basis that the respondent would inevitably establish objective justification. It considered that the respondent could not be required to conduct its German-focused business in English for one UK employee.

The claimant appealed. The central issue was whether the Tribunal could properly conclude, at strike-out stage, that the respondent’s justification defence had no reasonable prospect of failing.

1. Appeal allowed. The Employment Tribunal erred in striking out the three indirect discrimination claims. Its assessment of justification was insufficiently rigorous for a summary process.

2. Under Equality Act 2010, objective justification requires both a legitimate aim and proportionate means. Applying Bilka-Kaufhaus, Hardys & Hanson and Homer, proportionality requires an objective balance between the discriminatory impact of the PCP and the employer’s reasonable needs. The Tribunal must make its own judgment after a critical, thorough and demonstrable evaluation. It must not accord the employer a margin of appreciation.

3. The Employment Tribunal examined only the respondent’s side of the balance. Taking the claimant’s case at its highest, removal of English-language website support could have made it extremely difficult for him to continue performing UK-facing work. The Tribunal did not analyse that impact adequately, nor did it explain the cost of retaining English website material or assess the practical difficulty of enabling English participation in meetings and recruitment processes.

4. The absence of witness evidence capable of challenge, and the limitations of a four-day strike-out hearing, prevented the detailed assessment of working practices, business considerations and discriminatory effect required for justification. The fact that some background facts were largely undisputed did not cure that deficiency. Nor did findings on other claims make the appeal academic, since those claims involved a different legal analysis.

5. Ground 1 succeeded. Ground 2 had substance, but it was unnecessary formally to determine Grounds 2 to 4. The claims were remitted for determination by a differently constituted Employment Tribunal. The contingent cross-appeal was dismissed.

• Employment Appeal Tribunal: allowed the claimant’s appeal, set aside the strike-out of the indirect race discrimination claims, and remitted them to a differently constituted Employment Tribunal: [2024] EAT 9.
• Employment Tribunal: struck out the claims concerning the website, job advertisement and meetings, concluding that the respondent would establish justification. The judgment and reasons were sent on 5 August 2022.