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Home / News and Insights / Insights / Supreme Court clarifies test for indirect discrimination

Indirect discrimination occurs where a provision, criterion or practice (PCP) applied by an employer has the effect of disadvantaging some workers because of a protected characteristic such as their sex, race, or disability.

Indirect discrimination may not be unlawful if the employer can show that there is an objective justification for it, by demonstrating that the discriminatory impact is a proportionate means of achieving a legitimate aim. The Supreme Court has recently delivered an important judgment dealing with the legal tests for indirect discrimination in the combined cases of Essop and others v Home Office (UK Border Agency) and Naeem v Secretary of State for Justice.

In the Essop case, the PCP was the requirement to pass a generic Core Skills Assessment in order to be promoted to any post of higher executive officer level or above within the Home Office. Statistical evidence revealed that black and minority ethnic (BME) candidates over the age of 35 were less likely than non-BME and younger candidates to pass the assessment. However, the reason for the different pass rates was not clear. Mr Essop and the other claimants, who were from BME backgrounds and over the age of 35, failed the test. They brought indirect age and race discrimination proceedings against the Home Office but could not show the reason why they were disadvantaged. The issue for the Supreme Court was whether a claimant has to prove the reason why the PCP put the affected group at a disadvantage, and whether that has to be the same as the reason why an individual claimant suffered from the disadvantage.

Overruling the Court of Appeal, the Supreme Court ruled that there was no requirement for a claimant to prove the reason why a PCP put the affected group at a disadvantage. It was sufficient that there was a causal connection between the PCP and the disadvantage suffered. The Supreme Court also held that the disadvantage suffered by a group and the individual must be the same. In this case, the disadvantage was the increased likelihood of failing the Core Skills Assessment, and the individuals also suffered this disadvantage. However, although Mr Essop did not need to explain the reasons why the test caused him to suffer a disadvantage, it was open to his employer to show that there was no causal link between the PCP and that disadvantage. For example, the Home Office might be able to show that he failed because he did not complete the test or was not sufficiently prepared for it. Alternatively, the discriminatory impact of the assessment might be objectively justified by the Home Office. The case was remitted to be determined by the Employment Tribunal.

The case of Naeem v Secretary of State for Justice concerned a claim of indirect religious discrimination. Until 2002 only Christian prison chaplains were employed on a salaried basis. Other chaplains were engaged on a sessional basis due to lesser demand for their services. Mr Naeem, a Muslim chaplain, began working full-time for the Prison Service in 2004. He entered the pay scale at the lowest point and gradually moved up the scale through his performance appraisals and length of service. Given that the pay system emphasised length of service, Christian chaplains were more likely than Muslim chaplains to be near the top of the pay scale. Mr Naeem argued that he had been disadvantaged as a Muslim chaplain by the application of the length of service criterion (the PCP), which meant that the average basic pay of Muslim chaplains was lower than that of Christian chaplains. The main issue in the Supreme Court was whether the reason for the disadvantage suffered by Mr Naeem had to be related to his religion.

Once again overturning the Court of Appeal’s judgment, the Supreme Court held that the reason why a PCP puts a group at a disadvantage does not have to relate to the protected characteristic. Muslim chaplains had shorter average lengths of service because of the social conditions existing prior to 2002. The Supreme Court also confirmed that the pool for comparison should include everyone affected by the PCP. In this case, the correct pool was therefore all employed chaplains. Within this pool, Muslim chaplains were put at a particular disadvantage when compared with Christian chaplains as they received a lower average salary. However, although Mr Naeem had established indirect discrimination, the Home Office was able to objectively justify the pay scale and his claim therefore failed.

The Supreme Court has clarified some of the problematic issues which can arise in indirect discrimination cases. Employers should note that this judgment relates to the legal tests which have to be satisfied by claimants. It does not alter the fact that employers can still justify indirect discrimination by showing that it was a proportionate means of achieving a legitimate aim. This case is also a reminder that employers should minimise the risk of indirect discrimination claims by considering whether policies and practices might have a disproportionate impact on groups with a particular protected characteristic.

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