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Farrer & Co | Indirect discrimination: the hidden barriers

At the beginning of April, the Supreme Court heard two cases about indirect discrimination, a notoriously complex area of law. The Court explained that indirect discrimination is about 'dealing with hidden barriers which are not easy to anticipate or spot'.

In short, indirect discrimination deals with situations in which a provision, criterion or practice (PCP) puts a group of people who share a protected characteristic (such as age, sex or race etc) at a particular disadvantage when compared to others who are not part of that group.

Indirect discrimination isn't always easy to see coming. That said, the Court's unanimous decision in these cases does provide some reassurance about the steps employers can take to justify indirect discrimination.

The Facts

Essop v Home Office

Essop worked for the Home Office. As a requirement for promotion, Home Office staff needed to pass a Core Skills Assessment (CSA). However, black and ethnic minority candidates and candidates over 35 were statistically less likely to pass the CSA than the average candidate. When the claimants failed their CSA, they brought claims of indirect race and age discrimination against the Home Office.

The Supreme Court upheld the appeal, finding that all that needs to be shown in an indirect discrimination claim is that there is a link between the PCP implemented and the disadvantage suffered by the group (as opposed to the claimant personally). This usually requires statistical evidence – and a statistically lower pass rate for the CSA was sufficient here.

Naeem v Secretary of State for Justice

Naeem brought a claim because Muslim chaplains were paid statistically less than their Christian counterparts. The difference was because pay was based on length of service and Muslim chaplains have only been in full employment in the Prison Service since 2002.

The Supreme Court rejected the Prison Service's argument that the reason for the disadvantage had nothing to do with race or religion – the pay scale was clearly a PCP that put Muslim chaplains at a particular disadvantage. However, the indirect discrimination claim ultimately failed because the Court accepted the practice was objectively justified as a way to reward experience and length of service.

Objective justification

The common issue in both cases was whether claimants in indirect discrimination claims need to show a reason why they suffered the particular disadvantage claimed. The Supreme Court has now put this issue to rest, confirming that it is enough to show that a PCP puts one group at a disadvantage, without going on to explain why. Statistics themselves will usually suffice for this purpose. The result for employees is that requirements to demonstrate indirect discrimination are now relatively low.

That said, it is not all doom and gloom for employers. The reality is that a lot of PCPs may on the face of it be indirectly discriminatory. However, the Supreme Court in Essop was at pains to point out that this is not necessarily something about which employers should recoil in horror or shame, especially as a lot of the time it may be due to factors over which an employer has little control or for which the employer has good reasons. Instead, the proper question for employers is whether the use of a PCP is objectively justified in the circumstances. This is a particularly important (and reassuring) point because, if a PCP can be shown to be both justified and proportionate then, as in the case of Naeem, an indirect discrimination claim will fail.

In order to justify indirect discrimination, an employer must establish:

1. A legitimate aim

This essentially means a 'real business need'. This might include things like health and safely, resourcing requirements or running an efficient service.

While costs can be taken into account as part of the reason for an employer's action, economic reasons alone will not be enough to justify discrimination.

2. Proportionality

The employer must show that the measures taken to achieve their aim were appropriate and 'reasonably necessary'. Employers should consider what options are available to them. If there are better and less discriminatory ways of achieving the same objective, it will be more difficult to justify discrimination.

The takeaway, then, is fairly simple – employers should keep a close eye on their policies and procedures and remain alive to any statistical discrepancy which might be used to support a claim for indirect discrimination. Employers might want to consider introducing discrimination impact assessments when new measures are proposed to ensure they have thought through why particular policies are being applied and considered any impact they may have on particular groups. By carrying out this exercise in advance, employers should be much better placed if allegations of indirect discrimination do arise.
