Ms T Xu v Binary.ai Ltd and J Patrick-Evans: 2216118/2024
EMPLOYMENT TRIBUNALS
Case No 2216118/2024
Between
Ms T XuClaimantBinary.ai Ltd and J Patrick-EvansRespondent
Before
Employment Judge BatyMr J Raizon (instructed by counsel) for claimantMr G Probert (instructed by counsel) for respondentDate 21 February 2025
JUDGMENT
The claimant’s complaints of direct race discrimination and indirect race discrimination both fail. JUDGMENT having been sent to the parties on 24 February 2025 and written reasons having been requested by the claimant on 7 March 2025 in accordance with Rule 60(3) of the Employment Tribunals Rules of Procedure 2024, the following reasons are provided:
REASONS
The complaints
[1]By a claim form presented to the employment tribunal on 8 March 2024, the claimant brought a complaint of direct race discrimination. The respondents defended the complaints. The claim concerns an application by the claimant for employment in a role with the first respondent.[2]The issues of the complaint were clarified at a preliminary hearing for case management purposes before EJ Walker on 10 July 2024 (the “July preliminary hearing”) and the case was listed for a 3 day final hearing commencing on 12 November 2024. - 1 -[3]The claimant then sought to amend her claim to add a complaint of indirect race discrimination. The final hearing was converted to a further preliminary hearing to consider this (the “November preliminary hearing”).[4]At that preliminary hearing, EJ Goodman allowed the amendment. The case was relisted for the present 3 day final hearing, before an employment judge sitting alone.[5]The hearing took place in person at London Central Employment Tribunal. The hearing floated and I was only able to start the hearing just after 1 pm on the first day of the hearing, after completion of a separate hearing allocated to me.[6]In these reasons, references to “the respondent” are to the first respondent and references to “Dr Patrick-Evans” are to the second respondent.
The issues
[7]At the start of the hearing, I spent some time discussing and agreeing the issues of the claim with the representatives. These were essentially an amalgam of the issues agreed at the July and November preliminary hearings. However, we also needed to agree what the PCP was for the purposes of the indirect race discrimination complaint. We did so. The PCP was agreed as being “Potential employees needed to be likely to be able to obtain security clearance in respect of themselves”. By agreement, the parties updated the list of issues and sent a copy to me on the morning of the second day of the three day hearing.[8]However, by the end of the evidence, it seemed to me that the evidence indicated that the PCP as defined was not something the respondent applied generally to all prospective employees but only to prospective employees for certain roles; there was therefore a risk that the indirect discrimination complaint would fail at the first stage on a technicality not envisaged by either party. Therefore, before the representatives started their submissions on the morning of the final day of the hearing, I suggested that the PCP should be changed to “Potential employees needed to be likely to be able to obtain security clearance in respect of themselves in relation to such job roles where security clearance is required.”[9]Mr Probert agreed and said that he thought my suggested formulation was more accurate. He said that in any case the respondent accepted that it applied the PCP (as reformulated). Mr Raizon asked for a short break to take instructions; when the hearing reconvened, he said that the claimant was also happy to accept that change to the list of issues.[10]The characteristic of race relied on for both the direct and indirect race discrimination complaints is nationality, specifically the claimant’s Chinese nationality. Neither complaint is based on Chinese ethnic or national origins and indeed, complaints based on Chinese ethnic or national origins would fail anyway, for reasons which will become clear. - 2 -[11]Finally, although it was agreed at the start of the hearing that I would first decide issues of liability, it was also agreed that I should at the same time determine the issue “Would the respondent have discontinued the claimant’s application/not hired her in any event for reasons other than security clearance and, as alleged, nationality.”. There is obviously some overlap between this issue and the first remedy issue set out in the list of issues. However, as agreed with the representatives, it is only the issue set out here that I determined at the liability stage with the other liability issues.
The evidence
[12]Witness evidence was heard from the following: For the claimant: The claimant herself. For the respondents: Dr Patrick-Evans.[13]An agreed bundle numbered pages 1-363 was produced to the tribunal. One additional page of documentation headed “correspondence with Wellfound”, was added by agreement at the start of the hearing.[14]I read in advance the witness statements and any documents in the bundle to which they referred.[15]A timetable for cross-examination and submissions was agreed between the representatives and me at the start of the hearing. This was largely adhered to.[16]Both parties produced written submissions, which I read in advance of hearing their oral submissions.[17]After submissions, I adjourned to consider my decision. When I returned, I gave the parties my decision and reasons for it orally at the hearing. Reliability of evidence[18]Before going on to set out my findings of fact, I make a few brief observations about the reliability of the evidence given by the witnesses, namely the claimant and Dr Patrick-Evans.[19]Both witnesses were transparent, sought to answer the questions put to them in cross-examination and to assist the tribunal generally, and often made candid admissions where they felt they could have done things differently. I had no concerns in general about the reliability of their evidence. There were in fact very few areas where their evidence conflicted; indeed the only material one - 3 - concerned the nature of their discussion regarding salary at the 29 September 2023 interview between them.[20]I should add that many of Mr Raizon’s criticisms of the respondents, in particular where he invited me to draw inferences of discrimination, were based on his suggesting that Dr Patrick-Evans’ evidence should not be accepted; however, as I shall come to, I do not accept them.
Findings of fact
[21]I make the following findings of fact. In doing so, I do not repeat all of the evidence, even where it is disputed, but confine my findings to those necessary to determine the agreed issues. The respondent[22]The respondent is a UK-based Cyber Security start-up building AI models to identify hidden backdoors in software and protect organisations from software supply chain attacks. It is a small business and, at the time of the events related to this claim, it had only five employees.[23]Dr Patrick-Evans is the founder of the respondent. He has spent his career in Cyber Security and holds a PhD in Cyber Security and AI. Software and Cyber Security[24]It is obvious that software drives the modern world. It underpins our everyday lives and runs every sector of our state. It is in every mobile phone, television, in consumer goods, schools, hospitals, and critical national infrastructure and forms the backbone and the operations of UK government and UK defence. Therefore, it is paramount that the security and operational capability of the software that drives our everyday lives should remain intact and free from malicious hackers and state actors wanting to persuade political outcomes or obtain sensitive information.[25]The UK government and its Western allies that form the five eyes alliance have been under constant attack by many of these malicious groups, mainly from state-backed hacking groups from countries such as North Korea, Russia, China and Iran. These hacking groups have tried to obtain a “backdoor” or malicious remote access into software that forms the backbone of UK infrastructure such as 5G telecoms, NHS health networks, powerplant controllers, and water infrastructure systems. It is therefore imperative that the security of the software that drives these systems is verified, controlled and secured. Dr Patrick-Evans provided in his witness statement and in the bundle copious evidence of these types of attacks.[26]“Backdoors” have a devastating impact on the security of UK sovereignty and economic well-being. They allow foreign states to spy on the most sensitive UK data and steal sensitive information and economic trade secrets. Detecting backdoors hidden in software is exceptionally difficult. - 4 -[27]The respondent uses AI to verify that software built is free from malware, backdoors, viruses, trojans and software weaknesses.[28]The respondent’s primary customers are currently organisations operating in the UK and US defence community where the strictest security concerns are essential. These organisations typically operate at a top security clearance level and require extensive background checks and verifications on the people and services from businesses that operate with them.[29]As noted, the threats described above come primarily from groups backed by states such as North Korea, Russia, China and Iran. That creates enormous challenges to anyone who is a national of any of these countries working in the industry. Background to the claimant’s application[30]In September 2023, the respondent had a contract with the Defence Science and Technology Laboratory (“DSTL”) and other members of the UK Ministry of Defence to develop AI that could identify hidden backdoors inside software. The contract required employees to pass security checks. The contract interfaced many different organisations inside the defence community and the respondent worked directly, and extensively, with members of both US and UK Defence during the term of the contract. The end customer was US and UK Defence.[31]The respondent was awarded this contract on 31 August 2023 and was due to start it on 2 October 2023. In mid-September 2023, the respondent did not have any employees capable of developing the AI models in question and it was under pressure to employ one who could easily pass the security checks required before the commencement of the contract.[32]On 11 September 2023, DSTL emailed Dr Patrick-Evans stating that all key workers on the project who did not hold security clearance would need to pass additional security checks.[33]In the middle of September 2023, Dr Patrick-Evans advertised for a job role for the position of Lead AI Researcher. The role was critical to the respondent as a start-up and the incumbent (and any successors) would be expected to be pivotal to the course of the respondent over the next 20 years.[34]There were a number of applicants for the position. The claimant was one of them. The claimant is a Chinese national.[35]The job advertisement for the role quoted a total package of £160,000 - £220,000. Dr Patrick-Evans gave evidence that, as a start-up, the respondent simply could not compete with the headline salaries which could be offered by big establishment brand names like Google, but needed to look attractive when people browsed the job boards. He gave evidence that it was therefore common for companies such as the respondent to state a headline package that would be - 5 - heavily biased towards share options, and the value of options would be conditional upon both staying with the company long-term and significant eventual commercial success. There has been some dispute between Dr PatrickEvans and the claimant about the make-up of the proposed package. However, I have no reason to doubt Dr Patrick-Evans’ evidence and I accept it. In particular I accept that the quotation of £160,000 - £220,000 was a total package and not, as the claimant has suggested at this tribunal, a basic salary.[36]In making this finding, I also note that there is a tension in the claimant’s evidence about this (paragraphs 19-23 of the claimant’s witness statement). On the one hand, she suggests that the range in question was indeed basic salary only and that that was what she told Dr Patrick-Evans at her interview of 29 September 2023 she would be prepared to accept. However, at other points, she seems to accept that the range included a combination of salary and options. She then again suggests that a salary in that range would have been reasonable for someone with her background. Furthermore, Dr Patrick-Evans’s evidence was that his recollection is that the claimant asked at her interview on 29 September 2023 for a salary of £110,000 - £120,000 (i.e. considerably less than the range of salary which the claimant now says comprised basic salary only), and that he told her that the respondent would not be able to offer that much. In view of the fact that the ultimately successful candidate joined on a salary of £100,000 (plus options), it is very unlikely that the original offer in the advertisement was for a salary of £160,000 - £220,000. Furthermore, it is also unlikely that, as she submits in evidence, the claimant asked for a basic salary in that range at the interview, as that would have been so far out of kilter with Dr Patrick-Evans’ expectations that he would have recalled that specifically; rather, I accept that what the claimant asked for at the interview by way of basic salary was £110,000 - £120,000.[37]On 20 September 2023, Dr Patrick-Evans had an introductory call with the candidate who was eventually successful in obtaining the role, to discuss the position and the respondent’s needs, direction and mission to see if it aligned with his goals. This call was successful and that individual therefore continued in the recruitment process.[38]On 24 September 2023, Dr Patrick-Evans exchanged brief messages over a recruitment platform with the claimant. They scheduled a call for the following day.[39]On 25 September 2023, Dr Patrick-Evans had a 30 minute introductory call with the claimant, in which he explained more information about the respondent, its mission, his background, what the respondent was looking for in the candidate, where the respondent was going as a company, and sought to make sure that it aligned with the claimant’s future direction in her career.[40]Dr Patrick-Evans followed up this call with an email to the claimant giving her an example of the types of technical research the respondent would like to conduct. He had identified that the claimant had no experience at all in this field and was not the best equipped candidate in that respect and so he asked her to look over some existing work in the area to see if she could handle it. - 6 - Specifically, he sent her two particular papers relevant to the field in question. The email also invited the claimant to an in-person interview on 29 September 2023. 29 September 2023[41]On 29 September 2023, Dr Patrick-Evans conducted two in-person interviews. The first of these was with the ultimately successful candidate for the role. That candidate’s background was strongly aligned with the role, he had both a PhD and a Post-Doc in the area, had worked closely with the UK government and had confirmed that he had previously held UK security clearance and would not struggle to gain it in the future. The candidate was a British national, so nationality issues were not of relevance in relation to security clearance. Dr Patrick-Evans decided to continue to progress his application.[42]In her evidence in cross-examination, the claimant accepted that the ultimately successful candidate was at least as good a candidate as her. Dr Patrick-Evans’ evidence was that he was a better candidate. He had prior experience in the area which the claimant did not have. I therefore accept that, even before one takes into consideration the security clearance issue, the ultimately successful candidate was a better candidate for the role than the claimant. I similarly accept that Dr Patrick-Evans’ perception was certainly that the ultimately successful candidate was the better candidate for the role.[43]The second interview which Dr Patrick-Evans conducted on 29 September 2023 was with the claimant. He was particularly impressed with her grasp of the papers which he had sent her on 25 September 2023, given that she was new to the field and had not worked in this area before. Although the claimant’s background and skill set were not relevant to the position, she had an impressive background in other areas of mathematics and machine learning.[44]As already noted above, there was a discussion about salary at this interview. Without repeating the rationale for my findings set out above, I found that the claimant sought a salary of £110,000 - £120,000 and that Dr PatrickEvans told her that, as a start-up, the respondent would not be able to offer this but would give total compensation which included stock options in addition to basic salary.[45]Furthermore, the basic salary expectations of the ultimately successful candidate were much lower and, indeed, in due course, the ultimately successful candidate accepted the role for a basic salary of £100,000 (plus options).[46]I accept Dr Patrick-Evans’ evidence that the claimant’s much higher salary expectations, in comparison with the ultimately successful candidate, were one (of several) reasons why he offered the role to the ultimately successful candidate and not to the claimant. Financial concerns and an inability to pay very large salaries were clearly an issue for the respondent as a start-up; it is therefore likely that salary expectations would be a consideration in determining to whom to offer a role and I have no reason to doubt Dr Patrick-Evans’ evidence in this respect. - 7 -[47]During the interview with the claimant, Dr Patrick-Evans explained that, as a start-up, the respondent was not set up to hire individuals on a visa, but that he would research what processes needed to take place in order to do this as an employer. He also explained that the respondent’s industry meant that he would need her to be able to pass security checks.[48]I infer from the reference to obtaining visas and therefore find as a fact that Dr Patrick-Evans had, therefore, by that stage learned from the claimant that she was a Chinese national (who would require a visa), as opposed to simply being of Chinese ethnic or national origin. Security clearance issues[49]Around this time, Dr Patrick-Evans informally asked members of the UK defence community for advice about hiring for the role of “Lead AI”, particularly as it was the core and central role for leading the respondent’s AI efforts. He specifically asked about the implications of employing a Chinese national to such a position and what that would mean for the respondent. He was informed by top defence officials that a Chinese national could not work in this area due to national security constraints. They informed him that the only way this kind of a hire was possible would be if the respondent could facilitate a complete separation of work, communication, and physical location for an individual to be employed at the respondent where the work was deemed to be sensitive or going into sensitive areas; in other words so that that individual only worked on or had access to non-sensitive work. Whilst that was something that might be possible in a large business with many different divisions, it would be very difficult in a start-up such as the respondent. The defence officials advised Dr Patrick-Evans not to hire a foreign national for this position and that doing so would create all kinds of difficulties for the future of the respondent’s business selling into the defence community.[50]Mr Raizon submitted that I should not accept Dr Patrick-Evans’ evidence in this respect and he noted that Dr Patrick-Evans had not brought a witness from the defence community to corroborate this evidence. However, I do not accept Mr Raizon’s submission for a number of reasons.[51]First, I do not consider that it is surprising that Dr Patrick-Evans has not brought a witness from the national security community to give evidence. As he stated in evidence, he did consider whether it was appropriate to consider the option raised earlier by a judge earlier in this case of the case being heard under the employment tribunal’s national security provisions; however, that did not address the underlying issue that those involved in the national security industry do not want to get involved in court proceedings unless it is unavoidable and that an employment tribunal claim brought against one of their third party suppliers is unlikely to meet that threshold. Notwithstanding the possibility of obtaining a witness order, Dr Patrick-Evans needs to maintain a relationship of trust with these individuals (it is at the heart of the respondent’s business) and getting such individuals involved in court proceedings unnecessarily would therefore be hugely detrimental to that trust and to the respondent’s business. I fully accept - 8 - that explanation. As I indicated to the parties at the hearing, I have enough knowledge myself of national security issues to recognise exactly why individuals from the national security community would, with good reason, not want to get involved in court or tribunal proceedings unless it was unavoidable. The absence of a witness from the national security industry is not therefore a reason to doubt Dr Patrick-Evans’ evidence in this respect.[52]Secondly, Dr Patrick-Evans instead contacted his national security contact again about the issue of the respondent hiring foreign nationals. I have seen various emails, all dated 11 December 2024 from them (with name and contact details, entirely reasonably, anonymised). One email states: “… unfortunately our position has been hardening on this in recent months and we are now unable to fund Chinese nationals for any NS-related work (no matter how long they’ve been resident). The work you’re doing is of great interest to our community and is likely to get into quite sensitive territory, so I would strongly advise against hiring a Chinese national. Sorry for the brief email and potentially hard line…”. A further email states in relation to foreign nationals: “For instance, foreign national (defined as anyone that is not a sole US citizen) personnel from close US allied countries would be viewed differently than personnel of Chinese, Russian, North Korean, or Iranian origin…” These emails are consistent with the evidence given by Dr Patrick-Evans at this tribunal in this respect.[53]Finally, in one of the claimant’s own interchanges on X (formerly Twitter”), dated 28 October 2023, one of her interlocutors states “No, I meant you simply cannot work for the company because of nationality (Russian, Chinese, Iranian, and some even if you are American it’s not allowed as Germany has suffered in some cases espionage from our allies).… You application would be disregarded.”. The claimant replies: “Well sure, that’s reasonable. But it isn’t the case here.” Although the claimant maintains that it wasn’t the case with her then recent rejection for the Lead AI role at the respondent, her answer indicates that even she thought it was reasonable in principle not to allow someone to work for a company in these sorts of circumstances simply if that person was of a certain nationality, such as Russian, Chinese or Iranian. This is indicative that the claimant herself not only realised that her Chinese nationality was likely to preclude her being employed in certain roles in certain industries but that she considered that being so precluded was reasonable.[54]For all these reasons, I do not accept Mr Raizon’s submissions and I accept Dr Patrick-Evans’ evidence about what he was told by his national security contacts.[55]Furthermore, I find that the fact that an individual is a Chinese national (or, indeed, a Russian national, North Korean national or Iranian national) did preclude that individual working in a role, such as the Lead AI role, which involved working closely on matters concerning national security. Finally, I find - 9 - that that prohibition was a decision of the respondent’s customers, rather than of the respondent or Dr Patrick-Evans themselves.[56]From this point on, therefore, I find that Dr Patrick-Evans believed that he would not be able to offer the claimant the Lead AI role because he believed that, because she was a Chinese national, she would not be able to obtain the security clearance necessary to do that role.[57]The claimant accepted in cross-examination that there would be significant difficulties in her obtaining security clearance as a Chinese national. Indeed, she accepted that she would not even have applied for the Lead AI role if she had known at the time of applying that security clearance would have been a requirement. The claimant’s messages on X[58]Around the same time, Dr Patrick-Evans did some further background research of his own in connection with considering the claimant’s application more generally. In the course of this, he found the claimant’s social media account on X.[59]I was taken to a number of the entries from X which were in the bundle. I do not need to set these out here. However, having read them, I accept Dr Patrick-Evans’ evidence that when he read them, they gave rise to concerns about some of the claimant’s abilities. I also accept that the concerns were of such a nature as to be, as Dr Patrick-Evans gave evidence that they were, a further reason in due course not to offer the lead AI role to the claimant. Offer of Lead AI role[60]On 3 October 2023, Dr Patrick-Evans offered the Lead AI role to the ultimately successful candidate. It was a conditional offer, requiring the candidate to provide a short research proposal, as well as being conditional upon references and including various options for a balance between shares and equity, with the basic salary varying between £80,000 and £100,000 (as noted, the successful candidate ultimately opted for a package of a basic salary of £100,000 (plus options)). It took several weeks until the offer was confirmed.[61]To be clear, as there appeared in the claim to be some confusion about this, no offer was ever made to the claimant. The claimant appeared to accept that at this hearing.[62]By 8 October 2023, the offer to the ultimately successful candidate had not yet been accepted. Dr Patrick-Evans had not completely discounted the claimant for the role. He did not, therefore, reject the claimant at that stage. He did not want to do so until the respondent was sure on the outcome of the position regarding the other candidate. Furthermore, even though it would have been unlikely that the respondent could have employed the claimant in the Lead AI role itself because of her Chinese nationality, he did not want to reject her at that stage because of the possibility, however remote, and because he was - 10 - impressed by her, of her being able to work/supply services to the respondent in a different position or form which perhaps would not need to involve direct access to national security matters.[63]On 8 October 2023, therefore, Dr Patrick-Evans sent the claimant a holding email. This included the following: “Thanks for coming into the office, it was a pleasure to meet you. I was very impressed by your level of understanding in a completely new field in a short space of time. We consider you an extremely strong candidate for the position and would be happy to pay for your visa. Going forward, I would need to submit your details and perform a quick background check. Please could you send me the following details: …”[64]The email then asked the claimant to provide certain details, including nationality, address and passport details. The reason he did this was because he wanted to be absolutely sure that he was working with a full picture on anything nationality related. The claimant subsequently supplied the information.[65]The reference in this email to Dr Patrick-Evans being impressed by the claimant’s understanding “in a completely new field in a short space of time” is further evidence that this was indeed a new field for the claimant – as opposed to the successful candidate, who was experienced in this field.[66]On 23 October 2023, the successful candidate completed the recruitment process and signed his contract. 28 October 2023 - discontinuation of claimant’s application[67]Therefore, on 28 October 2023, Dr Patrick-Evans wrote to the claimant. I quote the email in full, as it is this email which is the main basis for the claim (indeed, the original particulars of claim, which are very short, set out (parts of) this email and little more): “Thank you for coming into the office and meeting face-to-face. I think you're highly intelligent and a brilliant candidate for the role. I still haven't had a response from the background check, but I assume it will be fine. However, disappointingly I've come to the decision not to proceed with your application on the sole basis of your nationality. As a company, we work closely in sensitive areas with western governments and wish to continue to do so. We're simply not big enough of a company to ensure the separation and security controls needed to hire someone of your nationality at this stage. I apologise for not knowing the full extent of this situation ahead of time. Depending on our growth path, I'd love to reach out to you in a few years time.”[68]The email states that the sole basis for not proceeding with the claimant’s application was her nationality. However, this was not true. The main reason for not proceeding with the claimant’s application was because Dr Patrick-Evans had offered the role to a better candidate, who had then accepted the role. Furthermore, the three other reasons why that candidate had been offered the role rather than the claimant were: the concerns that the claimant would not be able to obtain security clearance for the Lead AI role (whereas - 11 - there were no such concerns in relation to the successful candidate, who was a British national who had previously obtained security clearance); the concerns which Dr Patrick-Evans had about the claimant which arose from his observation of her posts on X; and the claimant’s salary expectations, which were substantially higher than those of the candidate to whom the role was offered.[69]The reason why Dr Patrick-Evans did not set all of this out in his email of 28 October 2023 to the claimant was in an attempt to “let her down gently”. He focused on a reason which was nothing to do with either the claimant’s comparative abilities or her behaviour/demands. He was trying to be considerate and set out a reason which, whilst real because of the position of the respondent’s customers, was in no way the claimant’s fault.[70]There are also a few further important points about the email, which are clear from a study of the email as a whole rather than merely a partial view of it focusing only on the second sentence of the second paragraph.[71]First, it is evident that Dr Patrick-Evans did, as he has maintained at this tribunal, think highly of the claimant; the references in the first sentence to her intelligence and brilliant candidacy and in the final sentence to the fact that he would love to reach out to her in the future are indicative of this. It is not the case that, as Mr Raizon submitted, he thought the claimant was “unsuitable” for the role; quite the opposite. He thought that there was a better candidate (to whom he offered the role), but he still rated the claimant very highly. Given the importance to the respondent of the contract with the Ministry of Defence, he kept the claimant waiting until the successful candidate accepted the role. It is not inconsistent that, notwithstanding the security clearance issue, he might have considered her for another role either then or in the future, if it was possible for this to be a position which was not requiring of security clearance. Furthermore, the final sentence is further indicative of Dr Patrick-Evans’ evidence that, even if the respondent may not have been able to employ her in the Lead AI role because of the security clearance issues, it would like to be able to work with her in general in the future.[72]The second, and most important point is this. Dr Patrick-Evans admits that it is a very clumsy email. Furthermore, if you read the words “I’ve come to the decision not to proceed with your application on the sole basis of your nationality” in complete isolation, it looks like an admission of direct race discrimination on the basis of nationality. However, the wider context of the email alone, let alone the background context set out in my findings, indicates a very different picture. On any fair assessment, Dr Patrick-Evans is not in fact stating that he discontinued the claimant’s application simply because she was a Chinese national; he is saying that the respondent is not in a position to be able to obtain security clearance or to put in place separation and security controls such that security clearance is not an issue. The reason is the inability to get security clearance; that reason would apply to people of any nationality where it was not possible to get security clearance (including Russian, North Korean and Iranian nationality as well as Chinese nationality). The reason is not nationality per se. - 12 -[73]Mr Raizon submitted that the security clearance issue was in fact merely a proxy for rejection on the basis of Chinese nationality. However, that flies in the face of the evidence as set out above and is not logical. The security clearance concerns relate to nationals of all states seen as hostile, including Iran, Russia and North Korea; it is not limited to China. There is therefore no basis for Mr Raizon’s submission in this respect.[74]Finally, Mr Raizon submitted that the emails of 11 December 2024 from Dr Patrick-Evans’ national security contacts, and Dr Patrick-Evans’ acting on their advice, amount to evidence of racial stigma and/or stereotyping. There is absolutely no basis for such a submission. The emails, and the fact that, following the advice from his national security contacts, one of Dr Patrick-Evans’ reasons for discontinuing the claimant’s application was because it would not have been possible to get security clearance for her to do the Lead AI role, were simply about that; security clearance. There is no basis for inferring anything beyond that. The law Direct race discrimination
The law
[75]Under section 13(1) of the Equality Act 2010 (“EQA”), a person(a) (A) discriminates against another person(b) (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others (direct discrimination).[76]Race is a protected characteristic for the purposes of direct discrimination. Under section 9 EQA, “race” includes “colour; nationality; and ethnic or national origins”. As already noted, this claim is brought on the basis of nationality only (both the direct and the indirect race discrimination complaints).[77]For the purposes of the comparison required in relation to direct discrimination between B and an actual or hypothetical comparator, there must be no material difference between the circumstances relating to B and the comparator.[78]Under section 39(1) EQA, an employer must not discriminate against a person (B) in the arrangements A makes for deciding to whom to offer employment; as to the terms on which A offers B employment; or by not offering B employment.[79]In respect of the above provisions, the burden of proof rests initially on the employee to prove on the balance of probabilities facts from which the tribunal could decide, in the absence of any other explanation, that the employer did contravene one of these provisions. To do so the employee must show more than merely that she was subjected to detrimental treatment by the employer and that the relevant protected characteristic applied; there must be “something more” to indicate a connection between the two (Madarassy v Nomura International plc [2007] IRLR 246). If the employee can establish this, the burden of proof shifts to the employer to show that on the balance of probabilities it did - 13 - not contravene that provision. If the employer is unable to do so, I must hold that the provision was contravened.[80]However, if the tribunal can make clear positive findings as to an employer’s motivation, then it need not revert to the burden of proof (Martin v Devonshires Solicitors [2001] ICR 352 (EAT)). Indirect race discrimination[81]Under section 19(1) EQA, a person(a) (A) discriminates against another(b) (B) if A applies to B a provision, criterion or practice (PCP) which is discriminatory to a relevant protected characteristic of B’s.[82]Race is a relevant protected characteristic for indirect discrimination.[83]Section 19(2) EQA provides that a PCP is discriminatory in relation to a relevant protected characteristic of B’s if: 1. A applies, or would apply, it to persons with whom B does not share the characteristic; 2. It puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it; 3. It puts, or would put, B at that disadvantage; and 4. A cannot show it to be a proportionate means of achieving a legitimate aim.[84]In this claim, the respondent has conceded that items 1-3 above are established. The only issue to determine is item 4 (justification). The burden of proof is on the respondent to establish this and, if it cannot do so, I must hold that discrimination did occur.[85]The Supreme Court in Essop v Home Office (UK Border Agency) and Naeem v Secretary of State for Justice [2017] UKSC 27, [2017] IRLR 558, SC, emphasised that there can be no finding of indirect discrimination until “all four elements of the definition are met” – including that the PCP is not justified.[86]In Homer v Chief Constable of West Yorkshire Police and West Yorkshire Police Authority [2012] UKSC 15, [2012] IRLR 601, SC, Lady Hale summarised the position on proportionality, in the light of EU case law, as follows: “To be proportionate, a measure has to be both an appropriate means of achieving the legitimate aim and (reasonably) necessary in order to do so.” (at para.22).[87]In MacCulloch v ICI [2008] IRLR 846, EAT, Elias J set out four legal principles with regard to justification, (since approved by the Court of Appeal in - 14 - Lockwood v DWP [2013] EWCA Civ 1195, [2013] IRLR 941, [2014] ICR 1257, CA): ''(1) The burden of proof is on the respondent to establish justification: see Starmer v British Airways [2005] IRLR 862 at [31]. (2) The classic test was set out in Bilka-Kaufhaus GmbH v Weber Von Hartz (case 170/84) [1984] IRLR 317 in the context of indirect sex discrimination. The ECJ said that the court or tribunal must be satisfied that the measures must “correspond to a real need … are appropriate with a view to achieving the objectives pursued and are necessary to that end” (paragraph 36). This involves the application of the proportionality principle, which is the language used in reg. 3 itself. It has subsequently been emphasised that the reference to “necessary” means “reasonably necessary”: see Rainey v Greater Glasgow Health Board (HL) [1987] IRLR 26 per Lord Keith of Kinkel at pp.30–31. (3) The principle of proportionality requires an objective balance to be struck between the discriminatory effect of the measure and the needs of the undertaking. The more serious the disparate adverse impact, the more cogent must be the justification for it: Hardy & Hansons plc v Lax [2005] IRLR 726 per Pill LJ at paragraphs [19]–[34], Thomas LJ at [54]–[55] and Gage LJ at [60]. (4) It is for the employment tribunal to weigh the reasonable needs of the undertaking against the discriminatory effect of the employer's measure and to make its own assessment of whether the former outweigh the latter. There is no “range of reasonable response” test in this context: Hardy & Hansons plc v Lax [2005] IRLR 726, CA.''[88]The question of legitimate aim is an issue of fact for the Tribunal. In Bilka-Kaufhaus, the ECJ decided that a discriminatory condition was justified: “…where it is found that the means chosen for achieving that objective correspond to a real need on the part of the undertaking, are appropriate with a view to achieving the objective in question and are necessary to that end.” Conclusions on the issues[89]I make the following conclusions, applying the law to the facts found in relation to the agreed issues. Direct race discrimination[90]As set out above in my findings of fact, the claimant’s application for the role of AI Lead was not discontinued because of her Chinese nationality. Rather, it was discontinued primarily because the respondent had offered the role of AI Lead to a better candidate who then accepted that role. In addition, it was discontinued because of concerns about being able to obtain security clearance in respect of the claimant; concerns about the claimant because of her posts on X; and because of the claimant’s salary expectations, which were higher than those of the successful candidate.[91]As to the security clearance aspect, the respondent would have discontinued the application for the role in question of anyone else who was unlikely to obtain security clearance, be they for example of Russian nationality, North Korean nationality, Iranian nationality or Chinese nationality. This part of the reasons for discontinuing the claimant’s application was therefore about the - 15 - likelihood of obtaining security clearance in relation to her; it was not about her Chinese nationality.[92]As noted, the direct race discrimination complaint was brought on the basis of nationality and not of national or ethnic origins. It follows from my findings above, and indeed Dr Patrick-Evans gave evidence of this which I accept, that someone of Chinese ethnic or national origin (but not Chinese nationality) would not necessarily have been unlikely to obtain security clearance and would not, therefore, have had their application discontinued for that reason or for reasons including that reason. The same would apply in relation to individuals of Russian, North Korean or Iranian ethnic or national origin but who were not of Russian, North Korean or Iranian nationality. Therefore, complaints brought on the basis of Chinese ethnic or national origin would have failed anyway.[93]I was able to make clear positive findings in this respect without needing to revert to the burden of proof and duly did so.[94]Even if I had applied the burden of proof, I would not have found that the claimant had caused the burden of proof to shift. The only evidence which the claimant could plausibly rely on in that respect was Dr Patrick-Evans’ email of 28 October 2023; however, even that would not cause the burden to shift because, read in its proper context (even in terms of the context of the email itself, let alone the wider context as a whole), it is clear that the reason given is about security clearance and not in fact nationality; it is not therefore a fact from which I could (in the absence of an explanation) decide that the respondents had discriminated against the claimant such that the burden of proof would shift to the respondents. Furthermore, even if I could decide that the burden of proof had shifted, the respondents have shown that they did not discriminate against the claimant because of her Chinese nationality; indeed, as set out in my findings of fact above, the respondents have shown that the reasons for the discontinuation of the claimant’s application were in no sense whatsoever because of her Chinese nationality.[95]In fact, Mr Raizon submitted that I should determine the complaint on the “reason why” basis alone; and Mr Probert submitted that it was permissible (and useful) to determine the complaint focusing on the reason for the treatment. I agree, and I have duly done so.[96]I do not, therefore, need to determine the issues about appropriate comparators, which occupy so much of the section of the agreed list of issues which relates to the direct discrimination complaint. However, if I were to do so, I would accept that the correct comparator is that relied on by the respondents. The comparator relied on by the claimant is too broad. Any comparator’s circumstances must be materially the same as the claimant’s. The hypothetical comparator posited by the respondent takes this into account.[97]The complaint of direct race discrimination therefore fails. - 16 - Indirect race discrimination[98]Notwithstanding the amendment to the claim to include a complaint of indirect race discrimination, most of Mr Raizon’s focus at this hearing was on the direct race discrimination complaint. However, given the facts which I have found on the basis of the evidence (much of which was not disputed), I accept Mr Probert’s submission that this claim is really an indirect race discrimination claim rather than a direct race discrimination claim.[99]As already noted, the respondents accept that the respondent applied the PCP (as reformulated) set out in the list of issues. Furthermore, they also accept that the application of the PCP put Chinese nationals at a particular disadvantage in general and that it put the claimant at that disadvantage. What remains, therefore, is the question of justification and I remind myself that the burden of proof is on the respondent to show that the application of this PCP was a proportionate means of achieving a legitimate aim.[100]The aim relied on by the respondents is for the respondent’s business to operate in the cyber sphere of national security and produce products and services that meet the requirements of customers in the field, including national security entities in the UK and USA. As set out in my findings of fact above, that is what the respondents business is and it is clearly a legitimate aim for the respondent to seek to operate its business. The respondent operates in a highly sensitive niche industry, whose end users are Western governments. Those end users set the rules on what they consider to be security requirements within the industry. A product is not viable if a company falls short of those requirements. As Dr Patrick-Evans put it in his witness statement: “If Binary AI wants to continue to operate as a start-up in this sector - and of course we do - we have to abide by the expectations of our clients’ national security requirements.”.[101]I therefore turn to the question of proportionality. In this respect, I accept many of the submissions made by Mr Probert.[102]First, I accept that the context of the respondent’s industry gave little scope for alternative arrangements. The Lead AI role would need to meet the security requirements of the market, as Dr Patrick-Evans was told directly by his national security contact.[103]Due to the small, start-up nature of the business, there was not a feasible means of separating work, for example behind firewalls, to adequately or reasonably satisfy the security requirements. The Lead AI role was a senior, key role in the business. It was the focal point of the product.[104]A key point is that even if the claimant had been given a more junior role, that would not have meant that she could do the Lead AI role, which required security clearance, and the respondent would have had to have recruited someone else for it anyway. Therefore, giving the claimant a different role would not have alleviated the disadvantage of not getting the Lead AI role. - 17 -[105]Therefore, even if the other reasons for discontinuing the claimant’s application (better candidate who accepted the role/posts on X/salary expectations) had not applied, the respondent would still have had to have discontinued the claimant’s application because she would not have been able to obtain security clearance. There was not, therefore, a less discriminatory way of doing it. It was necessary to do so.[106]The decision to discontinue the claimant’s application was, therefore, a proportionate means of achieving the respondents’ legitimate aim.[107]The indirect race discrimination complaint therefore also fails. Would the respondent have discontinued the claimant’s application/not hired her in any event?[108]Finally, although it is not strictly necessary for me to do so in the light of my conclusions above, I consider the issue of whether or not the respondent would have discontinued the claimant’s application in any event for reasons other than security clearance. I find that it would have done so and would have done so at the same time.[109]As I have found, a separate candidate was offered the role (for nondiscriminatory reasons - the separate candidate was a better candidate) and accepted it. That person would have been offered the role and accepted it even if there had been no security clearance issue regarding the claimant.[110]It follows, therefore, that even if the security clearance reason was discriminatory, the other candidate would have been offered and would have accepted the role; and the claimant would not have been offered the role and her application would have been discontinued, and discontinued at the same time that it was in fact discontinued.[111]Therefore, even without the reason that was alleged to have been discriminatory, it is 100% certain that the claimant would not have been offered and would not have obtained the Lead AI role anyway, and that her application for it would have been discontinued, and discontinued at the same time as it in actual fact was. Written reasons[112]After I had delivered the reasons for the my decision orally, I explained that I would, in a moment, ask the parties whether they wanted the written reasons for the decision and that they would be able to request them either now at the hearing or within 14 days of the judgment being sent to the parties.[113]Before doing so, I explained, for the benefit of the claimant and Dr Patrick-Evans, two things. First, I said that, if a party wished to appeal the tribunal’s decision, that party would need the written reasons in order to do so, although I stated that an appeal could only be founded if there was an error of law by the tribunal or if its decision on the facts was perverse; there were no - 18 - grounds for appeal if a party simply disagreed with the factual findings that the tribunal had made. Secondly, I explained that, if written reasons were produced, they would be published online on the tribunal’s website and that the tribunal had no discretion as to whether or not to do this. I added that the reasons were searchable by name and that the tribunal was aware that potential future employers might carry out such a search. I made these remarks because I was concerned about whether it was in either party’s own best interests for the written reasons to be produced and consequently published online.[114]I then asked the representatives whether they wanted the written reasons. Both representatives took instructions and said they would like to think about it and made no request at that point.[115]The judgment was subsequently sent to the parties on 24 February 2025.[116]The claimant then requested written reasons on 7 March 2025 and these written reasons have accordingly been provided.