Naeem v The Secretary Of State For Justice (Race Discrimination : Indirect) [2014] UKEAT 0215_13_1501

EAT
Naeem v The Secretary Of State For Justice (Race Discrimination : Indirect)
[2014] UKEAT 0215_13_1501 · 2014-01-15
[27]“ The correct principle, is that the pool must be one which suitably tests the particular discrimination complained of: but that is not the same thing as the proposition that there is a single suitable pool for every case. ” 25. That summary of the holding is amply justified by the judgment given by Sedley LJ, with which the other two members of that division of the Court of Appeal agreed. Although what was said was in the context of an equal pay claim, Sedley LJ said this at paragraph 33:[33]“ I mention the comparison of like with like because it seems to me a relevant guide. Section 5(3) of the Sex Discrimination Act 1975 requires comparisons made for, inter alia, indirect discrimination purposes to ‘be such that the relevant circumstances in the one case are the same, or not materially different, in the other’. This seems to me a useful indicator of how the pool should be chosen. It needs to include, but not be limited to, those affected by the term of which complaint is made, which can be expected to include both people who can and people who cannot comply with it. ” Sedley LJ had earlier said in the same Judgment, at paragraph 27: “The correct principle, in my judgment, is that the pool must be one which suitably tests the particular discrimination complained of: but this is not the same thing as the proposition that there is a single suitable pool for every case.”26. The dilemma for fact-finding Tribunals is that they can neither select a pool deliberately in order to give a desired result nor be bound always to take the widest or narrowest available pool, yet have no principle which tells them what is a legally correct or defensible pool. In discrimination claims, the key determinant is the issue which the Claimant has elected to pose and which the Tribunal is therefore required to evaluate by finding a pool in which the specificity of the allegation can be realistically tested. Provided it tests the allegation against a suitable pool, the Tribunal cannot be said to have erred in law, even if a different pool with a different outcome could legitimately have been chosen.27. The choice for us is as stark as the choice that faced the Employment Tribunal. Is it permissible to take as the pool all chaplains employed by HM Prison Service when the necessary consequence of doing so will be to include pre-2002 employees in a context where the inclusion of those persons simply serves to highlight a material difference between the treatment of Muslims and Christians prior to 2002: viz that no Muslim chaplains were on the permanent staff or recruited to be so at that time.28. We have reluctantly concluded that the Tribunal were in error. We accept that they erred in principle in failing to focus on the need to compare like with like. The inclusion of pre-2002 Christian chaplains distorted the true comparison. The PCP in question here could only properly be tested as to its effect by limiting the pool to those persons employed since 2002, from which point forward Muslim chaplains and Christian chaplains had been on a level playing field.29. In reaching this conclusion we have had the advantage, not available to the Employment Tribunal, of oral argument about the decision and implications of the decision of the Supreme Court in the Homer case. Unlike Grundy , that was a discrimination case. The PCP complained of in that case was a criterion that an employee could not be admitted to the upper pay threshold without holding a law degree. Mr Homer, the Claimant in that case, was coming up to retirement and did not have a sufficient period of service remaining to enable him to obtain that qualification in time. The question, or one of the questions, for the Supreme Court was how one draws the pool of comparators. Mr Clive Lewis QC, for the employer in the Homer case, suggested that one would have to build in to the comparator group not simply those persons who were and were not facing retirement on the grounds of age but also any other persons in reasonable proximity to the termination of their employment for whatever reason. Thus, submitted Mr Lewis, there could be no unlawful discrimination in Mr Homer’s case, because there was no connection between the disadvantage he was labouring under and the fact that he was approaching retirement. In short, his age bore no reference to the application of the criteria, and in those circumstances no drawing of the pool could produce a result which showed him to be at a disadvantage by reason of the protected characteristic of ‘age’. In her judgment, Lady Hale, speaking for the majority of the Supreme Court, rejected Mr Lewis’s argument. She said (at paragraph 17):[17]“The law of indirect discrimination is an attempt to level the playing field by subjecting to scrutiny requirements which look neutral on their face but in reality work to the comparative disadvantage of people with a particular protected characteristic. A requirement which works to the comparative disadvantage of a person approaching compulsory retirement age is indirectly discriminatory on grounds of age. ”30. Both parties relied upon this judgment. We are satisfied that the interpretation of Homer advanced by Mr Fetto for the Respondent employer is the correct one. In Homer , the prescribed characteristic ‘age’ was inseparably linked to the question of the time needed to undertake the qualification required. In contrast, there is no link between ‘religion’ or ‘belief’ or ‘race’ and time in our case. In truth, Mr Fetto submitted, the real gravamen of any complaint that the present Claimant may have relates to the straightforward fact that prior to 2002 HM Prison’s Chaplaincy Service had simply not required the permanent employment of non-Christian chaplains. To expand the pool of comparators taken into account, for the purposes of testing the present claim, to include pre-2002 chaplains was incorrect in principle. We accept that submission.31. In the result, it seems to us inexorable that the cross-appeal must be allowed. The Employment Tribunal did err in principle in fixing the parameters of the relevant pool. The only principled way of drawing the pool on the facts of the present case would be to restrict the pool to those who had joined the Chaplaincy Service since 2002. That pool would include both Muslims and non-Muslims and they would be persons to whom the same PCP would have been applied. That pool would allow a correct analysis to see whether the present Claimant had been disadvantaged and, on any analysis, applying that pool, there had been no such disadvantage.32. The result of allowing the cross-appeal is to produce the consequence that, in any event, the Claimant’s claim falls to be dismissed, as indeed the Tribunal did dismiss it on other grounds. (v) ‘Proportionate means of achieving a legitimate aim’33. Although allowing the cross-appeal is determinative of the present matters before us, in deference to the very helpful arguments we have had from counsel, we proceed to consider the appeal itself. For these purposes, it is therefore necessary to assume that the Tribunal were correct on the matter in respect of which we have found them to be in error and that the point that had been properly reached was that the burden had shifted to the employer to demonstrate, for the purposes of section 19(2)(d), that the PCP applied in this case was “a proportionate means of achieving a legitimate aim”. As we have already indicated, the Tribunal was satisfied that such ‘justification’ was made out.34. The grounds of appeal set out in the Notice of Appeal are seven in number. In the event, the Claimant did not pursue grounds 5 and 7 and we say no more about them. (vi) ‘Legitimate aim’35. Grounds 1 and 2 of the grounds of appeal contend that the Tribunal erred in its approach on the question of whether the employers were able to establish a ‘legitimate aim’ for the PCP applied by them in this case: that is to say, the application of a pay scale or pay banding system which gave emphasis to length of service in a lengthy ‘ladder’ of increments.36. The Tribunal dealt with this matter at paragraphs 20.15 and 20.16 of their judgment. In the first of those paragraphs they record the employers’ case on ‘legitimate aim’ as set out in the final version of the response to the Claimant’s claim. “The Respondent contends that the length of service criterion represents a proportionate means of achieving a legitimate aim. It is wholly legitimate to seek to retain and reward those who have served loyally as Chaplains over time and built up associated experience and knowledge of the prison system and personnel and their particular role in relation thereto. That experience and knowledge is an asset not only because it tends to enhance the performance of those who have it, but is valuable as an example and resource for those who do not. It is obviously proportionate to meet that aim by increasing salary in measured increments as service accumulates, since salary is the most potent and measurable of a reward for service, and increased salary is a powerful morale booster and incentive towards sustained future service.” At paragraph 20.16 the Tribunal accept that that is a description of a legitimate aim.37. Up to that point, Ms Lewis takes no issue with the Tribunal’s approach or findings. However, it is incontrovertible that the evidence before the Tribunal showed that the Respondent employer had been endeavouring to get away from the largely length-of-service-driven pay scales. The Tribunal sets out the history of the pay systems adopted by the Respondent from 1994 to date. They record acceptance by the Respondent employer of the need “to rationalise and modernise this legacy” of prior pay systems. The migration to a new simplified pay arrangement placing more emphasis on assessed achievement than length of service was to be, as the Tribunal found, “a prolonged and complex task”. The submission which embraces grounds 1 and 2 of the grounds of appeal is that the Tribunal, having heard the requisite evidence, failed to grasp the point that the legitimate aim of the Respondent employer had moved on from the legitimate aim which had been the foundation of the earlier length of service related pay scale to a more nuanced aim in relation to the payment of staff. The high water mark of the Tribunal’s acceptance of that proposition appears from paragraph 10.5 of their judgment, in which they say:
“The Respondent’s management aspiration is that all pay scales should consist of 6 points, with progression within 6 years from minimum to maximum. The further aspiration is to achieve a pay system where progression is related to assessed performance, and not merely related to length of service.” 38. Faced as they were with a claim brought by a man who had achieved almost ten years’ service (including a period of part-time service before permanent employment) Ms Lewis asked rhetorically how the employers could advance as a legitimate aim, and how the Tribunal could adopt as a legitimate aim, that which had been originally adopted some years earlier, and from which the employers were seeking to move away at the fastest speed available to them. Ms Lewis placed reliance on the decision of the Court of Appeal in Wilson v The Health and Safety Executive [2010] IRLR 59 . She deployed that case as authority for the proposition that any indirect discrimination must be justified not only by reference to the legitimate aim of a policy or practice when adopted, but also at the time that it had been actually applied to the Claimant in question. 39. The difficulty for Ms Lewis’ submission, and thus in consequence for grounds 1 and 2 of the grounds of appeal, is that the Tribunal here were alive to the difficulties that this intended shift in approach posed for the Respondent employer on the justification question. They record that matter, the submissions of the parties upon that matter, and more importantly the evidence that they heard. At paragraph 25 of their judgment they say as follows: “Drawing these matters together, we find that the original scale represented the objective stated, that of rewarding service incrementally. We find that the Respondent has embarked on the complex task of modernising the Chaplain’s pay scale, among many other such scales, operating within the framework and constraints which we have described above. We accept and find that progress has been inherently slow as a result of the scale and complexity of the task, and has now been effectively stalled by government economic policy relating to pay in the public services.”
Having drawn those threads together, the Tribunal then conclude as follows in paragraph 27:
“In our Judgment, and forming our own view of the matter, we find that the Respondent has demonstrated that its defence of justification has been made out and that the claim fails. We have considered the objective as the single one of rewarding length of service and increasing experience, while at the same time managing an orderly and structured transition, over a period of time to the shorter, single pay scales described above. That is clearly a serious objective, which represents a real organisational need of the Respondent.” 40. In that context it is our unanimous judgment that the Tribunal has not lost sight of the need to identify the legitimate aim. It has identified, in the passages we have extracted, the employers’ aim at the material time and has described it as legitimate, even though the aim was shifting away from that which had underpinned the originally adopted and still currently applied pay scale scheme to one which the Respondent employer wished to move. We can identify no error in this respect by the Employment Tribunal. (vii) ‘Proportionate means’ 41. By grounds 3 and 4 of the Notice of Appeal, the Claimant contended that the Tribunal had erred on the question of whether the PCP represented a proportionate response to the impact of the legitimate aim upon persons such as the Claimant. More particularly, the submissions of Ms Lewis asserted that the Tribunal had erred in finding that the disadvantage caused to the Claimant was no more than was necessary to achieve the legitimate aim. Put shortly, her case was that the Chaplaincy group was a relatively small group of employees within the Respondent’s department. A relatively modest adjustment, in her submission, was needed to deal with or address the consequences of the application of the PCP. Moreover, the Tribunal had been offered the example of an adjustment to the treatment of a significantly larger group of Prison Service employees (psychotherapists) in whose case a suitable adjustment had been made in order to eliminate discriminatory treatment. Ms Lewis prayed in aid the observation made by Lady Hale in Homer at paragraph 25 to the effect that the answer to the justification question at least depends to some extent “upon whether there were non-discriminatory alternatives available.”
She makes the point that the Employment Tribunal in the instant case have found that the Claimant has suffered a disadvantage that was “no more than is necessary to achieve the objective” without spelling out a consideration of any of the possible alternatives. 42. Replying to the submissions, Mr Fetto countered that although the burden of proof was on the Respondent, it did not need to canvas any particular alternative and less disadvantageous practices if none were advanced or suggested by the Claimant himself. The Claimant’s reliance on the example of the psychotherapists had been inappropriate given that the adjustment in relation to the psychotherapists was made in order to address an equal pay claim. In the instant case all that was being done was that the employers were seeking to justify a scheme based on length of service which caused disadvantage to the Claimant only because he had lesser service than others. The employers had recognised the need to shift to a different system, but had been prevented from making the change in a timely manner for the reasons that the Tribunal had identified and accepted. 43. There is some merit in Mr Fetto’s proposition that the Claimant ought at least to have expressly indicated to the Tribunal some means by which there might have been a lesser disadvantage to him from the application of the PCP. But, in our judgment, the Tribunal should themselves have seized and addressed the obvious proposition that there were manifest alternative ways in which the employers could have continued to apply the PCP in question but without disadvantage to the Claimant. One example would be to backdate length of service. Another would be to have added an additional increment at the start of his service, and yet another would have been, in the light of restraints on the public purse generally, to have constrained any further pay increments for those higher up the scale whilst deploying such financial resources as were available to improve the position of those with lesser lengths of service. All of those alternatives were sufficiently obvious as alternatives that in our judgment the Tribunal ought to have addressed them. 44. For those reasons, we are satisfied that the appeal should succeed in relation to grounds 3 and 4 of the Notice of Appeal. It would ordinarily therefore follow that we would have remitted the question of justification to the Tribunal for reconsideration. However, given the outcome of the cross-appeal that matter does not arise. (viii) The relevance of pay controls 45. The final ground of appeal before us was ground 6. The contention of the Claimant was that the Tribunal had erred in law in deciding that a blanket pay freeze imposed on the public sector could amount to a legitimate justification for discrimination by this particular government department. In support of that proposition Ms Lewis relied on the recent judgment of the Supreme Court in O’Brien v Ministry of Justice [2013] IRLR 315 . We accept that that decision is authority for the proposition that an employer cannot justify a PCP by exclusive reliance upon a lack of financial resources caused by its own decision as to how much money to expend on the pay of particular staff. 46. However, we are not satisfied that the ground of appeal is made out in the instant case. We accept Mr Fetto’s submission that the context of restraint of public expenditure was only one of the factors in the instant case that had led to the PCP being maintained in the way that it was rather than being replaced earlier with a more assessment-sensitive system. In particular, as the extracts we have already mentioned from the Employment Tribunal’s judgment made clear, there were multiple other factors explaining why the PCP had been maintained and it was far from a case of adopting or continuing to apply the PCP by reason only of a decision to restrict spending by the government department in question. Here, as we have already recounted, there was a historic anomaly of a huge number of pay scales and grades and there was a long and complex process in operation to produce the elimination of unnecessary differentials. The fact that the reform programme had been delayed in consequence of restrictions on available public funds was but only one dimension of the portfolio of matters which the Tribunal were rightly taking into consideration in forming their overall judgment that the PCP in question could be and was justified. Conclusion 47. For the reasons we have given the cross-appeal will be allowed, and in consequence the discrimination claims brought by the Claimant will remain dismissed. The appeal will have achieved a measure of success on grounds 3 and 4 but that produces no material advantage to the Claimant and no different result. This is best ultimately expressed by simply dismissing the appeal.